Civilization #49: The Dutch Golden Age and the Rise of the Middle Class

To understand the Anglo-American Empire which rules the world today, we will first look at the rise of the British Empire. And to understand the rise of the British Empire, we first need to discuss the rise of the Spanish Empire.

It was the Spanish who were the first to colonize the New World. They did so because they were looking for gold and silver, and it turned out they found a lot of it. All this money was now going back to Spain, and that became the basis of the Spanish Empire.

You would think it's a really good thing that they found all this gold and silver, but it was a disaster for the nation. The reason why is that at this time in history, Spain was a feudal Catholic monarchy, and all this money just made the system even worse.

A feudal system means that there is a rigid hierarchy of status, with the nobles and the clergy at the very top. Because of all this gold and silver, the clergy and the nobility didn't actually have to pay taxes anymore and had to make no contribution to society. You had this group of parasites that were sucking up a lot of wealth and energy within Spain.

Second is the idea of being Catholic. Because of the Catholic religion, people didn't really care about what happens today; they cared about what happens when they die. They cared about making sure that they had a place in heaven. So they got all this money from the New World, and none of it went into industry, innovation, technology, and science. All of it went into religious activities: religious festivals, churches, masses. All this money was being wasted.

The third thing is monarchy. They had a king, and this king also happened to be, through marriage, the king of the Holy Roman Empire, which was most of Europe. If you're a king and you have an infinite amount of money, what do you do? You go on a series of stupid, pointless wars all around Europe. He was fighting the Ottomans, the French, and even the Catholic Church because he wanted to be stronger and have more authority than the pope. He was paying for these wars with this gold but also by borrowing. So at the end of the 16th century, Spain—even though it was at this point in history the most powerful and wealthiest empire with the largest army—basically went bankrupt. This system was a disaster for Spain.

Another issue is that because of feudalism, the Spanish nobility thought it was beneath them to work hard. They believed that it was contemptuous to exert yourself; to be a noble meant to sit back and enjoy life. This money was a disaster for Spain.

To understand what happened, think of an analogy. Let's just say today I give each of you $100 million. You think that's a lot of money, so you go and waste it all on ski trips, on buying a new Maserati, on buying a private plane. Then you recognize, "If I keep on doing this, I'm eventually going to go bankrupt." So what do you do? You go and invest in businesses. You recognize that if you invest in businesses, you should borrow money from the bank to have greater leverage and make more money. The bank says, "Well, you have $100 million, so I will give you money." You take about a billion dollars in loans. But because you're not a very sharp business person and have absolutely no experience running a business, in 10 years, all your businesses go bankrupt. You find yourself a billion dollars in debt. You started out with $100 million, and then through reckless expansionism, you have a billion dollars in debt. That's exactly what happened to Spain.

The Rise of France, England, and Holland

This system created opportunities for those who did work hard. The three countries that would take advantage of the system were France, England, and Holland (or what we call the Dutch Republic). There are three ways in which they took advantage of this new system that the Spanish created.

The first is through industry. The Spanish didn't have any industry; they were still an agricultural-based nation, but they wanted textiles and finished goods. The French, the English, and the Dutch did work hard because of their religion—they were Protestants, and they believed in hard work. This created a middle class for them. They industrialized because of Spanish demand.

The second way is through piracy. These ships were transporting all this gold and silver from the New World back to Spain, which means that you could just hijack these ships and steal all their gold and silver for yourself. Piracy became the official policy of the English. Francis Drake was the most famous pirate of this time, and he was like an admiral in the British Navy, sponsored by Queen Elizabeth I. He was a national hero because he would go and steal all this gold and silver from the Spanish and replenish the English crown. Piracy was a really important way these three countries made money off Spain.

Also, because of piracy, these three countries were forced to innovate in their navy. The system of naval warfare at this time was to ram your ship at another ship, board it, and then take it over. It was hand-to-hand combat. What the English figured out was that they could just have cannons on their ships and pound the other ships from a distance—basically artillery and long-range fighting. That's what the English pioneered, and that's why, over time, they became the greatest navy in the world.

The third thing is trade, specifically through smuggling. All this territory in the New World was controlled by the Spanish crown, so everyone started to smuggle in order to avoid paying taxes and levies to the crown. They were mainly smuggling slaves. Slaves were, for most of human history, the most profitable product that you could trade, and this was even more true at this time because the New World had these plantations and they needed people to work them. So they started to transport slaves from Africa to the New World.

