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The GreatTransform ation:Germ an Econom y and Society,1850–1914

Oxford Handbooks Online

The Great Transformation: German Economy and Society, 1850–1914

Cornelius Torp

The Oxford Handbook of Modern German History

Edited by Helmut Walser Smith

Print Publication Date: Sep 2011

Subject: History, Economic History

Online Publication Date: Sep

DOI: 10.1093/oxfordhb/9780199237395.013.0015

2012

 

Abstract and Keywords

A study of the German economy and German society form the crux of this article. It shows how both industrialization and globalization transformed the German economy in the second half of the ‘long’ nineteenth century and how they affected German society. First, the longterm developments of the German economy between 1850 and 1914 are described based on quantitative indicators. There are only two points on which the industrialization experts seem to agree. First, the industrialization of the world started in England after the middle of the eighteenth century. In Germany, industrialization gained momentum in the late 1840s. Secondly, industrialization has to be considered not as a national, but as a regional phenomenon. A rapid globalization process in the nineteenth century was brought to a halt by the globalization backlash, which happened during the era of the two World Wars and the Great Depression. This article carefully explains the ushering of the Great Depression, and its effect on German economy.

Keywords: great transformation, German economy, German society, industrialization, globalization

15.1

NEVER before had the world changed so dramatically. In the second half of the ‘long’ nineteenth century, and within only two generations, the part of Central Europe which became Germany in 1871 underwent a fundamental and unprecedented social transformation. Many other forces, such as state building, contributed to this transformation, but arguably, economic development was the most important driving force behind this process. Capitalism was not a totally new phenomenon. Many of its features, such as the production for a market, the individualization of property rights, capital accumulation, or profit orientation can be found in particular contexts of Central European history long before the middle of the nineteenth century—from the long-distance trade of German merchants to proto-industrial enterprises to export-oriented large-scale farming. After 1850, however, capitalism became both industrial and global. At the same time, it left the particular niches and contexts in which it had existed before and started to penetrate the whole society.

Some scholars consider industrialization, the first of the processes mentioned above, as one of the two fundamental revolutions of mankind, comparable only with the ‘neolithic revolution’ that introduced humankind to the sedentary way of life centered on agriculture.1 Consequently, the process of industrialization has drawn the attention of generations of historians and economists—among them some of the most outstanding minds, from Karl Marx to Joseph Schumpeter to David S. Landes. In spite of nearly (p. 337) 300 years of empirical research and theoretical reflection, however, there still is nothing like a commonly accepted theory of industrialization.2 Neither is there a general agreement concerning the very nature of industrialization and its defining features. Nor has a consensus been reached as to the question of whether the ‘industrial revolution’ represents a more or less sudden breakthrough or an evolutionary process of incremental change.

There are only two points on which the industrialization experts seem to agree.3 First, the industrialization of the world started in England after the middle of the eighteenth century. Only here, at this time, was there to be found a particular combination of technical and institutional innovations, as well as the political and social preconditions that made a new level of economic development possible. From England, the industrialization spread to continental Europe, roughly following the coal deposits in a north-south and west-east direction, and to North America.4 In Germany, industrialization gained momentum in the late 1840s. Secondly, industrialization has to be considered not as a national, but as a regional phenomenon. Even if the nation states with their institutions and legal frameworks played an important role, regional factors, such as the existence of raw materials, the population structure, and transportation and communication channels, are decisive for explaining the success or failure of industrialization processes, as well as the particular forms they took. At the turn of the twentieth century, industrialized zones were still surrounded by regions dominated by traditional economic relationships. At the same time, these industrialized regions straddled national borders, such as the industrial macro-region between the Pasde-Calais and the Ruhr district.5

Entangled with industrialization in multiple ways, globalization was the second process that transformed the face of capitalism in the nineteenth century. Again, there had been forerunners of the modern world economy since the sixteenth century, such as the trade and production systems highlighted by Fernand Braudel or Immanuel Wallerstein.6 After the middle of the nineteenth century, however,

