Left: a galleon moored at Seville, where sailors unload chests of silver; right: the bustling Amsterdam Exchange before a map suggesting the route to Asia. Image generated with ChatGPT.
At the Origins of the Valorisation of the Economy (15th–19th Centuries) – Article 2
Spain and the Dutch Republic embody two paths into the first globalisation: the former rested on extraction and imperial coercion; the latter on the organised circulation of goods, information, and credit. From the mines of Potosí to the payment fairs of Antwerp and then Genoa, the “silver of the Indies” fed the Habsburg military machine and reshaped European finance. Facing it, Amsterdam built an economy of institutions and networks — the Wisselbank, the Exchange, and the East/West India Companies (VOC/WIC) — while relying on a substantial military and colonial apparatus. Each empire, by converting economic power into political power and vice versa, contributed to the valorisation of the economy. Along the way, a stop in Salamanca presents the price theory developed by its university masters — a theory which, intellectually, dignifies trade and finance. We conclude with a reflection on the Reformation and how it reinforced this movement of valorisation.
Birth of a Fractured Spanish State
The storybook union of Castile and Aragon
The marriage between Ferdinand II of Aragon and his cousin Isabella of Castile in 1469 was by no means inevitable1. Mutual distrust between the kingdoms, the fear among Castilian nobles of a strengthened Crown, and the hostility of Louis XI all weighed against it. Yet the Roman legacy of Hispania remained familiar in the Middle Ages, and a sense of “Spanish” belonging had already surfaced in certain discourses. More decisively, on the political plane Aragon faced a revolution in Catalonia and the expansionist ambitions of France. Isabella of Castile knew how to exploit this fragility to seal a union that granted clear pre‑eminence to Castile.
The marriage took place in secret. When Henry IV, King of Castile, learned of it in 1470, he repudiated his sister Isabella and recognised his daughter Juana as heir. On his death in 1474, Isabella was nonetheless crowned, and a civil war of succession tore the nascent state until 1479, when a treaty ended hostilities — though Juana did not cease claiming her right to the crown.
The Castilian preponderance in the state-in-embryo reflected geographical, demographic, political, and economic differences that the marriage did not resolve2. Geographically, Castile — almost four times larger than Aragon — was better endowed with natural resources. Demographically, it contained 80% of the population of the Iberian peninsula.
Politically, while Castile was already a unified state — a Cortes (estates assembly), a fiscal system, a language, a currency, an administration, and no internal customs barriers — each Aragonese realm (Aragon, Catalonia, Valencia, Majorca, Sardinia) had its own Cortes, laws, language, and currency. Moreover, the Aragonese Cortes enjoyed greater prerogatives: the relationship between them and the monarchy was conceived contractually, limiting the powers of each. Thus, upon his coronation the Aragonese king swore to uphold existing laws and not to legislate without the assent of the three orders.
Economically, Castile possessed solid structures, notably thanks to the Mesta, the association of transhumant sheep‑breeders, and the Hermandad de las Marismas, a network of north‑western port cities through which the wool trade passed — wool production being the country’s main non‑agricultural activity. In addition, Castile’s merchant fleet insinuated itself into the Mediterranean, long the preserve of Catalonia during the Middle Ages.
A state, not yet a nation
These differences, added to existing dissensions, show that the nascent Spanish state was not founded on a nation. It emerged from dynastic ties, and the style of government of the new sovereigns — despite a centralising tendency — remained imbued with feudal traditions, as three aspects of their reign illustrate. First, the king and queen frequently criss‑crossed their realm3, notably to dispense justice in person during the early years of their reign4. In 1522 the Admiral of Castile reported that they “knew everyone, always paid honours to those who deserved them, travelled through their kingdoms, were known to great and humble alike, and could be approached by all5.”
The second aspect concerns Aragon: in 1486, to end the age‑old conflict between Catalan aristocracy and peasantry, Ferdinand chose to renew traditional, contractual institutions, granting greater autonomy to peasants while compensating the nobles financially6. In so doing, he compromised the centralisation of royal authority in Castile.
The third aspect is seen in the celebrated year 1492, marked first by the end of the Reconquista — concluded in January with the capture of Granada — and then by Columbus’s voyage which “discovered the Indies” (the Americas) and began their colonisation. Both enterprises shared a similar strategy: delegated conquest. In the case of the Reconquista, the war effort relied on the Castilian nobility who, in parallel, were granted lands and royal prerogatives in justice and finance7. In the case of America, colonisation rested on private initiatives. American lands not already cultivated by indigenous peoples were apportioned by the Crown among the conquistadors, who were also granted extensive, temporary legal rights8. In this way the Spanish sovereigns deftly compensated for the absence of a centralised state by turning to non‑state individuals and collectives (noble and non‑noble).
1492 was also the year the Jews were expelled from Spain, destabilising the wool market — the kingdom’s non‑agricultural lung. To restore trade, the Consulado, an Aragon‑inspired institution combining the functions of guild and commercial court, was created in 1494 at Burgos, replacing the Hermandad de las Marismas. The Consulado of Burgos became Spain’s hub for wool and served as a model for the establishment in 1503 at Seville of the Casa de Contratación (House of Trade). The latter centralised exchanges between Spain and America, notably the import of precious metals9. A monopoly of trade with America was thus granted to the Andalusian city. The Consulado and the Casa de Contratación expressed a centralising effort which nonetheless relied on private corporations rather than a state bureaucracy.