There is a misconception in history that the Europeans went to Africa, kidnapped these slaves, and then transported them to the New World. This is not true. The reason it's not true is the Europeans actually did not want to go to Africa and stay there because of malaria. What was happening was that the Europeans set up trading centers around Africa, and it was the Africans themselves who would give the Europeans slaves. These nations and tribes in Africa were fighting against each other, and the custom at the time was if you lost a war, the entire population would be enslaved and then sold to the Europeans. So not only were the Europeans getting rich off this trade, but so were many African clans and tribes.

The True Prize: Spices and the East Indies

What people misunderstand is that most of the profit was actually not in gold and silver. At this time in history, the most profitable product—the thing that was most valuable—was actually spices: things like nutmeg, cinnamon, and peppercorn. These are the things that Europeans really valued. One ship of these things was enough to make fortunes for entire families for generations.

In other words, the center of trade was not actually in the New World, but in Southeast Asia. From China, the Europeans imported silk and porcelain, and from the Southeast Asian islands (basically Indonesia), they imported spices. This became known as the East Indies, and this is where the money was to be made. The key to world conquest was who could control the trade routes into the East Indies.

The people that first really figured this out were the Dutch. The Portuguese were there, but they were like the Spanish—a Catholic nation. The Dutch were the ones who figured out how to make a lot of money out of the East Indies.

The Dutch Republic and the First Multinational Corporation

How were the Dutch able to succeed? It has to do with the fact that at this time in history, the Dutch were controlled by the Spanish. The Spanish were in charge of the Habsburg Empire, which included the Dutch. At this time, the Dutch are part of something called the Low Countries, which includes today's Belgium and the Netherlands. For the longest time, the Low Countries had been part of the Holy Roman Empire. This system worked well for them because they were poor and didn't have many resources, so they were left alone by the Holy Roman Empire. They had a lot of local autonomy and were a very independent and egalitarian nation. Because it was cold and poor, people worked hard, and the Low Countries was one of the first places to develop textiles. As such, they started to trade with Spain and became wealthier.

But over time, as Spain became more and more powerful, it went to exert more authority over the Low Countries. Protestantism was spreading all across Europe, and the king of Spain wanted to maintain Catholicism in the Low Countries, which brought them into conflict with the people there. This created something called the Eighty Years' War. It was really a war of independence between certain cities in the Low Countries that wanted independence from Spain, and of course, Spain wanted to maintain control.

The problem is that Spain was the most powerful nation in the world at this time. The Low Countries had about 1.5 million people; it was a very, very small place. They couldn't possibly fight Spain, but they persisted because they were led by religious fanatics. Over time, what they realized is even though they couldn't beat Spain on land, they could actually beat Spain at sea. They recognized that the way to beat Spain was to control the trade in the East Indies. That would give them the wealth and the resources to defeat Spain. But they were a small and poor nation, so how could they best do this?

The solution would forever change human history. In 1602, they created something called the Dutch East India Company, known as the VOC in Dutch. This is really important in human history because this is considered the first multinational corporation in the world.

This corporation was not controlled by the government, but it had the power of government. It could raise its own military, create its own laws, and issue its own currency. This company would go on to become the most profitable and most valuable company in the whole world. If you take Apple, Microsoft, and Google, and you combine them together, they would still not be as wealthy as the Dutch East India Company. The reason why is they had a monopoly over the trade for spices in the East Indies.

Why would the Dutch do this? They needed a way to unite the people of the Low Countries into fighting the Spanish. How do you incentivize people into fighting? Most people were indifferent; they were like, "We don't really care. The Spanish are far away." But you had some fanatics who wanted independence, and you also had some individuals who were heavily Catholic. Eventually, the people who wanted independence would move north to the Netherlands, and the people who wanted to remain Catholic would move south to Belgium. That's why if you go to Europe today, Belgium is heavily Catholic, but the Netherlands, which is still one of the wealthiest countries in the world, is actually Protestant.

They needed to unite the people, and the best way to do that was to incentivize them by giving them shares—equity—in a company. Now people actually had an incentive to fight the Spanish because if the Dutch East India Company made money, they got rich. And that's what happened. The Dutch East India Company became extremely wealthy, and that created a middle class in Holland.

This was also a very clever way to raise taxes. If you try to get taxes from people, they will rebel against you. But if you say, "Listen, we have this company, and if you invest in it, you might get rich," this is the equivalent of selling war bonds to people. That's why the Dutch East India Company really marked a turning point in the war between the Dutch and Spain.

