The Origin of our modern capitalist society has its roots in the former Dutch Republic.
The first international world currency was also formed during this period.
In this video we explore the cycles of the world Currencies. from the Guilder, to the Pound, to now the US Dollar.
Which currency will be next world Reserve at the end of the current cycle.
Tune in and find out!
0:00 Intro
1:11 Dutch Republic/ VOC
2:11 Mercantile Capitalism
3:37 Rise and fall of Empires
10:45 World Reserve Currency
12:30 Types of Capitalism
14:13 Downside of Capitalism
18:24 Welfare Capitalsm
20:30 Phases of Capitalism
25:21 New World Reserve Curency
28:30 Conclusion
Principles for Dealing with the Changing World Order by Ray Dalio
what’s good everybody today I want to talk about Dutch capitalism the mother of all capitalism the Dutch pretty much invented the type of capitalism we know today in short capitalism um is where a nation uses its entrepreneurs as a golden a sort of a golden geese and that lay golden eggs uh mainly and the eggs are mainly taxes and exclusive mutual bene beneficial agreements between the governments and the businessmen of the nation i’m going to show you a video by Ray Dalio you may have seen it already where he talks about the rise and fall of nation nations and he talks particularly about the Dutch in the golden era um the British and the rise of and the fall of the British and the United States he also mentions China uh but before we do that I want to talk to you a little bit about um the Dutch capitalism during the early days of Dutch capitalism the Netherlands was known as the Dutch Republic um in Dutch that was Republican Ven Netherland meaning um it translates to the seven United Republics of the Netherlands or low countries netherlands meaning low countries so you know translated now we just say the Netherlands but it really means the low countries in France they stay say Le Pisbas meaning low countries so the golden goose for the Dutch Republic was the Dutch East India Company or the Veos i will refer to it as the Veos is the just gonna say ve because otherwise I’m gonna have to say d e i c d so the specific type of capitalism that was practive uh that was practiced during the golden age of the Dutch was mercantile capitalism it’s where the VOCC had government governmental power but it was limited and in a few instances they could wage war against another country so they could act as a represent representative of the country these were their benefits and in return they would um pay income tax so now they were the only ones paying in that amount of income tax during the times the the citizens were just you know citizens they had another type of tax but this tax was the main source of income for the nation the state so their golden egg however was their trading capacities and the um the ability to turn the gilder into a world reserve so let’s watch this video by Ray Dalio where he talks about the rise and fall and also he mentions the gilder as a golden reserve and how is that is important in capitalism that the most important events that surprised me did so because they never happened in my lifetime these painful surprises led me to study the last 500 years of history for similar situations where I saw that they had indeed happened many times before with the ups and the downs of the Dutch British and US empires i studied the 10 most powerful empires over the last 500 years and the last three reserve currencies it took me through the rise and decline of the Dutch Empire and the Gilder the British Empire and the pound the rise and early decline in the United States Empire and the dollar and the decline and rise of the Chinese empire and its currencies as well as the rise and decline of the Spanish German French Indian Japanese Russian and Ottoman empires along with their significant in conflicts as measured in this chart now let’s simplify the form a bit as you can see they transpired in overlapping cycles that lasted about 250 years with 10 to 20 year transition periods between them typically these transitions have been periods of great conflict because leading powers don’t decline without a fight fight it during this phase leaders within the country have to design an excellent system to raise the country’s wealth and power first and foremost to be great they must have strong education which is not just teaching knowledge and skills but also strong character civility and work ethic these are typically taught in the family schools and religious institutions that provides a healthy respect for rules and laws order within society low corruption and enables them to unite behind a common purpose and work well together as they do this they increasingly shift from producing basic products to innovating and inventing new technologies [Music] for example the Dutch rose to defeat the Hapsburg Empire and become superbly educated they became so inventive that they came up with a quarter of all major inventions in the world the most important of which was the invention of ships that could travel around the world to collect great riches and the invention of capitalism as we know it today to finance those voyages they like all leading empires enhance their thinking by being open to the best thinking in the world as a result the people in the country become more productive and more competitive in world markets which shows up in their growing economic output and rising share of world trade you can see this happening now as the US and China are roughly comparable in both their economic outputs and their shares of