McCant A. (1997) Moral capitalism: investments to feed orphans

October 2, 2009

McCants, Anne E.C. (1997) “The Rise and Decline of an Institutional Endowment, in Civic Charity in a Golden Age. Orphan Care in Early Modern Amsterdam, Urbana/Chicago: University of Illinois Press, 151-191.

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Numerous elements point to the fact that Dutch charities were well-endowed in the early modern period (p.151). Nonetheless charities were expensive to run and part of the funds came from the beneficiaries themselves. For instance at the Amsterdam Municipal Orphanage, or Bugerweeshuis,

“the orphaned children of poor, but nonetheless, citizen, parents could not be denied entry on the basis of an inadequate inheritance to defray the cost of their support. But the orphaned children of prosperous citizens could also not expect to be cared for entirely at public expenses.”

Nonetheless the bulk of the institution’s resources came from its invested endowment (p.153). Read the rest of this entry »

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

September 29, 2009

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

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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). Read the rest of this entry »

Flandreau M. et al. (2009) Financiers without borders

September 6, 2009

Flandreau, Marc, Christophe Galimard, Clemens Jobst and Pilar Nogués-Marco (2009) “Monetary Geography Before the Industrial Revolution”, CEPR, DP7169, 25p.

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Some argue that national moneys have been constructed by states, but not before the 19th century. Prior, during the 18th century, there were no monetary borders to speak of and local markets were integrated by the ubiquitous bills of exchange; regulation remaining at a sub-national level (cities; p.1). Others have pointed out that the financial geography was not that seamless and that a shape arose from endogenous elements (transaction costs, agglomeration economies, etc.). Finally, institutionalist economists have argued that factors such as parliaments and constitutions were critical in the dawn of international finance (p.2). Read the rest of this entry »

‘t Hart M. (2009) Trust your friends, buy annuities

September 1, 2009

‘t Hart, Marjolein (2009) “Mutual Advantages: State Bankers as Brokers between the City of Amsterdam and the Dutch Republic”, in The Political Economy of the Dutch Republic, ed. Oscar Gelderblom, p.115-142.

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The Dutch public credit in the early modern period enjoyed a uniquely high standing; but how did it work? (p.116). The sale of the securities to the public were in the hands of a district receiver who earned a brokerage of 0.5% (p.118). It took political and family connection to accede the position as well as a significant amount of wealth (p.120). “The personal wealth of this agent radiated from his office and thus supported the credit of the state”. Besides, the position could be quite rewarding financially. Read the rest of this entry »

Frehen R., Goetzmann W. and Rouwenhorst G. (2009) Why invest in the bubbles?

August 31, 2009

Frehen, Rik, William Goetzmann and Geert Rouwenhorst (2009) “New Evidence on the First Financial Bubbles”, Yale international Center for Finance, Working Paper 04, 24p.

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This article is available online.

Why did investors decide to bet on the various companies that would form the three 1720 bubbles in France, England and the Netherlands? (p.1). How did these bubbles affect companies which unlike the Compagnie des Indes and the South Sea Company were neither involved in the Atlantic trade nor in public finance?

Read the rest of this entry »

Flandreau M. et al. (2009) The question was not how to develop finance

August 30, 2009

Flandreau, Marc, Christophe Galimard, Clemens Jobst and Pilar Nogués-Marco (2009) “The bell-jar: commercial interest rates betwee two revolutions” in The Origin and Development of Financial Markets and Institutions. From the Seventeenth Century to the Present, eds. Jeremy Atack and Larry Neal, Cambridge: Cambridge University Press, 161-208.

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An earlier version of this paper is available here.

For institutionalist economists as well as for contemporary commentators, the wealth of nations in 18th century Europe was rooted in their political system which influenced the level of interest rates and thus trade (p.165). The confidence investors had in the government’s credit was thus seen as critical (tellingly John Law’s primary aim was to bring interest rates down; p.166). Read the rest of this entry »

Quinn S. and Roberds W. (2006) When financial innovation’s good for the economy

August 18, 2009

Quinn, Stephen and Willam Roberds (2006) “An Economic Explanation of the Early Bank of Amsterdam, Debasement, Bills of Exchange and the Emergence of the First Central Bank”, Federal Bank of Atlanta. Working Papers Series, 13: 50p.*

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This paper is available online.


The United Provinces suffered from what Adam Smith termed the “small state” problem: it was awash in foreign coin and had little control over their quality, thus suffered from their constant debasement (p.1). Debtors always have an incentive to pay their due with debased coins. But this practice is only viable if the seigniorage he pays to the mint is lower than the amount of silver he saves in the operation. De facto, there is collusion between the mint and the debtor against the creditor (p.4). Read the rest of this entry »