Second Industrial Revolution (1870-1910): Innovations, Impacts, and Global Expansion

Second Industrial Revolution (1870-1910)

Rapid Industrialization and Finance Capitalism

The period between 1870 and 1910 witnessed rapid industrialization fueled by the rise of the financial sector. This involved investment activities through banks and stock exchanges, creating capital without direct product manufacturing.

Innovations and Changes

Increased Production

• New Sources of Finance:
  • Joint-stock company: Individuals contribute capital, buy shares, and receive/lose profits proportionally.
  • Bank: Lent money to businesses with interest.
  • Stock exchange: Marketplace for buying and selling company shares.
• New Business Structures:
  • Cartels: Horizontal associations of companies in the same industry, collectively deciding production and prices.
  • Trusts: Vertical associations of companies in different industries, controlling markets and eliminating competitors.
  • Holding companies: Large financial firms profiting from owning shares in other companies.
• New Technological Advances:
  • Improvement of the Bessemer converter.
  • Dynamite, stainless steel, and artificial fibers.
• New Sources of Energy:
  • Electricity: In 1869, Berges designed a hydroelectric generator. In 1879, Thomas Edison invented the electric light bulb.
  • Oil: Petrol from oil.
• New Industries: Electricity, food, chemical (perfume), automobile, and consumer goods industries.

Consequences of the Second Industrial Revolution

• Rise of finance capitalism.
• Development of consumerism.
• Economic instability.
• Expansion of international trade.

Organization of Work

Introduction of the assembly line, where each worker specialized in a specific task. Henry Ford was the first to implement this in 1913.

Birth of Consumer Society

• Upper class: Could afford luxury items, enhancing social status.
• Lower class: Lower wages, unable to afford luxury items. Window shopping became a practice, and advertising emerged to promote product sales and avoid surplus.

Economic Crises and Cycles

• Economic crisis: Excess of products that the market could not consume, creating an imbalance between supply and demand.
• Cycles: Crises became a recurring feature of capitalism, following a pattern:
  • Economic expansion: Increased investment, production, employment, salaries, demand, and company profits.
  • Crisis: Production exceeds demand, leading to falling prices, decreased profits, and reduced salaries.
  • Depression: Investment falls, companies close, and mass unemployment occurs.
  • Recovery: Supply balances with demand, and the economy begins to expand again.

Growth of International Trade

• Significant increase in international trade.
• Construction of large tunnels.
• Building of canals such as the Suez and Panama Canal.

Expansion of the Second Industrial Revolution

• USA: Immigration, mechanization, and concentration of companies.
• Germany: Leader in European industry (iron, steel, electricity, chemicals). Banks financed new companies, leading to industrial concentration. Patents protected inventors' rights.
• UK: Industrial power, but lost its leading position.
• France: Slower industrialization, main iron exporters.
• Japan: Industrialization began in 1870, with state intervention in the economy.
• Russia: Industrialization after 1890 with state investment in sugar and wood industries.

Industrial Power Shift

• 1870: UK, USA, Germany, France
• 1913: USA, Germany, UK, France

Industrial Development in Spain

• Slower than in the rest of Europe.
• Most industrialized area was Catalonia.
• Expansion of the railway network (radial) helped the iron and steel industry.

Imperialism (19th and Early 20th Centuries)

Causes and Development

Lands became colonies for political control and economic exploitation. The rise of finance capitalism drove the search for new markets, raw materials, and investment opportunities outside Europe.

• Colonies symbolized international prestige and provided strategic locations for security and mobility.
• European population growth led to emigration to colonies to avoid social conflicts.
• Scientific progress and the belief in the supremacy of white people fueled imperialism.

Colonial Empires

The largest colonial empires were those of France and the UK, competing for territories in Africa and Asia.

Colonial Empires in 1914

• UK: Maritime hegemony, with key possessions in India and Australia.
• France: Not as extensive as the UK, with Madagascar as a notable possession.
• USA: Influence in Latin America, Hawaii, and the Philippines.
• Japan: Control over Korea and Manchuria, leading to the Russo-Japanese War of 1904-05.
• Russia: Focused on Serbia and Central Asia.