1.

The Spread of the Industrialization in Europe and

Second Industrial Revolution
2. The Great (or Long) Depression
3. The new Imperialism
4. The Rise of the Mass Society
There has been a great historical gap (or divide, or
discontinuity) between 1870 and 1900.
Barraclough claims that because of the so called
Second Industrial Revolution an entire world came
to an end, and a new world, which is still our world,
was brought into existence. In his words: The scientific, technological
and industrial changes [] are the starting point for the study of contemporary history. They
acted both as a solvent of the old order and as a catalyst of the new.

These rapid and radical changes begun in Europe, the

U.S.A., and Japan from about 1870.
What these changes consisted of?
The main features of the Second Industrial Revolution:
1.It consisted of a geographical spread of the
industrialization England had witnessed a century
earlier (1770);
2.It was different from the First in that it was concerned
not so much with improving and increasing the existing
as with introducing new commodities.
3.It was deeply scientific: it was made possible thanks
to a massive application and implementation of science
to the production of goods and services.
 The First Industrial Revolution was an English
phenomenon. It quite soon interested also few other
countries, such as some regions of Belgium and Holland.
The Second Industrial Revolution spread rapidly to
most European countries (first and foremost
Germany, which is the key player of European
industrialization), to the United States and to Japan.
These were the countries that led a renewed impulse to
imperial expansion, which took place from 1880s.
Industrialism therefore lay at the roots of
contemporary Imperialism, and politically shaped in
this way the 20th century.
 In the closing decades of the 19th century there was not a
simple expansion of the process of industrialization, which had
begun in England a century earlier until it became world-wide.
a) We can epitomize the First Industrial Revolution as: making the
same things in a new way. It was the revolution of coal and iron,
and implied the gradual extension of the use of machines for
production of goods mainly textiles which had been produced
manually before. It implied also a fairly steady change from a
population mainly of agricultural workers to a population mainly
engaged in making things in factories and distributing them after
they had been made.
b) The Second Industrial Revolution was different. It was concerned
not so much with improving and increasing the existing as with
introducing hundreds of new commodities. It was also far quicker
in its impact, far more prodigious in its results, far more
revolutionary in its effects on peoples lives and outlook.
 The new industries was the result of the application of science to the
production of goods and services. Science, innovations and inventions
became a fundamental factor of the industrial advance and the
economic competition.
The exploitation of scientific potentiality implies some new conditions,
first and foremost the availability of large amounts of capital.
Consequently the new industrial techniques implied:
a) large-scale industrial plants;
b) concentration of masses of industrial workers (and their families)
in vast urban agglomerations;
c) endless overseas supplies for foodstuffs and raw materials;
d) an adequate and constant outlet for a growing bulk production.
The most important consequences were:
1) the rise of what has usually been called a mass society - for the
points a) and b)
2) A renewed impulse to an imperial expansion - for the points c) and d)
1. Capitalism and capitalistic crisis
2. Causes of the Long Depression
3. Consequences of the Long Depression
4. Dealing with the crisis: the economic and
political responses to the Long Depression
 Modern capitalism is a complex economic
system characterized by:
private ownership and control over the means of
production.
free markets defined by the laws of supply and
demand
absence of government intervention in the
economy, except that intervention which protects
private property and guarantees the respect of
economic treaties.
Financial capital: most of the initial capital is
procured thanks to banks or other financial
institutions (e.g. the Stock exchange market) that
provide money to obtain a profit in return.
 Capital is a sum of money invested in production factors,
which are:
a) Labour
b) Machines
c) Raw materials
To invest means to anticipate money to buy production
factors, with a view of attaining a profit by selling the produce.
Therefore, capitalists take a risk: if they dont succeed in
selling their products at a certain price they lose their money.
Consequently, most of the capitalists efforts aim to ensure on
the one hand the supply of production factors at the lowest
possible price, on the other hand the outlet of the produce.
 Generally speaking, capitalistic crisis are always caused
by difficulties in selling the entire produce and are
therefore crisis of over-production.
When the demand of goods is high (excess demand), prices and
profits are high as well. Capitalists borrow capitals from Banks
in order to increase the production. But, as many capitalists do
the same thing, the result could be a new situation, in which
quantity supplied is greater than quantity demanded
(excess supply).
As a result of these difficulties in selling, producers
cannot give back the financial capital they have
invested. Consequently financial institutions lose their
money and cannot furnish more capitals for other
capitalistic productions.
Therefore, capitalistic crisis always manifest
themselves as financial crisis, i.e. as a shortage of
funds or money.
 The Long Depression is firstly a crisis of the European agricultu-
ral sector. Europes farmers had borrowed large amounts of
money so as to meet the increasing demand of food.
But, because of the competition of food producers from other
parts of the world, food prices declined and Europes farmers
suffered in selling their produce at a fair price.
In turn, this new competition was due to:
a) The completion of the main railroad systems (1850-1870) and the
development of steamships of large tonnage, which made it
quicker and easier for American and Russian produce to reach
Europe.
b) The perfection of new methods of food preservation:
sterilization, pasteurization, food-canning industry,
refrigeration.
This made possible the provision of cheap and stable supplies to
the growing world population, but caused a striking impact on
the European economy.
 The Long Depression is secondly an industrys over-
production crisis, which is due to four main causes:
1. The new mass-production techniques, thanks to which
immense production of many goods and services had been
made possible.
2. Low average income of the Europes industrial workers,
who could not afford most of the things they produced.
3. The declining income of the Europes farmers, because of
the capitalist crisis of agricultural overproduction.
4. Shortage of money: the Gold Standard did not permit
States to emit more banknotes than the amount of gold
they possessed.
The Long Depression manifested itself as financial crisis,
when, after 20 years of growth, the railroad industry
underwent a series of bankrupts.
 Declining foodstuffs prices led to declining income for
farmers. On the other hand, manufacturing workers
income was traditionally low because of the abundant
availability of labour force.
Low incomes and high industrial productivity resulted
in a overproduction crisis and a financial panic in many
parts of the world (1873), followed by a long period of
stagnation or low rate of economic growth.
 The main economic response to the crisis consisted of a
rapid process of industry concentration in order to lower
economic competition and prices and profits decrease.
the small-scale businesses could not withstand the fall of
prices and the depression, and the formation of trust and
cartels was irreversible.
a cartel is an agreement between competing firms to control prices or
exclude entry of a new competitor in a market.
Trusts can be vertical or horizontal:
A horizontal trust is a combination of corporations engaged in the same line
of business.
A vertical trust is an organization that controls all or part of a series of operations
extending from the procuring of the raw materials to the retailing of the finished
products.
 The main political responses to the
Long Depression were:
1. Public investment
2. Protectionism
3. Social policy
4. Imperialism
1. Public investment: National States became in many cases
the main customers of the new industry system. The
creation of modern infrastructures, as well as the production
of new arms, were a major impulse to the industrial
development. One good example for the latter case is the
German navalism (i.e. the naval militarism, the creation of
a giant military navy) in the first decade of 20th century.
2. Protectionism: from the end of 1870s a second response to
the depression was in many countries to return to a
protectionist policy placing taxes and tariffs upon foreign
goods to make them more expensive, and thus to make it
more likely that the population would buy domestic
produced goods.
3. Social policy: from 1880s many countries
implemented a legislation aimed to an improvement of
the average standard of living by creation of, for
example, modern public health, sanitation, and
medicine, or by developing a public pension plan.
These measures allow people to spare money and to
use it buying commodities.
4. Imperialism: the urgent necessity of finding new
markets, as well as the need of raw materials, was one
of the main reasons, that gave rise to the new impulse
to imperialism.