Wind Trade: How the Concept of Wind Came to Embody Speculation in the Dutch Republic

TY - JOUR

T1 - Wind Trade

T2 - How the Concept of Wind Came to Embody Speculation in the Dutch Republic

AU - Leemans, Inger

AU - de Vries, Wouter

N1 - Publisher Copyright: © 2022 The University of Chicago. All rights reserved.

PY - 2022/6

Y1 - 2022/6

N2 - This article describes how the concept of wind came to embody speculative trade in the Dutch Republic. During the financial crisis of 1719–20, the term windhandel (wind trade) suddenly gained momentum as the preferred term in reference to high-risk trading in shares and derivatives. The use of this concept appears to be limited to the Netherlands: in France and England the term “wind trade” is rarely used. In this article, the sudden and nationally confined rise of “wind” as a financial term is explained by combining arguments from the history of finance, science, and industry. We argue that (1) the introduction of derivatives within a well-established stock market called for a new kind of conceptualization of (speculative) trade, indicating both the high gain potential and the inherent risks; (2) as wind and air were reconceptualized in scientific research (from spirit to substance), they gained suitability as metaphors for a trade that is both solid and highly evaporative; and (3) the Dutch Republic provided a tradition in the economization of wind, through an advanced industrial windmill park, where merchants could invest in wind through shareholder companies. The quite sudden introduction of wind in the realm of finance in 1720 triggered an explosion of cartoons and texts full of wind symbolism, which affected the traditional iconography of wind and helped to take the temperature of the economy.

AB - This article describes how the concept of wind came to embody speculative trade in the Dutch Republic. During the financial crisis of 1719–20, the term windhandel (wind trade) suddenly gained momentum as the preferred term in reference to high-risk trading in shares and derivatives. The use of this concept appears to be limited to the Netherlands: in France and England the term “wind trade” is rarely used. In this article, the sudden and nationally confined rise of “wind” as a financial term is explained by combining arguments from the history of finance, science, and industry. We argue that (1) the introduction of derivatives within a well-established stock market called for a new kind of conceptualization of (speculative) trade, indicating both the high gain potential and the inherent risks; (2) as wind and air were reconceptualized in scientific research (from spirit to substance), they gained suitability as metaphors for a trade that is both solid and highly evaporative; and (3) the Dutch Republic provided a tradition in the economization of wind, through an advanced industrial windmill park, where merchants could invest in wind through shareholder companies. The quite sudden introduction of wind in the realm of finance in 1720 triggered an explosion of cartoons and texts full of wind symbolism, which affected the traditional iconography of wind and helped to take the temperature of the economy.

UR - https://www.scopus.com/pages/publications/85133208012

U2 - 10.1086/719448

DO - 10.1086/719448

M3 - Article

AN - SCOPUS:85133208012

SN - 0022-2801

VL - 94

SP - 288

EP - 325

JO - Journal of Modern History

JF - Journal of Modern History

IS - 2

ER -