Territorial ambitions and their financing
On the European stage, the historic rivalry between Aragon and France continued in Italy from 1494, when Charles VIII invaded it claiming the throne of Naples. Though the kingdoms of Aragon, Naples, and Sicily had been divided among family members after the death of Alfonso V of Aragon in 1458, they retained close ties10. In 1495, while Charles VIII took possession of Naples — a papal fief — Spain and the Holy Roman Empire allied with Venice and Milan to repel the French, which they succeeded in doing, not without difficulty11. A few years later, in 1500, with Louis XII now king of France, France and Spain agreed to divide the Kingdom of Naples, but conflict resumed until the former recognised, in 1504, Ferdinand’s sovereignty over the realm.
From Italy, let’s cross the Mediterranean. The Reconquista — Ferdinand and Isabella’s greatest enterprise12 — gave life to the idea of a crusade in Africa, which Pope Alexander VI blessed in 1494. But Spanish troops were then tied down by the Italian wars. From 1499, with the revolt of the Alpujarras led by the Muslim population of the Kingdom of Granada, a Catholic religious impetus pushed for the realisation of an African crusade13. However, it had still not begun at Isabella’s death in 1504; in her last will she urged her husband to pursue it tirelessly. In the following years several coastal cities were conquered14 (Peñón de Vélez de la Gomera, Oran, Bougie/Bejaïa, Tripoli). Nevertheless, Africa did not become Ferdinand’s priority: he favoured securing his border by acquiring Navarre in 1515, and he focused on the western Mediterranean where he sought to consolidate his Neapolitan base and to drive the Turks from Italy.
Spanish territorial ambitions required financing that was far from obvious given the country’s limited economic development. In the 15th century the main source of revenue was the alcabala, a sales tax that represented more than 80% of state income15. Together with other revenues such as customs duties, these taxes were collected by tax‑farmers (arrendadores), as the Crown had a fiscal administration only for its own domains. The doubling of fiscal income between 1481 and 1510 was nonetheless insufficient to finance Neapolitan expeditions and diplomatic expenses. From 1489, the monarchs began to pay their debts by issuing juros (annuities) at 10% interest — a growing burden on the treasury. Financial difficulties thus forced the monarchs to summon a Cortes in 1501 to obtain a regular servicio (tax)16.
Antwerp and Genoa, pivots of the Spanish empire
Geopolitical and financial continuity
In 1516, Charles, grandson of Maximilian of Habsburg, became Charles I of Spain (with his mother Joanna). He travelled to Spain in 1517 and was recognised by the Cortes in 1518. Through his Burgundian inheritance he added the Low Countries (the Seventeen Provinces) and the Franche‑Comté to the Iberian crowns. In 1519, elected emperor, he became Charles V, heir to the Habsburg lands.
To many Castilian cities, Charles’s “imperial” orientation — dynastic quarrel with France, imperial campaigns against Protestant princes, defence against the Ottoman threat, arrival of Burgundian counsellors — seemed alien to Castile’s immediate interests and disproportionate given the fiscal and human effort required17. From the standpoint of statecraft, however, it extended Ferdinand’s axes: contain France in Italy, lock down the western Mediterranean against the Ottomans and Barbary corsairs, and affirm Catholic orthodoxy. The novelty was not the end but the scale of theatres now stretching across the international plane.
The successive wars into which Charles entered forced an unending quest for finance18. Since, until 1550, American revenues represented a minor share of imperial resources, European territories supplied most military expenditure. During the first part of Charles’s reign, the Low Countries and Italy provided the main contributions. When these sources dried up, the emperor turned to Castile, in particular to the Church, sensitive to the Protestant threat. He also leveraged customs dues, a tax on sheep transhumance, another on silk, and above all the alcabala and the servicio.
Despite all this, revenues remained insufficient as expenditures grew relentlessly. The emperor resorted to expedients such as appropriating private transfers of American silver, compensated by the grant of juros, or selling noble privileges. These stopgaps were more durably replaced by selling juros to bankers. The latter also provided advances against future American silver arrivals, contractualised as asientos. As the needs of the armies rose, the empire became increasingly dependent on banks located mainly in Antwerp and Genoa — two pivotal cities of the empire.
Antwerp
Since the 13th century Bruges had concentrated most of north‑European trade19 and, consequently, most banking activity. It also possessed a flourishing textile industry. Antwerp’s economic activity grew during the 14th and 15th centuries, supplanting Bruges by the end of the 15th century20. The reasons for this geographical shift were commercial and political21.
English cloth merchants chose the Brabant fairs as their distribution centre, their principal outlet being Germany. They could not turn to Bruges: competing with Flemish manufacturers, they faced sales bans enacted by the Bruges authorities. Moreover, access to French and Baltic markets proved difficult due to the Hundred Years’ War and Hanseatic monopolies. Under these conditions, English cloth was dressed and dyed directly in Antwerp.
During the 15th century German merchants, who exported textiles but also copper and silver, invested ever more in the city. The high price of silver in the Low Countries, the consequence of an overvaluation in 1466, made exporting this precious metal to Antwerp highly attractive. Meanwhile the Portuguese came to sell products from their African and Asian trade. They returned with precious metals, copper, and silver — silver becoming the main means of payment for Asian spices.
The foremost factor in Antwerp’s rise, however, was political. Maximilian of Habsburg, regent of Burgundy from 1482, faced the opposition of the Flemish towns — an opposition that degenerated into civil war. Ghent and Bruges led the resistance and even imprisoned Maximilian in 1488, while Antwerp chose to support him and ultimately contributed to his victory thanks to the financial support it provided. After the crisis, Antwerp was granted privileges, among them staple rights22 for alum from the papal mines of Tolfa (1491). Above all, Maximilian urged foreign merchants to leave Bruges for Antwerp. Although these measures were temporary, they helped shift the north‑European commercial heart from Bruges to Antwerp.