world trade as countries trade more globally they must protect their trade routes and their foreign interests from attack so they develop great military strength if done well this virtuous cycle leads to strong income growth which can be used to finance investments in education infrastructure and research and development they must also develop systems to incentivize and empower those that have the ability to make or take wealth in all of these cases the most successful empires used a capitalist approach to develop productive entrepreneurs even China which is run by the Chinese Communist Party use the form of this capitalist approach [Music] deng Xiaoping when asked about this said it doesn’t matter if it’s a white cat or a black cat as long as it catches mice and it’s glorious to be rich to do this well they must develop their capital markets most importantly their lending bond and stock markets that allows people to convert their savings into investments to fund invention and development and share in the successes of those who make great things happen the Dutch created the first publicly listed company the Dutch East India Company and the first stock market to fund it which were integral parts of the system that produced massive wealth and power as a natural consequence the greatest empires developed the world’s leading financial centers for attracting and distributing the world’s capital amsterdam was the world’s financial center when the Dutch were preeminent london when the British were on top New York is now and China is quickly developing its financial centers most importantly the capitalists the governments and the military must work together not only did the Dutch work well together they were one and the same the Dutch East India Company was granted a trade monopoly from the government and had its own officially sanctioned military to go out into the global markets to make and take wealth the British followed with the British East India Company and had a similar coordination of their government business and military operations the US military-industrial complex followed suit as does the Chinese system today as the country becomes the largest international trading empire its transactions can be paid with its currency making it the preferred global medium of exchange and because their currency is so widely accepted and frequently used people around the world want to save in it making it the preferred storehold of wealth and thus the world’s leading reserve currency the Gilder was the world’s main reserve currency when the Dutch led world trade the pound was when the British led and the dollar has been since the USled naturally China’s currency is increasingly being used as a reserve currency here’s where I might disagree with Mr dalio um he assumes that China is going to be the next world power um and the the reserve world currency will be the yen if you’ve been following the sources I have you would know that the next reserve currency uh will be in the form of digital currency through blockchain and not the current gold fiat system cbdc stands for central banking digital currency it might still mean that China will be the next uh world power uh because the charts do tell that story but it’s I don’t think it’s going to be the one because we don’t know we still don’t know who owns Bitcoin also for a state to to host the reserve world reserve currency it must also be able to gain the trust and the respect of the world community and as of now in my opinion China is nowhere near trust or respect in the world community so but hey there’s always war which trumps you know that option pun intended you know China following the United States which came which Britain came before and then the Dutch became before that um that would be a whole cultural shift that you know the world has yet to see let’s get back to capitalism i mentioned earlier that the type of capitalism that the Dutch Republic at its peak used was mercantile capitalism where the ruling authority got its income from a few golden geese and in exchange they were granted special privileges within the state in the case of the VOC uh they could practice trade monopolies and claim land in the name of the republic and among many other things like you know the whole colonial slavery thing the Netherlands we know now is no longer operating under mercantile capitalism obviously as a matter of fact we haven’t fully experienced mercantile capitalism since the fall of the British East India Company i’d say the closest we we get is what we have now as the Rockefellers and the JP Morgans we’ll talk about that later what I can tell you is that mercantile capitalism works almost parallel or exactly the same way as uh technocracy um would only with better gadgets technocracy is you know it’s it’s something that it’s a modern term we we haven’t fully seen it yet everybody says no that’s not possible but as it they explain in the video most of the these things happens once in every few generations so nobody has seen it seen it happening in their life let’s watch the video to understand how this worked [Music] while in the top phase most of these strengths are sustained embedded within the fruits of their success are the seeds of their decline as a rule as people in these rich and powerful countries earn more that makes them more expensive and less competitive relative to people in other countries who are willing to work for less at the same time people in other countries naturally copy the methods and technologies of the leading power which further reduces the leading