Debates on Industrialisation and Economic Growth in the Netherlands

Abstract

With the renewed interest in macro-economic quantification since the 1950s the study of long-term economic growth and development became also an important theme within the discipline of economic history. It developed into a major tool to analyse the process of industrialisation and to identify the forces which explain long-term growth and stagnation of the rich and poor parts of the world. This chapter examines the new branch of macro-economic history as it developed in the Netherlands after 1945. This new approach initially focused on the problem of the slow industrialization during the nineteenth century, but gradually branched out to include the early modern period and the twentieth century. Studies in this field were characterized by a strong quantitative orientation, and resulted in systematic overview of the growth of the Dutch economy from the Late Middle Ages to the present.

Full text

VOL. 11, N O. 2, 2014 8 5
Debates on Industrialisation and Economic Growth in
the Netherlands
Herman de Jong and Jan Luiten van Zanden
Abstract
With the renewed interest in macro-economic quanti cation since the 1950s
the study of long-term economic growth and development became also an
important theme within the discipline of economic history. It developed into a
major tool to analyse the process of industrialis ation and to identify the forces
which explain long-term grow th and stagnation of the rich and poor parts of
the world. This chapter examines the new b ranch of macro-economic history
as it developed in the Netherlands after 1945. This new approach initially
focused on the problem of the slow industrialization during the nineteenth
century, but gradually branched out to include the early modern period and
the twentieth century. Studies in this  eld were characterized by a strong
quantitative orientation, and resulted in systematic overview of the growth
of the Dutch economy from the Late Middle Ages to the present.
Keywords: long-term growth, t he Netherlands, economic str ucture, technological
change, industrialisation, institutions
I n t r o d u c t i o n
During the second half of the twentieth century economic growth was
arguably the dominant theme in economic historical literature. New
developments in economics – the Keynesian revolution resulting in the
emergence of macro-economics and g rowth theory, and the new per spective
on development issues inspired by Colin Clark and Simon Kuznet s – contr ib-
uted to a focus on the phenomenon of economic g rowth and development.
This was intensi ed by the rise of the ‘New Economic Histor y’ in the 1960s,
with its combination of quantication, hypothesis testing and the explicit
TSEG2014.2-boek.indd 85TSEG2014.2-boek.indd 85 05-06-14 15:4505-06-14 15:45

86
TIJDSCHRIF T VOOR SOCIALE EN ECON OMISCH E GESCHIEDENIS
VOL. 11, N O. 2, 2014
use of economic theory.
1 The present contribution surveys the new branch
of macro-economic history as it developed in the Netherlands after 1945.
This new attention to macro-economics and growt h initially t ranslated
into a major debate about the supposedly late and slow industrialisation
process in the Netherlands during the nineteenth century. Between the
1950s and 1990s, this was the focus of a large part of research into the eco-
nomic histor y of the Netherlands. In the 1950s, the idea emerged that there
was something peculiar about the economic performance of the country
during this period: whereas its neighbours industrialised rapidly – the UK
as the pioneer of the First Industrial Revolution, soon followed by Belgium
and Germany – the Netherlands was slow to accept the new technologies
and the related factory system. At the same time, growth was somewhat
slow. Whereas in the eighteenth century the Netherlands was possibly the
wealthiest country in Europe, by the late nineteenth century it had been
overtaken by several other European countries. These facts were probably
already known to the ‘rst generation’ of economic historians of the rst
half of the twentieth century (such as Posthumus, Van Dillen, and Sneller),
but interest in the issues of macro-economic performance and the related
structura l changes induced by industrialisation only took of i n the post-war
period. Why did the Netherlands, despite its relative favourable starting
conditions (strategic geographic location and high level of commercial
development) not industrial ise much faster during t he nineteenth centur y?
The debate on industrialisation in the nineteenth centur y identi ed causes
for the speci c development of the Dutch economy in this period, which
were often part of the legacy of the pre-1800 period. High wages, high
(indirect) taxes, a very productive agricultural sector, a strong tradition
of commercial services, an abundant supply of capital, the links with the
colonies (especia lly Java) and a fragmented state (before 1798) – these were
all products of the trajectory of Dutch society in the late medieval and Early
Modern Period.
This chapter discusses how the debate became linked with research on
the pre-1800 period, and how a new interpretation of the Dutch economic
miracle of the seventeenth centur y helped to bring the debate on the nine-
teenth centur y to a conclusion. Last, we deal with the discussions about the
results of industrialisation since the last quarter of the nineteenth century.
Because the industrialisation debate has already been covered in detail
1 J.W. Drukker, The Revolution that bit its own tail. How economic history changed our ideas
on economic growth (A msterda m 2006).
TSEG2014.2-boek.indd 86TSEG2014.2-boek.indd 86 05-06-14 15:4505-06-14 15:45

8 7
DEBATES ON I NDUSTRIALISATION AND ECON OMIC GR OWTH
DE JO NG & VAN ZA NDEN
in another article,
2 we pay more attention to recent developments in the
interpretation of growth in the twentieth century.
New approaches to the analysis and explanation of pre-
modern growth in Holland
The  rst generation of professional economic historians – Posthumus, Van
Dillen and others – focused on the late medieval and the Early Modern
Period. Although they published a number of impressive quantitative
studies on various aspects of the Dutch economic history (Posthumus’s
masterpiece about the Leiden textile industry immediately springs to
mind), they lacked the macro concepts of national income and economic
growth.
3 What came closest to such concepts, was a discussion about the
turning points in pre-1800 growth, in particular the question of when the
Golden Age had ended and the stagnation of the eighteenth century had
set in. Questions about the standard of living were focused on the study of
prices and wages – in particular real wages – to which Posthumus devoted
a considerable part of his energy.
4
In the second half of the t wentiet h centu ry, the original focus of research
on the Dutch Golden Age and its eighteenth century successor disappeared,
and research turned to the nineteenth and twentieth centuries. One of the
few studies that tried to apply the new macro-approach to the pre-1800
period was the work by Johan de Vries on economic trends during the
eighteenth century, which aimed to nd out – on the basis of available
quantitative data – if and when decline had set in.
5 The most important
new development during these years, the regional approach developed by
Slicher van Bath, however, did not use the new theories of economic grow th.
6
The modern character of the Dutch economy
A new phase in historical research began in the second half of the 1970s,
and innovation came from abroad. The book by Jan de Vries The D utch Rural
2 See J.L . van Zanden, ‘ Dutch economic h istory of t he period 1500 -1940: a revie w of the present
state of afairs’, Eco nomic and Socia l History in th e Netherlands I (1989) 9-30.
3 N.W. Post humus, De geschiedenis van de Leidsche lakenindust rie (’s Gravenhage 193 6-1939).
4 Ibidem, Nederlandsche prijsgeschiedenis (2 Volumes, Leiden 1943 , 1964).
5 J. de Vr ie s, De economische achteruitgang der Republiek in de achttiende eeuw (L eiden 1968).
6 B.H. Slicher van Bat h, Een s amenlevin g onder spanning (Assen 1957).
TSEG2014.2-boek.indd 87TSEG2014.2-boek.indd 87 05-06-14 15:4505-06-14 15:45

