I wrote before about the similarities between El Salvador today and 17th century the Netherlands (when it was about to enter its Golden Age).
One thing I didn’t mention is how both countries use(d) freedom as a competitive advantage.
Or in the words of El Salvador’s president:
“The plan is simple. As the world falls into tyranny, we’ll create a haven of freedom.”
-Nayib Bukele
Freedom as a way to attract capital and talent
By calling it “the plan” we know Mr. Bukele doesn’t (only) want to create a “haven of freedom” purely for humanitarian reasons.
It is actually a clever geopolitical strategy that is aimed to strengthen El Salvador’s industrial and intellectual base.
He uses freedom to attract the world’s most mobile capital (Bitcoin) and attract the smartest and most skilled talent (the Bitcoin space employs a lot of smart people).
And looking at history, we can see there is good precedent for his moves…
A haven of freedom in the 17th century
The Netherlands rose to superpower status in the 17th century. I wrote before about several catalysts causing this rise.
Another important one was that in the 17th century the Netherlands was “a haven of freedom” and attracted people fleeing tyranny and persecution in places like Spain and France.
People who took their capital and skills with them…
The Spanish Inquisition in southern Netherlands
An important wave of capital and skills came from the southern Netherlands (present-day Belgium) which was under Spanish rule at the time.
When the protestant Netherlands started its war of independence against Catholic Spain, Spain retaliated with the persecution of protestants in the south (the infamous Spanish Inquisition).
As a result many protestants fled to the northern provinces where they were free of persecution.
Many of these immigrants were skilled craftsmen in the fields of printing, textile manufacturing, arts or brought the trading contacts they had made in the port of Antwerp.
They significantly strengthened the industrial and cultural base of the Netherlands.
Influx of Sephardic Jews
In the 16th century the Spanish and Portuguese monarchs signed decrees forcing Jews to either convert to Catholicism or be expelled.
Some converted, while others chose to flee. A large portion ended up in the city of Amsterdam in the Netherlands.
These Sephardic Jews also brought their trade networks (especially in the Mediterranean) and had significant experience in banking, money lending and financial transactions.
It is not surprising Amsterdam became the financial capital of the world…
They also brought knowledge and texts from Spain, Portugal and the broader Mediterranean region about medicine and science.
Both are areas the Netherlands excelled at during its Golden Age.
France prosecuting the Huguenots
France witnessed a series of religious conflicts in the 16th and 17th centuries between Protestants (Huguenots) and Catholics.
As a result many Huguenots fled France, and many ended up in the Netherlands.
They brought crafts like silk waving, clock-making, and metalwork. And like the other migrant groups they also brought their trade and banking networks.
The Huguenots also valued education and scholarship. Many were highly educated and contributed to Dutch intellectual life, including theology, philosophy, and science.
Freedom as a competitive advantage
The history of the Netherlands shows that being “a haven of freedom” yields significant long-term results.
It takes a long time for a country to build capital and skills from scratch. Attracting them from other countries is a clever way to speed up this process.
Just ask Deng Diaopeng’s China…
Nayib Bukele understands this and uses freedom to attract skills and capital to El Salvador.
The Innovation and Technology Manufacturing Incentives Act and the Freedom Visa Program are good examples of this, making it attractive for skills and capital to move to El Salvador.
Mr. Bukele is making El Salvador an attractive place for companies and skilled individuals to settle and help build the technology and industrial base that will provide El Salvador prosperity for decades to come.
