Ultimately, England’s posturing was framed by a keen awareness that it was in a weak position to exploit the astonishing opportunities that had been created by the great changes of the early sixteenth century. Religious dispute and unfortunate timing had turned the country into the sworn enemy of the rising global power that Spain had become, leaving it poorly placed to benefit from the flood of riches coming from the Americas or from the trade flowing into Venice through the Red Sea and the land routes from the east. Criticism of the Spanish was all very well, but it did little to hide the fact that the English were scavengers, grateful for whatever crumbs came their way. England was ‘swarminge at this day with valiant youths’, noted the writer Richard Hakluyt, and thanks to a chronic ‘lack of employment’ was suffering from a woeful economic position. Would it not be wonderful, he asked, to put young men to work to create a navy capable of making ‘this realm . . . lords of all those seas [of the world]’?26 Talk of ruling the waves was ambitious; but there was nothing wrong with dreaming.
The English did not sit still while southern Europe boomed. Expeditions were dispatched in all directions to try to open up trade routes and build new networks of trade, transportation and communication. Few delivered encouraging results. Missions led by Martin Frobisher to explore the North-West Passage in the 1570s returned home without finding a hoped-for route to Asia – which was bad enough; what made them positively embarrassing was that the large quantities of gold brought back from what is now Canada and trumpeted as discoveries to rival those made elsewhere in the Americas turned out to be nothing of the sort. The glittering metal was marcasite, or white iron pyrite – fool’s gold.27
There were other disasters. Attempts to reach China through the Barents Sea ended in tragedy. Sir Hugh Willoughby and his men found their vessel trapped by ice near Murmansk as winter set in. All froze to death, their bodies discovered the following year. According to the Venetian ambassador to London, they were frozen solid ‘in various postures, like statues’, some ‘seated in the act of writing, pen still in hand and spoon in mouth; others opening a locker’.28
Further efforts to establish trade links with Russia in order to access goods from the east were hampered first by the fact that the English arrived at the moment that Ivan IV was at his most terrible, and second by the limitations of Russian commerce in Asia in the sixteenth century. Although this was about to expand dramatically, routes through to the Caspian and beyond were still too insecure for merchants to pass safely; even heavily guarded caravans were liable to be picked off by bandits.29
Merchants were also sent to Persia on several occasions in the 1560s, in a rather desperate bid to establish commercial links there. Usually carrying documents from Queen Elizabeth promising friendship and alliance, the envoys requested privileges from the Shah ‘upon an honest intent, to establish trade of merchandise with your subjects, and with other strangers trafficking in your realms’.30 So anxious were the English to gain concessions that traders were under strict instructions not to talk about religion after being wrongfooted in their responses when challenged about the relative virtues of Islam and Christianity by their devout Muslim hosts. If anyone asks about the state of faith at home in future, travellers were advised, it was better ‘to passe over it in silence, without any declaration of it’.31 In Europe, religious posturing counted for everything as Catholics and Protestants fought ferociously with each other; beyond, it could be conveniently left to one side.
By the start of the seventeenth century, there was little to show for the attempts to emulate the success of the Spanish and the Portuguese. New trading entities had been set up to try to raise money from private funds, starting with the Company of Merchant Adventurers for the Discovery of Regions, Dominions, Islands and Places Unknown, founded in 1551. A cluster of new and separate companies with different geographic ambitions mushroomed around it. The Spanish Company, the Eastland Company, the Levant Company, the Russia Company, the Turkey Company and the East India Company were founded with royal charters that granted monopolies on commerce within a designated region or country on the basis that business overseas was risky and required substantial investment. As such, incentivising merchants by protecting future success was an innovative way of trying to build up England’s trade – and with it, extending the country’s political tentacles.
Despite their impressive-sounding names, royal endorsements and high hopes, the results were meagre to start with. England remained firmly on the periphery of world affairs, while Spain’s position seemed to grow stronger and stronger. Precious metals gathered over centuries by the Aztecs, the Incas and others were gathered up and dispatched to Spain over the course of a few decades, along with the riches of mines that had either not previously been discovered or had been poorly exploited – such as at Potosí, which was said to produce a million pesos per year for the Spanish crown alone.32
Huge though Spain’s finds were, however, there was only so much treasure that could be squeezed from the New World. Resources were, after all, finite – as were those oyster beds off the coast of Venezuela that were devastated following the fishing of tens of billions of oysters in just thirty years in the early sixteenth century.33 Nevertheless, the Spanish treated the windfall as a bottomless pit, using the new-found wealth to fund a litany of grandiose schemes such as the building of the enormous palace at El Escorial, as well as financing never-ending military action against rivals all over Europe. There was a strong sense within the Spanish court that it was necessary to act as the Almighty’s policeman, delivering his will on earth – by force if necessary. Spain found it all but impossible to resist military confrontation with Protestants and Muslims alike. It was a new chapter for holy war.