88
TIJDSCHRIF T VOOR SOCIALE EN ECON OMISCH E GESCHIEDENIS
VOL. 11, N O. 2, 2014
Economy in the G olden Age (1974), led the way for a new assessment of grow th
and development in the Early Modern Period. He analysed the changes in
the agricultural sector of the coastal provinces between 1500 and 1700 as
the result of a systematic process of specialisation, which raised the level
of ag ric ult ural prod uct ivi ty b ut als o made p oss ible th e pro cess of urb anis a-
tion that occurred.
7 It was the beginning of an impressive series of major
studies on various aspects of economic change in the period between 1500
and 1800, of which De Vries’ study on the network of barges ( trekschuiten )
was perhaps the most innovative, his research on European urbanisation
perhaps the most impressive, and his ideas of an early modern ‘industrious
revolution’ preceding the industrial revolution of the eighteenth century
arguably the most inuential.
8 De Vries worked together intensively with
representatives of the Wageningen School, in particular Ad va n der Woude,
but in his work combined an interest in historical demography and secu-
lar trends in the economy (typical of the Wageningen approach) with a
theory-inspired focus on the processes of specialisation and productivity
growth that was untypical of the Wageningen paradig m. This collaboration
resulted in the seminal book by De Vries and Van der Woude, The First
Modern Economy. Success and Perse verance of the Dutch economy 1500-1815 ,
published in 1997, which ofered a synthesis of the work done by the 1970s’
generation of economic historians.
9 The bold thesis of the book was that
the economy of the Netherlands went through a  rst cycle of ‘modern
economic growth’ – characterised by specialisation, capital formation and
technological change – which brought real incomes to a level much higher
than the ‘subsistence’ of the ‘normal’ pre-industrial economy. This was
the result of a relatively modern institutional framework. The economy
was characterised by market exchange, the protection of property rights
and a usually benevolent government. In addition, the growth cycle ended
at some point during the second half of the seventeenth century due to
‘modern’ causes such as intensi ed international competition, and not due
to Malthusian events such as famines or plagues. In sum, the Netherlands
had been the  rst modern economy generating the  rst modern economic
growth.
7 J. de Vr ie s, The Dutc h Rural Econom y in the Golde n Age, 1500-1700 (New Hav en/L ond on 1 974).
8 Idem, Barges and capitalism: passenger transportation in the Dutch economy, 1632-1839
(Ut re cht 198 1); J . de V rie s, European urbanization, 1500-1800 (London 1984); Idem, The industriou s
revol ution: consu mer demand a nd the house hold economy, 16 50 to the present (C amb rid ge 20 08) .
9 J. de Vr ies and A.M. v an der Woude, The  rst mod ern econom y. Success, fa ilure, an d persever -
ance of the D utch economy f rom 1500 to 1815 (Ca mbr idge 19 97).
TSEG2014.2-boek.indd 88TSEG2014.2-boek.indd 88 05-06-14 15:4505-06-14 15:45

8 9
DEBATES ON I NDUSTRIALISATION AND ECON OMIC GR OWTH
DE JO NG & VAN ZA NDEN
The synthesis by De Vries and Van der Woude was based on a great
number of case studies of regions (often carried out by the Wageningse
School) and industries. Richard Unger, for example, published important
books on shipbuilding and beer brewing; international trade continued to
receive a great deal of attention, as did inter national banking and the capital
market.
10 Only rarely did this literature deal systematically with issues of
growth and the increase in productivity. Lucassen and Unger developed a
method to measure productivity growth in international shipping, which
demonstrated the advanced nature of the Dutch shipping sector in the
seventeenth cent ury.
11 A n alternative approach, using data on freight rates,
was applied by Van Zanden and Van Tielhof and pointed to considerable
productivity advances during the  rst half of that centur y.
12 Only the agri-
cultural sector was studied in a similar way (by amongst others Slicher van
Bath and D e Vries) t o detec t advance s in produc tiv ity.
13 At the same time, a
minor debate raged about the role of energy – and in particular of peat – in
the explanation for the Golden Age.
14 Moreover, inspired by literature on
state formation, important new work was done concerning government
nances and the institutional development of the Dutch Republic.
15 What
10 R.W. Unger, Dutch shipbuilding before 1800: ships and guilds (Amsterdam 1978); Idem, A
histor y of brewin g in Holland , 900-1900 . Economy, techn ology and the s tate (Leiden 2001); M. van
Tielhof, The ‘Moth er of all trad es’. The Baltic gra in trade in A msterdam f rom the late si xteenth to
the earl y ninetee nth centu ry (Leiden 2002); J. Israel, Dutch primacy in world trade, 1585-1740 (O xford
1989); C. Les ger, Hande l in Amsterda m ten tijde van de O pstand: koop lieden, com merciële ex pan-
sie en verandering in de ruimtelijke economie van de Nederlanden ca. 1550-ca.1630 (Hilversum
200 6); J.C. Ri ley, Inter national gov ernment  nance and th e Amsterdam ca pital market , 1740-1 815
(Cambridge 198 0); J.Th. Li ndblad, Swed en’s trade with th e Dutch Republi c, 1738-1795 (A sse n 1982).
11 J. Lucas sen and R .W. Ung er, ‘Shippi ng, Productiv ity and Economic Gr owth’, i n: R.W. Unger
(ed .), Shippin g and Economic Gro wth 1350-1800 (Leiden en Boston 2011) 3-44.
12 J.L. van Zanden and M. van Tielhof, ‘Roots of Growth and Productivity Change in Dutch
Shipping Industry, 1500-1800’, Explorations in Economic Histor y 46 (2009) 389-403; J.R. Bruijn,
‘Produc tivity, pro tabilit y and costs of private and cor porate Dutch ship ow ning in the seven-
teenth a nd eighteenth c enturies’, in : James Tracy (ed.) T he r is e of m er cha nt emp ir es. Lo ng- di st an ce
trad e in the early modern world, 1350-1750 (Cambridge 199 0) 174-194.
13 See the chapter by Piet van Cruyningen in this volume.
14 J.W. de Zeeuw, ‘Peat and the Dutch Golden Age: The Historical Mean ing of Energy Attain-
ability’, AAG Bijdragen 21 (1978) 1-31; R.W. Unger , ‘Energy Sources for the Dutch Golden Age:
Peat , Wind, and Coal’, Research in Economic History 9 ( 1984 ) 221-253; M.A.W. Gerding, Vier
eeuwen turfwinning: De verveningen in Groningen, Friesland, Drenthe en Overijssel tussen 1550
en 1950 (Wageningen 1995); J.L. van Zanden, ‘ Werd de Gouden Eeuw uit turf geboren?: over
het energieverbruik in de Republiek in de zeventiende en achttiende eeuw’, Tijdschrift voor
Geschiedenis 110 (4) (1997) 484-499.
15 M.C. ’t Ha rt, Th e making of a bou rgeois stat e: war, politics an d nanc e during the D utch revolt
(Manchester 1993); W. Fritschy, ‘A ‘Financial Revolution’ revisited: public nance in Holland
during the Dutch Revolt, 1568-1648’, The Econom ic Histor y Review 56 (2003) 57-89.
TSEG2014.2-boek.indd 89TSEG2014.2-boek.indd 89 05-06-14 15:4505-06-14 15:45

90
TIJDSCHRIF T VOOR SOCIALE EN ECON OMISCH E GESCHIEDENIS
VOL. 11, N O. 2, 2014
was also added by De Vries and Van der Woude, was an in-depth knowledge
of the labour market and wage and price developments, built up since
the publication of Posthumus’ history of prices.
16 Two parts of the new
synthesis remained subject to discussion, however. The  rst debate related
to the quantitative basis of the new interpretation: how much did the Dutch
economy grow and what were the precise turning points? The second debate
was about the medieval origins of the ‘First Modern Economy’ – when
did the ‘modern institutional framework’ that was characteristic of the
early 16th century, emerge? And why? And how much growth had already
occurred before 1500?
Quantifying growth factors in the economy of Holland
Research on the quantication of the growth pattern of the Dutch economy
in the Early Modern Period began with the already mentioned dissertation
by Johan de Vries from 1959, but was only picked up in the 1980s when a
number of papers were published experimenting with various methods
for assessing growth. In particular, the paper by Riley that suggested that
there was continuous growth during the eighteenth century was contested
by other authors.
17 Van Zanden tried to get a rmer grip on the long-term
grow th record by focusing on the reconstr uction of the national income of
Holland dur ing one benchmark year, 1514, for which very good sources were
available in t he form of an early modern ‘census’, the well-known Informacie
of that year.
18 This formed the starting point for a detailed reconstruction
of the national accounts of Holland between 1347 and 1807 (linking these
estimates to nineteenth century national accounts).
19 It turned out that
before the year 1500, GDP per capita had already increased substantially,
con rming the impression that in the Late Medieval Period the economy of
16 Posthumus, Nederlandsche prijsgeschiedenis; L. Noordegraaf, Hollands welvaren?Levens-
standaard in Holland 1450-1650 (Bergen 1985).
17 J. de Vries, ‘The decline and rise of the Dutch economy 1675-1900’, in: G. Saxonhouse and
G. Wright (eds.), Forms and methods in economic history: essays in honor of William N. Parker ,
(Greenwich 198 4) 149-189; J.C . Riley, ‘The Dut ch Economy after 1 650: Decline or Gr owth?’, Journal
of European Economic Histor y 13 (3) (1984) 521-569; J.L. van Zanden, ‘De economie van Holland
in de periode 1650-1805: groei of achteruitgang?’, Bijdragen en Mededelingen betrefende de
Geschiedenis der Nederlanden 102 (1987) 562-609.
18 J.L. van Zanden, ‘Taking the measure of the early modern economy: historical national
accounts for Holland i n 1510/14’, European Re view of Economic History 6 (2002) 131-163.
19 J.L. v an Zanden and B . van Leeuwen, ‘ Persistent but not Con sistent: The Grow th of Nationa l
Income in Holland 1347-1807’, Explorations in Economic Histor y 49 (2) (2012) 119-130.
TSEG2014.2-boek.indd 90TSEG2014.2-boek.indd 90 05-06-14 15:4505-06-14 15:45

