Steven Solomon

by Power;Civilization Water: The Epic Struggle for Wealth

  Private capital fled to nearby Amsterdam in the also-rebellious free northern provinces, galvanizing its rise and long reign as Europe’s leading center of finance, trade and market capitalism. In 1579, the seven northern provinces united against Spain and soon formed the tiny, commerce-centric Dutch Republic. While the southern provinces of the Spanish Netherlands eventually succumbed to Spanish troops, the north successfully resisted Spain’s superior army by opening dikes to defensively flood landscapes that lay below sea level and taking their battle to the northern sea-lanes, where Spain’s land power advantage was neutralized by the natural exigencies of seafaring. By the 1580s the Dutch Protestant rebellion had escalated into a full-blown international struggle with its own momentum. It set up an inexorable military collision between Spain and England, whose denouement came in the celebrated summer 1588 sea battle against the Spanish Armada.

  The struggle between mighty, prosperous Spain and the small, relatively poor English island-nation proved to be one of history’s outstanding examples of the equalizing effect of sea power on otherwise militarily unmatched enemies. England relied exclusively on its naval prowess for its defense. Philip II, on the other hand, planned to bring to bear Spain’s formidable panoply of oceangoing galleons and other ships to hold the English Channel in support of a land invasion led by 30,000 of his troops who were to be ferried across the Strait of Dover from Dunkirk near the Spanish Netherlands. The revolution in naval warfare in which battleships were employed as mobile batteries fighting from long distance with on-board cannonry was only partly complete by the time the Armada sailed. England’s Royal Navy, since the time of Elizabeth’s father, Henry VIII, had been in the vanguard of that revolution. Its cannons fired long-range, light 17-pound rounds through side portholes. Its naval captains commanded all on board without regard to social rank. Its sleeker and faster ships were among the most maneuverable on the seas. Spain, by contrast, lagged behind in the naval power revolution. Its large fleet carried heavy cannons that fired 50 pound shots but over a shorter range. It was far less maneuverable sailing windward, maintained an aristocratic chain of command, many swordsmen and musketeers for close-in and traditional on-board fighting.

  Underlying these tactical differences, notes British historian George Macaulay Trevelyan, was a more profound “difference of social character between Spain and the new England. Private enterprise, individual initiative and a good-humoured equality of classes were on the increase in the defeudalized England of the Renaissance and Reformation, and were strongest among the commercial and maritime population.” Enriched by its New World bullion, Spain remained fixedly wedded to its medieval class hierarchy, centralized political authority, army-centered military power, and a state-directed command economy anchored in traditional agriculture. The battle of the Armada between England and Spain, in short, contained within it a contest between two competing political, economic, and social tendencies for Western civilization’s future.

  To lead England’s defense, Elizabeth turned to its resourceful privateers of the Spanish Main. Foremost among these was Francis Drake. Although second in formal title, he was first in shaping and executing England’s strategic battle plans at sea. Drake in many ways personified the spirit of the rising English nation. Born of a Protestant tenant farmer in the early 1540s, his family fled a Catholic uprising and lived for a while in the hull of an old ship moored along the Thames. At 13 he was apprenticed to the captain of a small trading vessel that traveled among North Sea ports. Seeking fortune and adventure, at 23 he sailed for the West Indies. Although an early trip on which he had been second-in-command ended in financial ruin when his ship was attacked by Spanish vessels, Drake’s skills came to the attention of Queen Elizabeth, who granted him his own privateering commission. Thus was launched the career of England’s greatest privateer, explorer, and naval innovator.

