The Second Industrial Revolution and Agricultural Shift

The Agricultural Sector and Economic Challenges

The decade from 1870 to 1880 was a prosperous era for agriculture, during which yields reached their peak for the century. However, from the 1880s onward, while the industry maintained its upward trend of progress, agriculture experienced much slower growth and began to diverge. The profitability of agriculture declined, resulting in a decrease in agricultural income and land value.

The real cause of this depression was the inability of agriculture to adapt to new conditions created by the urban economy and industrial development. In some cases, the fall in prices was the effect of poor market organization, as has been remarked regarding cereals and other agricultural products. Because of low profitability and increasing competition introduced by the development of countries outside Europe, capitalists shunned investing in land. Much of the agricultural economy remained outside of nationalization and did not participate in the benefits of a market economy.

The social and political consequences of this lack of harmony between industrial progress and agricultural stability raised serious public policy problems.

Industrial Development and Technological Innovations

Since 1870, the industry has adopted new manifestations in its structure and forms. Some economic historians describe the new era that opened up as the Second Industrial Revolution. This period is characterized by the use of new sources of energy, such as electricity and petroleum, and significant scientific inventions, including:

• The internal combustion engine
• The telephone
• Synthetic dyes
• Industrial concentration

This second industrial revolution resulted from the close marriage of science and technology—the laboratory and the factory. The birth of applied sciences and technology was a consequence of the changing conditions of capitalist market organization. Increasing competition led to mass production at lower costs. In this process, technical laboratories became an indispensable part of the industrial complex, combining the technical and economic aspects of production. The competitive market served as the driving force behind this technical renovation.