Rise of Industrial Powers and Global Economic Shifts
New Forms of Capitalism: Industrial Expansion
Great Britain dominated the global economy until 1870, with London as the financial capital. Its population tripled, mostly living in large cities. Britain maintained its hegemony until 1914. Other nations like Italy, Russia, Spain, Germany, Sweden, Belgium, and Holland followed. By 1871, Germany’s political unification led to rapid industrial growth, fueled by advanced technology and state-supported banking. This made Germany a leading European power, increasing rivalry with Britain. The USA also industrialized rapidly, particularly in textiles, mining, metallurgy, railways, and oil, propelling it towards global economic leadership.
Rhythms of the Capitalist Economy
Globalization intensified in the late 19th century. Capitalism became subject to cyclical rhythms of expansion and crisis. Unlike pre-industrial scarcity crises, capitalist crises were due to overproduction. Firms produced more than could be consumed, leading to price drops.
The Great Depression
In 1873, a major economic crisis began, initially thought to be short-lived. This recession, known as the Great Depression, started with agriculture. European markets were flooded with cheap agricultural products, devastating farmers. The industrial and financial sectors followed suit. The Vienna Stock Exchange crash led to bank failures and rising unemployment. This prolonged crisis resulted in falling prices and unprecedented unemployment, impacting political and social structures. Competition intensified, as did rivalry among major powers for resources and markets.
Causes of Imperialism
Economic Causes
Economic interests are a common explanation for imperialism. Nations sought to expand their economies, acquire raw materials, labor, and markets for surplus capital. Lenin linked imperialism to capitalism, arguing that European expansion was driven by the need to export surplus capital. Contemporary Marxists explain US expansion in the Third World similarly.
Political Causes
Political factors, such as the desire for power, prestige, and diplomatic advantages, also drove imperialism. For example, France sought to regain international prestige after the Franco-Prussian War. The USSR’s expansion into Eastern Europe after 1945 was a security measure against potential invasion.
Ideological Causes
Some nations aimed to spread their political, cultural, or religious values. The British Empire believed in the “white man’s burden” to civilize “backward” peoples. German expansion under Hitler was based on the belief in German cultural superiority. The US sought to protect the “free world,” while the USSR aimed to liberate peoples in Eastern Europe and the Third World.