  Drake’s plundering expeditions along the Spanish Main throughout the 1570s brought him such fortune and fame that in 1577 he was chosen by the queen to command the greatest raiding expedition in history—a stealthy, surprise marauding of Spanish ships and settlements in the Pacific Ocean. Drake’s three-year journey in his 75-foot flagship, the Golden Hinde, developed into history’s first round-the-world voyage completed by a single captain. Upon navigating through the treacherous Strait of Magellan—astoundingly, in only sixteen days—Drake turned northward along South America’s Pacific Coast. So easy was the plundering of more than 10 tons of gold, silver, pearls, and precious stones from undefended Spanish outposts that before long Drake’s booty-stuffed vessel was sailing below her watermark. Continuing northward toward Canada, Drake unsuccessfully searched for the northwest passage to the Atlantic, and for a time anchored in the San Francisco Bay area, which he claimed for England. Notwithstanding almost losing everything at one point when his ship ran aground on reefs, he returned home in 1580 by way of the Pacific, bringing with him a treaty for England to trade for spices in the Moluccas. Ignoring vigorous Spanish protests about his piratical exploits, Queen Elizabeth personally knighted him aboard the Golden Hinde after his return.

  For several years Drake settled down as the mayor of the port of Plymouth in southwestern England—and organized an early freshwater supply system, featuring a 17-mile-long aqueduct known as Drake’s Leat that lasted for three centuries. In the mid-1580s he returned to raiding Spanish interests in the New World, so successfully that it impinged Spain’s international ability to borrow. When it became known by 1586 that Philip II, with the blessing of Pope Sixtus V—one of Rome’s Renaissance Water Popes—finally had resolved to invade England directly, Drake, in command of some 30 vessels, led a spectacular surprise raid on Spanish shipping at ports at Cádiz, Lisbon, and Cape St. Vincent that did so much damage that it set back Philip’s plans by an entire year. Yet by mid-1588, the enormous Spanish Armada of 130 ships with 8,000 sailors and some 22,000 soldiers was rebuilt, outfitted, and bound for the English Channel to spearhead the invasion of England.

  The defeat of the Spanish Armada has become enshrined as one of England’s hallowed national myths. In fact, the outcome more closely resembled a comical farce decided by the haphazard forces of nature than by the heroic deeds of man or, as claimed by the victors, divine intervention. Although led by its 25 formidable warships, the Spanish fleet also included many slow-sailing, converted Baltic merchantmen that had difficulty traveling upwind. As a result, the nimbler English fleet of roughly the same size had little difficulty winning through the first rule of fighting under sail: to always get and stay windward of the enemy. Yet even with this advantage, the light English cannon could not sink a single Spanish ship. For their part, the heavier Spanish cannonballs turned out to be so poorly fabricated in Spain’s notoriously inferior iron foundries that they split apart on the few occasions they got close enough to strike their English targets. As a result, most of the battle was engaged with the two fleets firing futilely at one another as they floated with the tide and wind down the Channel toward the narrow Strait of Dover.

  When the Spanish fleet anchored hoping to support the crossing of the army invasion force that had yet to show up, the English unleashed eight burning fire ships down the current toward the wooden Armada—one of the oldest tactics in sea warfare. To avoid catching flame, the Armada hastily cut anchor and fled in panic. Chased by an attacking fleet of English warships which itself ran badly low on ammunition, it was driven out of the Channel into the North Sea, past the troop rendezvous points and unable to sail back to it. With the wind against it, the Armada had no choice but to try to return to Spain by sailing north around Scotland and Ireland into the Atlantic. But in the rough weather of the September Atlantic, many of the ships, their crews weakened by low rations and disease, began to break up and were driven into the rocky coastlines. In the end, only half the Armada returned safely to Spain, its mission unaccomplished.

  Despite its comical aspects, the battle of the Spanish Armada deserved its place among the great sea engagements tha
t dramatically altered history. It saved England’s independence, as well as saving the Dutch Republic from extinction, while ensuring the survival of northern Europe’s Protestant Reformation and its seafaring, market economy and fledgling, liberal democratic states. At the same time, it presaged the decline of Spain’s bid for hegemony, the shift of European power to North Atlantic states using the most advanced, mobile, long-distance artillery-based naval warfare, and the early transformation of the small English nation of 5 million, only half that of Spain at the time, into what would become the nineteenth-century colonial British Empire of 24 million. As for Francis Drake, the celebrated captain was sent by Queen Elizabeth to Panama in 1595 to seize two of its settlements for ransom. He succeeded in taking Nombre de Dios, but himself contracted dysentery and died. He was buried at sea.