9 1
DEBATES ON I NDUSTRIALISATION AND ECON OMIC GR OWTH
DE JO NG & VAN ZA NDEN
Holland had already ‘taken of’.
20 Moreover, in the 1670s, the turning point
that is generally accepted as having ended the Golden Age, there was not a
decisive break in per capita growth (although there was in terms of popula-
tion growth). Growth continued during the eighteenth century, thanks to
a shift towards more capital-intensive activities, albeit with a stagnating
population. In fact, as demonstrated by Van Leeuwen and Van Zanden,
per capita growth had already begun directly after 1347, and continued
until 1807 at more or less the same pace (0.18 per cent per capita per year).
21
Growth before 1800 was consistent, but slower than af ter 1800 (when about
1 per cent per year became the norm). As predicted by De Vries and Van der
Woud e, mo der n cau ses of gro wth – capit al form ati on, t ech nologi cal cha nge
and specialisation – dominated the growth process.
Growth began (at least in Holland) in the late Middle Ages. Why? De
Vries and Van der Woude speculated that the absence of a feudal past might
explain the remarkable development of institutions and the economy, but
that answer has not convinced everyone. Important work on the late me-
dieval advance of the economy of Holland was done in the 1970s by Jansen
and De Boer amongst ot hers, but this did not resu lt in a new interpretation
of the causes for the rise of the province in this period.
22 In a number of
studies, scholars from Utrecht University have tried to explain the speci c
development of the Late Medieval Period, focusing on the rise of markets for
land, labour (Van Bavel), capital (Zuijderduijn) and goods (Dijk man).
23 What
these markets had in common is that high levels of commercialisation had
already been attained quite early on. This was possibly due to the relatively
balanced power structures of the society, in which feudal elements were
combined with traditions of ‘freedom’ for peasants, strengthened by the
strong position they acquired during the great reclamations of the central
peat area between 900 and 1300.
24 In fact, recently Prak and Van Zanden
turned the argument on its head and argued that feudal socio-political
20 B.J.P. van Bavel and J.L. van Zanden, ‘The jump-start of the Holland economy during the
Late-Medieval Crisis, C.1350-C.1500’, The Economic Histor y Review 57 (2004) 503-532 .
21 Van Zanden and Van Leeuwen, ‘Persistent but not Consistent’, 119-130.
22 H.P.H. Jansen, Hollands Voorsprong . Inaugural lecture Leiden 1976. D.E.H. de Boer, Graaf
en graek:sociale en economische ontwikkelingen in het middeleeuwse ’Noordholland’ tussen
plusm inus 1345 en plus minus 1415 (Leiden 1978).
23 B.J.P. van Bavel, Manors and markets. Economy and society in the Low Countries, 500-1600
(Oxford 2010); C.J. Zuijderduijn, Medieval capital markets. Markets for renten, state formation
and private investment in Holland (1300-1550) (Leiden 2009); J.E.C. Dijkman, Shaping medieval
markets. The organ isation of commodity markets i n Holland, c. 120 0 – c. 1450 (Leiden 2011).
24 Se e the concluding es say: B.J.P. van Bavel e t al., ‘The orga nisation of ma rkets as a key fac tor
in the r ise of Holland f rom the four teenth to the s ixteent h centur y: a test cas e for an inst itutional
approach’, Continuity and Change , 27 (3) (2012) 347-378.
TSEG2014.2-boek.indd 91TSEG2014.2-boek.indd 91 05-06-14 15:4505-06-14 15:45

92
TIJDSCHRIF T VOOR SOCIALE EN ECON OMISCH E GESCHIEDENIS
VOL. 11, N O. 2, 2014
relations were highly  exible, based as they were on negotiations between
(for example) the count of Holla nd and his  efs, and this tradition of power
sharing facilitated the incorporation of communes and ‘free’ farmers into
the political economy.
25
The industrialisation debate
That the performance of the nineteenth century economy was often
quite unsatisfactory was not a new fact ‘discovered’ by post-1945 eco-
nomic historians. In the nineteenth century itself, social commentators
and economists had already written about the failings of government policy
and the slow economic progress (or the lack thereof), and this literature
was used extensively by twentieth century scholars who tried to diagnose
the problem. This debate only really took of in the 1950s, when a more or
less systematic discussion began about the diferent causes of the slow
and tardy industrialisation. Initially, the contrast was made between
‘economic circumstances’ which had retarded industrial revolution (such
as the absence of coal), and ‘psychological factors’, for example the lack
of entrepreneurship, as the main cause. The second issue that dominated
the debate concerned exactly when industrialisation had begun: during
the 1850s and 1860s, a position taken by I.J. Brugmans, or even much later,
in the 1890s, which for some time became the orthodox position thanks
to the impressive book on the topic by J.A. de Jonge.
26 De Jonge was one of
the rst to try systematically to estimate the quantitative development of
key industries. Similar work on measuring GDP growth was carried out
by Teijl, who applied diferent methods to calculate national income and
production between 1850 and 1910, all pointing to a relatively slow process
of economic growth in that period.
27
25 M.R. Prak and J.L. van Zanden, Nederland en het poldermodel. Sociaal-economische ge-
schiedenis van Nederland, 1000-2000 (Amsterda m 2013).
26 J.A . de Jonge, De i ndustrialisatie in Nederl and tussen 18 50 en 1914 (A msterda m 1968).
27 J. Teijl, ‘Nationaal inkomen in Nederland in de per iode 1850-1900’, Economisch- en Sociaal-
Histori sch Jaarboek 34 (1971) 232-262.
TSEG2014.2-boek.indd 92TSEG2014.2-boek.indd 92 05-06-14 15:4505-06-14 15:45

9 3
DEBATES ON I NDUSTRIALISATION AND ECON OMIC GR OWTH
DE JO NG & VAN ZA NDEN
New views on nineteenth-century growth in the Low
Countries
Such was the state of this debate in the early 1970s, when a number of fresh
contributions – inspired by the New Economic History – changed the discu s-
sion fundamentally. Joel Mokyr ’s book on the comparative industrialisation
of the Low Countries was the  rst one to place the Dutch experience in
an international comparative perspective and link it with theories and
model s ex pla in ing th e pac e of i ndu str iali sat ion. He conc lude d th at the hi gh
wage levels in the Northern Netherlands constituted the main obstacle to
the spread of modern industry.
28 A slightly more nuanced interpretation
was developed by Richard Gri ths in his study of Dutch industrialisation
between 1830 and 1850. He pointed at factor costs – prices of inputs such as
coal, and wages – as determin ing the industrialisat ion in the various regions
of the Netherlands, which had quite di ferent sets of relative prices.
29 Dutch
scholars such as Jan de Meere and Roel Bos also contributed to this more
precise analysis of the causes of growth or stagnation.
30 The ‘factor costs’
approach soon also became popular with historians of technology such
as Harry Lintsen, who analysed the cost advantages (or disadvantages) of
moving from handicraft technology to the modern steam-driven produc-
tion processes, resulting in case studies that suggested it was quite often
rational to delay the introduction of steam, given the factor costs faced by
Dutch entrepreneurs.
31 Such studies became the bread and butter of the
large research project on the history of technology carried out by a team
of researchers led by Lintsen.
32
However, why were factor costs in the Netherlands so unfavourable for
the tra nsition to modern industry? It had been suggested that capital market
failures might have played a role. The rise of modern banking also came
late in the nineteenth (or early twentieth) centur y, but more recent studies
of the actual functioning of the capital market (by amongst others Joost
Jonker) showed that this was incorrect: interest rates were quite low, and
entrepreneurs could often use their networks to mobilise su cient funds
28 J. Mokyr, Indu striali zation in the Low C ountries 1795-1850 (New Haven 1976).
29 R.T. Gri ths, Indu strial reta rdation in the Net herlands 1830-1850 (‘s Gravenhage 1979).
30 See for example: J.M.M. de Meere, Economische ontwikkeling en levensstandaard in Ned-
erland gedurende de eerste helft van de negentiende eeuw (‘s Gravenhage 1982); R.W.J.M. Bos,
‘Factorpr ijzen, technolog ie en marktst ructuur: de g roei van de Nederla ndse volkshui shouding
1815-1914’, AAG-Bijdragen 22 (1979) 109-137.
31 H.W. Lint sen, ‘Stoom als s ymbool van de i ndustriël e revolutie’, J aar bo ek vo or d e G esc hie de ni s
van Bedr ijf en Techniek 5 (1988) 337-354 .
32 See the chapter by Karel Davids for a review of this literature.
TSEG2014.2-boek.indd 93TSEG2014.2-boek.indd 93 05-06-14 15:4505-06-14 15:45

