1. I.                   New Patterns in an Industrial Economy
    • a.      Second IR played role in emergence of basic economic patterns that have characterized much of modern European economic life
    •                                                               i.      Recessions and crises still evident
  2. 1873-1895
    • 1.      1873-1895: great depression, but Europeans experienced a series of economic crises during those years
    • a.      Prices fell dramatically
    • b.      Slumps in business cycle reduced profits
  3. Differed among countries
    • a.      France and Britain: 1880s/ Germany and US: recovering in 1870s
    • 2.      1895-WWI: Europe experienced economic boom and achieved prosperity that led to title: golden age in European civilization, la belle époque 
  4. German Industrial Leadership
    •                                                               i.      After 1870, Germany replaced Great Britain as industrial leader of Europe
    • 1.      Evident in new areas of manufacturing, like organic chemicals, and worldwide trade
  5. Why?
    • 1.      Britain’s early lead in industrialization gave it established industrial plants and made it more difficult to adapt new techniques of Second IR
    • 2.      Germany entered late and built the latest and most efficient industrial plants
  6. Why cont.
    British entrepreneurs and GErman Managers
    • 1.      British entrepreneurs made the situation worse by their suspicion of innovations and reluctance to invest
    • 2.      German managers accustomed to change and formation of large cartels encouraged German banks to invest a lot of money
    • 3.      Unlike Germans, Brits didn’t encourage formal scientific/ technical education
  7. After 1870
    •                                                               i.      After 1870, science and technology grew closer
    • 1.      Newer fields of industrial activity required more scientific knowledge than the commonsense tinkering employed by amateur inventors
    • a.      Companies invested in lab equipment for research and hired scientific consultant
  8. German schools
    1.      German technical schools were allowed to award doctorate degrees and were turning out 3-4000 graduates a yearà went to industrial firms 
  9. 1900: Europe %
    • a.      1900: Europe divided into economic zones
    •                                                               i.      Great Britain, Belgium, France, Netherlands, Germany, western Austro-Hungarian empire, n. Italy= advanced industrialized core that had a high standard of living, decent systems of transportation, and relatively healthy and educated populations
    •                                                             ii.      Most of Austria-Hungary, Spain, Portugal, Balkans, Russia: little industrialized and largely agricultural
  10. Growth of industrial economy
    •                                                               i.      Abundance of grain and lower transportation costs caused prices of farm commodities to plummetà responses
    • 1.      Some used tariff barriers against lower-priced goods
    • 2.      Landowners introduced machines for threshing and harvesting
    • 3.      Specialization in other food products
    • a.      Denaker: eggs, butter, and cheese
    • b.      Bohemia and France: sugar beets
  11. Intro of chem fertilizers
    1.      Small farmers couldn’t afford ità farm cooperatives that provided capital for making improvements and purchasing equipment and fertilizer
  12. Spread of Industrialization
    •                                                               i.      Rapid development in Russia and Japan
    • 1.      In Japan the imperial government led promotion of industry
    • a.      Financed industries, built railroads, brought foreign experts to train Japanese employees, and created universal educational system based on applied science
  13. end of 19th
    • a.      End of 19th: Japan developed key industries in tea, silk, armaments, and shipbuilding
    •                                                                                                                                       i.      Workers were those who abandoned farms due to severe hardships in countryside and fled to cities, where they provided abundant source of cheap labor
    • b.      Workers worked long hours in coal mines and textile mills in bad conditions
    • c.       In Nagasaki, coal miners worked naked and were shot for escaping 
  14. A World Economy
    •                                                               i.      Economic developments and transportation revolutionà world economy
    • 1.      1900: Europeans were importing beef and wool from Argentina and Australia, coffee from Brazil, etc. 
  15. European capital
    • 1.      European capital invested abroad to develop railways, mines, electrical power plants, and banks
    • a.      High rates of return, such as 11.3% on Latin American banking shares that were floated in London, provided plenty of incentive
  16. Foreign countries
    • 1.      Foreign countries also provided markets for the surplus manufactured goods of Europe
    •                                                             ii.      Europe dominated world economy by end of nineteenth
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