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The GreatTransform ation:Germ an Econom y and Society,1850–1914

technological innovation imparted a new quality to global capitalism, with the extensive use of steamships in overseas trade and the massive expansion of the railroad networks leading to nothing less than a transportation revolution. Concurrently, the establishment of a global telegraph network revolutionized communications. As a consequence, world wide economic integration after 1850 increased so rapidly and steadily that by the eve of World War I a level of global trade intensity had been reached that was comparable to the level achieved in the 1970s and 1980s. Moreover, new world wide investment opportunities boosted international capital mobility to an extent that in some ways has not been arrived at even today. Finally, in the years between 1850 and 1914, transnational mass migration surpassed everything before or since, and tended to establish a world labor market with a global wage nexus. All in all, there is ample evidence of a rapid globalization process in the nineteenth century brought to a halt only by the globalization backlash, which the era of the two World Wars and the Great Depression implied.7 In this first phase of world wide economic integration, just (p. 338) as in the second wave of globalization after 1950, Germany was one of the most important global players.

In the following pages, I will try to show how both industrialization and globalization transformed the German economy in the second half of the ‘long’ nineteenth century and how they affected German society. First, the long-term developments of the German economy between 1850 and 1914 will be described based on quantitative indicators (15.2). Then, the main stages of German economic history since 1850 with their characterizing features will be discussed more thoroughly (15.3 and 15.4). Finally, I will try to outline the most important social consequences of the economic transformations Germany went through in the decades before the First World War (15.5).

15.2

Industrialization is often equated with the spread of technological inventions, such as the ‘Spinning Jenny’ or the steam engine. This story, however, is way too simple. Even if technological inventions played an important role in the process of industrialization, they did not make up more than a necessary precondition. Whether an invention becomes an innovation depends on its economic profitability. Whether the use of a technology is efficient and profitable in turn hinges on a whole set of social, institutional and economic circumstances.8 In economic history, the complexity of the problem has led to the development of different economic indicators, each focusing on a particular defining feature of industrialization.

Industrialization, first and foremost, means the long-term acceleration of economic growth. Net domestic product (NDP), which measures total economic output (gross domestic product) minus depreciation of capital goods, provides the best gauge of this process. Whereas the NDP of Germany within its 1871 borders increased by around two-thirds between 1800 and 1850, it rose by two-and-a-half from 1850 until 1900.9 Compared with the middle of the nineteenth century, the NDP on the eve of the First World War had more than quintupled (see Table 15.1). Since economic growth even (p. 339) outpaced population increase, the NDP per capita rose from 265 Marks in 1850 to 728 Marks in 1914.10 These figures, it is true, are only rough estimates due to the poor state of the statistical material. The general macro-economic trend, however, is clear enough.

Table 15.1 German net domestic product in billion marks (prices of 1913), 1850–1913

1850

1855

1860

1865

1870

1875

1880

1885

1890

1895

1900

1905

1910

1913

9.4

9.7

11.6

13.2

14.2

17.7

17.7

20.4

23.6

27.6

33.2

37.2

43.0

48.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Walter G. Hoffmann et al., Das Wachstum der deutschen Wirtschaft seit der Mitte des 19. Jahrhunderts (Berlin: Springer, 1965), 454 f.

Economic growth, the second characteristic feature of industrialization, did not come at a steady pace, but followed business cycles. In traditional economies, fluctuations in economic development were typically caused by climate changes due to the central importance of weather for the agrarian sector. The resulting random pattern of economic development differs fundamentally from industrial economies that follow a growth path with more or less cyclical variations. These fluctuations vary in duration and are attributed to different causes from overinvestment to credit changes. In the German case, it can be shown that at the end of the 1840s, industry had gained such an importance that business cycles began to have a significant impact on the course of economic development.11 From that time onward, until the First World War; three different main phases can be distinguished. The first lasted until 1873 and was characterized by a continuity of high economic growth rates, only interrupted by the first world wide economic crisis of 1857–1859 and the short recession of 1866. It culminated in the socalled ‘Gründerboom,’ the boom period in the years before and, more forcefully still, shortly after the founding of the German Empire. The period between 1873 and 1895 has become known as ‘the Great Depression.’12 However, economic historians today agree that these years were less an enduring depression than a period of retarded growth and of declining prices. Even in the worst years (1874–1883) of the ‘Great Deflation’ (the proper designation for the period) real NDP increased by 1.22 percent per year.13 Nevertheless, it is important to bear in mind that contemporaries perceived the decades after 1873 as a sharp and long-lasting depression due to numerous crashes of companies and banks, and due to the radical difference compared with the boom before. From the early 1890s onward the German economy experienced an upswing that lasted until 1913. It was interrupted only by two brief, though serious, slumps in 1900–1902 and 1907–1908. How well the Germany economy did during the two decades before the Great War may be gauged from the fact that the annual growth rate of the NDP from 1895 to 1913 amounted to 3.41 percent and that the production index for all manufactures rose from 48.9 to 100 in the same time period.14

