Pioneers of Capitalism

The socioeconomic evolution of the Netherlands from 1000 to 1800 is of unique intellectual significance for scholars of capitalism. The Dutch economy was the “first modern economy” to achieve self-sustaining growth since the mid-medieval period.1 The causal mechanisms behind this groundbreaking path urge social scientists to explore the preconditions that made such growth possible. As New Institutional Economics argues that inclusive institutions and secure property rights contribute to initial economic development, for example, the study of capitalistic institutions’ emergence in the Netherlands becomes particularly consequential.2Additionally, the Netherlands’ socioeconomic transformation as one of the pioneers of capitalism is related to the transition between feudalism and capitalism. Did the country undergo a transition in line with Marxism, which claims that “primitive capital accumulation,” the commercialization of labor, and the rise of the bourgeoisie are necessary conditions for capitalism? Prak and van Zanden’s book introduces the eight centuries of social and economic history in the Netherlands, offering enlightening lessons from these two perspectives.The authors have focused on the Netherlands’ socioeconomic transformation for decades, believing that it offers a valuable opportunity to test hypotheses of different schools. The authors explore Marxism, New Institutional Economics, and Braudel’s definition of capitalism in the first chapter. The exceptionality of the Netherlands lies not just in being one of the first capitalistic market economies but also in its ability to sustain stable economic growth for over eight centuries. In chapter 2, economic measures show that not only gdp and gdp per capita but also other sorts of well-being, such as the literacy rate, rose remarkably and consistently in that time. Progress was not based on the feudalistic economy but on its absence; chapter 3 reveals how the socio-political structure allowed citizens and civic organizations to play a greater role, fostering a relatively benevolent institutional environment. Chapter 4 address the significant structural changes that followed two exogenous shocks in the mid-1300s—the Black Death, which led to large-scale labor shortage (and thus widespread wage increases), and the environmental crisis, which dramatically decreased agricultural production, and increased urbanization, commercialization, and marketization.Nonetheless, economic adaptation alone did not complete the transformation. The Dutch Revolt (1566–1609, covered in chapter 5) acted as an external catalyst, politically and financially integrating Dutch local powers into one unit, marking the formal rise of the bourgeoisie. The rest of the book deals with the following centuries, when the Dutch economy continued to expand globally and enjoyed domestic prosperity, with civil society playing a vital role as the Netherlands embraced republicanism. Yet, in the eighteenth century, economic inequality increased substantially, and the Netherlands’ era as an economic hegemon approached its end while England launched the Industrial Revolution.The authors elegantly combine qualitative and quantitative approaches in their analysis. They use the Smithian growth theory and the Braudelian model to define the Dutch economy in different periods and provide rich empirical evidence, including economic data and historical archives to substantiate their analyses. The combination of theoretical hypotheses and the quantitative evidence sets an exemplary standard in social science research. The authors effectively highlight the Netherlands’ transformative changes, demonstrating how the process contributed to the rise of capitalism and sustained economic growth

Bourgeoisie · Capitalism · Commercialization · Economic history · Economics · Economy · Feudalism · Neoclassical economics · Political science · Politics · Population · Socioeconomic status · Sociology · Culture, Economy, and Development Studies · Historical Economic and Social Studies · Law