  With the decline of Spain and the Habsburg’s bid for European dominance, the new fulcrum of European and world power in the age of oceanic sail shifted to two small maritime trading nations, the Dutch Republic and England. These states gave wider berth to private enterprise, market economy, religious and political liberty, and representative government than other European nations. During their primacy in the next two centuries, they became progenitors of modern capitalism and liberal democracy. Through their colonies and influence as global powers, their peculiar mode of political economy was exported far and wide to societies throughout the world.

  The Dutch were the most precocious. A republic ruled by the merchant classes that prospered as sea trading middlemen, the United Provinces were lineal descendants of the traditions of ancient Athens and medieval Venice. Its leading seaport, Amsterdam, in the province of Holland, bore a striking resemblance to Venice. It arose in the thirteenth century from its inhospitable, muddy, often flooding lowlands—over a quarter of its territory lay below sea level—on the arduous labor and ingenuity of land reclamation involving extensive drainage, pumping, dredging, embankment building, damming, diking, and sluicing. Following the historical pattern of association between advanced water engineering and ascendant societies, Dutch land hydraulics set world-class standards during its century-long golden age and has continued to be a leader in modern times. Even more notable, the highly decentralized, democratic nature of the Dutch Republic was a direct outgrowth of the local water boards established in the thirteenth century to manage the water infrastructure sustaining the reclaimed lowlands or “polders.” The success and cooperation of the local water boards—which continue to function to the present day—became an essential part of the model of governance adopted by the seven northern provinces that seceded from Spain to form the Dutch Republic in 1581.

  Similar to Venice, Amsterdam’s urban landscape featured its canals, which were designed in semicircular, concentric rings. At its heart, as a Dutch counterpart to Venice’s Rialto Bridge, was a dam on the Amster River controlling the flows to a huge inlet of the North Sea. From the 1500s to the late 1600s, Dam Square was the leading entrepôt of the world market economy. The Republic self-interestedly championed free trade, freedom of the seas, and secure private property rights. Staple goods from the Baltic, the North Sea, the Atlantic coast, Mediterranean, and as far away as the Spice Islands were unloaded and stored in warehouses along the quays near the dam, then bought and sold by merchant representatives meeting in the nearby bourse. Merchant banks facilitated the trade through issuance of credit, discounting bills of exchange, and other financial instruments of modern capitalism. An early stock market developed. Gold and silver flowed in from everywhere, imparting to the Dutch Republic the significant comparative advantages of cheaper and abundant financing enjoyed by states that hosted major world financial centers. From only about 30,000 inhabitants in 1575, Amsterdam’s population multiplied sevenfold to 200,000 within a century.

  As a tiny state with little arable land, again much like Venice, Dutch wealth depended heavily upon its unexcelled efficiency in shipping and adding values to other states’ goods. It rose by garnering control of over half of the shipping leaving or entering the Baltic Sea, and dominating the carrying trade between northern and southern Europe. Prominent in this trade was the profitable cargo shipped from Indian Ocean ports into Lisbon by Portuguese vessels.

