Thursday, November 03, 2011

What Life is Like in a Rentier Society:
The Example of Amsterdam

Following up on the rentier class (cf. link), Geert Mak in his history of Amsterdam offers some fascinating insight into the long trajectory of the Dutch miracle.  We all know how the Dutch were the first great trading nation with one of the first great colonial empires.  But that ended long ago.  What happened after?  After all, the money didn't just go away.  The merchant princes still had it. And once you have a lot of money, you become a bank.  Mak elaborates:
During the economic boom of the seventeenth century the capital sums amassed in the city were such that it became much more lucrative for merchants to lend money than to bear trading risks themselves. Princes and governments, the Emperor of Austria and even the Bank of England borrowed from Amsterdam on a grand scale. By the end of the eighteenth century about 500 million guilders had been invested abroad. When the economy of the country went into recession many of Amsterdam’s leading regents continued to invest abroad, nor was any authority in a position to stop them doing so. The Amsterdam merchant had metamorphosed from an active trader into a passive broker; in short, he became a banker. The nature of trade had shifted, veering towards a culture of living off interest, so that the middle classes began to regard consumption, rather than production, as central to their lives.
--Mak, Geert (2010-09-30). Amsterdam (p. 152). 
Vintage Digital. Kindle Edition. 

But the rich didn't actually do anything with their money, except to try to invent new patterns of quiet enjoyment:
 Those who paid most tax, the wealthiest group of citizens, consisted of 23 shareholders (rentiers), 30 merchants, 30 city administrators, and only three brewers and one manufacturer.20 For all its wealth, however, the shareholding Amsterdam sought a quiet existence. The rich kept themselves occupied with politics, literature, painting, science and music, founded clubs and societies, and spent a great deal of time complying with a complicated set of social obligations: visits, meals, parties, the theatre, walks, journeys. As in every moneyed culture, its members found themselves more or less obliged to do nothing; after all, one had to be able to demonstrate that one could live off one’s interest and yet still be both able and willing to spend a lot. Language, manner, and dress were used in such a way as to differentiate oneself from those who were unlucky enough to have to work for a living. It is therefore not surprising that the literature of the century that followed the advent of this culture is obsessed with acquiring

--Mak, Geert (2010-09-30). Amsterdam (p. 153). 
Vintage Digital. Kindle Edition. 

Mak also shows the other side of the coin: growing misery and desperation among the poor.  For a large swath of Dutch society, Mak argues, the economy offered two choices: prostitution for women, or  if you were a man, go to sea.  Either choice was really a lottery on the death penalty, with predictable results.  Mak offers a telling anecdote about one "survivor" of the life at sea:
 In 1980, the skeleton of a Dutch whaler, probably a harpooner, was found on the island. He had died aged 68, and his body displayed astonishing injuries, including fractures, with which he had survived for many years.  Both his legs had been damaged, the right being stiff, most likely due to a fall from a mast, he had broken ribs on both sides, broken (and more or less mended) shinbones, a wrist which had been fractured and had healed at a strange angle, and several broken bones in his hand. Accident after accident, danger after danger had been survived by this man who had been as tough as a wild animal.

--Mak, Geert (2010-09-30). Amsterdam (pp. 161-162). 
Vintage Digital. Kindle Edition.

Readers are urged not to make too much out of comparisons with the present uproar. 

Meta Note:  The citation form above is what I get when I cut-and-paste from the Kindle app  on my desktop/laptop.  Will it become a new standard?

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