power’s competitiveness for example British ship builders had less expensive workers than Dutch ship builders so they hired Dutch designers to design better ships that were built by less expensive British workers making them more competitive which led the British to rise and the Dutch to decline also as people become richer they tend not to work as hard they enjoy more leisure pursue the finer and less productive things in life and at the extreme become decadent values change from generation to generation during the rise to the top from those who had to fight to achieve wealth and power to those who inherited it they’re less battleh hardened steeped in luxuries and accustomed to the easy life which makes them more vulnerable to challenges the golden era of the Dutch Empire [Music] and the Victorian era of the British Empire [Applause] were such high prosperity periods like this the financial bubble bursts this creates great domestic hardships and forces the country to choose between defaulting on its debts or printing a lot of new money it always chooses to print a lot of new money at first gradually and eventually massively that devalues the currency and raises inflation for the Dutch this was the financial crisis brought about by financial excesses and paying for the fourth Anglo Dutch War similarly for the British it was paying for its financial excesses and its debts from the two world wars and for the US it’s been three cycles of debt finance booms and busts since the ’90s with the central bank stepping in each time with stronger measures when the flight of wealth gets bad enough governments outlaw it those seeking to get out begin to panic these turbulent conditions undermine productivity which shrinks the economic pie and causes more conflict about how to divide the shrinking resources populist leaders emerge from both sides and pledge to take control and bring about order that’s when democracy is most challenged because it fails to control the anarchy and it is when the move to a strong populist leader who will bring order to the chaos is most likely as conflict within the country escalates it leads to some form of revolution or civil war to redistribute wealth and force the necessary big changes this can be peaceful and maintain the existing order but it’s more often violent and changing the order have been devalued for the Dutch this happened after their defeat in the fourth Anglo Dutch War when they weren’t able to repay the massive debts they built up during it this led to a run on the Bank of Amsterdam and a desperate selloff forcing massive money printing which devalued the currency and the empire into irrelevance for the So where is the Netherlands now whoa everybody okay where is the Netherlands now the Netherlands is now a welfare capitalist state which is far from mercantile capitalism this means that the state is no longer just a tax collector it’s also a provider and a regulator it doesn’t have special classes or is not supposed to have special classes it’s a step closer to socialism and it also means that the golden goose or geese will be heavily regulated and restricted like in a farm and it probably won’t be golden eggs it’ll just be regular eggs but a lot of it the estate will usually fall in this phase of capitalism usually after a period of crisis or inequality for the Netherlands and most of Europe this was at the end of World War II between 1945 and 1980 is when the foundations for pensions uh health care and welfare systems uh that were built that we’re now seeing the fruits of here in the Netherlands i guess the fruit sort but you know it’s all also running its course uh the financial crash of 2008 also recently perpetuated the situation so that we are in a welfare state that’s so that we’re dependent on the government for an income and it’s not so or the government is dependent on it’s a mutual thing I guess um now let me show you the four phases of capitalism in order it is a cycle that eventually leads back to the merkantile system of capitalism like I mentioned before now they call it technocracy or what we are seeing coming as technocracy okay phase one capitalism often mercantile or lair they call it it’s private ownership minimal state interference rapid growth innovation and wealth concentration phase two crisis or inequality spikes which is where the Netherlands um is right now at um in the long term i’m not saying that the the Netherlands is in a crisis but it just got out of one about 60 to 70 years ago the whole world did so we’re seeing now the effects of it we’re not no longer in a crisis but we already made the deal so now we’re living that part of it phase three is an increased state involvement you know I would argue that uh the Netherlands is might be in phase three instead of uh phase two um is increase state involvement regulations social safety nets redistribution or nationalization to stabilize society and reduce inequality phase four is push back and liberalization over time excessive state control can stifle innovation and efficiency leading to calls for deregulation and privatization and then it returns to phase one which is capitalism i would say the US is at phase four now these things these phases overlap as you may have seen in the video it doesn’t happen in a straight timeline some and sometimes some things happens before the other but um if you look at the bigger picture you will see that you are you know between these two faces for sure maybe not exactly in a phase in certain areas you are in certain areas you you are um it’s just to get a better