This would allow the Dutch East India Company to work hard to control the trade in the East Indies because if they worked hard, they were the ones who profited, not the king. Over time, the Dutch East India Company would push out the Portuguese and monopolize this entire area. As a result, they would become extremely wealthy.

What's important to remember—and this is why the Dutch don't really talk about this history—is that a lot of brutal horror happened because of this process. Because they were a multinational corporation only interested in profit, they committed ethnic cleansing. They basically wiped out populations and enslaved people to work in plantations to grow these spices. They would constantly engage in a series of wars against the Portuguese, the English, and the French in order to maintain control over the monopoly.

Over time, they would recognize that they didn't actually have the population resources to maintain their empire. So they would retreat and leave this empire to the French and the English, but they would still be subcontractors to them. That's why the Netherlands remains one of the wealthiest countries in the world today. A lot of their wealth is hidden.

Calvinism and the Birth of a New Identity

This war was actually driving the growth of the middle class and Protestantism in Europe. The specific religion was Calvinism. There are two major ideas that differentiate Calvinism from Catholicism.

The first is the idea of justification by faith. In the Catholic religion, you show your faith to God by doing good works, basically by giving money to the church. But in the Calvinist religion, which the Dutch Republic adopted, it's justification by faith, which means that you and God communicate. God knows if you are faithful, and you yourself know if you're faithful. So if you spend money or build stuff, that doesn't matter. The works don't matter; what matters is your true faith.

The second thing, which is more important, is the idea of double predestination. Remember from our lecture on the Protestant religion, reformers were trying to destroy the influence of the Catholic Church because they thought the pope was evil. The main power of the Catholic Church came from the idea that it is the church who decides whether or not you go to heaven. The Calvinists believed, no, the church doesn't, because at the beginning of time, even before the world was created, God had already decided who would go to heaven and who would go to hell. That's the idea of double predestination. Your destiny has already been decided, and only a minority called the elect will go to heaven. Everyone else will be damned to hell.

These ideas were created in order to erode, dilute, and destroy the influence and power of the Catholic Church so that people could be liberated from it. But these two ideas created a new problem: how do you know if you are part of the elect? How do you really know?

The answer they discovered is you know through your virtuous hard work. Through simple hard work. And how do you know if you are working hard? How do you know that your life is simple enough? Because you're accumulating money. Money now is actually useful. Before it wasn't that useful, but now money is a testament to your faith.

This marks a radical change in human perception and identity. Before, we were people very much focused on status. Now, we focus on wealth.

What does status mean? Status just means how you are perceived in your community. You work hard in order to win approval from your peers. Remember the Vikings? They would go on these crazy adventures. Why? Because they would come back and tell these stories that would entertain and impress their peers. Also, remember the Viking funerals: a third of all their wealth would go into funeral expenses, having a big feast for everyone. A third of their wealth would go into funeral clothes, and a third would go on to the family members. For most of human history, we didn't believe it was important to have money. What was important was to impress the community. That's why if you made any money, you would immediately come back and hold a huge feast. That's still true in China today, where if you are from a village, come to Beijing, open a restaurant, and make a lot of money, you go back to your village and hold a huge feast for the villagers.

That's the idea of status. Now, we're concerned about wealth. Why? Because wealth is a measure of your faith. It is a testament to whether or not you will go to heaven. This marks a radical change in human perception and creates the idea of class and the market.

The Dutch Golden Age of Art

Now that the Dutch, through trade, are making a lot of money, they're actually not allowed to spend it because they have to exemplify simple hard work. So how do they enjoy their wealth? The answer is through art. For the first time in human history, you have an art market. Before, art was something that was patronized by the wealthy. But as the middle class rose in the Dutch Republic, now the middle class could enjoy art. This would mark a radical change in how art is created.

Because of this, you also have a new idea called materialism. If you don't spend your money on the community or the church, where do you spend it? You spend your money on the house, on where you live. That's why it's important to buy silk and porcelain from China. That's why you want to buy spices—because it's a measure of your wealth within the household.

