19th Century Industrialization: Great Britain, US, Belgium & Germany
The Industrial Revolution in the 19th Century
Great Britain: The First Industrial Nation
In 1815, Great Britain was the world’s leading manufacturing and commercial nation, retaining its dominance for most of the 19th century. Agriculture played a crucial role.
Great Britain: The Workshop of the World (1830-1870)
Textiles, coal, iron, and engineering were the pillars of Britain’s early prosperity. The leading strategy involved exporting final products and technology.
- Textile Industry: By 1880, Britain’s production of cotton yarn and cloth surpassed the rest of Europe combined.
- Coal Industry: Britain maintained its lead in Europe and produced a surplus for export.
- Engineering Industry: This sector’s roots can be traced to the textile, coal, and iron industries, all of which required machinery and technology.
Britain’s Relative Decline (1870-1914)
Britain’s relative decline was inevitable. Several explanations have been offered:
- Highly technical factors involving the relative prices of primary products and manufactured goods, terms of trade, investment ratios, and patterns.
- Availability of natural resources and access to raw materials.
- Entrepreneurial failure and lack of innovation. Late Victorian entrepreneurs lacked the dynamism of their predecessors, as the heirs to family firms adopted leisurely lifestyles.
- Education: Britain was the last major Western nation to adopt universal public elementary schooling, which was crucial for training a skilled labor force.
The United States: Rapid National Economic Growth
The 19th century saw rapid national economic growth in the United States. Population growth was fueled by emigration from Europe and a high rate of natural increase. Income and wealth grew even faster than the population.
Factors contributing to this growth included:
- Abundant land and richer natural resources than Europe.
- Rapid technological advancements and increasing regional specialization.
- An active role of the state.
- A large domestic market, virtually free of trade barriers.
Transportation: Realizing the nation’s economic potential required a vast transportation network. Canal construction and railways played a vital role. Railways were not only crucial for transportation but also for their links with other industries, especially iron and steel.
Agriculture: Played a dynamic role by feeding the population, supplying the domestic market, and generating exports.
Finance and Banking: The US lacked a central bank until the Federal Reserve was established, resulting in a chaotic banking system.
Belgium: The British Model on the Continent
Belgium was the first region in continental Europe to fully adopt the British model of industrialization. Despite political changes, Belgium maintained remarkable continuity in its economic development. This was due to several factors:
- Proximity to Britain.
- A long industrial tradition.
- Abundant natural resources.
- Significant infusions of foreign technology, entrepreneurship, and capital due to its location, tradition, and political connections.
Finance and Banking: The Belgian banking system played a crucial role in promoting economic development, with institutions like Société Générale ed Belgique, Banque de Belgique, and Banque Nationale de Belgique taking an active part.
Germany: From Backwardness to Industrial Powerhouse
In the first half of the 19th century, Germany was a poor and backward nation, predominantly rural and agrarian. Poor transportation and communication, along with political divisions, hindered economic development. However, by the eve of World War I, the unified German Empire had become the most powerful industrial nation in Europe.
This remarkable transformation occurred in three periods:
- 1800-1833: A gradual awakening to the economic changes taking place in Britain, France, and Belgium. This was a period of observation and learning.
- 1833-1870: Imitation of the industrial models of other nations.
- 1870-1914: Germany rapidly rose to industrial supremacy in Europe.
Key Factors:
- Foreign influences.
- The formation of the Zollverein, which abolished internal tolls and customs barriers, creating a German common market and a common external tariff. This resulted in a unified German economy.
- Railway development.
- Rapid growth of the coal industry.
- An active role of the state in education and the legal framework, which protected domestic industry and allowed cartels.
- Finance and Banking: The German banking system was virtually nonexistent in the first half of the 19th century. However, from the 1840s onward, it played an increasingly important role. Universal or mixed banks played a prominent role in industrial development.
- The size of companies and the emphasis on education were also significant factors in Germany’s industrial success, marking the characteristics of the Second Industrial Revolution.