For the House of Habsburg, Antwerp was a gateway to international trade and a major source of fiscal revenue and credit23. Charles V obtained substantial loans from Antwerp’s banks and merchants, particularly the Fuggers, whose relations with the Habsburgs dated from the 15th century. More than once the emperor or his collaborators underlined the importance of Antwerp’s financial market in their correspondence. Unsurprisingly other countries, such as England, also resorted to the city’s financial houses.
The volume of Spanish debt climbed inexorably during the 16th century and reached breaking point with the bankruptcy of 1557 — by which time Philip II had succeeded his father — the first in a series: 1560, 1575, 1596, 1607 (Philip III), 1627 and 1647 (Philip IV)24. The 1557 bankruptcy hit France, where the Lyon bourse failed together with the royal finances of Henry II: “In Antwerp, the circuit of money that sustained the market then snapped. It never recovered satisfactorily and the German bankers were henceforth out of the Castilian game, replaced by the Genoese. The ‘Century of the Fuggers’ had just ended25. »
Genoa
The seventy years (1557–1627) that followed were marked by Genoa’s domination of European finance26. Unlike Antwerp, whose apogee owed much to trade, Genoa’s success rested essentially on finance. From as early as 1528, Charles V, “though dependent on the merchant bankers of Augsburg — above all the Fuggers27,” began borrowing from the Genoese. In 1557 they were thus well placed to take over.
As the years passed, Genoese merchants became caught up in an ever‑growing task. The revenues — but also the expenditures — of the Catholic King increased unceasingly, and so did Genoese profits. No doubt they advanced to the king the money deposited with them by lenders and savers from Spain or Italy. But all their mobilisable capital also entered this mechanism. Unable to do everything, they were seen in 1568 to lose interest in financing mercantile operations between Seville and America, and to intervene less than before in purchases of wool at Segovia, silk at Granada, or alum at Mazarrón. They moved outright from merchandise to finance28.
Profits poured in from arbitrage in gold and silver, from compound interest, and from speculation on juros. The Genoese excelled on the money market and in bills of exchange: the money supplied by Spain was resold to the Portuguese and to Italian cities turned towards the Levant — Venice and Florence. The latter bought silver against bills on the northern countries where their trade balance was positive29. Thus funds could be transferred to Antwerp, which remained the payment centre for the Spanish army. At the end of the monetary circuit, the money ceded by the Genoese to Italian cities was transformed into gold payable in the Low Countries30. “Gold remained, moreover, the Genoese’ best weapon for controlling their triple system. When the Catholic King, in 1575, decided to dispense with their services and took measures against them, they succeeded in blocking the circuits of gold. Unpaid Spanish troops mutinied and Antwerp was sacked in November 1576. The king ultimately had to yield31.”
The School of Salamanca and the arbitristas
Cases of conscience, the silver of the Indies, and governing the economy
In a world upended by the discovery and colonisation of the Americas, the School of Salamanca appeared as the laboratory in which Castilian theologian‑jurists (Vitoria, de Soto, Suárez, Azpilcueta, Mercado, etc.) devised solutions to unprecedented problems. Many of their reflections arose from acute cases of conscience concerning the lawfulness of conquest and of just war, the rights of the Indians, their conversion, forced labour (encomienda, repartimiento, mita), and spoliation. To this was added the demographic catastrophe in the Caribbean, Mexico, and the Andes, which compelled a rethinking of the relationship between evangelisation, empire, and economy.
In the same movement, these “moral economists” reassessed mercantile practices by addressing questions of credit and usury, the just price, exchange and bills of exchange, and the mobility of capital. Above all, the massive inflow of American silver prompted a structuring enquiry into rising prices, disrupted wages and rents, the Catholic Monarchy’s fiscal dependence on bullion, and the haemorrhage of coin abroad via asientos and payment fairs.
The arbitristas would take up these diagnoses with a more programmatic bent, recommending that outflows of bullion be stemmed, luxury imports reduced, manufactures and trading companies stimulated, useful labour promoted, and tax and currency cleaned up. Thus, between Salamancan casuistry and arbitrista memoranda, a shared horizon took shape: to make the economy an object of government — and of conscience — within an empire rendered problematic by colonial exploitation, depopulation, and the Genoese monetisation of Spanish power.
Quantity theory of money and the just price
At the heart of the questions raised by the “silver of the Indies”, Martín de Azpilcueta, in his Comentario resolutorio de cambios (1556), observed that money is dearer where it is scarcer32. In particular, the inflow of gold and silver into Castile made goods and labour dearer. The general price level thus depends on the quantity of money relative to the goods available and the exchanges to be effected. His perspective, initially moral and practical (confession and merchants’ casuistry), touched a major theoretical point: a monetary explanation of the Castilian inflation triggered by American metals.
A decade later, the French jurist Jean Bodin, in his Réponse à M. de Malestroit (1568), systematised the “price revolution”: the principal cause was the abundance of gold and silver, to which he added monopolies, taxes, exchanges, and new consumptions. Azpilcueta’s priority is clear33. Nonetheless the two diagnoses converge on the directing role of precious metals.
