How beer created the state of belgium

Around the world, Belgium is famous for its beers and its brewing tradition. However, there is another link between beer and Belgium: historically, the country owes its very existence to

beer. Surprisingly, it was not Belgian beer that played this important role, but rather beer consumed by what is now its northern neighbour, the Netherlands. Taxes on beer consumed in the

Netherlands gave this region the military power to break away from the Spanish-occupied Low Countries, leaving the territory of present-day Belgium behind. The border established by this

separation still forms the border between Belgium and the Netherlands today. Until the end of the sixteenth century, the territory of present-day Belgium and the Netherlands formed one

region, the Low Countries. Comparing maps from that era (like the one in Figure 1) with a present-day map of the Low Countries (Figure 2), it’s hard to see the origins of the current border

separating Belgium and the Netherlands. There are no geographical features or administrative divisions hinting at the current border, and neither were there originally any major cultural

differences that could predict the present-day situation. At the end of the sixteenth century, the Low Countries were ruled by the Spanish King Philip II. As ruler of an empire “on which the

sun never set”, he tried to centralise the administration of his empire. Moreover, Philip was a fervent Catholic, and he was determined to fight Protestantism throughout his realm. Both

elements caused unrest in the Low Countries. Philip did not respect traditional rights and privileges of the nobility and the wealthy towns in the Low Countries. In addition, Protestantism

was very popular throughout the Low Countries. This unrest led to a revolt, and in 1581, several northern provinces declared their independence from Spain. Initially, this Dutch Revolt

seemed a hopeless case, with just a handful of towns struggling against the mightiest empire on earth. However, Spain never managed to defeat the rebels. Instead, the Revolt dragged on for

80 years, making it one of the longest uprisings in European history. After eighty years of fighting, an exhausted Spanish Empire was prepared to sign the 1648 Treaty of Münster, giving the

rebels independence on extremely favourable terms. This Treaty divided the Low Countries into the independent Dutch Republic in the north and Spanish-occupied territories in the south. The

border established by this treaty still forms the present-day border between Belgium and the Netherlands, as can be seen by comparing a map showing the 1648 border (Figure 3) with a

present-day map (Figure 2). But how did the rebels in the north manage to break away from the powerful Spanish empire? The answer to this puzzle lies in the remarkable capacity of the Dutch

to finance their struggle. Because of technological developments and innovations in strategy and tactics, warfare during the Dutch Revolt was an increasingly costly undertaking. For

instance, sieges during the Revolt typically dragged on for months or even years, which meant large wage bills for the armies with only a small chance of victory. Because of these large

costs, the ability to finance war expenditures was crucial. Unfortunately for the Spanish, their army in the Low Countries was constantly short on funds and had enormous difficulties paying

the troops. Soldiers often went unpaid for several months. As a result, demoralisation, desertion and mutinies undermined the Spanish position. During the first half of the Revolt, the

Spanish witnessed on average more than one major mutiny per year, paralysing their war efforts. In some cases, mutineers even sold their forts to the Dutch. The Dutch, by contrast, developed

a highly efficient public finance system which allowed them to raise unprecedented amounts of tax revenue. This stable source of revenues gave the Dutch the means to finance the increasing

costs of war while providing a regular pay to their soldiers. Holland, the leading province of the Dutch Republic, was especially successful in financing ever-larger expenditures. The

taxation system in Holland depended in large part on excise taxes, and excises on beer in particular. As we document in our paper, throughout the Revolt, taxes on beer accounted for 19% of

total revenues in Holland, making it the single largest source of revenue during the Revolt. Since Holland alone was responsible for over half of the total war budget, this means beer taxes

were the largest revenue source on the Dutch side. To get an idea of exactly how important beer tax revenues were, consider the following comparison. During the Dutch Revolt, Spain benefited

from large inflows of silver from its colonies in America. These inflows were taxed at a flat rate of 20%. A comparison of these tax revenues with the revenues from beer in Holland show

that beer taxes in Holland alone brought in the equivalent of 31% of the Spanish silver taxes over the entire course of the Revolt. During the last decade of the Revolt, Dutch beer taxes

probably brought in more revenue than the tax on silver from the Spanish colonies. Why exactly was beer so important to the Dutch? The answer is twofold. On the one hand, beer consumption in

the sixteenth and seventeenth century was very high compared to modern levels. Historians estimate that beer consumption in Holland was around one liter per person per day, including

children (although it should be noted that beer had a lower alcohol content in those days). At a time when water was polluted and other beverages were either too expensive or too perishable,

beer was the healthiest and cheapest choice of drink. On the other hand, the Dutch used an ingenious system to minimise tax evasion. Brewers were not allowed to sell beer to consumers

directly. Instead, they had to sell their beer to certified beer porters, who in turn had to deliver the beer to the pubs. Porters could only transport beer if the brewer could give them

receipts proving that he had paid the necessary excises. In turn, the porters had to give these receipts to the pub owners. Tax enforcement officials could ask pub owners to show them the

receipts for the beer they were selling. This system is not unlike the VAT-system in use in many countries around the world today, and it made tax enforcement highly efficient. As a result

of high consumption levels and a clever enforcement system, beer taxes became the largest source of income for the Dutch. The fiscal revenues from beer taxes thus enabled the Dutch Republic

to break away from Spanish rule, leaving the territory of present-day Belgium behind as the remainder of the Spanish Low Countries. The border established by this separation still forms the

division between Belgium and the Netherlands. Hence, beer contributed to the separation of the Low Countries, the creation of Belgium, and the present-day border between Belgium and the

Netherlands.