Faculty of Humanities researcher Lodewijk Petram has been awarded the Dirk Jacob Veegens Prize 2012 for his doctoral thesis about the creation of the Amsterdam stock market during the seventeenth century. Petram received the prize for his PhD dissertation The World’s First Stock Exchange: How the Amsterdam Market for Dutch East India Company Share Became a Modern Securities Market, 1602 – 1700 (Amsterdam 2011).
In his dissertation Petram illustrates how many of the characteristics of current financial systems were already emerging in Amsterdam during the seventeenth century. Because there was still oversight of the Dutch East India Company (VOC) market, Petram’s research provides insight into the complex and abstract workings of contemporary markets.
The Veegens Prize is meant for research which is original, focused on aspects of the economic, political and social history of the Netherlands, and provides insight into developments which have a contemporary resonance. The Prize - which consists of 12, 500 euros in prize money - is biannually made available by the Stichting Fonds voor de Geld-en Effectenhandel, and is awarded by the Royal Holland Society of Sciences and Humanities (KMHW) on 11 September.
According to the judging panel, whose members include Profs. Hans Blom, Kim Kooij and Piet de Rooy, Petram’s disseration fulfills the necessary criteria for the Veegens Prize. Not only is it a historical study that elucidates recent financial developments, it is also an important addition to current Dutch historiography.
The world’s first modern securities market
Petram’s prizewinning dissertation is based on lawsuits, merchant books, correspondence between traders and notarial archives. On the basis of these sources, Petram illustrates how in the period between 1630 and 1650 the financial market of the VOC became the world’s first modern securities market. Traders not only traded in shares, but also developed all sorts of derivative financial products such as options and periodic contracts. By doing so, a lively trading market emerged. One in which even the less wealthy could take part in. Liquidity was high and price fixing was a constant process.
Added to these findings, Petram’s study also provides insight into the methods and motives of financial traders, both then and now. Because the act of trading was conducted on a personal basis during the seventeenth century, the process was much more discernible than current securities trading. Transactions between profit-driven traders were based on personal trust and the credit reputation of the trading partner. According to Petra, current moneylenders miss this type of knowledge, which is partly the reason for the global financial crisis.