If the “silver of the Indies” raised the general price level, what made the just price of a particular good in a given place and time? Before Salamanca, medieval scholasticism had already mapped the terrain. Thomas Aquinas anchored the just price in commutative justice, based on contractual exchanges34: the things exchanged had to be similar in quantity, quality, and in the labour required for their production; and each party made a licit profit. Value resulted from the satisfaction of needs, not only of the buyer but of the whole community. Such an equilibrium presupposed a common estimation which is “the estimation of the market at the time of sale35.” The Franciscan Peter of John Olivi introduced complacibilitas (desirability/utility in the subjective sense) among the factors of estimation without identifying the just price with individual utility: for vital goods he excluded subjective utility as a basis of price and returned to an estimation oriented by the common good, bringing in scarcity, difficulty of access, labour (industria), risk, and the status of the parties36. With Nicole Oresme, the ethics of exchange met monetary policy (debasements, alterations): the prince who corrupts the coin falsifies prices and violates justice37. On the eve of the 16th century, the idea of a common estimation — subjective yet framed by the common good and anti‑usurious — coexisted with so‑called “intrinsic” criteria: costs of production, labour expended, risks borne by the merchant, and scarcity of the goods.
The Salamancans reformulated the just‑price question by giving more weight to the subjectivity of actors without abandoning the moral end (commutative justice). The labour factor, however, moved to the background38. For Vitoria, the just price is determined in three ranked ways: (i) the legal price where the state has set it; (ii) the common estimation where there are enough buyers and sellers; (iii) failing that, where the market does not function freely, on prudential grounds tied to intrinsic criteria. Vitoria sets out the second path thus: “where there are many sellers, the price appears to form of itself, and anyone may sell at the value of the place39” (the market). Tomás de Mercado, writing for merchants, endorsed the passage from principle to practice. A price may be fixed by the authority (Crown or city) representing the common good. Where it is not, he makes the market price the measure of the just price and, in parallel, denounces monipodios (cartels/monopolies) and illicit sales which impede the formation of a common price40. Luis de Molina, while retaining the two historical forms of evaluation — intrinsic criteria and the market — moved the cursor towards the market41. For example, in determining the just price he placed the opinion of the decent merchant above that of the moral theologian, and he reduced the government’s legitimacy to regulate prices.
Taken together, Salamancan treatises analysed deeply the causes of price variation. They linked the micro level (just prices formed on the market) to the macro level (the general price level dictated by the quantity of money). The abundance of silver from the Indies altered the scale of prices without abolishing the moral rule: a market price could remain “just” relative to the new monetary scarcity, yet reveal distortions (opacity, monopolies, positional rents) that the Salamancans condemned.
The arbitristas: diagnoses and remedies for a Castile in crisis (c. 1550–1650)
In the Castilian political language of the 16th–17th centuries, arbitrio denoted an expedient to which the sovereign resorted “for the good of the realm42.” The arbitrista was the counsellor who, faced with Castile’s depression, submitted to the king proposals blending moral appraisal with concrete economic measures. The concept, coined by 17th‑century satirists43, carries a pejorative ring while grouping disparate lines of thought44. Still, some broad orientations can be drawn out.
The arbitristas inherited Salamanca’s agenda (market police, fight against monopolies/hoarding, fiscal‑monetary reform) but not necessarily its theories. For example, Luis Ortiz — often seen as an initiator of arbitrismo45 — did not mobilise the quantity theory of money; he explained dearness by international trade and de‑industrialisation46:
It is well known that out of an arroba of wool, which costs foreigners 15 reales, they manufacture outside Spain tapestries, cloth, and other things, and send them back again worth 15 ducats. And from raw silk worth two ducats a pound they manufacture Florentine satins and Genoese velvets, Milan cloth and other fabrics, on which they make a profit of over twenty ducats47.
According to Ortiz, Spain was the laughing‑stock of nations which treated it worse than the Indians; for in exchange for their silver, at least the Indians received useful things. Foreigners, for their part, carried money out of Spain — without the inconvenience of extracting it — to supply trinkets in return48.
Some concrete measures recommended by the arbitristas were: reform the millones — a consumption tax that hit the poorest49; limit juros50; revive agriculture and handicrafts51; curb imported luxury52; create manufactures and trading companies53; police monopolies and hoarding54; and above all, retain coin instead of seeing it drain abroad through exchange and asientos55.
One may wonder how the arbitristas could, on the one hand, advise the state to create enterprises — to which royal privileges might be granted — and, on the other, condemn monopolies. The inconsistency dissolves once we distinguish public from private monopolies. What was stigmatised was the monopoly encroaching upon the common good.
On the ground, many of the suggested remedies remained a dead letter under the Habsburgs. A few attempt56 neither broadened the fiscal base of privileged orders nor broke positional rents, nor replaced Genoese asientos and the fairs where royal funds were raised and transformed with Castilian credit circuits. Elliott’s diagnosis57 is classic: the ideology of an idle nobility, politico‑fiscal fragmentation, and dependence on external credit limited the scope of reform.
By contrast, without positing a proven filiation, one observes convergence between arbitrista memoranda (retain coin; constrain private monopolies; promote manufactures and trading companies) and ancien régime mercantilism (regulation at the service of public power). Colbert, for example, would systematise in France tariff protection, royal manufactures, trading companies, and the policing of quality; in England, de Malynes and above all Thomas Mun popularised the “balance of trade” as a rule of enrichment for a maritime and colonial apparatus.
The Dutch turn
What the arbitristas described as a haemorrhage — the silver of the Indies escaping via exchange fairs and asientos — became in the North a sap that irrigated Antwerp, then Amsterdam, in the Low Countries already flourishing in the 16th century. From this differential use of metals — Iberian retention vs mercantile circulation — sprang the possibility of another hegemony, made real by the revolts and independence.
