Dutch success was due to a number of political, economic, and military factors. Politically, the Dutch were the only European nation at that time with a republican government, rather than an absolute monarchy. This gave each citizen a greater stake in the nation's success, and a greater responsibility for helping the country to do well. This also gave more power to the Dutch merchants, whose shrewd business sense and pragmatism led them to a position of prominence in Europe. The success of Dutch merchants provided ample tax revenues from which the Dutch government could wage war, protect its borders, establish colonies, and care for its citizens. It also provided a large supply of money for lending at favorable interest rates, which, in turn, helped the Dutch government finance its activities when tax revenues were not sufficient. These three factors reinforced each other and enabled the Netherlands to achieve a prominence that belied its relatively small size and population.
During the seventeenth and eighteenth centuries Europe was in a nearly constant state of war. Alliances developed and shifted continually between England, France, Spain, the Netherlands, Sweden, and smaller states as the European nations first built themselves and then jockeyed for power and dominance.
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