Amsterdam
Why Nations Fail: The Origins of Power, Prosperity, and PovertyAmsterdam is presented as a hub of western European demand that helped make eastern European agriculture more profitable—and its workers less free. Its imports and commercial ties show how an expanding market could connect regions while deepening unequal institutions within them.
Grain Demand and the Second Serfdom
After 1500, western European demand for agricultural goods from Eastern Europe grew. Rye was a particularly important commodity: 80 percent of the rye imported into Amsterdam came from the Elbe, Vistula, and Oder river valleys. Soon, half of the Netherlands’ booming trade was with Eastern Europe.
This commerce brought eastern landlords stronger incentives to control production and the labor force. They increased taxes on tenants’ own plots and took half of their gross output. The labor obligations imposed on peasants also grew: in Korczyn, Poland, work for the lord was paid in 1533, but by 1600 nearly half had become unpaid forced labor. In Mecklenberg, workers’ unpaid service rose from a few days each year in 1500 to one day a week by 1550 and three days a week by 1600; their children could also be required to work for the lord without pay. These developments became known as the Second Serfdom.
A Market with Unequal Terms
The trade linked Eastern European producers to a booming western market, but it did not make the region’s economy inclusive. Agricultural goods flowed west while landlords tightened their hold over peasants and land. By the end of the sixteenth century, serfs subject to such rules made up 90 percent of Hungary’s rural population; elsewhere, too, commercial expansion coincided with the loss of workers’ freedom.
The book uses Amsterdam’s grain supply to illuminate a broader divergence. Western European workers increasingly entered a market economy as free laborers, while eastern European workers participated as coerced serfs producing goods sought in the West. Amsterdam thus marks not simply the reach of trade, but the unequal institutional conditions under which that trade was supplied.