Secession of already‑flourishing provinces
In the 16th century the Low Countries already possessed a prosperous economy. Since the Middle Ages they had exchanged raw materials and manufactured products with the whole of Europe and with the countries around the Baltic, competing with the Hanseatics58. As Fernand Braudel put it, “the Baltic in the Middle Ages was a sort of America within reach59.” It was in this context, among others, that Bruges and then Antwerp became economic centres, relying on port infrastructures and an abundant merchant fleet60. In the mid‑16th century, following a severe grain shortage, the Genoese and the Portuguese placed their grain orders with Amsterdam, which on that occasion supplanted Antwerp for grain redistribution and was soon nicknamed “the granary of Europe61.” By 1560, 70% of the heavy Baltic trade (grains, planks, masts, tar, etc.) passed through Amsterdam, becoming the “mother‑trade” of the Low Countries.
Baltic grain was redistributed to Portugal and then to Spain. By the mid‑16th century, Dutch trade carried most of the traffic between northern Europe and the Iberian peninsula. It supplied the latter with wheat, rye, naval stores (mast timber, tar, etc.), and industrial goods, some of which were re‑exported by Seville to America. It brought back to northern Europe salt, oil, wool, wine — and above all silver. The latter underpinned trade with the Baltic, where the balance was negative, and in particular it helped push rivals aside.
The revolt that engulfed the Low Countries in the 1560s sprang from an entanglement of religious, political, and fiscal motives62. At root, the conflict was triggered by the contradiction between a composite monarchy that tightened centralisation in the name of Catholic orthodoxy and provinces jealous of their privileges where Calvinism had taken root in urban milieux. The iconoclasm of 1566 served as a pretext for the intervention of the Duke of Alba, whose measures — special courts, garrisons, and the “tenth penny” — affronted local order and the interests of urban elites. After years of war and shifting loyalties, the Pacification of Ghent attempted unity, but the confessional fracture hardened with the Union of Arras in the South and the Union of Utrecht in the North (1579). The Act of The Hague (1581) then formalised Philip II’s deposition and founded a sovereignty without a prince.
The resulting regime was an aristocratic‑leaning republic of estates. The regents (a patriciate of merchants, jurists, magistrates) held the towns and sat in the provincial estates. The States‑General coordinated foreign and military affairs. The stadhouder — the title given to a provincial governor — was a war leader rather than a sovereign. The economy was secondary in the revolt’s causality but became decisive for its longevity. It conditioned naval and financial superiority, the privateering war of the “Sea Beggars”63, Amsterdam’s rise after the closure of the Scheldt (1585), and the institutional foundations (companies, banks) that leaned on circuits already in place. Thus the Republic secured the material endurance of a power without a king, shored up by the city, by credit, and by fiscal bargaining.
The Dutch colonial system
After the Iberian Union64 of 1580, the Spanish embargo cut Dutch merchants off from Lisbon’s spices. The United Provinces therefore decided to go “to the source”. From 1595–159765, and even more so after the founding of the Dutch East India Company (VOC, Vereenigde Oostindische Compagnie) in 1602, Dutch convoys retraced the Indies routes and challenged the Portuguese Estado da Índia. The VOC founded Batavia (1619) as a bridgehead, waged a war of seizures and alliances there, then seized or neutralised key positions — as far as Malacca in 1641 — and thereby eroded the Portuguese mesh. In a Braudelian reading66, this was not a mere military episode: it marked the shift of a world‑economy’s centre towards Amsterdam, which captured the silver flows indispensable for Asian trade, reorganised the European redistribution of pepper and nutmeg, and substituted a “counter‑empire” of companies for the Luso‑Iberian chain of outposts.
The Dutch colonial empire rested on the VOC and, to a lesser degree, the Dutch West India Company (WIC, 1621), both receiving from the state a regional monopoly and quasi‑sovereign prerogatives (to wage war and make peace, conclude treaties, administer justice, strike coin). Juridically and financially the former was closely tied to the state: it supported the war effort, borrowed with state backing, and administered territories in the Republic’s name — a way to project power while limiting direct budgetary outlays. The institutional practice of slavery was embedded in this arrangement: in Asia, the VOC organised and regulated large‑scale slave circulations within the region (Batavia, Ceylon, the Moluccas, etc.), and it owned slaves itself (c. 4,000 in the 17th century) employed in building the empire’s infrastructures and in running its trade67. Over the long term it generated substantial profits, distributing sizeable dividends in the 17th century. The WIC’s success was more fragile: after the Brazilian adventure and Atlantic setbacks it went bankrupt in 1674 before being refounded. It depended heavily on the Atlantic slave trade for its survival.
As legal counsel to the VOC, Hugo Grotius devised a doctrine that directly served the Republic’s objectives68. In De Iure Praedae (The Law of Prize and Booty), whose twelfth chapter69 justified the seizure of the Santa Catarina (1603), Grotius started from the law of nature according to which, originally, nothing was the property of any community or individual — all things were common70. The transition from a state of nature without possession to a civil state where the law guaranteed private property took place gradually. First, the consumption of foodstuffs showed that once ingested they could not belong to anyone else. Next, this observation was extended to the use of movable goods or objects such as clothing. Finally, the parcelling of fields became inevitable: their cultivation was tied to the consumption of the products that grew there, and cultivable land was insufficient to be used indiscriminately. The resulting human law which justified private property “imitated” nature because appropriation occurred through “bodily attachments71.” In the case of immovables (land), such appropriation had to be accompanied by human activity such as building or setting boundaries. Following this reasoning, the sea could not be appropriated and no one could hinder navigation upon it. Consequently, any obstruction to maritime commerce constituted a cause of just war72.
