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How and why did the German economy grow after

1871? 10/09/2010 04:14:00By 1871, economic take off had already occurred. This was due to

population growth. This always acts as a catalyst for industrialisation.

Prussia was the initial state to take advantage of this first industrial

revolution. This enabled Prussia to secure its dominant position andfurthered their growth in strength and power on all fronts.

By 1914, Germany was the strongest European Industrial power. Between

1871 and 1914 this is generally speaking the second industrial revolution.

i) How did Germanys 2ndindustrial revolution unfold?

1871 1914 Industry developed in 4 core areas:

In the first industrial revolution, the standard areas (coal, steel, textiles)

flourish, but, in the 2nd revolution, what set Germany apart and made

them strong was their advancement into different core areas:

Electrics people wanted electric lighting etc. Siemens, AEG.

Chemicals By 1900, Germany is producing 90% of the worlds

synthetic dyes. Development of fertilisers aiding the production of food.

Cars Germany was the pioneer of the automotive industry.

PrecisionEquipment hi-tech industrial development (cameras, optics,

mechanical engineering) Bosch, Zeiss.

However, Germany did not abandon its strengths in its strength in areas

from 1st revolution (coal, steel etc)

The agricultural sector of society remained strong, unlike in Britain whorelied on importing food to feed the people. This again aided Germanys

population growth and thus supported their 2nd industrial revolution and

growth.

However, 1894-1914, 8% fall in agricultural workers. Industry grew

conversely. Although there was this shift toward industry, it is not as

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extreme as Britains, meaning it did not render itself unable to support

itself internally.

Urbanisation

ii) short & long term factors explaining Industrialisation from

1871-1914

LONG TERM

Population growth

Supports industrialisation. More workers etc.

The population at the time had its peak where the majority of people

were within working age (20-30s). This German population characteristic

is key.

Rawmaterials

An abundance of Coal in the Ruhr and the Saar.

Germany has therefore got vast amounts of power.

In 1870-1, Germany, in the Franco-Prussian War, gainedAlsace-Lorraine,

which is full of iron ore.

As a consequence, Germany has a mass of raw materials, which it can not

only use internally to fuel its industry, but can export too.

Germany is raising 759 million Reich-marks as a profit after imports and

exports.

Geography

Movements of goods around the country and abroad through:

y navigable rivers (Elbe, Rhine, Danube) act as quality trade links.y Access to the North Sea.y Plains in the North of Germany allow an extensive rail network to

be able to be built.

SHORT TERM

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Education

Germany had the strongest education system in the world at this time.

Between 1890 and 1914, the number of people going to University

doubled. This gave Germany a large and intelligent and skilled work force.

This similarly allowed Germany to dominate in the complicated core areas

of industry shown above (chemicals).

Banks

Bismarcks Germany had little regulation of banks.

This led banks to be able to give off many loans freely. Thus, investment

in new industries and companies was high, aiding growth.

Tariffs

In 1879, Bismarck passed the Tariff Law.

Germany was thus exporting much, but also protecting internal business

by raising tariffs on imported goods (External Competition)

Cartels

When different companies agree to sell at agreed prices to protect

interest of big business.

In 1885 there were 90 cartels in Germany, by 1905 there were 306.

This is opposite to British and American Governments which aimed to

encourage free trade and competition.

As a result, big companies came together to fix prices and protect their

interests.

Governmentownershipof major industries

The government at state and federal levels was prepared to step in and

support (through part ownership) businesses.

*the short term factors were key in making the economy to stand apart

from other countries and strengthen rapidly.

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