As the earlier Crusades had shown, holy warfare’s appetite for men and money could be ruinously expensive for royal treasuries. The situation was not helped by the willingness of the Spanish crown to use debt to finance its projects, which encouraged short-term and ambitious decisions while hiding consequences that would only become clear later – especially when things went wrong. Fiscal mismanagement and incompetence were part of the picture; but ultimately Spain’s inability to control military spending proved catastrophic. Incredibly, it became a serial defaulter on its debts in the second half of the sixteenth century, failing to meet its obligations no fewer than four times.34 It was like a lottery winner that had gone from rags to riches – only to squander the prize money on luxuries that were unaffordable.
The effects of the flood of riches were felt elsewhere. As it was, there had been a price revolution across Europe as inflation took hold thanks to the money flow from the Americas, which naturally led to more and more consumers chasing a finite quantity of goods. Growing urbanisation exacerbated the problem, driving prices higher still. In Spain, the price of grain alone quintupled in the century after Columbus’ discoveries.35
Things eventually snapped in the provinces and towns of the Low Countries, which formed part of the Spanish demesne, where anger was fanned by the way that Spain sought to solve its financial woes through heavy taxation. Northern Europe was a hive of productive urban centres, with Antwerp, Bruges, Ghent and Amsterdam emerging in the fourteenth and fifteenth centuries as important emporia for goods to and from the Mediterranean, Scandinavia, the Baltics and Russia, as well as the British Isles. Naturally, they blossomed further still following the opening up of trade from India and the Americas.36
These cities became magnets for merchants from far and wide, which in turn made for vibrant social and economic life and for strong civic identities. The growing populations required surrounding land to be used efficiently, prompting rapid advances not only in yield management of crops in the surrounding territory but also in irrigation techniques, such as the construction of dykes and sea walls to allow every piece of available land to be used profitably. The burgeoning size and productivity of the cities of the Low Countries and their hinterlands made them lucrative honey pots – centres which generated tax reven
ues, something not lost on the Spanish rulers who by luck of dynastic marriage and inheritance controlled most of this region.37
It was not long before individual provinces and cities were howling in dismay at the introduction of punitively high levels of taxation, coupled with brutally heavy-handed attitudes on matters of faith. The ideas of Martin Luther, John Calvin and others who emphasised the institutional corruption of distant political rulers and the spiritual importance of the individual fell on fertile ground in these heavily urbanised areas and helped Protestantism embed deep roots in the region. Economic and religious persecution proved a powerful cocktail for fomenting revolt and eventually led to the Union of Utrecht of 1581 – a declaration of independence by what became the Union of Seven Provinces, effectively the Dutch Republic. The Spanish responded with a show of force, together with an embargo on trade across the Low Countries that began in 1585. The aim was to starve the rebel provinces and cities of oxygen and force them into submission. As is so often the case when sanctions are put in place, the result was the opposite: faced with little alternative, the separatists went on the offensive. The only way to survive was to use every ounce of knowledge, skill and expertise they had to their advantage; it was time to turn the tables.38
In the last years of the sixteenth century, circumstances came together to provide the context for a miracle in the Low Countries. Spain’s attempt to suppress the region caused large-scale emigration, as the population migrated north from the southern provinces, causing cities like Ghent, Bruges and Antwerp to suffer what one scholar has called ‘a catastrophic haemorrhage of inhabitants’. The timing was fortuitous. The trade ban ensured that there were huge stockpiles of grain and herring, which meant that food supplies were both plentiful and cheap. Although rents rose quickly, the swelling of the population also produced a boom in house construction, and brought together an effective group of experienced merchants and other professionals who were trying to escape the pressure exerted by the Spanish.39
When the blockade was finally lifted in 1590, the Dutch moved quickly to clear out Spanish troops who had been sent to maintain order, taking advantage of the fact that Philip II of Spain had become embroiled in military conflict elsewhere in Europe. Suddenly free from military pressure and with a window of opportunity presenting itself, the Dutch threw themselves into international trade, seeking to build connections with the Americas, Africa and Asia.
