This chapter initiates our concrete historical inquiry into modern world finance. It begins with the Amsterdam-centred Dutch world financial order of the seventeenth and eighteenth centuries, and then moves to consider the London-centred British world financial order of the nineteenth and early twentieth centuries. An Historical IPE approach to world finance suggests that the Dutch financial order is the appropriate point for longue durée inquiry to commence. During the seventeenth century world credit practices first took on their modern form, becoming framed and legitimated by the principles of rationality and reason. The Dutch and British financial orders were, however, a complex mix of continuity and change.
In terms of the position of WFCs within world finance, the Dutch financial order was a continuation of the tendency since the fourteenth century for great mercantile cities to rise to WFC status. Amsterdam followed in the wake of Venice in the fourteenth and fifteenth centuries, and Antwerp and Genoa in the sixteenth century (Braudel 1977; Tilly 1990; Arrighi 1994). With the unravelling of the Dutch world financial order from the late eighteenth century, and the concurrent rise of London as WFC of the British financial order that became established after 1815, an important structural transformation took place in the nature of world financial orders. London stood, first and foremost, as the financial centre of the industrialising British national political economy (Kindleberger 1974/1978:79-83; Braudel 1984:35; Germain 1997:45-7). With the emergence of European industrial state-society complexes during the nineteenth century, consolidated national political economies as imaginary and regulatory constructs came to form the foundations of both world financial orders and the world economy more broadly (Jacobs 1963; Radice 1984; Agnew and Corbridge 1995). As Cameron and Palan (1999:274) summarise:
The strongly territorial idea of the nation-state was from the outset closely bound up with the extension of regulatory control over the assets and transactions of the national population and the emergent institutions of the private and public sectors. At the same time, the state border as an economic boundary serves to separate and create the ‘domestic’ and the ‘international’ economies as discrete spaces.