A third feature refers to the relation between capital accumulation and economic growth as one of the key mechanisms of industrial

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The GreatTransform ation:Germ an Econom y and Society,1850–1914

capitalism. In order to use the technical innovations of the industrial age economically, a huge increase in the capital stock of the industrializing economies was necessary. This meant a structural change in the organization of production and consumption. A substantial part of the financial resources that otherwise could have been spent for consumption now had to be saved and invested in railroads, iron mills etc. in order to realize profits in the future. This is echoed in Walt W. Rostow's often criticized model of ‘The Stages of Economic Growth’ according to which the ‘take off’ stage of an industrializing economy is characterized by a sharp rise in the effective investment rate from around five percent of national income to ten percent or more.15 Even if this precondition for ‘self sustained growth’ (p. 340) does not seem to apply to the industrial forerunner England and other countries, it fits quite well in the German case. Table 15.2 shows that the German economy experienced its ‘take off’ phase in the two decades after 1850. Before mid century, effective investment rates had been much lower; after 1870, with the exception of the early 1880s, they clearly exceeded the critical ten percent line.

A final feature of industrialization is the shifting importance of the diverse sectors of the national economy. In traditional economies, by far the largest part of the workforce is employed in the primary sector, which involves the extraction and production of raw materials, i.e. mainly agriculture and mining. With industrialization picking up steam, the secondary sector, which includes all types of manufactures, quickly gains in importance and finally overtakes the agrarian sector. In Germany, this process set in around the middle of the nineteenth century (Table 15.3). Already in the early 1890s, the secondary sector outperformed the primary sector in terms of both workforce and value added. There was, however, not only a significant shift between the main sectors (p. 341) of the economy, but also within the secondary sector itself. In 1850, only 16 percent of the workforce employed in the manufacturing sector was made up of modern industry whereas the majority was occupied in more traditional branches like handicraft or the proto-industrial putting-out system. In 1913, on the contrary, industrial enterprises accounted for 62 percent of the workforce occupied in the secondary sector, leaving the other subsectors far behind them.16

Table 15.2 Effective investment rates in Germany, 1850–1913 (five-year averages, current prices)

1850–

1855–

1860–

1865–

1870–

1875–

1880–

1885–

1890–

1895–

1900–

1905–

1910–

1854

1859

1864

1869

1874

1879

1884

1889

1894

1899

1904

1909

1913

9.8

8.1

12.1

9.9

14.1

11.0

9.3

11.5

11.8

14.8

13.9

15.3

15.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Hoffmann et al., Wachstum, 104.

Table 15.3 Distribution of the workforce among the three major sectors of the German economy, 1825–1907 (in percent)

Raw material

Manufactures

 

Services

1825

59.0

22.0

19.0

1846

56.8

23.6

20.4

1855

53.9

25.4

20.6

1861

51.7

27.3

21.0

1871

49.3

28.9

21.8

1882

42.2

35.6

22.2

1895

36.6

38.9

24.8

1907

34.0

40.0

26.0

 

 

 

 

Source: Toni Pierenkemper, Umstrittene Revolutionen. Industrialisierung im 19. Jahrhundert (Frankfurt: Fischer, 1996), 95.

At the same time when industrialization was kicking in, the economies of central Europe increasingly were drawn into the expanding world economy. Unfortunately, even for the dimension of international trade where statistics are much more reliable than for capital export, the available data before the founding of the German Empire are incomplete. For the subsequent period, however, a tremendous increase of German exports can be discerned, as they essentially quadrupled from 1872 to 1913, going from 2,353 million marks in current prices to 10,097 million marks. With this pace of growth, German exports rose even faster than the already quickly increasing world exports and the exports of most other developed countries. As a result, the German Empire before 1914 steadily moved up in the hierarchy of export nations. Of the four most important export nations before the First World War, listed in Table 15.4, only Germany was successful in constantly extending its share of world exports. Only US exports rose at a comparable though more uneven pace, whereas France and the UK continuously lost ground. In the year before the Great War, France actually had dropped out of the league of top exporters. Germany, the United States and the United Kingdom were now more or less equal with around 2.5 billion dollars of exports.17

