LOSS OF LEADERSHIP^445
bacco processing in Amsterdam were declining even before midcen-
tury. An index of industrial production setting 1584 at 100 shows a
peak of 545 in 1664, dropping to 108 in 1795.^4 Among the toughest
competitors: the rapidly growing cottage industries of Flanders, Rhen
ish Germany, Saxony, and Silesia.^5 Nor was commerce spared: the "rich
trades" to the Levant and Spanish America dwindled, along with bulk
carrying of herring, salt, and wine in European waters. A few sectors
held up, notably the import, processing, and re-export of such colonial
wares as sugar, coffee, tobacco, tea, and cocoa. Yet even there, Holland
lost relatively, to Britain and France in particular.^6
Economic contraction pulled at the social fabric. The major cities
shrank as skilled craftsmen and small entrepreneurs sought better op
portunities in other lands. The decline, though moderate, contrasted
significantiy with steady and even rapid urbanization elsewhere.^7 That
Dutch towns did not shrink more was because rents and food prices fell
and some poor relief was available; this was a matter of public order if
not of charity. Besides, Dutch wages still topped those in surrounding
lands, in large part owing to the resistance of craft guilds, and this gap
drew cheap labor from abroad to compete with the newly unemployed.
Increasing hostility and conflict found an outiet in strikes, until noth
ing was left to strike about.
Some of this may remind readers of conditions in the United States
in the last quarter of the twentieth century. As branches of manufac
ture have shrunk before foreign competition, enterprises have dis
charged redundant labor or moved to lower-wage areas. New workers
cost less than old, as the airlines know only too well. Poor immigrants
have kept coming. Unions have struck, sometimes only hastening plant
closings or transfer of orders to cheaper suppliers. (Mutatis mutandis,
one finds similar developments today in western Europe.)
So in Holland two centuries ago. The United Provinces pared and
trimmed to meet the competition, but the best they could do was run
in place. Many businessmen gave up the fight and retired to the coun
try and to a life of passive investment. Incomes polarized between the
rich few and the poor many, with a diminishing middle in between. Tax
returns show that by the late 1700s, most wealthy Dutch were big
landowners, high state officials, or rentiers. Gone the prosperous en
terprisers of the "golden age": employers were now confined to the
middle and lower ranks.
In the process, the United Provinces abdicated as world leader in
trade and manufacture and went into a postindustrial mode. Italy had
gone that way before. In Venice, for example, the wool craft had sunk