LOSS OF LEADERSHIP^443the latter seventeenth century pointed to Holland as exemplar and ad
versary; when French writers of the eighteenth century noticed and de
plored English commercial and financial achievements—they were
venting their envy, hopes, and dissatisfaction in an age of state build
ing and intense national rivalry. That was the nature of Europe, very
different here from ecumenical China or anarchical India and Islam.
Europe consisted of states big and small, each steered by the pride and
interest of the ruler, but increasingly by self-aware nationalism. All
vied. All knew the significance of money for standing and power.
The primacy of money in the service of power found expression in
economic thought. Mercantilism was not a doctrine, nor a set of rules.
It was a general recipe for political-economic management: whatever
enhanced the state was right. Even Adam Smith had his mercantilist
moments: the navigation acts, he noted, may have cost the British con
sumer, but they worked wonderfully to put down Dutch seapower.
By Smith's day, the era of Dutch primacy was over. It had been a
hundred-year wonder: this small country dominating the oceans; mov
ing goods, bulky and rare, in thousands of vessels; standing up to and
defeating more populous nations; setting an example to all of ratio
nality and purpose. Nothing shows this better than the conquest of
England by William of Orange, Stadholder of the United Provinces, in
- This was the last successful invasion of England, and the first
since another William, him of Normandy, in 1066. To be sure, the
British do not remember it that way. The Whig interpretation of the
overthrow of James II as the "Glorious Revolution" has obscured the
character of the event. Yet invasion it was, and it was intended to take
over the English crown to prevent it from joining with France against
the Netherlands. The Dutch fleet assembled that September was four
times the size of the Spanish Armada and carried the best troops in the
Dutch army, plus foreign volunteers, animals, equipment, and a huge
artillery train. "When all dimensions are considered—military, naval, fi
nancial, logistical, diplomatic, domestic ... it was arguably one of the
most impressive feats of organization any early modern regime ever
achieved."^1
As late as 1776, Adam Smith still thought of Holland as richer than
England. How did he know? He compared interest rates in the two
countries and found that the Dutch government could borrow at 2
percent, private parties at 3. English rates, he wrote, ran about a point
higher; Scottish rates, maybe two points. This implied, he said, that
capital was more abundant in Holland and profits lower. To be sure,
Dutch entrepreneurs complained that business was poor; but for