This chapter offers an example of the role of the Bank in European state finance. The kingdom of Prussia made heavy use of the Bank during the Seven Years War (1756—1763). Public finance in Prussia during this period was primitive, lacking basic features such as a bond market or central bank. Under heavy financial pressure, Prussian King Frederick II chose to finance much of the war through the production of debased coinage. The task of minting debased coins was outsourced to private contractors (“mint entrepreneurs”), who purchased much of the necessary silver in Amsterdam, making use of credit which was abundant in the Amsterdam market. Details of these transactions are revealed in the Bank’s ledgers. Frederick also relied on gold subsidies from Great Britain, which were paid via Amsterdam and can also be matched to Bank records. Finally, at the end of the war, Frederick called upon his entrepreneurs to engineer a reverse debasement (reinforcement). This activity once again relied heavily on Dutch resources, including remote smelting furnaces, Amsterdam credit, and Bank money. Traces of the entrepreneurs’ activity can again be seen in the Bank’s records.

South Africa’s multi-ethnic heritage

African science articulates a cosmology of interconnectedness like that of the Baltics. According to Mathias Guenther (2020), the Sān peoples of Southern Africa shared a common perception of the universe as unbounded and changeable. Roaming an arid landscape alongside the other species they depended upon for subsistence, the ancient Sān believed humans and animals flowed into one another through spacetime. These social interactions brought meaning and order to the chaotic impulses of a participatory universe. In contrast to the gather-hunter Sān, who recognized the right of all life to a free existence, the pastoral Khoekhoe possessed livestock and paid tribute to tribal leaders (Smith, 2009). While Khoekhoe societies introduced a degree of hierarchy into the self-other relationship, animal welfare was a shared value among all Indigenous Southern Africans, who often shifted between herder and hunter lifestyles and Khoe-Sān identities (Barnard, 2008).

Across Sub-Saharan Africa, Bantu-speaking societies teach a similar worldsense. Experiencing the cosmic web of life as a divine Vital Force, Bantu-speaking peoples recognized the rights of other species to wellbeing, with cultural philosophers appointing the spirits, ancestors, and living human elders as ecological guardians. During the colonial era, the Bantu concept of Vital Force merged with Christian notion of God, giving rise to African Christianity, in all its cultural, linguistic, and ethnic forms (Kaoma, 2014).

Ubuntu is a pan-African moral philosophy. Although the term derives from the Xhosa and Zulu languages of Southern Africa, Ubuntu concepts undergird moral thinking across the continent. As a distinctly African science, Ubuntu challenges the Euro-Western discourse on human rights, which places individual and collective rights into opposition rather than recognizing their interdependence. In The Lessons of Ubuntu, Mark Mathabane (2018) identifies the hostile and nihilistic ideologies undergirding racial and ethnic relations within the neoliberal world-system. The survival-of-the-fittest theorem buttressing modern rational discourse reduces human agency to a stark choice: ‘to hate or be hated, to oppress or be oppressed, to kill or be killed’ (p 9).

This introductory chapter describes salient features of the Bank of Amsterdam and proposes that these were sufficiently advanced to qualify the Bank as a modern central bank. Sophisticated central banking, however, was not the Bank’s original mission, which instead was to apply contemporaneous information technology (double-entry accounting) within a limited-purpose institution to facilitate the movement of safe assets (trade coins) through Amsterdam. By the eighteenth century, the Bank had moved well beyond its original design and evolved into a de facto fusion of two banks, active and passive, linked by a common liability — fiat ledger money. This chapter outlines this evolution, which is explored in greater detail in subsequent chapters.

Latvian folk song

Land and freedom

It is an early morning on Ataugas Farm. I awake under the wooden rafters of Aivars and Lilija Ansoni’s home and groggily make my way down the stairs, unsure what the day will bring. I arrived on the farm the evening before, having arranged to work in exchange for an account of Latvia’s organic farming movement from a couple who has been involved since its inception. Aivars is in the kitchen, frying eggs in a skillet. He adds a generous dollop of sour cream to the sizzling eggs then slides them onto a plate and hands the food to me, blue eyes twinkling. I inhale the rich aroma with surprised pleasure. Aivars laughs and tells me that this is one of the many benefits of being a farmer: ‘I have always loved sour cream on fried eggs,’ he says, ‘but it was too fattening to eat when I worked in the city. This will give you the energy to work hard today!’

