202410081042 Status: #idea Tags: #british_empire #politics #economics #finance #institutions # Financial innovations drove power dynamics in Europe The Dutch introduced many financial innovations that allowed them to compete with much larger European nations in the 1600s - chief among them being a proto-central bank for managing currency and a stock exchange where the government could sell low-interest bonds to finance large scale projects. After the Glorious Revolution, these financial innovations made their way to England and were put to use against France in the Seven Years’ War. Britain outspent France and doubled its national debt during the war from roughly £70 million to £140 million, financing this debt through issuing bonds. This money was spent on a massive naval buildup that allowed Britain to control the seas, blockade France, and cut it off from its colonies. [[Greater population and productive capacity acts as slack for poor strategy in war]] Without these financial innovations, Britain may have lost the Seven Years’ War and the world may have ended up French. Given the length and scope of the Seven Years' War, these financial innovations (unlocking productivity in shipbuilding) made a huge difference: [[The longer war drags on, the more economic it becomes]] --- # References [[Empire_ the rise and demise of the British world order and the lessons for global power]]