1. New Markets
    • a.      Growth of industrial production depended on development of markets for the sale of manufactured goods
    • b.      After 1870, best foreign markets already saturated, forcing Europeans to take renewed look at their domestic markets, which gave possibilities
  2. Dramatic population increases
    • a.      Dramatic population increases after 1870à steady rise in national incomes
    •                                                               i.      Britain and Germany doubled/ tripled national incomes
    • b.      1850-1900: real wages increased by 2/3 in Britain and 1/3 in Germany
    • c.       Prices of both food and manufactured goods declined due to lower transportation costsà Europeans spend more on consumer products
  3. Businesses
    •                                                               i.      Businesses saw value of using new techniques of mass marketing to sell consumer goods made possible by the development of the steel and electrical industriesà created the department store
    • 1.      Desire to own bikes, electric lights, etc. created new consumer ethic
  4. Tariffs and Cartels
    •                                                               i.      Increased competition for foreign markets and the growing importance of domestic demand led to reaction against free trade
    • 1.      Protective tariffs guaranteed domestic markets for products of their own industries
  5. Cartles
    •                                                               i.      Cartels being formed to decrease internal competition
    • 1.      In a cartel, independent enterprises worked together to control prices and fix production quotas, thereby restraining the kind of competition that led to reduced prices
    • a.      Especially strong in Germany
  6. Cartel formation
    • a.      Cartel formation was paralleled by creation of larger manufacturing plants, especially in iron and steel, machinery, etc.
    •                                                               i.      Most evident in Germany, where workers in factories rose from 205kà879k
  7. Rise in workers in factories in Germany led to what?
    • 1.      This led to pressure for greater efficiency in factory production at the same time that competition led to demands for greater economy
    • a.      Result: desire to streamline or rationalize production as much as possible
  8. Ways to streamline/ rationalize production
    •                                                                                                                                       i.      One way: cut labor costs through mechanization of transport within plants, like using electric cranes
    •                                                                                                                                     ii.      Another way: development of precision tools enabled manufactures to produce interchangeable partsà creation of assembly line for production
    • 1.      First used in US, then Europe used for nonmilitary goods, like bikes and automobiles
    • a.      Scientific management maximized workers’ efficiency
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