The agrarian ideal runs deep in the Latvian national consciousness for, in this formerly colonized society, land is a potent symbol of cultural freedom. When Latvia first secured its independence from foreign rule in 1920, the young Republic immediately passed the Agrarian Reform Law. Transferring land ownership from the Baltic German nobility – who at the time were less than 4 per cent of the population – to Latvian peasants, the Republic abruptly dismantled a colonial production regime that had been in existence since the fourteenth century (Plakans, 1995). This act radically transformed the agrarian landscape, as large estates were carved into small-scale family farms. When Latvians again declared their independence in 1990, the transitional government re-enacted the agrarian reforms of the First Republic, encouraging a new generation of Latvians to return to the land and take up the national tradition of homesteading (Žakevičiūtė, 2016).

The existential dimension of development

The early twenty-first century sits at the apex of the Anthropocene, a new geological epoch that has come into being over the last century. The Anthropocene is marked by what Christopher Chase-Dunn (2013) has called a converging set of social and environmental catastrophes, ranging from climate crisis and mass extinction events to sharp increases in social inequality, and the re-entrenchment of authoritarianism in response to global precarity. The Cenozoic Era in which the Anthropocene more broadly is placed is known as the Age of Mammals, and given the demise of large mammals and birds occurring now, the climate scientist Roger Barry (2020) suggests that Cenozoic may be ending.

Unlike previous mass extinction events, however, ours has been induced by human activity, wrought by our dependency upon fossil fuels and more than 4,700 forever chemicals, comprised of per-and polyfluorinated alkyl substances (PFAS) that do not occur in nature (Chambers et al, 2021). Introduced in the 1940s, PFAS now are found in everything, from food packaging and cookware, to cosmetics, electronics, cleaning fluids and fire-fighting foams. PFAS have been found in every ecosystem on Earth, including in the blood, breastmilk, and umbilical cords of humans and other species, and magnifying across recent generations via a process of bioaccumulation (Kempisty and Racz, 2021).

Latvian folk song

Latvia’s cultural and linguistic heritage

Baltic moral philosophies perceive a participatory universe where dynamic flows of energy interweave material existence. Drawing from archaeological and linguistic sources, Endre Bojtár (2000) finds that ancient Baltic societies developed in accordance with an animist ontology and a matriarchal axiology. Like many other Indigenous societies around the world, precolonial Balts inhabited a cosmological realm where humans, trees, and animals transmuted into one another through cycles of reincarnation. Not only did people worship sacred forests and make daily offerings to Mother Earth, but they also maintained intimate bonds with all living beings, from flora and fauna to hills, rivers and stones. Cultural customs, such as seasonal festivals, encouraged people to view non-human forms of life as kin, and to nurture biodiversity as one would care for children.

When German crusaders colonized the Baltics, proto-Latvians responded by enfolding their pagan spirituality into Christianity. Although colonizing forces have fragmented Indigenous Baltic knowledge systems, obscuring their contributions to global science, their lessons are encoded in linguistic and oral traditions, as well as in folk symbols that transmit the wisdom of an archaic Baltic science.

Song is central to cultural identity across the three Baltic sister states, where Latvian Dainas, Lithuanian Dainos, and Estonian Runo song traditions house ancient moral philosophies. Latvian Dainas are quatrain-based poems, composed of four lines that alternately rhyme and typically are sung at gatherings. There are more than 1.2 million poems in existence – many of which are more than a thousand years old – making Dainas one of the largest recorded bodies of oral knowledge in the world (Bula, 2017). Dainas share linguistic ties to Lithuania’s non-rhyming songs, but they employ a similar rhythm as ancient Liv and Estonian songs; indeed, Latvian Dainas are culturally unique (Stepanova and Stepanova, 2011).

This chapter further analyzes the workings of the receipt system, using data from the Bank’s cash books, which survive from 1711. These data show that heavy usage of the receipt system began from about 1714, following the end of the War of Spanish Succession. From about 1720, most coins entering the Bank under receipt were foreign coins. Inflows of coins into the Bank’s receipt facility are shown to be appreciable percentages of New World gold and silver production. Coins under receipt were usually withdrawn from the Bank less than a year after they were deposited, with the exception of gold coins, which were sometimes surrendered to the Bank upon expiration of their receipts (such coins were said to be “fallen to the Bank”). Waves of fallen gold coins sometimes coincided with surges of gold into Amsterdam, as occurred after the 1720 collapse of John Law’s system in France. Because the receipt system functioned much as a repo facility, the chapter concludes with a derivation of implicit discounts (“haircuts”) on coins under receipt. Haircuts on silver coins are shown to be consistently positive, while haircuts on gold coins are variable and sometimes negative. These haircuts, combined with higher redemption fees for gold, created incentives for more consistent use of the receipt facility for silver coins, while usage of the receipt facility for gold was intermittent.

