The launch of the Dutch East India Company in 1602 initiated Amsterdam's
transformation from a regional market town into a dominant financial
center. The Company introduced easily transferable shares, and within
days buyers had begun to trade them. Soon the public was engaging in a
variety of complex transactions, including forwards, futures, options,
and bear raids, and by 1680 the techniques deployed in the Amsterdam
market were as sophisticated as any we practice today.
Lodewijk Petram's eye-opening history demystifies financial instruments
by linking today's products to yesterday's innovations, tying the
market's operation to the behavior of individuals and the workings of
the world around them. Traveling back to seventeenth-century Amsterdam,
Petram visits the harbor and other places where merchants met to strike
deals. He bears witness to the goings-on at a notary's office and sits
in on the consequential proceedings of a courtroom. He describes in
detail the main players, investors, shady characters, speculators, and
domestic servants and other ordinary folk, who all played a role in the
development of the market and its crises. His history clarifies concerns
that investors still struggle with today, such as fraud, the value of
information, trust and the place of honor, managing diverging
expectations, and balancing risk, and does so in a way that is vivid,
relatable, and critical to understanding our contemporary financial
predicament.
