SAN JOSÉ STATE UNIVERSITY
ECONOMICS DEPARTMENT
Thayer Watkins
The Netherlands
Background
The economic circumstances of the Low Countries are disguised by political
boundaries. Economically the crucial aspect of the Low Countries is that
they are at the mouth of the Rhine River. This gives them, particularly
Holland, access to the Rhine River Valley, but they also have access to the
coastal trade of the English Channel, the North Sea and beyond. This strategic
location is evidenced in the fact that the busiest port of Europe is Rotterdam.
In particular, petroleum supplies for western Europe can come by way of
Rotterdam.
The riverine nature of the Netherland is revealed in the names of the major
cities, Rotterdam, the dam on the Rot River; Amsterdam, the dam on the Amster
River.
The Period of Spanish Domination
The Netherlands came to be dominated by Spain because the heir to the
Habsburg realm in the Low Countries, Philipp I ("the Handsome") married the
heiress to the throne of Spain, the daughter of Ferdinand and Isabella. This
made their son Charles (later Charles V of the Holy Roman Empire) the
heir to both Spain and the Low Countries and other Habsburg realms. Charles
was born in Ghent in what is now Belgium.
Charles grew up in the Low Countries and apparently was more comfortable
speaking Dutch than Spanish. The accusation was often made later that he did
not speak Spanish. Charles expanded his territories in the Low Countries, but
when he became King of Spain he shifted his location and field of interest
to Spain. Most disasterously of all he chose Spaniards to rule in the
Netherlands, most notably the infamous Duke of Albi.
For a period of time in the Renaissance the Netherlands was the
wealthiest, most powerful country in the world. But by the time England
was going through the industrial revolution the Netherlands was lagging
behind. In part, this was due to the lack of coal and metal ores.
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