This is driven by three factors:

1. Anxiety: Anxiety comes from the fact that you don't know if you're faithful to God or not, so you must prove to yourself that you are faithful.
2. Uncertainty: At this time in history, the Dutch Republic is at war with Spain, the most powerful empire in the world. You don't know if you'll survive. The uncertainty also comes from the fact that trade is precarious. Right now you're wealthy because the Dutch East India Company is profitable, but it's also possible that tomorrow England, France, or Spain comes and wipes it out.
3. Competition: Remember, only a few people will go to heaven, but there are a lot of wealthy people in the Dutch Republic. So how do you prove that you're better than the other members of the middle class? There's going to be competition. You have to prove that you are a more simple, more faithful individual.

Because of these three factors—anxiety, uncertainty, and competition—it will drive three major developments in human society: the creation of the art market, the idea of materialism, and the modern concept of money. If you think about it, this now becomes the prototypical middle-class identity. Even though we're in China and are not a Christian nation, the middle class in China still has the values and ideas that the Dutch had 500 years ago. The Chinese middle class is obsessed with moneymaking, materialism, and the accumulation of artistic objects.

Spanish Art vs. Dutch Art

Let's focus the rest of the lecture on art because art will give us a portal into the mindset and psychology of the Dutch people. But before we do that, let's talk about Spanish art. During the Spanish Golden Age, a lot of money went into patronizing great art. As you can see, Spanish art is very Catholic, so it's very allegorical. They're drawing images from the Bible and the Catholic tradition, and it's a worship of the religion.

This is the most famous painting of the Spanish Golden Age by a painter named Diego Velázquez. This is his most famous painting, called Las Meninas (The Handmaids). What's amazing about this painting is that as we are observing it, the painting is actually observing us as well. The painter is looking at us as we're looking at him.

Now let's move on to the Calvinist Dutch mentality of paintings. Let's do a compare and contrast. This is a Dutch painting, and this is an Italian Renaissance painting by Caravaggio. This is baby Jesus and Madonna, and there are two supplicants who are worshiping Madonna. This is the Catholic mentality, which is that God can be with us at any time.

This is the Dutch equivalent, where this is a middle-class woman and these are two street musicians who are trying to interact with this world. What's really important for us to understand is that with the rise of the middle class, there's a huge focus on hierarchy and boundaries. Why? Because the middle class itself is a very fluid, flexible, and uncertain group of people. Their paintings will reflect this anxiety and uncertainty. As you can see, the inner world is full of light; the outer world is pretty dark. This door is a portal. Within the house, there's this divinity, but in the outside world, there's only darkness and mystery. God is within your household, basically.

Still life is a very important aspect of Dutch painting. It captures the material world as it is. It's a celebration of the material world because remember, the Catholics celebrate the afterlife, but the Calvinists, the Protestants, celebrate the here and now. They do that through depictions of life in the household.

The Psychology of Middle-Class Art

One thing that obsesses the Dutch middle class is the poor. Why? Because the middle class is an anxious, uncertain group of people. The way they define themselves is by differentiating themselves from other groups, including the poor and the nobility. In their imagination, the poor just give themselves up to temptation. They're drinking all the time, getting drunk, and they're lazy. By depicting the poor in this way, it's almost like a talisman to protect themselves from being poor.

Prostitution is also a very popular theme. What's interesting is that prostitution at this time was very popular in the Dutch Republic. Good middle-class women were responsible for going and negotiating with prostitutes in order to satisfy their husbands. The idea of prostitution was a huge topic in the Netherlands and a cause of a lot of anxiety, uncertainty, and desire within the middle class.

At the same time, you also have depictions of what it means to be a good middle-class household. These paintings are ones of simplicity, restraint, temperance, and prudence. Within these paintings captures a lot of middle-class Christian values.

This is probably the prototypical portrait of a wealthy person in the Dutch Republic. She's wealthy, but the most important thing is that she's simple. She's not luxurious and decadent like the Spanish are. She is very restrained, focused, and temperate in her behavior. She represents the quintessential wealthy middle-class woman.

So why were the Dutch buying these paintings? There are different reasons.

• Refinement: To show that you're refined, to engage in beauty, to show you have taste.
• Worship at Home: Because of the Calvinist religion, money no longer goes to churches. People transferred their wealth from the temple into the household to better worship God.
• Conspicuous Consumption: To enjoy your wealth and to show it off to your neighbors.
• Meditation: The middle class was always afraid of becoming poor. They froze their anxiety, competition, and uncertainty in a contemplative whole. They took their anxiety and projected it onto the painting to better meditate on what it means to be middle class.

But there are also three more reasons which are more important for us: the representation of the other, taboos, and boundaries.