This final chapter discusses the role of the Bank within a selective history of central banking. “Exchange bank” institutions such as the Bank became obsolete by the end of the eighteenth century. The new model for central banks was the Bank of England, which incorporated features such as private equity capital, large holdings of sovereign debt, a discount window, and the issue of circulating banknotes. It is argued that the Bank of England nonetheless gravitated to a two-bank structure following the 1844 passage of Peel’s Act, with many similarities to the eighteenth-century Bank of Amsterdam. Peel’s Act split the Bank of England into two banks, a passive bank (“Issue Department”) that issued notes against gold deposits and paid out gold coins, and an active bank (“Banking Department”) used its ledger money to commercial paper and engage in various types of open market operations. A concluding section argues that the active—passive dichotomy bears some relevance for modern financial markets, with active liquidity arising from traditional central bank open market operations, and passive liquidity arising from arrangements such as repo transactions. It is argued that recent crisis events have revealed the interconnectedness of these two forms of liquidity.

This is a comparative historical tale of agrarian resistance and change, as it has occurred over the longue durée in two lands situated at opposite ends of Earth. In the deep forests of Northern Europe, ancestral Latvian tribes lived in egalitarian societies far from the slave-owning empires of the ancient Afro-Eurasian world-system. This changed when German crusaders invaded the Baltics in 1195, beginning a period of colonization and imperial rule that would culminate in the Soviet occupation of the twentieth century. In sunbaked Southern Africa, South African tribes likewise maintained egalitarian societies apart from the ancient imperial world. Dutch merchants invaded the Western Cape in 1652, engendering a trajectory of colonialism that would result in the formation of a White supremacist apartheid state in 1948.

In both countries, peasants resisted the alienating yoke of authoritarian rule by maintaining Indigenous knowledge systems grounded in social and ecological connection. Imparting life-affirming values, these intellectual and cultural currents succoured communities through desperate times, empowering people to mount collective resistance to state repression. When the Soviet and apartheid regimes collapsed at the end of the twentieth century, farmers took advantage of democratic reforms by investing in organic production technologies and establishing alternative trade networks. In Latvia, farmers have established a vibrant local and slow food movement to restore small-scale production and revitalize this nation’s precolonial agrarian heritage. In the Cederberg Mountains of Western South Africa, small-scale farmers have worked to secure their heritage as artisanal producers of Rooibos tea by establishing fair trade partnerships with international buyers at the heart of its geographical origin.

Their efforts join a broader global justice movement that is constructing bottom-up approaches to development and social change; and, within this manifold movement, food and trade justice activists are confronting a global agro-food regime dominated by large multinational firms whose interests are backed by powerful states. While the rationalization of agriculture has enabled the capitalist world-system to produce cheap food at an industrial scale, the exploitative production and trade systems that rationalism has produced are a key driver of the current existential crisis in development.

In Benin, top businesspeople not only capture the economy but also the executive, and possibly legislative power. This book develops a comprehensive analysis aimed at identifying and reducing the institutional constraints that impede Benins rapid, sustainable, and inclusive development. The research reveals a chain of causality between four main categories of institutional weaknesses in Benin, namely corruption, inefficiencies in governance, opacity in public decision-making, and excessive informality in the Beninese economy. These institutional weaknesses are traced back to proximate and ultimate causes. The immediate causes include political instability, elite capture of key state functions, weakness of the state, and the possibility of easy but illegal rents. In turn, these causes are linked to deep-rooted underlying factors such as the nature of the political game, essentially neo-patrimonialism with multiple economic and/or political Big Men, but also geographical or ethnic factors. We elaborate on policy reforms aiming at overcoming or circumventing these institutional problems.

In Benin, top businesspeople not only capture the economy but also the executive, and possibly legislative power. This book develops a comprehensive analysis aimed at identifying and reducing the institutional constraints that impede Benins rapid, sustainable, and inclusive development. The research reveals a chain of causality between four main categories of institutional weaknesses in Benin, namely corruption, inefficiencies in governance, opacity in public decision-making, and excessive informality in the Beninese economy. These institutional weaknesses are traced back to proximate and ultimate causes. The immediate causes include political instability, elite capture of key state functions, weakness of the state, and the possibility of easy but illegal rents. In turn, these causes are linked to deep-rooted underlying factors such as the nature of the political game, essentially neo-patrimonialism with multiple economic and/or political Big Men, but also geographical or ethnic factors. We elaborate on policy reforms aiming at overcoming or circumventing these institutional problems.