Funding an Empire - Gustavus Adolphus and the Swedish Economy

Sweden emerged as a great power in the 17th century despite its numerous deficiencies. Nevertheless, this kingdom transformed into a force to be reckoned within less than 50 years.

Gustavus Adolphus and the Birth of the Swedish Empire

King Gustavus Adolphus Vasa steered the Kingdom of Sweden to the forefront of European politics. He inherited a kingdom in huge trouble but managed to turn the tables to his favor. His successes, however, came to a tragic end on the battlefields of Germany.

Born on December 9, 1594, Gustavus Adolphus was the son of Swedish King Charles IX. In 1611, his father passed away and he ascended as King of Sweden at the age of 17 years old. He inherited a kingdom in war with its neighbors with the Russians in the east, the Poles in the south, and the Danes in the west. He ended these conflicts with some agreements providing Sweden with advantages while others with problems.

In the 1620s, the Thirty Years’ War brought Europe into chaos resulting in carnage and death of thousands of Protestants and Catholics alike. Gustav dreamt of the Baltic Sea becoming a Swedish lake and saw the war as an opportunity for territorial expansion. He and his abled Chancellor Axel Oxenstierna then initiated various reforms to shape the Kingdom for war. By 1631, he unleashed his reformed military against the army of the Holy Roman Empire in the Battle of Breitenfeld. His stunning victories in battles cemented Sweden as a military power marking the Era of Great Power in the Kingdom’s history.

Gustav’s brilliant reign, however, abruptly and tragically ended with his fall in the Battle of Lützen on November 6, 1632. After his death, Sweden continued to exercise tremendous prestige until 1721. Sweden became an Empire despite its insignificant situation, but how did Gustavus Adolphus do it?

Death of Gustavus Adolphus in Lutzen

Sweden: A Black Sheep

Sweden lacked the trappings of great power before the 17th century. Economically, the Kingdom lagged behind its counterparts in continental Europe. Its people only survived and not thrived. Such the condition Gustavus Adolphus inherited in 1611.

The Swedes survived through fishing, farming, and mining. The fishing industry centered in southern Sweden providing a supply of herring which they pickled to preserve the fish for cold winter days. It became a staple and a major part of Swedish cuisine. Meanwhile, the Swedish nobility enjoyed for their table crayfish – a breed introduced to Sweden from England.

Farming, on the other hand, concentrated on Sweden’s numerous rivers and lakes. They cultivated rye, barley, and oats as well as peas in some regions such as Östergötland.

Foraging remained as an additional livelihood. The forests of Sweden provided mushrooms and lingonberry. Despite a variety of food sources, by the time of Gustavus Adolphus ascension, common Swedes lived on pickled vegetables and fruits and salted meat rather than fresh abundant produce.

The mining industry took a major share of the Swedish economy. Iron, silver, and copper ores came out from the various mines of the Kingdom’s Bergslagen region which composed of Vastmanland and parts of Dalarna and Värmland. Swedes started to mine silver in 1510 from the Sala mines while iron mining dated as far back as the 12th century. Copper mines, on the other hand, operated as early as the 11th century and managed by the Stora Kopparberg Mining Company founded at 1347.

In the Swedish mining industry, iron topped in terms of scale and amount of exports. It provided significant for many traders and most importantly to the Swedish crown, especially under the patronage and support of King Gustav I Vasa. Many Swedish cities line Dannemora turned into booming mining towns.

Gustav Vasa

Trade, on the other hand, became an instrument to gain necessities that the country lacked. Barter dominated the activities in Swedish ports. Swedes imported salt, textile, and hops by paying with iron, fats, and hides. Swedish export relied on the Hanseatic League for shipping – a mercantile relation that dated back to the 14th century. Sweden’s reliance on barter saved the country from trade restrictions under the mercantilist principle – which relied on the safekeeping of metallic coins. Thus, Swedes saw export as a means to gain the needs they lacked domestically with ease.

