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THE “SPIRIT OF CAPITALISM”: SPAIN'S

LOSS AND HOLLAND'S GAIN

The Dutch economic explosion was fueled principally by Jews and, to an even greater extent, Protestants—both fleeing persecution from Hapsburg Spain. As these two groups built flourishing communities in Holland, they made the Dutch Republic the center of global trade, industry, and finance.

Take, for instance, the diamond trade. Before 1725, when diamonds were discovered in Brazil, virtually all of the world's raw diamonds came from India. Some of the most famous diamonds in history hail from India, including the legendary Hope, a rare blue diamond weighing 44.5 carats, the 280-carat Great Mogul (current whereabouts unknown), and the 100-plus-carat Kohinoor, now one of England's crown jewels. (In 2000, members of India's parliament demanded that the British government return the Kohinoor; for the moment, it is still embedded in the queen's crown in the Tower of London.) The early mining methods used in India were primitive. Poor laborers from the lowest castes, sometimes 60,000 at a site, dug shallow pits along riverbeds. The excavated gravel was then hand-sifted for diamonds.

The business of transforming these rough stones from India into the gorgeous, sparkling multifaceted gems that adorned the necks of Europe's aristocracy was dominated by Jews. As early as AD 1000 a network of Jewish merchants extending from Madras to Cairo to Venice had controlled the world's diamond trade. Moneylenders since antiquity (because they were barred from most other forms of livelihood), Jews had developed an expertise in appraising, cutting, and selling gems, which were often put up as collateral for loans. As a result, where the Jews settled, they brought the diamond business with them, together with an ever-expanding trading and financing network linking Europe and the Mediterranean to Asia, Africa, and the Americas.

When Spain expelled its Jews in 1492, many of them settled in Lisbon and later in Antwerp (at that time still under Hapsburg rule). Not coincidentally, both cities became booming hubs of international trade and finance. Lisbon became the entry point for almost every diamond destined for Europe, and Antwerp became the world's preeminent diamond-cutting center. By 1550, the port of Antwerp was so crowded that incoming merchant ships had to wait in long queues before unloading their cargo: The city had become the securities exchange for the entire Hapsburg Empire— indeed, the “supreme money market” for all Europe.15

But rising intolerance cost the Hapsburgs dearly. When the Inquisition hit Portugal in earnest in the 1540s, and as expulsion efforts mounted in Antwerp in the 1550s, Jews and conversos began fleeing to the more tolerant towns of Holland. These Iberian Jews and conversos, in contrast to the large numbers of impoverished and poorly educated Ashkenazi Jews flooding into the Netherlands to escape pogroms in Poland and Germany, were among the wealthiest merchants and financiers in the world. Elegant, erudite, and aristocratic—and many of them eventually ennobled—these Sephardic Jews poured capital into the Dutch Republic, infusing bank reserves, augmenting state funds, fueling Dutch colonialism, and playing a central role in the establishment of the famous Amsterdam Stock Exchange. By the mid-seventeenth century, Amsterdam had replaced Lisbon and Antwerp as the diamond center of Europe and the hub of the worldwide Jewish banking and trading network.

Jewish families also became prominent in lucrative industries such as tobacco spinning, sugar refining, silk weaving, chocolate making, and civet and diamond production. (It was common for Ashkenazi Jews to work as menial laborers for Sephardic employers. Poor Ashkenazi Jews, for example, were often seen outside Amsterdam scrounging up cheap meat to feed civet cats.) Many, including the Belmonte, Lopes Suasso, Nunes de Costa, and Pinto families, were also great philanthropists. They served as patrons for artists, poets, and musicians, established welfare programs, and funded both religious and secular scholarly