On the financial plane, Amsterdam equipped the economy with two decisive innovations. On the one hand, the Wisselbank (1609) — a public deposit bank in “bank money”, whose secrecy was guaranteed — was created on the model of the banks of Venice and Seville73. It stabilised settlements and generated confidence within a money market rife with debasements and speculation, thereby easing exchanges and lowering transaction costs74. On the other hand, the Exchange gave rise to deep secondary markets that offered savings outlets and disciplined indebtedness, public or private. VOC shares were traded there forward; short‑selling — frequently banned from 1610 — and put options were also practised, especially in circles of seasoned traders where the discipline of contracts relied largely on private mechanisms75. Within this set‑up, Amsterdam also became a European centre for bullion and payments: the Wisselbank advanced funds and provided metal to the VOC, which bought and exported it to pay for its purchases in Asia — Asian demand for silver then driving a large part of global flows.
Two models for a single end: power
To grasp the singularity of the Dutch system, it must be set against the Spanish model — and one can see that, by different routes, both empires made the economy a spring of power. Spain bet first on the extraction of precious metals and on an imperial monopoly centred on Seville; the United Provinces relied on international trade and on modern financial tools to multiply its reach. In both cases the state granted exclusive privileges — the Casa de Contratación on the one hand, the VOC/WIC on the other — and militarised the protection of exchanges, a sign that the economy was no longer merely the backdrop to politics but one of its conditions.
On the Iberian side, American silver structured the imperial apparatus. The Crown organised and disciplined access to the Indies through the convoy system, the Casa de Contratación, and the grant of monopolies, then yoked this flow of coin to its military commitments and its credit (asientos, juros). This choice provided short‑term fiscal power — it financed armies and sustained diplomacy — but did little to encourage the development of peninsular agriculture and handicrafts: the metropolis imported a large share of manufactured goods, suffered price tensions, and exposed itself to maritime hazards and to the silver markets. In short, the model worked as long as the fleets arrived and credit held. Beyond that it revealed its fragility.
By contrast, the United Provinces specialised in intermediation. They carried exchanges between the Baltic, the Atlantic, and Asia; they organised value chains in which navigation, insurance, storage, and resale created margin; and they relied on manufactures more efficient than Spain’s without pretending to produce everything. Above all, they equipped trade with financial institutions — the Wisselbank, the Exchange, the public debt — that stabilised payments, reduced transaction costs, and opened capital markets capable of feeding the VOC/WIC. Amsterdam drew in Europe’s silver, redirected it to Asia when needed, and closed its books with credit — mechanisms that multiplied the reach of commerce.
For Braudel, “the merchant is king and merchant interest plays in Holland the role of raison d’État76.” He supported this statement with voices from the 16th century, including Pieter de la Court (“trade wants to be free”). Two limits, however, qualify the assertion. First, “king” commerce required a navy and a fiscal system (convoys, admiralty boards, public debt) — state organs without which the Dutch empire would not exist. The republicans of the De Witt period embraced a conditional pacifism: “all war is an obstacle to freedom”, except maritime war that protects the freedom of trade77. Second, hierarchy flipped in existential emergencies: the Rampjaar (“Year of Disaster”, 1672) and the rise of William III brought back a classical raison d’État (anti‑French coalitions, a priority on the military effort), even if the fiscal and financial base remained that of a country of merchants78.
Taken as a whole, the two empires valorised the economy by giving it an institutional role (state monopolies), a military role (convoys, privateering, blockades), and a financial role (credit, taxation, banks, rentes). Yet their trajectories diverged: while Spain converted a bullion flow into immediate power at the cost of a fragile productive base, the United Provinces converted a network of exchanges and capital into durable power because they integrated finance at the heart of trade and diversified revenue sources. In this sense the economy was no longer only an object: it became the very method of power — either through extraction and a metropolitan monopoly, or through intermediation and financial discipline — two paths which, each in its way, put the economic at the principle of the political.
The Reformation, an indirect cause of the economy’s valorisation
The Reformation did not invent a path of power; it put existing paths (Iberian extraction and Dutch intermediation) under pressure. By fragmenting Christendom it unleashed civil and international conflicts that lasted, shifted, and recomposed. In so doing it weighed indirectly upon states, which systematised practices such as escorted convoys, wartime taxation, public credit, and the delegation of tasks to companies endowed with monopolies.
The Reformation also contributed to secularisation which, in turn, stimulated the economy: under Lutheran and Calvinist doctrines, the clergy had to submit to temporal authority. Moreover, historically and practically, fatigue with the wars of religion favoured urban accommodations such as local neutralities, managed tolerations, or broader rights of residence for minorities. These dispositifs created opportunities and attracted capital, printers, merchants, artisans, and others. They shifted skills from one city to another — from Antwerp to Amsterdam, notably — and they thickened the ecosystems of credit and trade. We do not pass from a “religious” world to an “economic” one; we pass to more secularised governances that treat the economy more autonomously.
What of Weber’s thesis that Protestantism — especially Calvinism — created a psychological and social climate favourable to capitalist rationality? Protestantism reconfigured the work ethic by valuing discipline, sobriety, and responsibility — a cultural fact. But work had long been appreciated culturally: since Antiquity, labour was seen as the best antidote to idleness. Moreover, the Renaissance rehabilitated industria and diligentia.
To conclude, let’s compare the (Catholic) Italian Renaissance with the (Protestant) Dutch Republic. Italy had already monetised power and invented forms of intermediation. What it lacked was not a “work value”, which it possessed, but an expansive political dispositif able to project its networks durably beyond the Mediterranean. The United Provinces, for their part, combined a republic, managed confessional openness, and a commercial empire. They transformed mercantile capital into global power thanks to companies and institutions that spanned the oceans. In this context the Protestant ethic helped crystallise institutional choices — especially via radicalisations and via secularisation. It accelerated their determination and implementation. In that sense it contributed to the valorisation of the economy by context and by indirect constraints, more than by any direct doctrinal causality.