94
TIJDSCHRIF T VOOR SOCIALE EN ECON OMISCH E GESCHIEDENIS
VOL. 11, N O. 2, 2014
for their projects.
33 Why then were wages so high in the Netherlands, and
wh y was t he co al m ark et so f rag ment ed t hat pr ices were oft en pr ohibit ive ly
high? Further, was slow industrialisation indeed a problem, or was the
economy simply specialising in other activities, such as agriculture (pro t-
ing from a booming demand for luxury products such as butter and meat
from industrialised England and Germany) and international services (in
which it already had acquired a very strong position during the preceding
centuries)? Gri ths was the  rst to suggest that the speci c development
path may have been optimal, given the circumstances, instead of proof of
failure.
34
These issues were tackled in two ways: First, the rising inuence of
New Institutional Economics deepened the understanding of the market
economy and the determinants of factor prices and brought the state back
into the picture. Second, the systematic application of historical national
accounts to the nineteenth centur y economy created a much more detailed
picture of economic development and its phases of success and failure.
The combination of these two developments resulted in a new synthesis
of nineteenth century economic growth – Van Zanden and Van Riel’s
study on institutions and economic growth 1780-1914 – which brought the
industrialisation debate to a (temporary) close.
35
Reconstructing the national accounts
Between 1988 and 2000, a large project was carried out by researchers
at the Free University of Amsterdam, the University of Groningen and
Utrecht University, to quantify systematically the development of the
Dutch economy between 1800 and 1940, and to interpret the new results
33 See J.P.B. Jonker, ‘Lachspiegel van de vooruitgang. Het historiograsche beeld van de
Nederlandse industrie- nancier ing in de negentiende eeuw ’, NEHA-Bulletin 5 (1) (1991) 5-23.
34 R.T. Griths, Achterlijk, achter of anders?: aspecten van de economische ontwikkeling van
Nederland in de 19de eeuw (A msterda m 1980).
35 J.L . van Zande n and A. van R iel, Ned erland 1780- 1914. Staat , instit uties en econo mische ont wik-
keling (Amsterdam 2000). It was based on a number of monographs and dissertations: R. van
der Voort, O verheidsbeleid en overheidsnanciën in Nederland, 1850-1913 (Amsterdam 1994); M.
Jansen, De industriële ontwikkeling in Nederland 1800 -1850 (Amsterdam 1999); E. Horlings, The
economi c developmen t of the Dutch ser vice sector 180 0-1850. Trade an d transpor t in a premoder n
economy (Amsterdam 1995); J.P. Smits, Economische groei en structurele veranderingen in de
Nederlandse diensten sector 1850-1913 (A ms ter da m 19 95) ; M . Kn ib be, Agriculture in the Netherlands
1851-1950. Production and institutional change (Ams terdam 1993); P. Groote, Kapitaalvorming in
infrastructuur in Nederland 1800-1913 (Groningen 1995); R. Albers, Machinery investment and
economi c growth: the d ynamics of Du tch development, 1800-1913 (Gron inge n 1998) .
TSEG2014.2-boek.indd 94TSEG2014.2-boek.indd 94 05-06-14 15:4505-06-14 15:45

9 5
DEBATES ON I NDUSTRIALISATION AND ECON OMIC GR OWTH
DE JO NG & VAN ZA NDEN
making use of new insights from international literature on growth and
industrialisation. This resulted in a number of PhD theses related to
the diferent sectors of the economy, an integral reconstruction of the
national accounts for this period based on this research, and an attempt
to analyse the growth path that emerged from this new work.
36 The new
studies demonstrated the vitality of the service sector during the greater
part of the nineteenth century and the dynamic role played by agriculture
in the process of economic development.
37 The new results showed that
growth had indeed been relatively slow during the whole century, that it
had already begun by around 1820 (as in neighbouring countries), but that
the period between 1845 and 1865 was characterised by a stagnation of the
industrialisation process. After 1865, industrial growth was nevertheless
quite rapid. A number of causes for the slow performance during the middle
deca des w ere s ugg est ed: gr owth bet ween 182 0 and 184 5 had been some wha t
art icial, due to the Javanese Cultivation System and the related protection
given to certain industries – a system that was liberalised and reformed
during the 1850s and 1860s. Industrial growth was retarded due to the
high cost of coal, which was at least partly caused by indirect taxes on its
consumption, and which led to the fragmentation of the coal market. The
absence – until about 1860 – of e cient railway connections w ith German
and Belgia n coalmines exacerbated t he problem. Similarly, wage costs were
driven up by high indirect taxes on basic necessities such as bread. The
next step was to inquire why the state intervened as it did – why it raised
indirect taxes, and protected certain industries but not others – which led
to a detailed analysis of government policy and the underlying changes in
the political economy. In particular, the reign of Willem I, who took many
initiatives to further economic development, came under scrutiny and the
institutional limitations of his ‘top down’ reforms were analysed in detail.
A related cause of slow industrialisation between 1845 and 1865 was the
boom in agricultura l exports after the liberalisation of international trade,
star ting with the repeal of the Corn Laws in 1842 . Dutch agriculture pro ted
from this change, but it limited incentives for structural transformation –
during these middle decades labour productivity in agriculture was often
higher than in manufacturing industry. The prosperity of agriculture and
of international services due to the link with Indonesia was paradoxically
one of the causes of the slow growth of industry.
36 Th e  n al r ese ar ch r epo rt o f th is proj ec t: J . Sm its , E. Hor lin gs a nd J .L . va n Z and en, Dutch GNP
and its Components. 1800-1913 (Groningen, 2000); for an overview of the publications resulting
from t his project, se e the followi ng website: http://nation alaccounts .niwi. knaw.nl (19-0 9-2013).
37 Horlings, The economic development ; Smits , Economische groei; Knibbe, Agriculture.
TSEG2014.2-boek.indd 95TSEG2014.2-boek.indd 95 05-06-14 15:4505-06-14 15:45

96
TIJDSCHRIF T VOOR SOCIALE EN ECON OMISCH E GESCHIEDENIS
VOL. 11, N O. 2, 2014
Since the publication of the synthesis of the historical accounts project
in 2000, silence has set in on this topic. This may be due to the new results,
which were based on relatively solid quantitative ev idence, but may also be
related to a changing perception of the Dutch economy itself. The idea that
it was slow to modernise and perhaps even ‘failed’ during the nineteenth
century, tted into a self-image of an economy with a large agricultural
sector, lacking the modern industry of the First Industrial Revolution. The
rst historian to put this theme on the agenda, Henriëtte Roland Holst, in
fact tried to explain why Dutch society had remained so ‘traditional’, with
a strong in uence from religion and a weak labour movement.
38 However,
after 1965, when the long industrialisation boom came to an end and the
transition towards a post-industrial society set in, the absence of ‘modern
industr y’ became a much less problematic issue in historical literature. In a
way, with its early focus on services, already characteristic of the eighteenth
and nineteenth century economy, the Netherlands had arguably led the
way. The problem of slow industrial growth therefore evaporated in the
historiography towards the end of the twentieth century.
Economic growth in the twentieth century
Similar to the discussions about pre-twentieth century developments, the
debate on economic growth and industrial performance since 1900 has
greatly bene ted from new theories and from new results of economic
historical research carried out since the second half of the 1980s. There are
many more twentieth century (statistical) data sources available than for
earlier periods, but this also leaves much room for diferent interpretations
of the growth trajectory of the Dutch economy. The reconstruction of pre-
1914 national accounts data by economic historians and the work of the
Central Bureau of Statistics (CBS) covering the twentieth centur y have led to
a consistent set of macro dat a and its components for the Dutch economy for
two hundred years. Dutch GDP growth in the t wentieth centur y was much
higher tha n in the preceding period. Between 1913 and 2000, GDP increased
annually by 3.1 per cent, against a growth rate of 1.9 per cent for the period
1820-1913. Per capita GDP increased by 2.0 and 0.8 per cent respectively.
39
38 H. Rola nd Holst-van der Scha lk, Kapitaal en arbeid in Nederland (A ms ter da m 19 02); a sec ond
part, dealing with the period 1902-1925, was published in 1932 under the same title, together
with a revised part I.
39 R.J. van der Bie and J.P. Smits (eds.), Tweehonderd jaar statistiek in tijdreeksen 1800-1999
(Voorburg/Heerlen/Amsterdam 2001).
TSEG2014.2-boek.indd 96TSEG2014.2-boek.indd 96 05-06-14 15:4505-06-14 15:45

