IN THE LATE 1800s, Europe entered a dynamic period of material prosperity. Bringing with it new industries, new sources of energy, and new goods, a second Industrial Revolution transformed the human environment, dazzled Europeans, and led them to believe that their material progress meant human progress. Scientific and technological achievements, many naïvely believed, would improve humanity’s condition and solve all human problems. The doctrine of progress became an article of great faith.
The new urban and industrial world created by the rapid economic changes of the nineteenth century led to the emergence of a mass society by the late nineteenth century. Mass society meant improvements for the lower classes, who benefited from the extension of voting rights, a better standard of living, and education. It also brought mass leisure. New work patterns established the “weekend” as a distinct time of recreation and fun, and new forms of mass transportation – railroads and streetcars – enabled even ordinary workers to make excursions to amusement parks. Coney Island was only 8 miles from central New York City; Blackpool in England was a short train ride from nearby industrial towns. With their Ferris wheels and other daring rides that threw young men and women together, amusement parks offered a whole new world of entertainment. Thanks to the railroad, seaside resorts, once the preserve of the wealthy, became accessible to more people for weekend visits, much to the disgust of one upper-class regular, who complained about the new “day-trippers”: “They swarm upon the beach, wandering listlessly about with apparently no other aim than to get a mouthful of fresh air.” Enterprising entrepreneurs in resorts like Blackpool welcomed the masses of new visitors, however, and built piers laden with food, drink, and entertainment to serve them.
The coming of mass society also created new roles for the governments of Europe’s nation-states. In the early nineteenth century, “nations” functioned as communities of people bound together by common language, traditions, customs, and institutions. By the mid-nineteenth century, however, the “state” – the organized institutions of government – had come to dominate European lives. By 1871, the national states promoted economic growth and mass education, amassed national armies by conscription, and took more responsibility for public health and housing in their cities. By taking these steps, the governments of the national states hoped to foster national unity and national loyalty.
Within many of these national states, the growth of the middle class had led to the triumph of liberal practices: constitutional governments, parliaments, and principles of equality. The period after 1871 also witnessed the growth of political democracy as the right to vote was extended to all adult males; women, though, would still have to fight for the same political rights. With political democracy came a new mass politics and a new mass press. Both would become regular features of the twentieth century.
At the heart of Europeans’ belief in progress after 1871 was the stunning material growth produced by what historians have called the Second Industrial Revolution. The First Industrial Revolution had given rise to textiles, railroads, iron, and coal. In the second revolution, steel, chemicals, electricity, and petroleum led the way to new industrial frontiers.
The first major change in industrial development after 1870 was the substitution of steel for iron. New methods of rolling and shaping steel made it useful in the construction of lighter, smaller, and faster machines and engines, as well as railways, ships, and armaments. In 1860, Great Britain, France, Germany, and Belgium together produced 125,000 tons of steel; by 1913, the total was 32 million tons. Whereas in the early 1870s Britain had produced twice as much steel as Germany, by 1910, German production was double that of Great Britain. The United States had surpassed them both in 1890.
CHEMICALS Great Britain also fell behind in the new chemical industry. A change in the method of making soda enabled France and Germany to take the lead in producing the alkalies used in the textile, soap, and paper industries. German laboratories soon overtook the British in the development of new organic chemical compounds, such as artificial dyes. By 1900, German firms had cornered 90 percent of the market for dyestuffs and also led in the development of photographic plates and film.
ELECTRICITY Electricity was a major new form of energy that proved to be of great value since it could be easily converted into other forms of energy, such as heat, light, and motion, and moved relatively effortlessly through space over wires. In the 1870s, the first commercially practical generators of electrical current were developed. By 1881, Britain had its first public power station. By 1910, hydroelectric power stations and coal-fired steam-generating plants enabled entire districts to be tied in to a single power distribution system that provided a common source of power for homes, shops, and industrial enterprises.
Electricity spawned a whole series of inventions. The light-bulb, invented independently by the American Thomas Edison (1847-1931) and the Briton Joseph Swan (1828-1914), opened homes and cities to illumination by electric lights. A revolution in communications was fostered when Alexander Graham Bell (1847-1922) invented the telephone in 1876 and Guglielmo Marconi (gool-YEL-moh mahr-KOH-nee) (1874-1937) sent the first radio waves across the Atlantic in 1901. Although most electricity was initially used for lighting, it was eventually put to use in transportation. The first electric railway was installed in Berlin in 1879. By the 1880s, streetcars and subways had appeared in major European cities and had begun to replace horse-drawn buses. Electricity also transformed the factory. Conveyor belts, cranes, machines, and machine tools could all be powered by electricity and located anywhere. In the First Industrial Revolution, coal had been the major source of energy. Countries without adequate coal supplies lagged behind in industrialization. Thanks to electricity, they could now enter the industrial age.