Notes
1 J.H. Elliott, Imperial Spain, 1469–1716, Penguin Books, 2002, 1.1.
2 Henry Kamen, Spain, 1476-1714. A Society of Conflict, Pearson, 2005, p. 13 sq.
3 Ibid., p. 63.
4 Ibid., p. 31. In 1489, a permanent court of justice was established at Valladolid.
5 Ibid., p. 63.
6 https://es.wikipedia.org/wiki/Sentencia_arbitral_de_Guadalupe#La_sentencia
7 Henry Kamen, op. cit.,p. 12.
8 J.H. Elliott, op. cit., 2.5.
9 Ibid., 3.4 ; https://www.universalis.fr/encyclopedie/casa-de-contratacion/
10 Henry Kamen, op. cit., p. 7.
11 https://en.wikipedia.org/wiki/Italian_Wars#Italian_War_of_1494%E2%80%931495
12 Henry Kamen, op. cit., p. 52.
13 J.H. Elliott, op. cit., 2.2.
14 Escamilla, Michèle. « Chapitre II. Politique africaine des Rois Catholiques ». Le siècle d’or de l’Espagne Apogée et déclin 1492-1598, Tallandier, 2015. p.39-56. CAIRN.INFO, shs.cairn.info/le-siecle-d-or-de-l-espagne‒9791021005259-page-39?lang=fr.
15 Henry Kamen, op. cit., p. 51 sq.
16 J.H. Elliott, op. cit., 3.2.
17 Ibid., 5.1.
18 Ibid., 5.4.
19 Cf. previous article.
20 Michael Limberger, “‘The Greatest Marketplace in the world’The Role of Antwerp in the Economic and Financial Network of the Habsburg Empire” in Les Villes Des Habsbourg Du Xve Au Xixe siècle, edited by Ludolf Pelizaeus, Éditions et Presses universitaires de Reims, 2021, https://doi.org/10.4000/books.epure.2774.
21 Ibid.
22 https://fr.wikipedia.org/wiki/Droit_d%27%C3%A9tape
23 Michael Limberger, op.cit.
24 Fernand Braudel, Civilisation matérielle, économie et capitalisme XVe-XVIIIe siècle. Volume 3 : Le temps du monde, Armand Colin, 1979, p. 186.
25 Ibid., p. 176.
26 Ibid.
27 Ibid., p. 189.
28 Ibid., p. 190.
29 Ibid., p. 191.
30 Since Charles V’s 1541 ordinance, bills of exchange were required to be paid two-thirds in gold.
31 Ibid., p. 192.
32 Marjorie Grice-Hutchinson, The School of Salamanca, Clarendon Press, 1952, p. 94 sq.
33 Ibid., p. 52.
34 Gérard Sivéry, « La notion économique de l’usure selon saint Thomas d’Aquin », Revue du Nord, 2004/3 n° 356 – 357, 2004. p.697-708. CAIRN.INFO, shs.cairn.info/revue-du-nord-2004-3-page-697?lang=fr.
35 Gérard Sivéry, op. cit.
36 Giuseppe Franco and Peter Nickl, “A Certain Seminal Character of Profit which We Commonly Call “Capital”: Peter of John Olivi and the Tractatus de contractibus”, Journal for Markets and Ethics/Zeitschrift für Marktwirtschaft und Ethik, 6(1), 2018. URL : https://austrian-institute.org/wp-content/uploads/2021/02/Franco-Nickl-A-Certain-Seminal-Character-of-Profit-Petrus-Olivi.pdf
37 https://www.universalis.fr/encyclopedie/traite-des-monnaies/
38 Marjorie Grice-Hutchinson, op. cit., p. 50.
39 Raúl González Fabre, « La teoría del precio justo según Francisco de Vitoria », Estudios Eclesiásticos 72 (1997): 635-41, 647, 651-52.
40 Tomás de Mercado, Suma de tratos y contratos (Séville, 1571), Libro II, cap. VI (« De la autoridad que tiene la república en tasar los precios, y cuál de ellos es justo ») et cap. VIII (« Cuál es el justo precio donde no hay tasa, y de los monipodios y ventas ilícitas »), online ed., Biblioteca Virtual Miguel de Cervantes.
41 Rudolf Schüssler, “The Economic Thought of Luis de Molina” in A. Aichele and M. Kaufmann (eds.) A Companion to Luis de Molina, Brill 2014, 257-288.
42 https://es.wikipedia.org/wiki/Arbitrismo
43 Anne Dubet, « L’arbitrisme : un concept d’historien ? », Les Cahiers du Centre de Recherches Historiques [En ligne], 24 | 2000, mis en ligne le 17 janvier 2009, consulted 28 septembre 2025. URL : http://journals.openedition.org/ccrh/2062 ; DOI : https://doi.org/10.4000/ccrh.2062
44 JJoseph Schumpeter, in his History of Economic Analysis (Routledge, 1954), distinguishes, for example, two types of economic literature from the sixteenth to the eighteenth centuries: that of advisers and that of pamphleteers.
45 Ibid.
46 Grice-Hutchinson, Marjorie. Early Economic Thought in Spain, 1177–1740. London: Allen & Unwin, 1978 (rééd. Liberty Fund, 2015), https://oll.libertyfund.org/titles/early-economic-thought-in-spain-1177-1740.
47 Luis Ortiz in Ibid.
48 Ibid.
49 Sancho de Moncada, Restauración política de España, Biblioteca Virtual Miguel de Cervantes, 1999 (1619), Disc. VI : « El servicio de millones es muy dañoso a España… [hace] quitar de la boca al pobre jornalero el trago de vino…»
50 Ibid., Disc IV : « los huesos y nervios de España… fundan el serlo en tener juros ». Moncada souligne ici le rôle envahissant des juros.