9 7
DEBATES ON I NDUSTRIALISATION AND ECON OMIC GR OWTH
DE JO NG & VAN ZA NDEN
Looking back from the twenty-rst century, it is now possible to interpret
the rst three quarters of the twentieth century in many countries as a
large wave of economic and technological developments resulting from
the Second Industrial Revolution. It is characterised by new production
processes in meta l industries, the rise of chemical industries, electri cation,
motorisation, communications technologies, and the rise of big business
and scale economies. Th is wave can be viewed as a long-term a nd structu ral
phenomenon, overarching the shocks that afected the Dutch economy
during the twentiet h centu ry. There have been at least four major exogenous
shocks that had an impact on economic development, their starting dates
being 1914, 1929, 1940 and 1973. Were these crises and the related policy
reactions turning points in the growth patterns of sectors and industries?
What was the nature of economic growth in the Netherlands and was it
diferent from the experiences in other countries?
Structural factors in twentieth-century growth
The early over views of the Dutch economy during the twentieth centur y by
I.J. Brugmans (1969), Frans Messing (1981) and Johan de Vries (1983) provide
detailed descriptions of the economy and of economic policies.
40 Growth
and cyclical variations were explained by touching upon many possible
factors, but they were not ranked, tested or internationally compared. The
overview of Johan de Vries took the form of a Braudelian three-layered
approach distinguishing between str ucture, cycles and economic policies.
Behind the general characterisation of the Dutch economy as being open
and industrial, he de ned ve structural factors that have shaped Dutch
economic development: geography, demography, technology, ideology
and institutions. Later research would follow up on these ‘fundamentals’
of twentieth century Dutch development. We therefore will start with
some general overviews of the Dutch economy before we move on to more
detailed studies of sub periods and sectors.
Some of the previously mentioned structural factors can be found in t he
rst comprehensive overview of the Dutch economy in the twentieth cen-
40 I.J. Brugmans, Paardenkracht en mensenmacht. Sociaal-economische geschiedenis van
Nederla nd 1795-1940 (’s -Gr ave nh age 196 1); F. M ess in g, De Nederland se Economie 1945-1980. Herstel,
groei, stagnatie (H aa rle m 19 81); J. de Vri es, De Ned erlands e economie tijd ens de 20e ee uw (Bussum
1983).
TSEG2014.2-boek.indd 97TSEG2014.2-boek.indd 97 05-06-14 15:4505-06-14 15:45

98
TIJDSCHRIF T VOOR SOCIALE EN ECON OMISCH E GESCHIEDENIS
VOL. 11, N O. 2, 2014
tur y by Van Zanden and Gri ths, published in 1989.
41 For this, the authors
relied partly on the comparative growth studies of Angus Maddison. This
development economist, who was a professor at the University of Groningen,
devoted his ca reer to the measurement and analysis of long-term economic
growth worldwide. In his publications, the Dutch economy was always
centre-stage because it had once been the leading economy in the world.
42
Van Zanden and Gri ths tried for the  rst time to analyse Dutch growth
performance from an international perspective. Their study highlighted
peculiar Dutch characteristics, such as the extremely fast growth of the
population, which afected the labour market and patterns of capital ac-
cumulation. The Dutch economy was portrayed as an industrial latecomer,
not very specia lised like other sma ller economies, but displaying a versatile,
diversied process of industrialisation. The modernisation of agriculture
and international services, cha racterised by scale economies, gave birth to
a large food processing industr y and a sizable shipbuilding and engineering
sector. Other important aspects of the Dutch economy were its regional
economic diversi cation and its position as a colonial power. These forces
shaped the wave of industrialisation between 1890 and 1965. However, it
eventual ly broke down, giving way to a less broadly based industrial sector,
with fewer manufact uring industries and a relative rise in energy-intensive
process industries. The authors were the  rst to point to the comparatively
high productiv ity level of the Dutch economy (which is not the same as GDP
per capita) throughout the century.
In a follow-up edition, written by Van Zanden as single author, the
concept of the ‘long twentieth century’ was introduced.
43 According to
this view, since about 1870 a broad societal process of changes in economic
and institutional structures shaped Dutch industrial society. Industrialisa-
tion and the rise of labour unions (in the typical segmented structure of
culturally and politically dened pillars) marked a step from liberalism to
neo-corporatism. This constellation eventually reached a peak between
1960 and 1980, but was losing strength by the last quarter of the century.
Indeed, the period was marked by the technologies of the Second Industrial
Revolution and by the rise of large corporations and multinationals. A
41 J.L. van Zanden and R.T. Griths, Econom ische geschi edenis van Nede rland in de 20e ee uw
(Utrecht 1989).
42 A. Maddison, D yn am ic F or ces in Cap it al is t D ev elo pm en t. A lo ng- ru n c om par at iv e vi ew (Oxford
1991). After his death in 2010 Maddison’s work has been continued by the so-called Maddison
Project , see J. Bolt and J.L . van Zanden, ‘ The First Upd ate of the Maddison P roject; Re-Es timatin g
Growth Before 1820’, The Economi c Histor y Review (forthcoming in 2014).
43 J.L. van Zanden, The Econom ic History of t he Netherland s, 1914-1995: A Sma ll Open Econom y
in the ‘Long’ Twentieth Centur y (London 1997).
TSEG2014.2-boek.indd 98TSEG2014.2-boek.indd 98 05-06-14 15:4505-06-14 15:45

9 9
DEBATES ON I NDUSTRIALISATION AND ECON OMIC GR OWTH
DE JO NG & VAN ZA NDEN
second characteristic was the important position of the government in the
labour market, trying to regulate and control wage levels. Third, it was the
period that gave bir th to the welfare state, including a ll kinds of (short-lived)
experiments with economic policies. The  nal characteristic that needs
mentioning here is the political economy of Dutch society. Although one
cannot ma intain that t he Dutch economy is small (see e.g. Fremdling et al .
44 ),
the openness of the economy is substantial, which magni es its response
to international business cycles in times of a liberal market system, while
during periods of co-ordination the efects may have been dampened.
45
Accounting for growth patterns
In 1996, Bart van Ark and Herman de Jong published the rst quantitative
analysis of the long-term growth of the Dutch economy between 1913 and
1994.
46 They applied growth accounting techniques to divide the growth
of real GDP into the contributions of its sub-components: labour, capital
input and eciency. The analysis was based on the latest estimates of
GDP and on new estimates of capital stock and labour input.
47 Their study
revealed that the 1910s and 1920s stand out as a per iod showing a signicant
improvement in economic performance, also in comparison with other
countries. Growth of GDP was on average 4 per cent per year and more than
60 per cent was attributable to eciency gains (total factor productivity,
TFP), indicating rapid adoption of newly available technologies. However,
there were also long periods of stagnation and negative TF P growth, such as
the depression and war years 1929 to 1947. During the post-war golden age,
the growth in GDP and TFP was even higher than in the  rst two decades.
The slowdown of the economy after 1973 revealed not only a disappoint-
ing performance vis-à-vis the golden years, but also when compared with
44 R. Fremdling, H.J. de Jong and J.P. Smits, ‘Die niederländische Wirtschaft während des
zwanzigsten Jahrhunderts’, Jah rbuch für Wir tschaftsgeschichte (20 01) 13-33 .
45 Dankers, Sluy terman and Van Zanden, Variaties in kapitalisme : Ontwikkeling en prestatie
van de Nede rlandse mar kteconomie in de twintigste eeu w (Den Haa g, 2013).
46 B. v an Ark and H.J . de Jong, ‘Accounting for E conomic Growt h in the Netherla nds since 1913’,
Econom ic and Social Hi story in the Netherlands 7 (1996) 199-242 .
47 G. P. den Bak ker, C.A. va n Bochove and Th. A . Huitker, Macro -economische ontwikkel ingen,
1921-1939 en 1969-1985 (’s-Gravenhage 1987); R.J. van der Bie, ‘Een doorlopende groote roes’: De
Economische ontwikkeling van Nederland, 1913-1921 (Amsterdam 1995); P. Groote, R.M. Albers
and H.J. de Jong, ‘A Standardised Time Series of the Stock of Fixed Capital in the Netherlands
1900-1995,’ Groningen, Groningen Growth and Development Centre Research Memorandum 25
(1996).
TSEG2014.2-boek.indd 99TSEG2014.2-boek.indd 99 05-06-14 15:4505-06-14 15:45

