This is the fourth in a series of posts discussing themes from The Aid Trap by Glenn Hubbard and William Duggan. In Chapter 2, the authors assert that prosperity began to grow in Holland after the country achieved independence from Spain in 1581. The feudal system (which was more about preserving the power of the few than creating prosperity for all) was replaced by a business-friendly system of governance.
The fertile Dutch soil and investment in ploughs and horses allowed farmers to grow surplus food, freeing up many people to do other activities such as creating woollen cloth. Holland’s strategic location at the mouth of the Rhine meant that transport to other locations in Europe was rapid and inexpensive, and Dutch ships traded all over the world. Many different types of goods were produced and traded, and there were many different opportunities for employment.
The authors seem to overstate their case, however, when they say that everyone rose out of poverty. It is most probably true that the average citizen of Holland was wealthier than the average citizen of other European countries, and Holland may have been the wealthiest country in the world. However, in real terms the average citizen of Holland in the mid-17th Century was still desperately poor by modern standards.