The absence of currency made tax paying to the Swedish crown in kind. Parts of the harvest went into government granaries and storage. Gustav Vasa earned a reputation as a shrewd merchant who sold grains in regions with scarcity for a price. In this way, he prevented famines while enriching the crown in the process. In addition to its influence in the grain trade, the Crown also owned the largest amount of land. Gustav Vasa turned to Lutheranism for economic reasons as it allowed him to confiscate vast lands from the Roman Catholic Church. These lands then became a favorite payment for the nobility as well as distinguished individuals in the country - a practice which Gustavus Adolphus continued during his reign.

Sweden lacked a developed economy that made it a wonder it became a great power. Its agriculture failed to provide enough fresh food to the people. Foreign shipping handled its trade and devoid of currency unlike the rest of Europe. Only the mining industry and the landownership provided a major source of revenue for the Vasa Dynasty and in particular for Gustavus Adolphus.

Rise of Gustavus Adolphus

By the time of Gustavus Adolphus’ ascension to the throne, Sweden fought with its neighbors that emptied its coffers and overstretched its resources. Nevertheless, he along with his Chancellor reformed the Kingdom utilizing its resources to establish an empire.

Gustavus Adolphus’ father, King Charles IX, squandered Sweden’s limited resources on wars against the Russians, Poles, and Danes.  In 1611, Gustavus Adolphus succeeded to the throne and extended the olive branch first with Denmark culminating with the signing of the Peace of Knäred in 1613. The peace, however, caused the so-called Älvsborg Ransom that placed the castle of Älvsborg, a vital Swedish port providing access to the North Sea, under Danish control until the Swedes pay a huge ransom. From 1613, Gustavus’ government scrambled to collect the needed money by imposing higher duties and new taxes. The Älvsborg Ransom economically crippled Sweden. Sweden’s already backward hit by a financially crippling indemnity made its prospect as a great power bleak.

Gustavus Adolphus and trusted Chancellor Axel Oxenstierna, however, managed to recoup some losses from the Ransom. In 1617, Sweden signed the Peace of Stolbovo with Russia that won the Kingdom lands that blocked Russian access to the sea, thus obtaining the right to impose duties on Russian exports bound to Europe via the Baltic Sea. Furthermore, the Peace of Altmark in 1629 gave Sweden rights to impose toll duties on ports in Brandenburg, Courland, and Gdansk which provided 30% of all income of the state. These duties replenished Swedish crown coffers along with revenues from the iron and copper trade.

Chancellor Axel Oxenstierna

Sweden, fortunately, won a jackpot in the international trade of copper. In 1599, Spain adopted a copper-based currency causing an increase in the metal’s price. Sweden, on the other hand, held the largest copper reserve in Europe. Its copper industry suddenly took off with centers such as Falun in Dalarna booming and the Swedish Crown that held a monopoly on the industry alongside with several investors like Louis de Geer profited substantially. In 1625, Gustavus Adolphus sought to increase copper prices by adopting also the copper standard. Because of copper’s low face value in Sweden, the copper coinage grew larger and more difficult to circulate. Nevertheless, the Swedish copper industry at its peak, Sweden supplied 2/3 of Europe’s copper demand.

Following copper, the iron industry also contributed substantial portions of the Crown’s revenue. Sweden already enjoyed centuries of iron industry tradition, and despite stiff competition with continental Europe, Swedish iron dominated for its incredible purity. The Kingdom initially exported huge pieces of iron to Europe called Osmund. However, the Walloon forge, a new technology from continental Europe, introduced by Louis de Geer shifted the focus from Osmund to the more profitable iron bars. Moreover, the Swedish government maintained strict quality control of its iron export with checks and inspection. The practice of “Iron Stamps” which determined the origin of iron served as both brands and a tracer for the flow of goods. Centers like Dannemora and Närke became major iron industry centers. Europe highly respected Swedish ironmasters who became sought after by various monarchs for employment.