100
TIJDSCHRIF T VOOR SOCIALE EN ECON OMISCH E GESCHIEDENIS
VOL. 11, N O. 2, 2014
the rst two decades of the century. The gures in this study point to an
economy that was capita l intensive and relatively e cient in ter ms of labour
productivity (GDP per hours worked), but with modest levels of GDP per
capita. There was a big expansion in the non-active population of working
age. One of the characteristics of the century is that the Dutch economy
failed to catch up with US levels in terms of per capita income, but it did in
terms of labour productivity.
The capital-intensive nature of the Dutch economy was also h ighlighted
in the study of manufactu ring industr y between 1913 and 1965 by De Jong.
48
This study was based on a detailed analysis of ocial production statistics
from the Central Bureau of Statistics, and inspired by the approach devel-
oped by Bart van Ark, Angus Maddison and Rainer Fremdling to measure
the performance of sectors bottom-up and make direct comparisons with
other countries. This method, termed ICOP (International Comparison of
Output and Productivity), has produced many sector comparisons across
countries and can be seen as an addition to country comparisons on the
level of total GDP.
49 De Jong found that the industrial sector was the most
dynamic part of the Dutch economy in terms of growth of output as well
as employment. The growth of the industrial sector was stimulated by the
exogenous shocks of the wars and the globalisation backlash during the  rst
half of the twentieth century, leading to import substitution and domestic
policies favouring the creation of industrial jobs.
50
In the next section, we will take a closer look at the discussions on sub
periods of the twentieth century to see if and how the various exogenous
shocks of the wars and crises have shaped the pattern of Dutch economic
growth.
Was the First World War a turning point in long-term
economic development?
Ronald van der Bie made a rst reconstruction of Dutch GDP during this
war and its after math (1913-1921), improving on earlier crude estimates made
48 H .J. de Jong, C at chi ng U p Twi ce . Th e Na tu re of Du tch Ind us tri al Gro wth du rin g th e 20 th Century
in a Compar ative Perspective (Berl in 2003).
49 Bart van Ark, International Comparisons of Output and Productivity. Manufacturing Pro-
ducti vity Perfor mance of Ten Countries from 1950 to 1990 (Groni ngen 1993).
50 Technology de velopment and its impac t on the twent ieth centur y Dutch economy a nd soci-
ety is t he central topic of t he monumental se ven-volume series e dited by tech nology histor ians
Johan Schot, Harry Lintsen and Arie Rip. See the chapter by Karel Davids for a review of this
literature.
TSEG2014.2-boek.indd 100TSEG2014.2-boek.indd 100 05-06-14 15:4505-06-14 15:45

1 0 1
DEBATES ON I NDUSTRIALISATION AND ECON OMIC GR OWTH
DE JO NG & VAN ZA NDEN
by the Central Bureau of Statistics.
51 He estimated that real GDP declined
during the war by about 15 per cent, but in 1921 the level of GDP was 20 per
cent higher than the level in 1913. Because of the war prices rose rapidly
whereas nominal wages stagnated, generating extremely high prots for
businesses. The country was able to maximise on the trading possibilities
that were still left. Not only did neutrality shield Dutch society from the
direct disasters of warfare, it also brought many new opportunities for the
Dutch economy to modernise quickly. During the rst two decades of the
twentieth century, the industrial base of the country was broadened by
new activities, for example in mining, oil, and basic metals. There was a
growing share of big business in the economy and concentration in retail
banking and industrial banking (Joost Jonker 1996).
52 In his dissertation
on Dutch agriculture, Merijn Knibbe described the rapid modernisation of
Dutch agriculture brought on by a large demand from the (former) hostile
countries that had witnessed stagnation in domestic production.
53 Improve-
ments in agricultural education, research and quality control streng thened
the supply side. Industr ial e ciency increased quickly; one of the examples
is the reduction of the working week in 1919 while nominal weekly wages
remained unaltered. This implicit rise in hourly wage rates had barely
any negative efect on businesses and on international competitiveness
because productivity also had risen, as shown for instance by Lex Heerma
van Voss.
54 A synthesis of recent studies by De Jong displays a picture of an
economy that proted from the specic dynamics of the Great War and
its aftermath. In contrast to many hostile countries, the circumstances of
the war stimulated the modernisation of the economy, through new capital
outlays, t he broadening of the industrial base and the use of new technology,
symbolised by the rapid introduction of electricity and electrical motors
in manufacturing.
55
51 Van der Bie, ‘Een doorlope nde groote roes’.
52 J.P.B. Jonker, Merchants, Bankers and Middlemen (A msterda m 1996).
53 Knibbe, Agriculture .
54 A .F. Heer ma van Voss, Kosten van arbeidstijdverkorting. De achturend ag in de jaren twinti g
(Utrecht 1991); see also H.J. de Jong and R.M. Albers, ‘Industriële groei in Nederland, 1913-1929:
een verkenning ’, NEH A-Jaarboek voor Economi sche, Bedrijfs- en Techniekgeschiedenis 54 (1994)
444-490.
55 H.J. de Jong, ‘Between the devil and the deep blue sea: the Dutch economy during World
War I’, in: S. Bro adberry a nd M. Harri son (eds .), The Econom ics of World War I (C amb rid ge 2 005)
137-168.
TSEG2014.2-boek.indd 101TSEG2014.2-boek.indd 101 05-06-14 15:4505-06-14 15:45

102
TIJDSCHRIF T VOOR SOCIALE EN ECON OMISCH E GESCHIEDENIS
VOL. 11, N O. 2, 2014
Modernisation and stagnation during the interwar period
How did the Dutch economy reap the benets of the new technologies
of the Second Industrial Revolution and did the depression hamper tech-
nological development? A very valuable account of the interwar period is
still the three-volume set De Nederlandse volkshuishouding tussen twee
wereldoorlogen ( The Dutch national economy between the two world wars ),
published in 1952, with detailed contributions on Dutch agriculture,
industry, services and on the total economy.
56 The most discussed period
is arguably the decade of the 1930s, when the Dutch economy faced the
Great Depression and the efects of the globalisation backlash. Keesing’s
an alys is of moneta ry and econo mic pol icies du ring the leader ship o f Pr ime
Minister Colijn (1933-1939) has been central in the debate about why the
Dutch economy had such a late recovery from the global crisis.
57 He blamed
the long-lasting depression in the Dutch economy on government policies to
maintain a  xed rate of exchange by st aying on the gold standard until 1936.
This monetar y policy necessitated a de ationar y adjustment policy, which
hampered economic recovery. Keesing’s view was attacked by Klein, who
st res sed th at a c hange in s uch p olic ies wou ld not h ave matt ered bec ause of
the obsolete structure of the Dutch economy.
58 During the 1970s and 1980s,
many new contr ibutions have been added to t he debate, alternating bet ween
the two views; see Drukker for a discussion.
59 In his inaugural lecture of
1988, Van Zanden concluded that the position of Klein was untenable and
that Keesing’s analysis gave a more accurate account of the situation; an
earlier devaluation would have had less devast ating efect s on the economy
and employment levels.
60 International analyses of the interwar period
have shown that countries that had left the gold standard at an early phase
were not forced into a painful path of deation and therefore recovered
faster. In his dissertation of 1990, Hein Klemann showed that the Dutch
56 P.B. Kr eukniet (ed.), De Nederlan dse volkshuishouding tussen t wee wereldoorlogen (Utrecht
1952).
57 F.A.G. Keesing, De conjuncturele ontwikkeling van Nederland en de evolutie van de eco no-
mische overheidspolitiek 1918-1939 (Utrecht en Antwerpen 1947), also published in Kreukniet
(ed.), see previous note.
58 P.W. Klein, ‘Depre ssie en beleid tijdens de ja ren dertig. K anttekeni ngen bij de ontwik keling
van de Nederlandse volkshuishouding in de jaren dertig’, in: J. van Herwaarden (red.), Lof der
Historie (Rotterdam 1973) 289-336.
59 J.W. Drukker, Waarom de crisis hier langer duurde. Over de Nederlandse economische ontwik-
keling i n de jaren dert ig (A mster dam 19 90).
60 J.L . van Zanden, De dans om de go uden stan daar d. Ec onom isch b elei d in de depre ssie van de
jaren derti g (oratie, A msterdam 1988).
TSEG2014.2-boek.indd 102TSEG2014.2-boek.indd 102 05-06-14 15:4505-06-14 15:45

