While some European countries, such as England and Germany, began to industrialize in the eighteenth century, the Netherlands and the Scandinavian countries of Denmark, Norway, and Sweden developed later. All four of these countries lagged considerably behind
in the early nineteenth century. However, they industrialized rapidly in the second half of the century, especially in the last two or three decades. In view of their later start and their lack of coal—undoubtedly the main reason they were not among the early
industrializers—it is important to understand the sources of their success.
All had small populations. At the beginning of the nineteenth century, Denmark and Norway had fewer than 1 million people, while Sweden and the Netherlands had fewer than 2.5 million inhabitants. All exhibited moderate growth rates in the course of the century
(Denmark the highest and Sweden the lowest), but all more than doubled in population by 1900. Density varied greatly. The Netherlands had one of the highest population densities in Europe, whereas Norway and Sweden had the lowest Denmark was in between but
closer to the Netherlands.
Considering human capital as a characteristic of the population, however, all four countries were advantaged by the large percentages of their populations who could read and write. In both 1850 and 1914, the Scandinavian countries had the highest literacy rates
in Europe, or in the world, and the Netherlands was well above the European average. This fact was of enormous value in helping the national economies find their niches in the evolving currents of the international economy.
Location was an important factor for all four countries. All had immediate access to the sea, and this had important implications for a significant international resource, fish, as well as for cheap transport, merchant marines, and the shipbuilding industry.
Each took advantage of these opportunities in its own way. The people of the Netherlands, with a long tradition of fisheries and mercantile shipping, had difficulty in developing good harbors suitable for steamships: eventually they did so at Rotterdam and
Amsterdam, with exceptional results for transit trade with Germany and central Europe and for the processing of overseas foodstuffs and raw materials (sugar, tobacco, chocolate, grain, and eventually oil). Denmark also had an admirable commercial history,
particularly with respect to traffic through the Sound (the strait separating Denmark and Sweden). In 1857, in return for a payment of 63 million kronor from other commercial nations, Denmark abolished the Sound toll dues the fees it had collected since 1497
for the use of the Sound. This, along with other policy shifts toward free trade, resulted in a significant increase in traffic through the Sound and in the port of Copenhagen.
The political institutions of the four countries posed no significant barriers to industrialization or economic growth. The nineteenth century passed relatively peacefully for these countries, with progressive democratization taking place in all of
them. They were reasonably well governed, without notable corruption or grandiose state projects, although in all of them the government gave some aid to railways, and in Sweden the state built the main lines. As small countries dependent on foreign
markets, they followed a liberal trade policy in the main, though a protectionist movement developed in Sweden. In Denmark and Sweden agricultural reforms took place gradually from the late eighteenth century through the first half of the nineteenth, resulting
in a new class of peasant landowners with a definite market orientation.