THE INTERNAL COMBUSTION ENGINE The development of the internal combustion engine had a similar effect. The first internal combustion engine, fired by gas and air, was produced in 1878. It proved unsuitable for widespread use as a source of power in transportation until the development of liquid fuels – petroleum and its distilled derivatives. An oil-fired engine was made in 1897, and by 1902, the Hamburg-Amerika Line had switched from coal to oil on its new ocean liners. By the end of the nineteenth century, some naval fleets had been converted to oil burners as well.
The development of the internal combustion engine gave rise to the automobile and the airplane. The invention of a light engine by Gottlieb Daimler (GUHT-leeb DYM-lur) (1834-1900) in 1886 was the key to the development of the automobile. In 1900, world production stood at 9,000 cars; by 1906, Americans had overtaken the initial lead of the French. It was an American, Henry Ford (1863-1947), who revolutionized the car industry with the mass production of the Model T. By 1916, Ford’s factories were producing 735,000 cars a year. Air transportation began with the Zeppelin (ZEP-puh-lin) airship in 1900. In 1903, at Kitty Hawk, North Carolina, Wilbur and Orville Wright made the first flight in a fixed-wing plane powered by a gasoline engine. It took World War I to stimulate the aircraft industry, however, and the first regular passenger air service was not established until 1919.
The growth of industrial production depended on the development of markets for the sale of manufactured goods. After 1870, the best foreign markets were already heavily saturated, forcing Europeans to take a renewed look at their domestic markets. As Europeans were the richest consumers in the world, those markets offered abundant possibilities. The dramatic population increases after 1870 (see “Population Growth” later in this chapter) were accompanied by a steady rise in national incomes. The leading industrialized nations, Britain and Germany, doubled or tripled their national incomes. Between 1850 and 1900, real wages increased by two-thirds in Britain and by one-third in Germany. As the prices of both food and manufactured goods declined due to lower transportation costs, Europeans could spend more on consumer products. Businesses soon perceived the value of using new techniques of mass marketing to sell the consumer goods made possible by the development of the steel and electrical industries. By bringing together a vast array of new products in one place, they created the department store (see here). The desire to own sewing machines, clocks, bicycles, electric lights, and typewriters rapidly created a new consumer ethic that became a crucial part of the modern economy (see “Mass Consumption” later in this chapter).
TARIFFS AND CARTELS Meanwhile, increased competition for foreign markets and the growing importance of domestic demand led to a reaction against free trade. To many industrial and political leaders, protective tariffs guaranteed domestic markets for the products of their own industries. That is why, after a decade of experimentation with free trade in the 1860s, Europeans returned to tariff protection.
During this same period, cartels were being formed to decrease competition internally. In a cartel, independent enterprises worked together to control prices and fix production quotas, thereby restraining the kind of competition that led to reduced prices. Cartels were especially strong in Germany, where banks moved to protect their investments by eliminating the “anarchy of competition.” German businesses established cartels in potash, coal, steel, and chemicals.
LARGER FACTORIES The formation of cartels was paralleled by a move toward ever-larger manufacturing plants, especially in the iron and steel, machinery, heavy electrical equipment, and chemical industries. Although evident in Britain, France, and Belgium, the trend was most pronounced in Germany. Between 1882 and 1907, the number of people working in German factories with more than one thousand employees rose from 205,000 to 879,000. This growth in the size of industrial plants led to pressure for greater efficiency in factory production at the same time that competition led to demands for greater economy. The result was a desire to streamline or rationalize production as much as possible. One way to accomplish this was to cut labor costs by mechanizing transport within plants, such as using electric cranes to move materials. Even more important, the development of precision tools enabled manufacturers to produce interchangeable parts, which in turn led to the creation of the assembly line for production. First used in the United States for small arms and clocks, the assembly line had moved to Europe by 1850. In the second half of the nineteenth century, it was used primarily in manufacturing nonmilitary goods, such as sewing machines, typewriters, bicycles, and eventually automobiles. Principles of scientific management were also introduced by 1900 to maximize workers’ efficiency.
The Second Industrial Revolution played a role in the emergence of basic economic patterns that have characterized much of the modern European economy. Although the period after 1871 has been described as an age of material prosperity, recessions and crises were still very much a part of economic life. Although some historians question the appropriateness of characterizing the period from 1873 to 1895 as a great depression, Europeans did experience a series of economic crises during those years. Prices, especially those of agricultural products, fell dramatically. Slumps in the business cycle reduced profits, although recession occurred at different times in different countries. France and Britain, for example, sank into depression in the 1880s while Germany and the United States were recovering from their depression of the 1870s. From 1895 until World War I, however, Europe overall experienced an economic boom and achieved a level of prosperity that encouraged people later to look back to that era as la belle époque (lah BEL ay-PUK) – a golden age in European civilization.