1 0 3
DEBATES ON I NDUSTRIALISATION AND ECON OMIC GR OWTH
DE JO NG & VAN ZA NDEN
economy sufered relatively heavily from the depression, because its most
important trading partners practiced beggar-thy-neighbour policies. The
United Kingdom imposed the General Tarif and depreciated the pound,
and Germany bilatera lised its international trade. Both were harmful to the
volume of Dutch exports.
61 Drukker nevertheless stressed that structural
factors are key in explaining mass unemployment, because labour-force
growth had outpaced the increase in investments during the 1930s.
Several studies have revealed that the stressful macro-economic
situation in the interwar period did not stop economic and technological
modernisation. In many sectors of the economy, technical progress was
apparent. In manufacturing, there were signs of strong recovery, partly
through import substitution. De Jong’s study documents that both real
industrial output and employment rose after 1932. However, employment
growth was much slower than output growth, indicating fast rising ef-
 ciency, in par ticu lar du ri ng t he period fro m 192 5 to 193 5. Kn ibbe repor ted
successful performance in agricultural output and productiv ity. After 1929,
agricultural output declined rapidly, but government support turned out
to be rather benecial for the sector. After 1936, there was a rapid increase
in farm incomes and rising labour productivity.
62 This would reinforce the
agricultural sector, which was a blessing in disguise during the German
occupation between 1940 and 1945, when an efective system of produc-
tion and distribution secured the food supply for the Dutch population.
In his book published in 1985, Gerard Trienekens showed that the great
famine of the winter of 1944-1945 that hit the urbanised western part of t he
Netherlands was caused by a breakdown of the transport system, not by a
lack of domestic food supply.
63
Did the Second World War change the economic structure of
the country?
How extensive was war damage and how diferent was the experience
compared with the First World War? Until the mid-1980s, the general view
of Dutch society during the war and the Ger man occupation had been domi-
61 H.A.M. Klemann, Tussen Reich en Empire, De economische betrekkingen van Nederland
met zijn belangrijkste handelspartners: Duitsland, Groot-Brittannië en België en de Nederlandse
handelspolitiek, 1929-1936 ( Amsterdam 1990).
62 De Jong, Catching up ; Knibbe, Agriculture .
63 G.M.T. Trienekens, Tussen ons volk en de honger. De voedselvoorziening 1940-1945 (Utrecht
1985).
TSEG2014.2-boek.indd 103TSEG2014.2-boek.indd 103 05-06-14 15:4505-06-14 15:45

104
TIJDSCHRIF T VOOR SOCIALE EN ECON OMISCH E GESCHIEDENIS
VOL. 11, N O. 2, 2014
na ted b y the m onum ent al work of L. de J ong, Het Koninkrijk der Nederlanden
in de Tweede Wereldoorlog ( The Kingdom of the Netherlands in World War
II ). 64 Economic development during the occupation was painted in dark
colours, stressing decline, exploitation, forced labour, and impoverishment
of the Dutch population on a massive scale. This view has been revised by
Herman de Jong and foremost by Hein Klemann, who in 2002 published a
monograph on the economic development of the Netherlands between 1938
and 1948.
65 The revision was necessary because the traditional accounts
of the war damage, with presumed mass looting and production losses,
proved dicult to reconcile with the fast growth of (industrial) produc-
tion shortly after 1945 that was observable in the post-war statistics of the
Dutch economy. Two conclusions were reached. First, both employment
and output levels were muc h higher t han in t he o  cia l wa rtime est imates
of the CBS. Second, damage and losses of capital were lower than ocially
reported. Industrial machine capacity had grown by 33 per cent between
1938 and 1946 (already reported by Van Zanden and Gri ths in 1989). War
damage was mainly limited to delays to repairs and replacement. K lemann
ca lculat ed that national product ion fell back to 8 0 per cent of it s 1938 level.
Because the Germans extracted more than 40 per cent of production, the
available income in the nal years fell back to about 50 per cent of the 1938
level, wh ich i ndeed points at impo ver ish ment du ring th e sec ond h alf of t he
German occupation. However, replenishment of the stocks of raw materials
led to a quick recovery of industrial output, which had already surpassed
the pre-war level by 1947.
These recent analyses have revealed a great continuity in economic
and technical development in all major sectors of the economy during
the 1930s, 1940s and 1950s. This leads to the conclusion that World War II
was probably less a turning point in Dutch economic history than World
War I, when industry really took of by broadening and deepening its
structure and raising its eciency. The efects of aid provided under the
Marshall Plan have been studied by Van der Eng and by Eichengreen and
Uzan. Both studies show that the efect of aid on the annual growth of net
national income was modest.
66 Although the Netherlands was one of the
64 L . de Jong, Het Koninkrijk der Nederlanden in de Tweede Wereldoorlog (Amsterdam 1970-1988),
see esp. III (1970), IV (1972), VII (1976), Xb (1981/82), XII (1988).
65 H.A.M. Klemann, Nederland 1938-1948. Economie en samenleving in jaren van oorlog en
bezetting (Amsterdam 2002); De Jong, Catching up .
66 P. van der Eng, De Marsh all-hulp. Een p erspectief voor Ne derland 1947-19 53 (Houten 1987); B.
Eichengreen and M. Uzan, ‘The Marshall Plan: economic e fects and implications for Eastern
Europe and the former USSR’, Economic Polic y 7 (14) (1992) 14-75 .
TSEG2014.2-boek.indd 104TSEG2014.2-boek.indd 104 05-06-14 15:4505-06-14 15:45

1 0 5
DEBATES ON I NDUSTRIALISATION AND ECON OMIC GR OWTH
DE JO NG & VAN ZA NDEN
greatest receivers of Marshall Plan aid, the most important efect was that
it facilitated the restoration of nancial stability and the liberalisation of
production and prices. In a similar way, a study by Clerx in 1986 concluded
that the post-war recovery of the Dutch economy accelerated after trade
liberalisation with Germany.
67
Economic growth during the post-war golden age and after
How have economic historians explained the end of the post-war golden
age? Why did the crises of the 1970s have such a large efect, causing a
major productivity slowdown in the Dutch economy? During the 1960s, the
second decade of the golden age, Dutch GDP and per capita GDP growth
was even higher than during the 1950s. In the monograph by Van Zanden
(1997) and in a contribution by Van Ark, De Haan and De Jong in 1996, it
is made clear that the underlying forces explaining growth during the
1960s were diferent from those of the 1950s.
68 The labou r ma rket tig hten ed
and wages increased very rapidly during the early 1960s. Wages increased
faster than productivity, changing investment behaviour, and capital
substituted for labour. The Dutch Central Planning Bureau estimated that
protabilit y declined signi cantly during the 1960s.
69 The economists Den
Hartog and Tjan explained the decline by applying vintage models of the
Dutch economy. These macro-economic models linked rising labour costs
to the premature scrapping of old equipment and its replacement by newer
alternatives with lower labour requirements.
70 Behind the rosy picture of
rapid welfare growth, the 1960s in fact witnessed the end of the post-war
growth miracle. The traditional possibilities to catch up with wage rises,
in ation and the decline of old industries had been ex hausted. However, the
exploitation of indigenous natural gas reserves allowed the country to gain
a competitive edge in energy-intensive and capital-intensive production.
The r apid r ise of en erg y pr ice s du ri ng t he 1970 s, an d es pecia ll y th e secon d
oil crisis in 1979, hit the Dutch economy very hard. Keetie Sluyterman has
analysed this period from the perspective of business behaviour and its
67 J.M.M.J. Clerx, Nederland en de liberalisatie van het handels- en betalingsverkeer, 1945-1958
(Gron inge n 1986) .
68 B. van Ark, J. de Haan and H.J. de Jong, ‘Characteristics of Economic Growth in the Neth-
erlands During the Post war Period’, in: N.F.R. Crafts and G. Toniolo (eds.), Economic Growth in
Europe Si nce 1945 (Cambridge 1996) 290-328; Van Za nden, A Sm all Open Econom y.
69 CPB, De Nederla ndse economie i n 1980 (’s Gravenhage 1976).
70 H. den Hartog and H.S. Tjan, ‘Investment, Wages, Prices and Demand for Labour’, De
Economist 1 24 (1976) 32 -55.
TSEG2014.2-boek.indd 105TSEG2014.2-boek.indd 105 05-06-14 15:4505-06-14 15:45