51 Ibid., Disc. VI . Moncada explicitly links prosperity to working wool and flax (labrar lana y lino) and to household production. He argues in favour of manufactures.
52 Ibid, Disc. IV : Moncada laments that foreigners have ‘introduced very costly fashions’ (introducido muy costosos trajes), i.e. imported luxury fashions that impoverish the realm.
53 Shai Cohen, “Entre sátira y política, la figura del arbitrista en el siglo XVII”, Pictavia Aurea, edited by Alain Bègue and Emma Herrán Alonso, Presses universitaires du Midi, 2013, https://doi.org/10.4000/books.pumi.3297 : « The arbitrista […] Manuel López Pereira influenced Olivares in 1624 by creating a new regime with the Junta de Comercio, and by setting up companies called ‘Admiralties’. These were international trading companies. However, Olivares’s efforts to revive Spanish commerce failed in 1630. » (je traduis)
54 Ibid., Disc IV : Moncada describes a situation of near-monopoly by foreign sellers: in the absence of local production, they venden solos (‘sell alone’) and set prices, which drains away rents and the domestic market.
55 Ibid., Disc III : An explicit programme to retain silver: ‘este discurso… retiene la plata en España’; Moncada points to outflows via intereses de cambios (profits on exchange operations) and réditos y corridos de asientos (interest and accrued charges on asientos) to the benefit of foreigners: ‘sacan… de intereses de cambios, de réditos y corridos de asientos…’; and he recalls the traditional ban on exporting coin and silver from Spain (sacar moneda y plata de España).
56 Three attempts:
1) Juntas de reformación: ad hoc royal commissions (late sixteenth–seventeenth centuries) tasked with proposing measures to reform morals and the economy — limiting luxury, policing markets and provisioning, combating idleness and begging, and revising regulations.
2) Fiscal lurches: one-off tax increases (notably the alcabala and the millones), conversions/augmentations of juros, and bringing revenues forward.
3) Manipulations of small copper coin (vellón, as opposed to silver coin): massive issues, raising the legal valuation, alloy alterations/debasements, and re-tariffings intended to finance the Treasury — at the cost of inflation and the disorganisation of payments.
Source : José Martínez Millán & José Eloy Hortal (dirs.), La Corte de Felipe IV (1621-1665): Reconfiguración de la Monarquía católica, Tomo I, vol. II, Madrid, 2015.
57 J.H. Elliott, op. cit.
58 Fernand Braudel, op. cit., p. 239.
59 Ibid.
60 Thierry Allain, Andreas Nijenhuis-Bescher, Romain Thomas, Les Provinces-Unies à l’époque moderne : de la révolte à la république batave, Armand Colin, 2010, chapitre 5, 1.1.1.
61 Fernand Braudel, op. cit.
62 Thierry Allain, Andreas Nijenhuis-Bescher, Romain Thomas, op. cit.
63 Sea Beggars (Watergeuzen): the name given to privateers and rebel fighters — mostly Calvinist — who operated at sea in the service of the Orangist cause during the Eighty Years’ War; their privateering targeted Spanish ships and positions.”
Source : https://www.britannica.com/topic/Geuzen
64 https://fr.wikipedia.org/wiki/Union_ib%C3%A9rique
65 Cornelis de Houtman’s expedition to Bantam.
66 Fernand Braudel, op. cit.
67 Matthias Von Rossum et Samantha Sint Nicolaas, « Les esclaves de la Compagnie néerlandaise des Indes orientales » in Paulin Ismard (ed.), Les Mondes de l’esclavage, Seuil, 2021.
68 Richard Tuck, Natural rights theories. Their origin and development, Cambridge University Press, 1979 (1949), p. 62. R. Tuck emphasises that Grotius’s originality lies in the gradual transition from the state of nature to the civil state, which gives private property a ‘natural’ character, the law ‘imitating’ nature. ; Ellen Meiksins Wood, Liberty and Property: A Social History of Western Political Thought from Renaissance to Enlightenment, Verso, 2012, p. 119 sq.
69 This twelfth chapter is the only one of this work to be published during Grotius’s lifetime, under the title Mare Liberum (1609).
70 Hugo Grotius, Commentary on the Law of Prize and Booty, Liberty Fund, 2006, p. 317. Grotius invokes the law of nations, aligning it with the law of nature.
71 Ibid., p. 318.
72 Ibid., p 363. Grotius also relies heavily on Vitoria to reach this conclusion.
73 Thierry Allain, Andreas Nijenhuis-Bescher, Romain Thomas, op. cit., chapitre 5, 1.3.
74 Jon Frost (BIS), Hyun Song Shin (BIS) and Peter Wierts (DNB), « An early stablecoin? The Bank of Amsterdam and the governance of money », Working Paper No. 696, De Nederlandsche Bank NV, November 2020, https://www.dnb.nl/media/b11ekie2/wp_696.pdf.
75 L. O. Petram, « The world’s first stock exchange: how the Amsterdam market for Dutch East India Company shares became a modern securities market, 1602-1700 » [Thesis, fully internal, Universiteit van Amsterdam], Eigen Beheer, 2011.
76 Fernand Braudel, op. cit., p. 237.
77 Catherine Secretan, “‘True Freedom’ and the Dutch Tradition of Republicanism”, Republics of Letters: A Journal for the Study of Knowledge, Politics, and the Arts, no. 1 (December 15, 2010): http://rofl.stanford.edu/node/81.
78 https://en.wikipedia.org/wiki/First_Stadtholderless_Period