Belgian society today is a living illustration of the law of uneven development which has dominated the whole history of capitalism. The present structural crisis of the Belgian economy is a direct consequence of the fact that Belgium was the first industrialized country in continental Europe. The crisis is deepest in the south of the country, Wallonia, which was once Belgium’s great industrial basin, but which is now a victim of the underdevelopment from which the north of the country, Flanders, suffered for over a century, but which it is now in its turn beginning to overcome.

This unequal development has profound historical roots. In the Middle Ages the great Flemish cities were, with the Italian towns of the Lombard plain, the most advanced centres of urban industry in Europe. In the fifteenth and sixteenth centuries this craft industry began to decline; however two Flemish cities, Bruges and Antwerp, became successively the main trading-ports on the North Sea, if not in the world. Then, when the Low Countries rose against Philip II of Spain in the first great bourgeois revolution of the modern era—one century before the English revolution and more than two centuries before the French and American revolutions—it was these Flemish cities, particularly Ghent and Antwerp, which provided the first and most radical centres of revolt. The more agricultural and less socially advanced Wallonia was fairly easily reconquered by the Counter-Revolution under Alexandre Farnese; but Antwerp was only occupied after a bloody siege. The vigorous resistance of Flanders allowed the revolution to triumph in the north, where it was further strengthened by thousands of emigrants from the south. In this way independent Holland was born.

The southern provinces—the future Belgium—paid for Spanish conquest and Dutch independence with a century and a half of uninterrupted economic decline. Occupied successively by the Spanish and the Austrians, they were the battleground of all the dynastic wars of the seventeenth and eighteenth centuries, and were constantly ravaged and devastated. The closing of the Scheldt stifled Antwerp. Holland inherited the commercial wealth of Belgium: Amsterdam replaced Bruges and Antwerp. But Holland in turn was to pay for a golden century of trade with a hundred and fifty years of stagnation and a serious delay in industrialization, for all her available capital was absorbed by commerce and colonial exploitation. Meanwhile, in the second half of the eighteenth century Belgium revived and became the scene of successive industrial revolutions, in the production of woollen cloth (Verviers), coal (Hainault and Liège), linen and cotton (Ghent). and finally steel (Liège).

Except for a section of the textile industry, this industrial revolution took place in Wallonia, not in Flanders, which had been economically, socially and politically decadent under the Ancien Regime, and was to remain in a state of extreme social and political decadence throughout a century of industrialization. A second bourgeois revolution exploded in 1789 in Liège and Brabant, simultaneously with the French revolution. In social and economic circumstances that were now profoundly different from those of 1560, its victory was complete.

At first dominated by individual entrepreneurs and family concerns, the industrial revolution saw the formation of a wave of joint-stock companies in the decade 1825–35. Their growth was vigorously supported, indeed stimulated, by the first great modern bank founded in Belgium, La Société Générale. This was from the beginning a mixed bank, that is both a deposit and an investment bank, owning important holdings in innumerable industrial, financial, commercial and transport concerns. Belgium is thus the birthplace of finance capital in the Marxist sense: banking capital which flows into industry, substitutes shares for credit, and exercises close control over company management. Belgian finance capital acquired a dominant position in the economy of the country half a century before the same phenomenon occurred in Germany, France, U.S.A., Italy and elsewhere.