106
TIJDSCHRIF T VOOR SOCIALE EN ECON OMISCH E GESCHIEDENIS
VOL. 11, N O. 2, 2014
long-term consequences. She concluded that the global recession of the
1970s accelerated the transformation of the Dutch economy from industry
to services.
71 Anot her characteristic of t his period mentioned by Slu yterma n
was the further internationalisation of Dutch business, also applicable to
services. Internationalisation became stronger with the creation of the
internal market within the European Union. Large Dutch multinationals
in the service sector were created – in banking, insurance, accountancy,
publishing and retailing – while at the same time manufacturing came
part ly into foreign ownership (transport equipment and paper). During the
last quarter of the twentieth century, the Dutch economy seemed to come
full circle. It resembled more than ever the situation of the pre-1914 period,
with a ver y open and internationalised economy where large industry was
less dominant and less integrated.
The crisis of the 1970s, de-industrialisation and increasing globalisation
toward the end of the twentieth century also had a profound impact on the
labour market and on industrial relations. Jelle Visser and A nton Hemerijck
have studied the transformation in the political economy of the country.
72
The disappointing performance of the economy with many job losses and
growing unemployment led the employers’ and workers’ organisations to
sign a soci al pact (the much- discussed Wassenaar Ag reement of 1982), where
wage moderation was exchanged for shorter working hours and early retire-
ment schemes, to restore prots and to increase the number of jobs. This
wa s fol lowed by re cord job g row th in the 1 990 s, i n parti cul ar p art-t ime jobs
for women in the service sector. Wage restraint and reforms in the labour
market (new laws on working hours and exible jobs) and social security
insurance reforms improved the competitiveness of the Dutch economy,
fuelled by a neo-liberal ideology of economic liberalisation, deregulation
and the privatisation of state-owned businesses (telecommunications and
energy).
The aforementioned study by Van Ark and De Jong shows  gures on
GDP and employment growth, which illustrate that from 1985 the Dutch
economy was on a job intensive growth path.
73 They concluded that wage
moderation stimulated investment by restoring pro tability and increasing
71 K.E. Sluyterman, Dutch enterprise in the t wentieth century: Business enterprise in a small
open economy (London and New York 2005) .
72 J . Vi ss er a nd A . He mer ijc k, ‘A Dutch Mi racle’: job gro wth, welfa re reform a nd corpora tism in the
Netherlands (A msterdam 1997). See also: J. Touwen, ‘How doe s a coordinated ma rket economy
evolve? Efects of policy learning in the Netherlands in the 1980s’, Labor History 49 (4) (2008)
439-464.
73 Van A rk en De Jong, ‘Accounting ’.
TSEG2014.2-boek.indd 106TSEG2014.2-boek.indd 106 05-06-14 15:4505-06-14 15:45

1 0 7
DEBATES ON I NDUSTRIALISATION AND ECON OMIC GR OWTH
DE JO NG & VAN ZA NDEN
exports. However, one of the efects of this growth st rategy was that labour
productivit y trailed behind, as d id innovation. The economic retardation of
the 1 980 s therefore can not be seen as ret urn to a ‘nor mal ’ gr owt h pa th a fter
the fast growth in the 1950s and 1960s. Post-1973 growth in TFP was slower
than in the pre-1929 period. The low TFP performance can be interpreted
as the combined efects of the end of the wave of the Second Industrial
Revolution, greater exposure to the forces of globalisation and successful
job creation. At the turn of the twenty- rst century, it manifested itself as
a much admired and miraculous ‘third way’ in between the co-ordinated
and liberal market economy. However, possibly it was just a peculiar ‘Dutch’
way of catching up. Looking more closely at the gures, the favourable
GDP per capita growth of the 1990s was to a large extent the result of
an economy and society that had successfully managed to increase its
(female) participation rates to international levels. Future research by new
generations of economic historians will answer the question of how well
the Dutch economy has reaped the fruits of the technologies of the ICT era
or whether these possibilities already had been exhausted at the start of
the twenty-rst century.
Conclusion
Dutch economic history writing closely followed international trends, in
particular f rom the 1970s onwards when the discipline began to focus more
on international debates. The big issues of international economic history
– growth and industrialisation – quickly achieved a central position in the
Dutch scene as well, albeit that the focus was often somewhat diferent.
Here, the debate centred on the slow pace of industrialisation during the
nineteenth century, whereas in neighbouring countries the focus was on
explaining the Industrial Revolution. Gradually, analytical instruments
developed by economics – such as the analysis of factor prices as drivers
of technological choices and of TFP growth as the source of long-term eco-
nomic change – were incorporated into the toolkit of the Dutch economic
historian.
One of the aims of macro research was to reconstruct the development
path of the Dutch economy in the long term. In this regard, the project has
been relatively successful; current ti me-series of GDP for the Netherlands as
a whole go back to 1806, whilst for Holland, estimates for the Early Modern
Per iod and even th e lat e Midd le Ages have been pr oduc ed. Thi s wor k on t he
Dutch historical national accounts has been part of the large international
TSEG2014.2-boek.indd 107TSEG2014.2-boek.indd 107 05-06-14 15:4505-06-14 15:45

108
TIJDSCHRIF T VOOR SOCIALE EN ECON OMISCH E GESCHIEDENIS
VOL. 11, N O. 2, 2014
research project organised by Angus Maddison to chart the development
of the world economy in the last two millennia. With the research of the
Maddison group at Groningen University and related work elsewhere, the
Netherlands became a global centre of the study of growth and productiv-
ity change in the world economy, resulting in a number of large research
projects (International Comparison of Output and Productivity, the Mad-
dison Project and Clio Infra),
74 which strengthened the central position
Dutch economic historians have played in this eld. In this overview, we
concentrate on research into the economic history of the Netherlands,
but a trend not yet mentioned is that increasingly, Dutch scholars have
focused their attention on other par ts of the world – former colonies such as
Indonesia or South Africa, but also China and the world as a whole – often
making use of the archival sources accumulated in the Netherlands as par t
of the colonial legacy.
At the sa me time, although we know much more about the grow th record
of the Dutch economy in the long term, there is less consensus about the
causes of its strong performance in certain periods, and its much slower
growth during other periods. In other words, work on the interpretation
of its development path has only started, especially for the earlier period
– before 1800 – for which we have many interesting hypotheses about the
role of institutions, gender relations, religion and human capital formation,
but only a few studies that have managed to test those ideas in a more or
less convincing way. The Netherlands, and in particular its western part,
became during the Late Middle Ages perhaps the rst ‘market economy’,
which generated a process of slow but consistent economic growth from the
late  fteenth centur y onwards. It actively took par t in the birth of economic
modernity, but we still do not really understand why this happened there
and then. Solving this puzzle is probably the greatest challenge for Dutch
economic history in the next decades.
About the authors
H e r m a n d e J o n g is a P rofessor of Economic His tory (Chair) at the Facult y of Econom-
ics and Business, University of Groningen. De Jong (1958) has published in major
international economic history journals. His research  elds include quantitative
74 For these large-scale international research projects see the relevant webpages of the
Groningen Gr owth and D evelopment Center (htt p://w ww.rug.n l/research/ggdc/); t he Maddison
Project ( http://www.ggdc .net/maddison/m addison-projec t/home.htm) and the C lio Infr a project
(http://www.clio-infra.eu/)
TSEG2014.2-boek.indd 108TSEG2014.2-boek.indd 108 05-06-14 15:4505-06-14 15:45

1 0 9
DEBATES ON I NDUSTRIALISATION AND ECON OMIC GR OWTH
DE JO NG & VAN ZA NDEN
economic h istory, product ivity a nalysis , comparative e conomic grow th in hist ory
and welfare measurement in the nineteenth and twentieth centuries. Between
2004 and 2010, he ser ved as a scienti c director of the N.W. Posthumus Instituut, a
Dutch/Flemish research school for economic and social histor y.
Email: h.j.de.jong@rug.nl
Jan Luiten van Zanden is a Professor of Global Economic Histor y at Utrecht Uni-
versity and also linked to the universities of Stellenbosch and Groningen. He has
published on various aspects of European and world history, most recently (with
Maarten Prak), Nederland en het Poldermodel. Sociaal-Economische Geschiedenis
van Nederland 1000-2000 (Amsterdam 2013); (with Daan Marks) Economic His-
tory of Indonesia 1800-2010. Between Asian Drama and Growth Miracle (London
2012); and The Long Road to the Industrial Revolution. The European Economy in a
Global Perspective, 1000-1800 (Leiden 2009).
Email: j.l.vanzanden@uu.nl
TSEG2014.2-boek.indd 109TSEG2014.2-boek.indd 109 05-06-14 15:4505-06-14 15:45

TSEG2014.2-boek.indd 110TSEG2014.2-boek.indd 110 05-06-14 15:4505-06-14 15:45