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Energy and the Dutch Industrial Revolution
It’s hard to imagine an Industrial Revolution without coal. Whether as an input in blast furnaces or steamship engines, in lighting forges or turning factories, coke was ubiquitous as a companion of British—and later European—development after the late eighteenth century. Britain’s transition from “advanced organic economy” to fossil-fuel and generally energy-intensive production marked a turning point in global history, opening one particular road to modern growth that industrializing countries ever since have been more or less fated to follow. Without an apparently inexhaustible source of combustible fuel to draw upon, even the most prosperous agrarian economies found themselves unable to take advantage of the wide range of mechanized and heat-using sectors—weaving, spinning, steam, and smelting—that proved the basis of modern production. Between 1700 and 1850, Britain’s energy consumption per head more than tripled, while the share accounted for by coal rose from an already-high 49.7 percent to 92 percent.
But as late as 1650, Britain was neither the world’s richest nor most energy-intensive economy. That honor fell to the Netherlands, in the final throes of the Dutch Golden Age. Popular history overstates the degree to which Dutch economic success was based on her substantial shipping sector. The country’s prosperity was actually founded on a highly productive agriculture and an equally dynamic range of (often urban) industries—paper-making, cloth-finishing, shipbuilding, lumber milling—which set the European standards for quality, costs, and efficiency. These manufactures required a great deal of energy, but the Netherlands had nary a seam of coal to exploit. By 1640, her woodlands had all but vanished, too. Part of the deficit was filled by windmills, of which the Dutch had 3-4 thousand during the seventeenth century, but despite their startling specialization and sophistication, they were useless for many industrial processes. You can’t blow glass, make bricks, or refine sugar without heat. Yet the Dutch did all three.
The solution to the Dutch problem? Peat. More commonly called turf, peat forms when plant matter, usually in marshy areas, fails to fully decay because of a lack of oxygen. It’s sort of an intermediate stage on the road to coal formation, and is really only semi-renewable—it takes 1000 years to form one meter, provided that you leave it undisturbed. The energy density of peat is equivalent to that of wood—15-17 MJ per kg—though lower than coal (24 MJ/kg) or charcoal (29 MJ/kg). And the Dutch, thanks to their geography, had plenty of the stuff: possibly over 275,000 hectares prior to commercial exploitation. Moreover, Dutch peat was exceptionally accessible; compared to her European neighbors, the peat reserves of the Netherlands were situated relatively close to the water table, meaning that canals could easily be built between the “peatery” and the consumer. By one estimate, hauling turf by land by cart would have required 110 thousand horses and 1 million hectares of land, one-third of the country’s surface area. The Dutch were the only Europeans to intensively exploit their turf reserves before the late nineteenth century, when electric power lines rendered hauling the bulky fuel overland unnecessary. By 1650, the per capita energy derived from peat may have been double what the English were getting from coal.
The first extraction of peat in Holland was primarily local, starting in the fifteenth century in the low-lying laagveen districts where farmers could dig it up without making capital investments. Rising demand from Antwerp, where peat reserves had already been exhausted, raised prices substantially from 1480 to 1530. This led to the invention of the baggerbeugel, a tool that allowed the Dutch to cut peat below the water table and haul it up the to the surface, and permitted the intensive exploitation of the bogs—so intensive, in fact, that the value of the land for agriculture collapsed. Huge lakes formed on the exhausted bogs, eating away at the surrounding countryside and sometimes consuming whole villages. In the seventeenth century, however, the pumping techniques prevalent for land reclamation in the polders was applied to solve this problem with some success. Areas of higher land, or hoogveen, needed capital—canals had to be dug—and so awaited the emergence of consortia to buy land, build the canals, and hire workers to extract the peat. In the seventeenth century, new canals connected southeastern Friesland, eastern Groningen, and Drenthe to the broader economy, while investments were also made in larger sluices, deeper channels, and dockyards. The first consortium was established in 1546, but the arrival of urban entrepreneurs from Holland and Utrecht only really set the industry in motion after 1600. The canal boom, during which over a dozen prominent veencompagnie were established, lasted until 1650, when output started to drop.
