“History repeats itself endlessly for those who are unwilling to learn from the past” – Leon Brown

In the 1500-1600 period the Spanish empire was the largest empire controlling around 13% of the world landmass including a small area called Netherland (now called Holland). When the Dutch became powerful enough in 1581, they overthrew the Spanish and went on to became the world’s richest empire.  The Dutch empire reached its peak around 1650 in what was called the Dutch Golden Age

The Dutch were highly educated people who were very inventive.  Not only they had great skills in shipbuilding and military, they also invented the world’s first stock exchange and a well-developed lending system in which debt could more easily be created. These enabled large numbers of people to collectively lend money and buy ownership in money-making ventures. The numerous investment market innovations and their successes in producing profits attracted investors, which led to Amsterdam becoming the world’s leading financial centre. the Dutch government channelled money into debt and some equity investments in various businesses, the most important of which was the Dutch East India Company, their first listed public company.

The Dutch also created the world’s first reserve currency and to have its currency so broadly accepted around the world. The Dutch guilder was the first “world reserve currency” other than gold and silver. Because of these inventions, the Dutch empire continued to rise remained the richest power for about 100 years until around 1700. At this time of prosperity, other countries, especially the British, grew in power and became more competitive too. Over time, as they bumped into each other in the same markets, the Dutch and British had lots of conflicts over trade and economic issues.

Anglo-Dutch Wars

In October 1651, the English Parliament passed the first of the Navigation Acts which mandated that all goods imported into England from its American colonies must be carried by English ships or vessels from the exporting countries, thus excluding mostly Dutch middlemen. Hostilities between the two countries grew from trade to military and led to the First Anglo-Dutch War in 1652-1654 which was won by the English.

Conflict between the two countries didn’t stop there. The English continued with its anti-Dutch trade policies including capturing Dutch merchant vessels returning from overseas. Many Dutch ships were captured, and Dutch trade and industry were hurt. This led to the Second Anglo-Dutch War between 1665–1667, which ended with Dutch victory.

The Third Anglo-Dutch War in 1672-1674 and the Franco-Dutch War in 1672-1678 were also won by the Dutch and prevented French plans to conquer the Netherlands. However, because of the war the Dutch was hurt financially and forced the Dutch to increase its debts to cover for the war.

From about 1720 Dutch wealth ceased to grow. By 1780 the per capita gross national product of the Kingdom of Great Britain surpassed that of the Dutch. Dutch support of the Americans who had rebelled against the British Crown led to the Fourth Anglo-Dutch war in 1780-1784. The war ended in significant defeat for the Dutch. The costs of the fighting and eventual peace helped usher in the end of the Dutch empire and the end of guilder as a reserve currency.

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