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The GreatTransform ation:Germ an Econom y and Society,1850–1914

Germany's foreign trade not only rose extremely fast compared with the exports and imports of other countries, but also in comparison with the quickly growing German economy as a whole. Table 15.5 lists the five-year averages of German exports and imports as a percentage of GNP for the decades before World War I. The data show that the German economy increasingly became dependent on its international trade relations. In the years before 1914, imports amounted to almost one-fifth of the German national income, with foodstuff consistently accounting for about one-quarter of (p. 342) German imports. A third of the wheat consumed in Germany after the turn of the century and almost half of the barley had to be imported from other countries. Yet by far the most important import category concerned raw materials, such as coal, ore, cotton, and wood, needed for Germany's expanding industries. Even more impressive than the rise of imports was the increase in exports. Even during the dismal downturn of the 1870s, the yearly growth rate of exports already amounted to 3.57 percent. In the subsequent decades, it increased steadily, reaching 6.47 percent in 1907–1913. As a result, between the founding of the German Empire and the First World War, German export ratios almost doubled and nearly attained the level later achieved by the highly export-oriented economy of the Federal Republic of Germany at the end of the economic miracle (19.7 percent in 1973). Finally, the structure of exports differed sharply from the composition of imports. Starting as a relative latecomer as compared with Great Britain, Germany before 1914 developed into an exporter of industrial manufactures par excellence. Moreover, the composition of German industrial exports was extremely ‘modern’ in the sense that it was dominated by the products of engineering, as well as of heavy, electrical, and chemical industry, rather than by textiles as was still the case in Great Britain.18

Table 15.4 Shares of world export, 1874–1913 (in percent)

 

1874–

1879–

1884–

1889–

1894–

1899–

1904–

1909–

 

1878

1883

1888

1893

1898

1903

1908

1913

Germany

9.5

10.0

10.6

10.4

11.0

11.5

11.8

12.2

France

11.7

10.2

9.8

9.4

8.7

8.4

7.8

7.5

UK

17.3

16.7

17.0

15.9

14.7

14.2

13.9

13.5

USA

10.0

12.1

10.9

12.0

12.8

14.3

13.4

12.7

 

 

 

 

 

 

 

 

 

Source: Cornelius Torp, Die Herausforderung der Globalisierung. Wirtschaft und Politik in Deutschland, 1860–1914 (Göttingen: Vandenhoeck & Ruprecht, 2005), 62.

Table 15.5 German export ratio and import ratio, 1874–1913 (export and import as percentage of GNP, in prices in 1913, five-year averages)

 

1874–

1879–

1884–

1889–

1894–

1899–

1904–

1909–

 

1878

1883

1888

1893

1898

1903

1908

1913

Export

8.5

9.7

10.5

10.6

11.0

12.0

13.7

15.8

ratio

 

 

 

 

 

 

 

 

Import

15.2

14.9

14.6

17.1

17.8

17.9

18.6

19.2

ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Own calculations based on Statistisches Jahrbuch fü r das Deutsche Reich, various volumes; Hoffmann et al., Wachstum; William Arthur Lewis, ‘The Rate of Growth of World Trade, 1830–1973,’ in Sven Grassman and Erik Lundberg (eds), The World Economic Order. Past and Prospects (London: Macmillan,), 11–81, here 30 (table 2); Albrecht Ritschl and Mark Spoerer, ‘Das Bruttosozialprodukt in Deutschland nach den amtlichen Volkseinkommensund Sozialproduktstatistiken 1901–1995’ Jahrbuch für Wirtschaftsgeschichte, no. 2 (1997), 51 (table A.1).