The Dutch historian J. W. de Zeeuw, writing in 1976, estimated the rates and total quantities of peat extraction during the Golden Age. He suggested that the available stock prior to exploitation was 6.2 billion cubic meters, removed at a rate of 15.5 million cubic meters per annum during the seventeenth century. This translated into 6 trillion kcal of energy per year, or 3.15 million per capita (for a population of about 1.9 million), which dwarfed the figure of 45 billion total (30,000 kcal per head) derived from windmills. A revised estimate by Unger produced an estimate one-fifth the size, but even if one were to accept his figure instead (it’s not clear that one must), the picture remains unchanged: the Dutch were still exceptionally energy-intensive. Transporting this material occupied 4,000 boats on Dutch internal and coastal waterways, and some of it was even exported to surrounding regions, including Germany and Flanders. The canals made peat cheap in the major urban areas of Holland; coupled with high wages, the result was a similar factor mix to that posited by Allen (rising labor costs driven by trade and cheapening Tyneside coal) as having stimulated labor-saving investment in Britain. Indeed, the Dutch economy looked forward to these developments in substituting capital for labor whenever possible and in honing a range of specialized mills that took advantage of cheap fuel.
Peat was everywhere in the seventeenth-century Dutch economy. It heated the salt pans used by the herring industry, the riverside brickworks of Holland and Utrecht, and the beer breweries of the North. Where access to water—and thus cheap peat—was easy, urban export centers arose, as with Haarlem, which used the fuel to bleach linen. Delft consumed peat en masse in producing its famous ceramics. Sugar refining was impossible without thermal energy, but after 1650, coal-less Amsterdam was the world’s premier refiner; half of all refineries in Europe circa 1662 were Dutch, processing Caribbean and Latin American sugar. Peat was also crucial in the shipbuilding industry for bending planks, melting tire, and forging iron fittings and freed up imported wood for use as a construction material. The list continues: roof- and paving-tile, pipe-, stoneware- and faience-factories, madder- and chicory-works, dyers and printers of textiles all consumed turf in the industrial sector. Furnaces, kilns, cookeries, bakeries, distilleries, drying-houses and roasters and smelters, and even charcoal burners also profited from the availability of peat, further concentrating industrial activity where it was cheapest.
Jan de Vries and Ad van der Woude (1997) definitively sum up the situation:
The cheap distribution of energy (peat and later coal) for home and industrial use is a key fact in accounting for the high level of urbanization already attained in the fifteenth century… And in the seventeenth century, numerous export-oriented industries (bricks, tile and ceramics, pipes, beer, spirits, sugar, salt, soap, whale oil, glass) shared a pronounced energy intensivity, which suggest their common debt to the Republic's uniquely low-cost energy supplies. It appears that energy use in the Republic, both household and industrial, stood far above the levels common to the rest of Europe until the end of the eighteenth century… A concentration of energy-intensive industries such as arose in Holland was simply not possible elsewhere before the eighteenth century.
Inexpensive fuel and productive labor contributed to the export success of Dutch industry, which in turn boosted the country’s unparalleled national income and drove technical improvement in agriculture. Peat helped to relieve the land constraint, too; 800,000 hectares of forest, or a quarter of the Dutch surface area, would have been needed to supply the same quantity of energy. Britain may have made the best use of the urban-agrarian feedback loop, but the Dutch were the early modern pioneers. The high wage-cheap energy nexus promoted capital investment, innovation, and organizational improvements in key sectors, intertwining with the region’s precocious financial development. European competitors across England and France sent spies and emissaries to the Republic to steal information about Dutch techniques and to hire away her artisans, engineers, and inventors.