GERMAN INDUSTRIAL LEADERSHIP After 1870, Germany replaced Great Britain as the industrial leader of Europe. Within two decades, Germany’s superiority was evident in new areas of manufacturing, such as organic chemicals and electrical equipment, and increasingly apparent in its ever-greater share of worldwide trade. Why had industrial leadership passed from Britain to Germany?
As a result of its early lead in industrialization, Britain had already established industrial plants and found it more difficult to shift to the new techniques of the Second Industrial Revolution. As later entrants to the industrial age, the Germans could build the latest and most efficient plants. British entrepreneurs made the situation worse by their tendency to be suspicious of innovations and their reluctance to invest in new plants and industries. As one manufacturer remarked, “One wants to be thoroughly convinced of the superiority of a new method before condemning as useless a large plant that has hitherto done good service.”1 German managers, by contrast, were accustomed to change, and the formation of large cartels encouraged German banks to provide enormous sums for investment. Then, too, unlike the Germans, the British did not encourage formal scientific and technical education.
After 1870, the relationship of science and technology grew closer. Newer fields of industrial activity, such as organic chemistry and electrical engineering, required more scientific knowledge than the commonsense tinkering employed by amateur inventors. Companies began to invest capital in laboratory equipment for their own research or hired scientific consultants for advice. Nowhere was the relationship between science and technology more apparent than in Germany. In 1899, German technical schools were allowed to award doctorate degrees, and by 1900, they were turning out three to four thousand graduates a year. Many of these graduates made their way into industrial firms.
EUROPEAN ECONOMIC ZONES The struggle for economic (and political) supremacy between Great Britain and Germany should not cause us to overlook the other great polarization of the age. By 1900, Europe was divided into two economic zones. Great Britain, Belgium, France, the Netherlands, Germany, the western part of the Austro-Hungarian Empire, and northern Italy constituted an advanced industrialized core that had a high standard of living, decent systems of transportation, and relatively healthy and educated populations (see Map 23.1). Another part of Europe, the backward and little industrialized area to the south and east, consisting of southern Italy, most of Austria-Hungary, Spain, Portugal, the Balkan kingdoms, and Russia, was still largely agricultural and relegated by the industrial countries to the function of providing food and raw materials. The presence of Romanian oil, Greek olive oil, and Serbian pigs and prunes in western Europe served as reminders of an economic division of Europe that continued well into the twentieth century.
The growth of an industrial economy also led to new patterns for European agriculture. An abundance of grain and lower transportation costs caused the prices of farm commodities to plummet. Some countries responded with tariff barriers against lower-priced foodstuffs. Where agricultural labor was scarce and hence expensive, as in Britain and Germany, landowners introduced machines for threshing and harvesting. The slump in grain prices also led some countries to specialize in other food products. Denmark, for example, exported eggs, butter, and cheese; sugar beets predominated in Bohemia and northern France, fruit in Mediterranean countries, and wine in Spain and Italy. This age also witnessed the introduction of chemical fertilizers. Large estates could make these adjustments easily, but individual small farmers could not afford them and formed farm cooperatives that provided capital for making improvements and purchasing equipment and fertilizer.
Although the lower grain prices had a negative impact on farmers, the decline in prices benefited many working-and middle-class families in northern Europe. As less money was needed to purchase bread, the consumption of other foods increased during the second half of the nineteenth century. In Germany, meat consumption doubled between 1873 and 1914, and in France bread fell from 20 percent of the diet to 9 percent in 1900.
THE SPREAD OF INDUSTRIALIZATION After 1870, industrialization began to spread beyond western and central Europe and North America. Especially noticeable was its rapid development in Russia (see Chapter 24) and Japan. In Japan, the imperial government took the lead in promoting industry. The government financed industries, built railroads, brought foreign experts to train Japanese employees in new industrial techniques, and instituted a universal educational system based on applied science. By the end of the nineteenth century, Japan had developed key industries in tea, silk, armaments, and shipbuilding. Workers for these industries came from the large number of people who had abandoned their farms due to severe hardships in the countryside and fled to the cities, where they provided an abundant source of cheap labor.
As in Europe during the early decades of the Industrial Revolution, workers toiled for long hours in the coal mines and textile mills, often under horrendous conditions. Reportedly, coal miners employed on a small island in Nagasaki harbor worked naked in temperatures up to 130 degrees Fahrenheit. If they tried to escape, they were shot.
A WORLD ECONOMY The economic developments of the late nineteenth century, combined with the transportation revolution that saw the growth of marine transport and railroads, also fostered a true world economy. By 1900, Europeans were importing beef and wool from Argentina and Australia, coffee from Brazil, nitrates from Chile, iron ore from Algeria, and sugar from Java. European capital was also invested abroad to develop railways, mines, electrical power plants, and banks. High rates of return, such as 11.3 percent on Latin American banking shares that were floated in London, provided plenty of incentive. Of course, foreign countries also provided markets for the surplus manufactured goods of Europe. With its capital, industries, and military might, Europe dominated the world economy by the end of the nineteenth century.