There was a clear commercial logic to the plan of establishing their own trade routes. Bringing goods direct to the Dutch Republic would avoid two rounds of taxation: first, goods would arrive without having had duties creamed off in ports in Portugal and Spain where cargoes were typically taxed before being sent north. Second, the fact that the Dutch authorities would now collect the revenues themselves, rather than pass them back to the Iberian masters, meant that the money produced from the thriving commerce in the Low Countries would not leech out to fund imperial ambitions and reckless spending elsewhere. This would bring immediate benefits and create a virtuous circle as greater profits could be reinvested, generating even stronger cash flows – both for individual merchants and for the fledgling republic.40
The ambitious programme paid dividends from the outset. An expedition that set out for the east in 1597 returned home the following year in triumph, carrying cargoes that produced profits of 400 per cent. Fleets now began to fan out in all directions, funded by investors emboldened by such strong returns on their capital.41 In 1601 alone, fourteen separate expeditions set sail for Asia, while as many as a hundred vessels a year were soon crossing the Atlantic to acquire salt from the Araya peninsula, which was vital for the domestic herring trade.42
The Spanish were outraged; they renewed their military action and imposed another blockade. According to the brilliant philosopher and lawyer Hugo Grotius, this simply reinforced the point that the Dutch had to take their destiny into their own hands. Rather than step back in the face of threats and pressure, the only choice was to invest yet more in commercial ventures and build a trade network as quickly as possible to help build up firepower and reinforce independence. It was a question of all or nothing.43
Key to Dutch success was superb shipbuilding, and above all innovations in the classic designs that had long enabled herring fleets to operate successfully in the North Sea and in shallow harbours thanks to their low draughts. From the 1550s, as the English built quicker and stronger warships, the Dutch focused their efforts on developing vessels that handled even better, could carry more cargo, required fewer crew to operate – and were therefore cheaper to run. These ships, called fluyts, set a new benchmark for commercial shipping.44
The Dutch did their homework and were well prepared when they set sail. While their European predecessors who had crossed the Atlantic and rounded the Cape of Good Hope were journeying into the unknown, the Dutch were not. They knew what they were looking for and where to find it. Authors like Jan Huyghen van Linschoten, secretary to the archbishop of Goa, who spent his time thoroughly researching trade routes, harbours, markets and local conditions across Asia, produced texts such as the Itinerario, which provided comprehensive blueprints that served almost as instruction manuals for those setting out for the east.45
Other works were also useful in preparing traders for their travels. The Dutch were world leaders when it came to cartography. Maps and sea charts prepared by the engraver Lucas Janszoon Waghenaer in the 1580s were considered indispensable throughout Europe thanks to their detail and accuracy. Attention was paid to collecting precise information and producing updated, detailed atlases of the East Indies as well as of the Caribbean; these set the standard for modern navigational aids in the early seventeenth century.46
Then there were texts that helped explain the vocabulary and grammar of the strange languages that Dutch traders could expect to encounter on their travels. One of the earliest of these new linguists was Fredrik de Houtman, whose Dutch–Malay dictionary and grammar was published in 1603 following his release from prison in Aceh by the Sultan of Sumatra, where he had diligently learnt the language of his captors.47 Such vocabulary lists were avidly studied by merchants heading to Asia in the sixteenth century; they set out useful words and phrases translated from Dutch into Malayalam, Malay, Bisayan, Tagalog, Tamil and other languages.48
The underlying secret to Dutch success in the seventeenth century was common sense and hard work. The Dutch reckoned that the way to work was not to follow the example of England, where the chartered companies used sharp practices to limit beneficiaries to a small circle of intimates, all looking after each other’s interests and using monopoly positions to protect their positions. Instead, capital was pooled and risks shared among as wide a body of investors as possible. In due course, the conclusion was reached that despite competing ambitions and rivalries between provinces, cities and indeed individual merchants, the most efficient and powerful way to build up trade was by combining resources.49
In 1602, therefore, the government of the United Provinces created a single entity to conduct trade with Asia on the principle that this would be stronger and more powerful than the sum of its parts. It was a bold move, not least since it involved soothing local rivalries and convincing all involved that interests would not only be aligned but be better served this way. The creation of the Verenigde Oost-Indische Compagnie (VOC) – the East Indies Company – and not long afterwards the sister corporation for the Americas, the West-Indische Compagnie (WIC) – the West Indies Company – was a textbook example of how to set up a world-class multinational corporation.50
The Dutch model proved astonishingly successful. Although some, like the merchant and founder of the WIC, Willem Usselincx, argued that the best idea was to colonise parts of the Americas that were yet to be settled, a clear plan took shape.51 The aim was not to try to compete with other European merchants such as in Goa where Portuguese, Venetian and German traders lived side by side; it was to displace them.52
The aggressive approach paid off
immediately. Attention turned first to the Spice Islands, where the isolated Portuguese community was expelled in 1605 as part of a systematic programme to establish control over the East Indies. Over the following decades, the Dutch kept consolidating their position, establishing a permanent headquarters in Batavia – the name a nod to the appellation given to the inhabitants of the Low Countries during the time of the Roman Empire – in what is now Jakarta.
Military force was used to take and secure a chain of points linking back to the motherland. Although the Dutch were frustrated in a few locations, such as Macau and Goa, the gains that were made in the seventeenth century were impressive indeed. Soon, it was not just the Europeans abroad who were beleaguered by the Dutch, but local rulers too whose realms were strategically sensitive or economically important. Control was established over Malacca, Colombo, Ceylon and Cochin, before the sultanate of Macassar (in modern Indonesia) was targeted in 1669. Macassar was the missing piece necessary in establishing a monopoly over the spice trade with Asia. Renamed New Rotterdam, its capture was followed by the construction of a major fort, as had been the case elsewhere – a statement of intent that such gains were not going to be surrendered lightly.53 A map held in the state archives in The Hague depicts the veritable spider’s web that was spun as the Dutch built up their position in the East Indies.54
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