During Gustavus Adolphus’ reign, other Swedish industries also saw growth through export to Europe. Swedish brass went on high demand in Europe and England. Tar and pitch also became another virtual Swedish monopoly profiting from increasing demand from Dutch, English, and French navies. The armaments industry also saw a rise with Gustavus Adolphus’ reform of the military.

A secret to the rise of various Swedish industry laid in its willingness to hire foreign talents and to accept foreign investments. Foreign iron masters led to the adoption of the latest state of the art technology making most out of Sweden’s high-quality iron and copper ore. It also accepted foreign investments and managers, such as the case of Louis de Geer. Of a Walloon descent, Louis De Geer served as Sweden’s export agent for its iron and copper to Europe before receiving the task of managing various vital Swedish industry making them efficient and profitable. For his service, Gustavus Adolphus awarded him lands which turned him to a major landowner as well.

Louis de Geer

Government policies, on the other hand, aimed towards amassing a huge fortune for Gustavus Adolphus’ military ambitions. They began to promote a money economy by collecting taxes in coins beginning with customs and taxes on manufactured goods. Monopolies in iron and copper failed to satisfy Gustavus’ desire to increase Crown revenue. In 1619, Gustavus established the Swedish Trading Company in hopes of increasing Swedish ownership of copper shipping competing with the Dutch, Scottish, and German merchants. The company received investments from the Netherlands as well as Hamburg. However, a slump in copper prices in 1627 led to its dissolution. Gustavus also ventured into more monopolies such as the salt monopoly in 1628 and the grain trade in 1631.  

Besides increasing revenue, Gustavus and his Chancellor also thought of the efficient management of finances. In 1618, Axel Oxenstierna spearheaded the establishment of a financial board headed by the state treasurer to manage the government’s finances. In 1624, they hired Abraham Cabeljan as an auditor. He oversaw the introduction of double-entry booking. Record keeping and booking keeping became a strict norm in the government.

In modern terms, Sweden became a major commodities exporter to the likes of Russia, Saudi Arabia, and Australia. Monopolies in various industries, especially iron and copper coupled with more efficient government oversight funded Gustavus Adolphus military buildup and his campaigns in the Thirty Years’ War that began in 1631. In that year, a new era dawned for Sweden.

Summing Up

Gustavus Adolphus ushered in the age of Empire for the Kingdom of Sweden. A huge turnaround from the economically backward and financially crippled Sweden he inherited during the first decade of his reign. Advantageous agreements alongside a booming iron and copper industries, exploited with monopolies, improved Sweden’ finances recouping loses from the Älvsborg Ransom. The development of other industries also increased revenue for Sweden. By 1630, Sweden already accumulated a wealth that allowed Gustavus Adolphus to enter Sweden in a massive continental conflict. The Thirty Years’ War marked Sweden’s success in its turnaround from a Baltic wasteland to a Scandinavian power.

See also:

Causes of the Thirty Years' War 

Gustavus II Adolphus

Military Innovation: Gustavus Adolphus

Bibliography:

Website:
The Editors of Encyclopedia Britannica. “Falun.” Encyclopedia Britannica. Accessed on August 31, 2020. URL: https://www.britannica.com/place/Falun#ref154668

Books:
Anderson, Ingvar. A History of Sweden. New York, New York: Frederick A. Praeger, Inc., 1968.

Heckscher, Eli. An Economic History of Sweden. Cambridge, Massachusetts: Harvard University Press, 1963.

Grimberg, Carl. A History of Sweden. Rock Island, Illinois: Augustana Book Concern, 1935.

Myrdal, Janken & Mats Morell (ed.). The Agrarian History of Sweden, From 4000 BCE to AD 2000. Lund: Nordic Academic Press, 2011.

Peterson, Gary Dean. Warrior Kings of Sweden: The Rise of An Empire in the Sixteenth and Seventeenth Centuries. Jefferson, North Carolina: McFarland & Company, Inc., 2007.

Wallerstein, Immanuel. The Modern World-System II: Mercantilism and the Consolidation of European World-Economy 1600-1750.