15.3

As to the driving forces of industrialization and the pace of global integration, German economic history between 1850 and 1914 can be divided in two periods. The first stage reaches from the middle of the nineteenth century until the 1880s. It (p. 343) was characterized by the dominance of a set of leading industrial sectors, which turned out to be typical for German industrialization. Stemming from development economics, the term ‘leading sector’ refers to the strategic core of an industrialization process.19 Whereas in Great Britain the textile industry functioned as the pacemaker of industrialization, in Germany four different branches—railroads, iron and steel, mining, and engineering—were together of crucial importance. These branches are regularly referred to as a ‘complex’ of leading sectors, deeply intertwined with various ‘forward’ and ‘backward effects; ’ the building and maintenance of railroads required large amounts of steel and coal; steel plants were dependent on massive inputs of coal; coal mines and steel works used large scale machines, and transported their products by train.

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The GreatTransform ation:Germ an Econom y and Society,1850–1914

To understand the sudden breakthrough of the leading sectors in Germany one has to consider the change in economic policy, which took place particularly in Prussia around the middle of the nineteenth century. This change had two major dimensions. On the one hand, the Prussian bureaucracy pursued a pronounced liberalization policy, which eased state control of coal mining, enabling the production of coal in Prussia to more than double between 1850 and 1860, and again in the following decade.20 A second important field of liberalization involved the German law on stock companies where a far-reaching revision took place in 1870. Liberated from the former restrictions and driven by the ‘Gründerboom,’ 928 joint stock companies were floated between 1871 and 1873 as compared with the 295 floated over the whole period between 1850 and 1870.21 On the other hand, Prussia as well as other German states started to mobilize massive financial resources around the mid-century in order to develop their economies. Most of these investments went into railroad building, either in the form of equity participation in railroad stock companies, by subsidies, or in direct investments in the construction of new railway lines. In Prussia, as a consequence of this new economic activity of the state, the national debt between 1848 and 1865 rose by more than 100 percent.22

Beyond doubt, railroads constituted the most dynamic and thus most important part of the German industrial core complex, displaying all the decisive characteristics of a ‘leading sector.’ First, the German railroad sector expanded at a breathtaking speed, far above average as compared with the rest of the national economy. To give only a rough impression, the track length between 1840 and 1880 increased from 469 to 30,125 km, the workforce from 1600 to 272,800 persons, and the volume of freight traffic from 3 million to 13,039 million tons km.23 Secondly, the railroad sector was of significant and growing importance for the German economy as a whole. From the middle of the 1840s onwards, railroads steadily attracted a substantial part of national effective investments, culminating in a share of more than a quarter of all investments in 1875–1879. Accordingly, the railroad sector's share of German capital stock increased from a mere 3.2 percent in 1850–1854 to 11.4 percent in 1880–1884.24 Thirdly, technological progress and the increased utilization of capacities allowed for huge productivity gains, which in turn led to decreasing freight rates. Fourthly, there were substantial ‘spreading (p. 344) effects,’ transcending the railroad sector itself and inducing economic growth in other sectors. As to backward linkage effects, the requirements of the railroads for new inputs of raw materials and machinery were decisive for the expansion of coal mining, and for the development of both the modern iron industry and engineering. Whereas throughout the first years of railroad construction in the 1830s and early 1840s, nearly all the iron products required had to be imported; after a few years a quick import substitution process set in. From the late 1840s onwards, foreign locomotives and rails increasingly were replaced by domestic products.25 The forward effects of the railroad sector were no less important. A dramatic decline in freight tariffs implied huge cost saving effects for all other industries, giving them access to new markets and setting up incentives for economic growth and modernization.

Other elements of the leading sector complex, interwoven with the railroad sector in multiple ways, also developed at an outstanding pace. The Prussian production of coal, which represented about 90 percent of German production, increased from 4.0 million tons in 1850 to 23.3 million tons in 1870, to 64.4 million tons another twenty years later.26 In the engineering sector, the demand for locomotives, as well as for all other kinds of machines and engines used in the iron and steel industry and in the mining sector, unleashed new economic activities on an unprecedented scale. In 1862, the statistics of the German Zollverein already listed 665 companies. By the end of 1871, this number rose up to 1400. From the 1860s onward, German engineering increasingly became internationally competitive and started to develop its long-term export orientation.27 The fabulous growth of German heavy industry stands out even more clearly against the background of its British counterpart. Having started as a dwarf compared with the British giant before the middle of the nineteenth century, the German iron and steel industry quickly caught up and finally overtook British heavy industry in 1893 in the volume of steel production, and ten years later in the production of pig iron. Simultaneously, Germany triumphed in the world market for iron and steel and up to World War I surpassed Britain as the leading exporter. Exports in times of economic downturns could take the form of dumping exports in order to discharge overproduction as was the case with the Krupp Company in the depression since 1873 when its export quota climbed up to about three-quarters.28 In the long run, however, the success of Germany's heavy industry rested on the combination of a set of structural factors: a high degree of vertical integration, strong cartels and tariffs reinforcing each other, and the realization of economies of scale that only could be achieved via large export quantities.29

