Our university group of 10 persons just finished Simon Lelieveldt’s financial history walking tour of Amsterdam. It was fabulous. We had only been in Amsterdam for two days, and the only museum we had visited prior to the tour was the Amsterdam (History) Museum for an overview of the city’s history.
Simon’s walking tour clearly explains the contribution of Amsterdam to economics and global finance. While weaving in and out of smaller streets and alleys--avoiding areas plagued by tourists—Simon traces the rise of a fishing village that cooperated in the building of a dam and exploited its ‘tax free status’ to become an entrepôt for goods moving from inland to the sea and to and from the Baltic and the Mediterranean seas. Simon points out that what actually enabled the Netherlands to master the Atlantic ‘bulk trade’ routes and later the ‘rich trade’ routes to Asia was a tradition of financial innovation. Not only was the joint stock corporation—the permanent joint venture, often with government imprimatur-- essentially invented in Amsterdam, but many of the ‘complex’ financial instruments that muddy financial waters today—options, puts and calls, derivatives such as forward contracts and futures—were all innovated in the commodity/stock exchange just off Dam Square.
Simon’s walking tour incorporates all the pivotal sites, but he also uses every stop to clarify important concepts. For example, the first persons to charge interest (usury) in Amsterdam were Lombards (Catholics) from Italy; their operations, equivalent to pawn shops, were then ‘nationalized’ by the city authorities to prevent abuses (excessive interest rates). The Exchange, where foreign currencies were transferred and trading accounts settled (typically on a particular day of the month), later morphed into a bank, much like the Medici maneuver in Italy. But most importantly, Simon emphasizes that was the migration of people into the Low Countries traders from the south--first Jews from Spain and Portugal, later Protestants and commercially-minded Catholics from Antwerp--that enriched Amsterdam’s capital stock. The migrants brought financial capital (funds), social capital (network connections with traders in other markets), but most importantly, human capital: skills and trading savvy.
Simon’s treatment emphasizes the process of ‘continuous improvement’ that enabled the Dutch ‘joint venture’—battling Spain for religious and political independence--to establish a global trading network which integrated the Spice Islands, South Africa, and Surinam, often to the detriment of their inhabitants. He doesn’t neglect to discuss the dark side: He ends the tour near an exhibit on the slave trade, and he is conscientious about revealing the role of trust, greed and derivatives in past (such as the infamous Dutch commodity bubble known as Tulipmania) and more modern financial crises.
Simon is low key and very good at ‘reading’ his audience, able to alter the pace to suit the audience and so well versed on financial topics that almost no question is outside his sphere. We would take another tour at the drop of a florin, if only he offered a sequel!
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