McCants A. (2007) Poverty v. Modernity: 1/0

McCants, Anne E.C. (2007) “Inequality among the poor of eighteenth century Amsterdam”, Explorations in Economic History, 44/1: 1-21.

d5124042lAnne McCantssteen_nicholas

The Netherlands, and more precisely Holland, are often described as the first modern economy (p.2). Economic growth over the Golden Ages attracted numerous migrants from the rural areas of the country as well as from all over Northern Europe. Usually these new comers were extremely poor and as a result standards of living in 1800 seem to have been lower than in 1500. Dutch cities were thus characterized by a very high level of inequality (p.2).

Job’s turkey

Sources of the time focus on the subtle differences of fortune existing between the wealthy but are nearly silent on those existing among the poor or even the lower middle class and the poor. Seventy to 90% of the urban population thus remains out of the historian’s sight. Evidence exist however, and the author is using the papers estimating orphans’ fortunes at the death of their parents as collected by a charitable institution in Amsterdam (p.4). These sources offer a unique occasion to look in detail at the belongings of sometimes-wrenchingly-poor households (p.5). However representative, this dataset will miss the poorest part of the population (the migrants) as only the citizens of Amsterdam could trust the orphanage with their children after their death (p.7).

A first conclusion can be drawn: women were more likely then men to be forced to rely on civic charity (p.9). More broadly there were stark differences between the families considered, for instance about 15% of them were considered to be deprived of any worldly good but “some worthless old junk”. Moreover nearly 60% of the households left unpaid debts at their death worth more than the total value of their assets. The rest left an average fortune of 76 guilders – barely enough to cover 6 months of care in the orphanage. If all the families are included the orphans were left with a negative fortune of -23 guilders at their parents death (p.12).

Even poorer

Based on the assets left to their children, even among the overall poor and fairly homogeneous segment of Amsterdamers who trusted their offspring to the orphanage, inequality was very high (Gini coefficient .77; p.15). For most, living conditions were dreadful: packed small rooms with little or no furniture (p.18). But overall marital status, age, the presence or not of a shop, etc. strongly affect the relative wealth of a household (p.19).

The youngest cohorts appear also to have been the most unequal (p.20). More surprisingly the more a household was indebt the richer it was. However the “disparity across the various households types suggest that more was involved in a person’s ability to contract debts than just the capacity to demonstrate the possession of assets as collateral. Married couples may well have enjoyed social prestige benefit which allowed them greater access to credit than their non-married peers”.

“Ironically, in a world which revolved around petty debts and shop credits as did this one, the failure to die in debt is as likely to be a sign of restricted consumption opportunities as of fiscal probity” (p.22).

Conclusion

Access to financial assets of any kind was not highly democratized unlike what has often been exposed in the rosy legends about the time. Indeed, on average, a household owning any kind of financial asset (from real estates to government bond and upstanding credit) was ten times richer than one which did not (p.23). However this did not represent a sufficient security as the placement of the children in an orphanage indicates; the base of wealth and survival remained the parents’ labour. Hence, despite a few modern features, the analysis of the fortune of the poorest parts of the Dutch society clearly indicates the so-called first modern economy retained numerous aspects reminiscent of underdevelopment (high risks, strong inequality and overall fragility of life; p.24).

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