A further backward effect of the leading sector complex as well as one of the most important features of nineteenth-century German economic history was the development of the German banking sector.30 From the very beginning, German banks had been deeply involved in the industrialization process. Unlike the light-industrial path to industrialization represented by Great Britain, German industrialization, with its dominance of railroads and heavy industry, was extremely capital intensive from the outset. Accordingly, capital market financial institutions, hitherto underdeveloped, (p. 345) were needed to collect existing rent-seeking capital and direct it into the new investment opportunities. Banks, mostly newcomers from the provinces such as the ‘Schaaff-hausensche Bankverein,’ Sal. Oppenheim JR, or S. Bleichröder, filled this niche. As major shareholders of railroad stock companies, but also as representatives in their decision-making bodies, bankers as early as the 1830–1840s found themselves closely connected to the world of industrial capital. Endowed with these experiences and contacts, it did not come as a surprise that banks again played an important role when capital for the expansion of the iron and steel industry and the mining sector was needed. With the companies of these very sectors increasingly developing into large-scale enterprises listed on the stock exchange, even the banks themselves had to rely on new financial resources and more and more took the form of stock companies (AGs).

There were two main waves of foundations of joint stock banks, both paralleling extreme boom phases. The first took place between 1853 and 1856, the second between 1869 and 1873. By the end of this time, all the major banks that determined German financial affairs until far into the twentieth century had come into existence, among them the four famous D-banks: the ‘Deutsche,’ the ‘Darmstädter,’ the ‘Dresdner’, and the ‘Disconto-Gesellschaft.’ From the outset, all these banks transcended the traditional British divide between ‘investment’ and ‘commercial’ banks and operated along the whole range of banking activities. It is difficult to assess how far the influence of the big German mixed banks (Universalbanken) in the German economy actually reached. The often heard claim of an all encompassing dominance of

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The GreatTransform ation:Germ an Econom y and Society,1850–1914

financial capital, already expressed by Rudolf Hilferding in his influential study of 1910,31 has been convincingly refuted.32 Collaboration and common interests, rather than domination of one side characterized the relationship between big business and big banks; they were partners on roughly equal terms. That banks played a crucial role in the German industrialization process, however, is hard to deny.

A major driving force behind German industrialization, railroads also transformed space in an unprecedented way. In the historical literature, this aspect is normally dealt with from the perspective of the integration of the domestic market and thus of nation building. There are, however, two other important spatial dimensions of the expansion of the railroad network, which need to be emphasized. First, railroads allowed for a pattern of industrialization, which was characterized by sharp regional differences in economic development.33 The mining and the iron and steel industry were particularly heavily dependent on the existence of natural resources, especially coal and ore. Heavy industrial centers thus thrived in regions where these factors were abundantly available. In Germany, it was first and foremost the Ruhrgebiet, but also the Saar region and Upper Silesia, which made up the leading regions of industrial development whereas other parts of the country remained widely untouched by industrialization. The railroad, on the one hand, enforced the agglomeration of economic activity by connecting the leading industrial regions with each other and with other ‘industrial islands,’ thus providing the necessary market for their products. On the other hand, (p. 346) economic concentration was fostered by the fact that railroads dramatically reduced the transport costs that previously had worked as ‘natural tariffs’ for regions of traditional industrial activity. Unable to compete with the ‘new kids on the block,’ these regions often were left bereft of significant economic activity.

Secondly, it has to be stressed that the integration of the national market, brought about by railroads not only in Germany, but everywhere in the second half of the nineteenth century, itself has to be seen as an integral and crucial part of economic globalization. Globalization and territorialization, understood as the increasing penetration of territorially demarcated political entities, therefore need not necessarily be conceived as opposing and historically incongruent processes.34 Rather, they could interact in a multiplicity of ways, sometimes strongly mutually reinforcing one another. To give just a simple example, the sharp decline of costs for the transport of a bushel of wheat from a farm in Illinois to a German provincial town could be attributed only in part to the improvements in transcontinental shipping. The main decrease in price was made up by falling freight rates of railroads in Germany and the USA. The emerging world economy has to be understood as a result of these intertwining developments in national and international transportation.