Could the “Golden Age of Turf” have lasted? Might the peat bogs have served as ample substitutes for the fabled coal deposits of the British North? Probably not. De Zeeuw’s optimistic figures show a depletion rate of 3 to 5 percent per year, and today, less than 3 percent of the original peat stock still exists. Output was falling by the late seventeenth century, and the revenues from the peat excise fell by 20 percent from 1660 to 1680. Turf prices accelerated faster than the overall price level until 1750, when they were sufficiently high that new bogs became profitable to exploit and farmers began to transfer land out of cultivation into extraction. Transport costs also rose as a result of the silting of waterways, which required expensive interventions to avoid: the “camel” used to drag ships across the sand bank of Pampus near Amsterdam and the dredging of rivers, canals, and harbors. Despite imports of coal, per capita energy use was probably 15 to 20 percent lower in 1750 than in 1660. In 1700, English per capita consumption was probably equal or higher than the Dutch equivalent, and could be carried on for millennia at an eighteenth-century rate if solutions were found—as they were—to drainage and winding once surface deposits had been exhausted.
At the same time, the Dutch economy began its well-known period of stagnation, if not outright succession. GDP per capita flatlined while urbanization and agricultural productivity probably went into decline. Dutch industry became increasingly high-cost and uncompetitive abroad, a process exemplified by the movement of production outside the urban centers into the countryside. The cities cried out for protection, demanding that duties be hiked on finished good imports and that the land tax and raw materials tariffs be slashed. Light woolen cloth, tapestry weaving, the breweries, soap boiling, salt refining, cooperage, the potteries; shipbuilding, lumber milling, and sailcloth weaving were all in crisis by the late seventeenth century. After 1680, the movement of skilled craftsmen outside the country became systematic, and Dutch windmill builders could be found from Sweden to South Carolina.
But had the Dutch really run up against a hard energy ceiling? Was the Netherlands a paradigmatic example of an “advanced organic economy” reaching the limits to growth without fossil fuels? It seems unlikely. Sure, one can point to innumerable examples of industries suffering under the weight of rising energy costs, such as the collapse of the Delft breweries around 1750. But peat wasn’t the only energy source in the Netherlands, even during the seventeenth century—just the cheapest. During the Golden Age, a sizable proportion of the energy supply may actually have been supplied by coal—the same Newcastle coal that was powering England’s own energy revolution. Indeed, coal was available in London and the cities of the Netherlands at comparable prices during the seventeenth century, both of which, after all, had to be supplied by sea. By 1800, imports from Britain were providing an equivalent amount of energy to that which had been secured from peat around 1660. This occurred despite export duties and the Navigation Acts, which were in any case most stringently applied to the Dutch during the seventeenth century.
The decline in energy consumption, then, looks like a demand-side story, not a supply-side bottleneck. Whatever structural forces conspired to cut patenting volumes after 1650 and blocked the use of the steam engine—employed in drainage since 1780—in the industrial sector reduced the demand of Dutch firms for heating fuel, not vice versa. Individual industries successfully switched to coal-firing, including distillers, sugar refiners, and brewers. It was more frequently the Dutch government—which taxed and sometimes prohibited coal use—than the British that limited the supply available to producers. Many sectors that collapsed, such as timber-sawing, used wind rather than heat for power. If we posit that energy availability raised Dutch operating costs and prices above British, we need better evidence and a more plausible timeline than we have. More likely causes include the small size of the domestic market and the need to source critical inputs from the Baltic, both of which made the Netherlands exceptionally outward-oriented and thus vulnerable to the mercantilist legislation of the late seventeenth century. Furthermore, Dutch decline coincided with the diffusion of her low-cost techniques and skilled workers to her nearby rivals, including the English, fostering catch-up growth and the loss of export advantages.
The complexity of the Dutch peat saga should also prompt us to think harder about the necessary role of energy in selecting geographical start for European industrialization. Coal was clearly an essential and necessary input for modern industry, both for the additional heat intensity provided and for the greater supply available, but it’s not clear that immediate proximity was a sine qua non for the development of manufacturing. The main early inventions of the textile revolution in Britain, for example, were developed in an industry driven primarily by water mills. Energy availability was mediated by a range of structural factors in the global economy, especially infrastructural links, but economies could and did face headwinds nevertheless. We must avoid getting bogged down by simplistic narratives of energy crisis.