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Why did the 1600s size of the Dutch merchant fleet exceed the combined fleets of England, France, Spain, Portugal, and Germany?

Why did the 1600s size of the Dutch merchant fleet exceed the combined fleets of England, France, Spain, Portugal, and Germany?

Why did the 1600s size of the Dutch merchant fleet exceed the combined fleets of England, France, Spain, Portugal, and Germany?

Economically it’s very possible for one country to dominate the world merchant marine and it’s happened many times in history. While not quite a majority of the world’s merchant ships, it should be noted that the Greek merchant marine today is, bizarrely enough, the largest in the world, beating out the USA, UK, and other countries typically associated with capitalism and sea power. In the Medieval period, the small city of Venice, with a population of less than 200,000, controlled at one point 3,000 merchant ships.

How is this possible?

Because a merchant marine is not an expense for a government. It’s actually a revenue. Merchant ships are privately owned, and they don’t discriminate based on nationality. A Dutchman can buy and rename the ship of an Englishman, so how many ships the merchants of one country owns has little to do with its industrial base or how many people live there.

The real question is “are there profitable trade opportunities?”. Trade is about margins, and where there are margins and profits, merchants will buy ships and enter the market. An example of a trade transaction in the 1600s might be as follows: Andrew Stockton, a New England merchant, picks up bales of cotton from Charleston, goes to Plymouth to offload goods (he wishes he could go to Madeira, but we’ll get into that later), and picks up guns. He sails to British-controlled factories (slave trading forts) on the African coast, picking up slaves and offloading his guns, before sailing back to Charleston and offloading his slaves, picking up cotton, and repeating the process.

Notice that our fictional friend only goes to British ports. This is because of mercantilism – trade controls the empires of the day instituted to edge out their competition. Multiple nations stipulated that trade be controlled entirely within their network. The Navigation Acts of the UK and the designation of Seville as the universal port for entry of goods from the Americas by the Spanish are two examples. The economic rationale for mercantilism was customs – the authority over the entry port got a cut of Andrew’s profits. In the above example, the English and their colonies would collect customs between 2-3 times, depending on their level of imperial control over that particular slave factory.

So if you wanted to have a giant commercial empire, you needed the following:
• A huge navy to defend your trade lanes from pirates and other navies
• A wide ranging spread of colonies around the world
• Enough colonies that your fleet has a high “shipping capacity”
• (Optional) trade treaties granting your merchants access to foreign ports

The Dutch had all of these and opened factories (trade houses) all over the world in huge number. At its peak, the Dutch Empire had hundreds of major factories in India, Asia, the East and West Indies, Africa, North America, South America, and the Middle East. This allowed the country to have the highest GDP per capita in the world by a longshot and gave huge opportunities for Dutch merchants to do business around the world.

It should be noted that this kind of business scheme doesn’t exist today. The USA has become the apex naval force but subscribes to freedom of navigation – in other words, it doesn’t just allow Americans to do international trade. The age of factories and each nation’s business community needing different ports and trade houses to do business abroad is over. This makes possible a nation like Greece, with established yet innovative shipping dynasties to have the largest merchant marine in the world.

1. A Splendid Exchange by William Bernstein
2. The Influence of Seapower Upon History, 1660–1783
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