  The seminal event in the sudden rise of the Dutch Republic as a world power dates to 1592 when, in the aftermath of the Armada’s defeat and the continuing rebellion in Holland, Spain’s Philip II in 1592 closed Lisbon harbor to Dutch shipping. Faced with the sudden loss of access to this vital intermediary trade center, Dutch merchants resolved to undertake their own voyages directly to the emporiums of the Indian Ocean. Some 50 ships made the months-long round-trip from the Netherlands over the next ten years, laden with rich cargoes of pepper, nutmeg, cloves, mace, tea, and coffee. Private and public interests invested together in 1602 in the limited liability, joint stock Dutch East India Company, which exerted its regional monopoly trading rights like a sovereign state and for a long period was the most celebrated emblem of Western capitalism. In remarkably short order, the Dutch seized control of the trade from Indonesia’s Spice Islands and the ports of Ceylon. They exploited it more effectively than Portugal ever had. Their power hinged on their domination of two strategic sea passages to the Spice Islands—the Malacca Strait between Sumatra and Malaysia, and the Strait of Sunda between Java and Sumatra on the direct sea route from the African Cape of Good Hope. In 1619 a new colonial center was established on Java at Batavia, modern Jakarta. The Dutch achievement reconfirmed the Portuguese experience of the disproportionate global influence sea power could confer on tiny states in the age of sail.

  Dutch colonists fanned out elsewhere over the globe in the same period. One notable fur-trading settlement was New Amsterdam at the mouth of the Hudson River in North America, established following the failure of East India Company–hired explorer Henry Hudson to find a northwest passage to India. In the twentieth century, under its British name, New York, it became a successor of Amsterdam and London as the world center of financial capitalism. Yet perhaps the greatest legacy of the Dutch Republic’s golden era was its fulfillment of the unsurpassed wealth-creating capacity of market-organized economies, and the superior military forces it could underwrite in seafaring democracies competing for primacy against traditional authoritarian kingdoms like Spain.

  Where the Dutch led, the English closely followed. Unable to beat the Dutch in the Spice Islands, England successfully supplanted the Portuguese in India and rapidly expanded its colonization of North America. On three occasions between 1652 and 1674, the Anglo-Dutch rivalry for commercial dominance flamed into inconclusive warfare; the second war, in 1665, was triggered by the British seizure of New Amsterdam. By the late seventeenth century, however, they put aside their hostilities to combat a larger, mutual threat—France’s bid for mastery of Europe under Louis XIV.

  Between 1662 and 1683, France had dedicated itself for one of the few times in its history to building a powerful navy to complement its formidable, huge army. France’s military success in subduing Europe was such that in 1689, when England came to the aid of the beleaguered Dutch, the French navy held the clear advantage against their allied strength. Financial overstretch, however, delayed implementation of the war plan at the decisive moment that its rare advantage might have prevailed. By the time Louis XIV was able to assemble 24,000 French troops and supporting ships three years later for a planned invasion of England across the Channel in 1692, the combined Anglo-Dutch navies had recovered enough strength to assert their superiority at sea. At the battle of La Hougue, in Normandy, on June 2, 1692, the French invasion fleet was utterly destroyed. With France’s navy in ruins and heavy financial burdens pressing upon the his monarchal state, Louis XIV abdicated the notion of rebuilding a strong state-run navy in favor of the cheaper, traditional outsourcing of naval harassment to French privateers. Meanwhile, England embarked upon a major naval expansion. As a consequence, by the early eighteenth century Britain’s navy reigned supreme among world powers; by 1730
it was as large as the next three or four navies combined.

  A pivotal component in England’s breakout as the world’s naval superpower was its ability to obtain abundant, cheap financing for warfare from private capital markets following the Glorious Revolution of 1688. The Glorious Revolution, which brought to the throne the Dutch William III and his English wife Mary, was firmly anchored in a new, unspoken governing compact committed to Dutch-style market economics and a liberal constitutional monarchy under Parliamentary control. Financial market institutions were expanded and private investment was widely encouraged as the principal motor of the economy. The confidence of private capital markets instilled by these reforms provided England with an enormous comparative financing advantage over rival centralized monarchies like France, where debt repayment depended solely upon the whim and will of the sovereign. After so many centuries, the long association between seafaring commerce and democratic political traditions had produced an economic mechanism dynamic enough to elevate the liberal democratic model to the forefront of civilization.