idea of you know if if you look at things from a um more of a outside perspective or from a um wider perspective um you know of history so the U for the US uh phase one would be uh Carnegie like I said earlier Rockefeller JP Morgan Ford CocaCola and other m multinational corporations that conquered the global market in the name of the United States as you can see some of these companies um they were there before and after World War Coca-Cola was just you know a little baby and because it could ride out um the war it you know it became some of them didn’t you know make it some you know you know you could search up the history of these companies and you’ll you’ll see um how they rode the wave so this phase we can’t call it quite mercantile but we can call it industrial type capitalism because it wasn’t fully merkantile as I described um earlier phase two uh would be the great depression again this was before the war but that’s what I I mean with it overlaps a little bit um with um some things happened not quite at the same time so the depression came and the war came so the war was more of had a more of an effect on Europe than it had on the United States in a negative way the depression was the negative thing for the United States they were already through that stage um so now phase three is when the US started focusing on pensions and as we know now that bubble has already pretty much burst in the US they started a little bit earlier um uh Europe caught on um afterwards they followed suit of what the US was doing with with the whole pension concept uh which is uh pretty much new in modern times so the US is now in phase four which is to become a technocratic state or China might come in and sweep their glory who knows who knows we don’t know with this new um there’s a new uh player in the game which is digital currency um and and AI also so these are going to be the So whoever controls these things I think is going to be uh the new world order or the new world at least uh reserve currency um we don’t most people think it’s going to be a state a nation it might not even be a state it might be a corporation and as we know some countries are already operating as corporations so we don’t know which corporation might um but it um we don’t know which corporations might take over uh the world currency so let’s continue with the video as you can see better education typically leads to increased innovation and technology development and with a lag the establishment of the currency as a reserve currency you can also see that these forces then declined in a similar order reinforcing each other’s decline let’s now look at the typical sequence of events going on inside a country that produces these rises and declines in a nutshell the big cycle typically begins after a major conflict often a war establishes the new leading power and the new world order because no one wants to challenge this power a period of peace and prosperity typically follows as people get used to this peace and prosperity they increasingly bet on it continuing they borrow money to do that which eventually leads to a financial bubble the empire’s share of trade grows and when most transactions are conducted in its currency it becomes a reserve currency which leads to even more borrowing at the same time this increased prosperity distributes wealth unevenly so the wealth gap typically grows between the rich halves and the poor have nots eventually the financial bubble bursts which leads to the printing of money and increased internal conflict between the rich and the poor which leads to some form of revolution to redistribute wealth this can happen peacefully or as a civil war while the empire struggles with this internal conflict its power diminishes relative to external rival powers on the rise when a new rising power gets strong enough to compete with the dominant power that is having domestic breakdowns external conflicts most typically wars take place out of these internal and external wars come new winners and losers then the winners get together to create the new world order and the cycle begins again modern capitalism started in the Dutch Republic in the early 17th century they launched the first world currency the Gilder and backed it with a staterun mega corporations like the Dutch East India Company or VOC powered by cuttingedge sailing tech after losing to the British in the fourth Anglo Dutch War the pound took over then came the dollar our current world reserve three empires three currencies three cycles what we call technocracy today is just mercantile capitalism in a lab coat same game new mask the cycle is not over it’s just changing uniforms some historians can speculate that the Chinese wand will be the next world currency but if you have been following the sources I have you would know that the next world reserve currency will be the digital currency through blockchain CBDC central banking digital currency whoever is the authority or the regulator of the digital currency will be the next world reserve currency nation whether it will be a traditional shift of a country like USA China Russia or maybe even a surprise entry of whatever happens in the Middle East or a corporation like Palunteer Black Rockck the WF or a surprise entry like Tik Tok or sentient AI if you know who it is put it in the comments below history says that it’s not the first time we have been at the end of a capitalistic cycle and it might just be part of a modern society click the link below to see my full video about this topic you will see me next time [Music]