1. The Other: The paintings of the poor represent them as lazy, excessive, and violent, always giving in to their sexual urges. They're trying to create the idea of the other—the poor are the other that we must at all times avoid.
2. Transference: You have all these desires to eat good food and engage in sex that you cannot do because of your religion. So you transfer these feelings onto the artwork itself. The artwork becomes the subject of your desire.
3. Hypocrisy: The artwork is a shield, an armor, a dress for you to show that you have good values.

These are still the reasons that drive culture today, including literature and movies.

To summarize, art is a response to the anxiety, uncertainty, and competitiveness of middle-class life. It encapsulates the alienation of the individual. This is happening because there are certain pathologies to middle-class life that are still true today. The first pathology is that middle-class identity demands the control and regulation of yourself and other people because you have a fear of disorder. This creates pathologies within you, which express themselves through a fear of disorder, a fear of germs (cleanliness), and a fear of loss (obsession with accumulation and achievement).

This explains why Chinese parents are so obsessed with getting their kids into good universities like the Ivy League. There's no logical reason why your kid must get into the Ivy League. But if you think about the pathology of the middle class—the fact that they're uncertain and anxious—getting their kid into the Ivy League is a way to relieve their anxiety, their OCD.

The Subversive Genius of Johannes Vermeer

I will conclude by talking about who I think is the greatest artist of the Dutch Golden Age: Johannes Vermeer. In every age, in every movement, a great artist will emerge who subverts the movement, who shows you the pathologies, the problems, the ironies, the paradoxes within it. What Vermeer is really good at doing in his artwork is demonstrating to us the hypocrisy of middle-class life.

This is one of his most famous paintings, called View of Delft. This was painted about 1650. I have no idea how he did this; no one has any idea. The lighting is perfect. It's like he had a camera, like an iPhone, and he snapped a picture of his city.

My only explanation is that what makes great artists different is they're able to dissolve their ego. They're able to dissolve their body, and their soul becomes part of the moment. In other words, Vermeer became the painting itself. The painting became him, and then he became the painting. He is just expressing his soul.

This is his most famous painting, Girl with a Pearl Earring. This is a beautiful painting, but there are some problems or ironies in it. Obviously, this pearl earring is a problem because she's an ordinary person, maybe a maid. She's poor. Why would she have a pearl earring, which is extremely precious and expensive? That's the mystery within this painting. This leads to the question: why is she looking at us seductively, with desire and yearning? Then you recognize she probably has a master, a patron. She's probably working in a household, and maybe there's a relationship of sorts between the maid and the husband.

It's a story, a novel that draws in your imagination, but more importantly, it shows you the hypocrisy within middle-class life. The entire purpose of prostitutes was so that the husband would not do this crap at home because it's important to maintain the sanctity of the middle-class household. It's your temple of worship, so you're not allowed to seduce your servants. This is an extremely subversive painting that at the same time seduces us. It almost begs us to do the same thing. It's trying to demonstrate our own sexual depravity and desires. It shows us the relationship between sex and power.

This is The Milkmaid, another really famous painting. Again, the lighting is perfect. Not only that, but the lighting is able to highlight the blemishes of the wall. He could have just made the wall white, but instead, he's showing us the cracks and blemishes, which is a metaphor for the blemishes and cracks within bourgeois life.

When you first look at it, you think, "Oh, this is a picture of middle-class simplicity and hard work." She's a virtuous, faithful young woman. But then you focus on the stream of milk, and there are sexual qualities to this, which is the center of the picture. Within this wholesome picture is embedded a picture of sexual possibilities. It's meant to be subversive. It's meant to make you uncomfortable.

These ideas—that middle-class life is inherently flawed, that there are blemishes and cracks behind the veneer, that it's fundamentally hypocritical—get captured in literature later on, first in Madame Bovary and then most famously in the greatest novel of all time, Anna Karenina. On the surface, it shows you the importance of maintaining the sanctity of middle-class life, of maintaining rules and order, because if you don't, it will lead to disaster and heartbreak. But at the same time, if you read this novel very closely, it also shows you the hypocrisy of middle-class life, how Anna Karenina herself has been oppressed by the taboos and boundaries set upon her by the world she lives in. This is what's going to drive literature from now on.

It's important that we remember that the British Empire—a lot of its ideas—are now being seeded in the Dutch Republic, including the idea of multinational corporations, capitalism, middle-class life, artwork, and literature.