Amsterdam: A History of the World’s Most Liberal City, by Russell Shorto, Little, Brown RRP£25 / Doubleday RRP$28.95, 368 pages

17th-century Amsterdam was tiny. From his front door, Rembrandt was a five-minute walk from the synagogue that expelled Baruch Spinoza. Five minutes the other way was the mansion of the Dutch East India Company, the world’s first multinational. A few minutes on was the world’s first stock exchange. Today, of course, Rembrandt would have cycled the route in a jiffy.

Rembrandt, Spinoza, the East India Company and the stock exchange are patron saints of liberalism: the creed that considers individuals and their rights supreme. Then as now, Amsterdam was arguably “the world’s most liberal city”, to quote the subtitle of this well-told history by Russell Shorto, an American writer who lives in Amsterdam. Shorto argues that little Amsterdam “has influenced the modern world to a degree that perhaps no other city has”.

Liberalism is literally in the water here. The Netherlands is where three great rivers meet the sea, and what land there was was mostly peat bogs. When Amsterdammers began to reclaim land from the water about 1,000 years ago, it was truly theirs. No bishops or nobles could take it. And so arose a port city of free citizens. In the 16th century the Dutch began to fight off the Spanish king, and created a republic – 200 years before similar revolutions in France and the US.

Amsterdam traded worldwide. The 17th-century city had four times the income per capita of Paris. Foreigners flocked here, and were left largely unbothered. Shorto notes that Amsterdam’s tolerance was – and is – above all pragmatic. Tolerance was good for business, for social peace and innovation. 17th-century Amsterdam published perhaps 30 per cent of all books on earth. Its inhabitants could develop their individual selves. No wonder the city produced the great painter of the individual, Rembrandt. Shorto nicely links him with Anne Frank: her diary is mostly “a story of interiority, as much as a Rembrandt portrait of a 17th-century Amsterdammer”.

You can see Amsterdam’s emphasis on the individual just by cycling the 17th-century streets. There are no giant buildings here, nothing like Notre Dame or Buckingham Palace. What’s distinctive, says Shorto, are Amsterdam’s canal houses: some of the first buildings anywhere meant to house nuclear families. This is a city built for people. Amsterdam also fathered New York, originally a tolerant, diverse Dutch colony. Shorto himself runs an American cultural centre from his office in the 17th-century West India House – “in effect, the place where New York City was conceived”.

Amsterdam, he explains, maintains a fine balance of individual and collective. This was never a Wild West town. Rather, because Amsterdammers have had to work together to maintain the dikes, society has been strong. The 17th-century merchants created “some of Europe’s first orphanages, homes for the elderly” and neighbourhoods where rich and poor lived side by side. This social liberalism accompanies Amsterdam’s economic and cultural liberalism.

After 1672, a year of Dutch military disasters, Amsterdam went into decline. Much later, the disaster of Nazi occupation helped kick-start the city’s second great period of innovation. The German occupiers had stamped out individual rights. Partly in reaction, writes Shorto, postwar Amsterdam went “probably farther than anyplace on earth in seeking to expand individual freedoms”. The link with the war was explicit for one Jewish activist for gay rights: “Benno Premsela later said he had spent the war years hiding because of his identity, and once the city was liberated he vowed that he would never hide again.”

Amsterdam’s 1960s hippies got so much right: urban bicycles, preservation of the ancient city from the bulldozers, no war in Vietnam, and tolerance for soft drugs rather than for cigarettes. Once again, the city became a light unto liberals everywhere. Much as the English philosopher John Locke had fled to Amsterdam in 1683, John Lennon held his first “bed-in for peace” in the Amsterdam Hilton in 1969.

In 2001 the world’s first legal gay weddings were performed in Amsterdam. Today, cycling from Rembrandt’s house, you pass flats where elderly gay couples keep geraniums on the windowsills – because, as Shorto says, Amsterdam is much more placid than its zany reputation. It’s particularly placid today, because since the 1990s it has been colonised by the Dutch elite, who inhabit the darling canal houses built by their 17th-century predecessors. Only out in the suburbs where Amsterdam’s new immigrants live can you find monumental apartment blocks.

Little in Shorto’s book is wholly new. But his fine portraits of individuals are in the Amsterdam tradition, and he has an Amsterdammer’s feel for this backwater town that remains the world’s laboratory of liberalism.

Simon Kuper is an FT columnist

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