The Great Cities Series: Amsterdam - The Birthplace of Liberal Capitalism

Hello, friend! Happy new month, and thank you once again for being a loyal reader of my blog. I genuinely appreciate the support you show by sharing my articles across your social media and in your direct messages. May the Almighty bless you!

Today, I’m thrilled to introduce a new series about nothing on my blog: The Great Cities Series. This series dives into the stories of three cities that each rose to become the world's largest and most influential in their time: Amsterdam, London, and New York (formerly New Amsterdam). I’ll explore how each of these cities transformed over the centuries, each one dethroning its predecessor to hold the title of the biggest city on Earth. 

Let’s start with Amsterdam, a city that laid the foundations of liberal capitalism and became Europe’s financial powerhouse in the late 16th and early 17th centuries. Here’s how it all began.

 

The Birth of Amsterdam’s Golden Age

In 1585, Amsterdam’s population was around 30,000. The city had recently emerged from a long and grueling war with Spain, thanks to Dutch leader William the Silent, who led the Protestant rebellion against the Catholic rule of King Philip II of Spain. While Amsterdam gained independence, the nearby city of Antwerp remained under Spanish control, leading many religious refugees seeking freedom from Catholicism to settle in Amsterdam. These refugees became a vital part of the city’s growth and identity.

Then, in 1594, a pivotal meeting took place at Martin Spil’s brewery in Dam Square. Ten Amsterdam merchants, each from a different trade, gathered with a bold agenda: they wanted to break Portugal’s monopoly on the spice trade with South Asia. They sent Cornelius de Houtman to Lisbon on a covert mission to learn the trade routes and methods of the Portuguese. Armed with this knowledge, the merchants funded a daring expedition to the East.

Though the expedition was grueling, and Cornelius himself was taken prisoner on Java by a local sultan, he eventually returned to Amsterdam two years later with 80 crew members and a modest amount of spices. Despite the hardships, investors saw the venture as a success. They were determined to establish a direct spice route to Asia.

The Rise of Amsterdam’s Shipyards

Around the same time, Dutch inventor Cornelius Corneliszoon van Uitgeest developed a revolutionary technique for building ships faster and more affordably. This breakthrough allowed Amsterdam to become Europe’s leading shipyard, enabling them to send more expeditions to Asia. By the turn of the century, dozens of ships were sailing back to Amsterdam with valuable spices, launching the city into a period of immense prosperity known as the Golden Age.

The returns from these expeditions were staggering. One successful voyage yielded 9 million Dutch guilders—enough to pay off the national debt that had accumulated from years of war with Spain. For the first time in recent memory, the Dutch were debt-free.

The Founding of the Dutch East India Company (VOC)

With so many private ventures competing in the spice trade, two significant problems emerged: soaring spice prices and escalating tensions with Portugal and Spain, who sought to protect their monopoly. In response, Dutch leaders proposed a solution: a central trading company to manage the expeditions and provide defense. This led to the formation of the Dutch East India Company, or VOC, in 1602.

In an unprecedented move, the VOC offered shares to the general public, regardless of social class. Over 1,100 people, including craftsmen and even housekeepers, invested a total of 3 million guilders. The concept of buying and selling shares sparked the beginnings of the modern stock exchange, with early investors trading their shares on the bridge facing the port. By 1611, Amsterdam had established the world’s first official stock exchange, paving the way for the stock markets we know today.

 Amsterdam’s Expansion and Prosperity

With resources from the VOC, Amsterdam expanded rapidly. A truce with Spain in 1609 allowed the city to focus on growth, adding 10 square kilometers of land, building over 3,000 houses, and constructing 100 new bridges. Amsterdam’s population surged to 105,000 by 1615, making it the wealthiest city in Europe.

The rise of Amsterdam is a remarkable example of liberal capitalism in action. The city’s openness to innovation, risk-taking, and public involvement in trade allowed it to flourish. This same spirit of resilience and determination is something we can apply to our own lives, reminding us that persistence in our pursuits can lead to great rewards.

Stay tuned for the next installment in The Great Cities Series, where we’ll explore the rise of London. Thank you for reading, and I look forward to taking you on this journey through history. 

Warm regards,  

K. Nakamoto