For the German economy, the widening of economic space meant not only new chances, but also brought the pressure of new competitors. As everywhere else in western and middle Europe, German agriculture was the first traditional sector severely hit by globalization. From the early 1870s onward, German farmers literally were confronted with a grain invasion from overseas where agrarian exporters, due to cheap and fertile ground, were able to produce at much lower costs.35 Prices went down dramatically as did the profits of German grain farmers who had been exporters of their goods before. Under the pressure of the new situation, the German Empire in 1879 embarked on a moderate protectionist policy which became more pronounced in the 1880s. Yet even if they were able to improve the situation of agriculture, the tariffs did not uncouple Germany from the international food market. Globalization, therefore, continued to put pressure on German farmers and thus promoted the industrial transformation of the German economy.

15.4

The second stage of the development of the German economy commenced around 1890 and lasted until the war broke out. It was marked by a change in the leading sectors of industrial growth and by a further speeding up of economic globalization, ushering in the belle époque of the world economy. During the 1870s and 1880s, the old leading sector complex of railroads and heavy industry increasingly lost its outstanding dynamic. The lead was taken over by ‘new’ industries, namely the chemical and (p. 347) electrical industry, which depended much more than earlier industries on systematic scientific research.

As to chemicals, industrial production on a large scale did not start until the 1860–1870s. In retrospect, this turned out to be an advantage since there had been little investment in outmoded technologies and German producers could choose the best technologies available. In Germany, for example, and unlike in Great Britain, there was not much capital bound up with the traditional Leblanc process of soda (sodium carbonate) production, which was the basis of many other inorganic chemical processes; German producers since 1880 thus could directly invest in the far more efficient and recently discovered Solvay process. As a result, German soda manufacturers within a few years became highly competitive on the international market. Already in 1884, Germany had switched from being a net importer to being a net exporter of soda, developing into the second largest exporter world wide only ten years later.36

Even more remarkable, however, was the success of the German chemical industry in the field of organic chemistry. Insignificant elsewhere, except in Switzerland, the organic branch of the German chemical industry had already by the end of the 1870s covered half of the world demand for synthetic dyestuffs. On the eve of World War I, this share had risen to almost 90 percent. Enjoying a world monopoly, German companies at the same time were heavily dependent on the global market. According to the statistics of three major players, the Badische Anilin-und Soda-Fabrik (BASF), Bayer and Agfa, the export business accounted for 82 percent of their turnover in dyestuffs in 1913. Wherever foreign tariffs or non-tariff barriers hindered the export of dyestuffs, the German chemical industry reacted by founding foreign subsidiaries. Particularly in France and Russia, but also in Great Britain and the United States, German dyestuff producers had launched substantial direct investments since the 1870s in order to circumvent real or expected trade obstacles, so that by 1914 all dyestuff companies had become truly multinational enterprises.37

Since laboratory experiments around synthetic dyes had enormous spin-off effects and the manufacture of pharmaceuticals, photographic materials, artificial fibers and explosives developed from there, the German chemical industry not only took the lead in the production of dyestuffs, but also in organic chemistry in general. Particularly in the field of medicinal drugs, besides the big players like Bayer and Hoechst, we find a number of medium size specialized manufacturers such as Schering, Knoll & Co., Merck or C. F. Böhringer. Together they made

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The GreatTransform ation:Germ an Econom y and Society,1850–1914

Germany the ‘pharmacy of the world.’ How much the other industrial countries were dependent on German chemicals became fully apparent after the outbreak of the First World War. Faced with the absence of the pre-war supply of German chemicals, British chemist William Henry Perkin in his presidential address to the Chemical Society in March 1915 deplored that ‘it has long been our habit to import almost all our organic fine chemicals from Germany,’ commenting further that ‘it may indeed be said that (p. 348) Germany has no competitor worth considering in the whole domain of organic chemical industry.’38

The crucial factor which enabled the chemical industry to meet the rapidly growing world demand in chemical products and to dominate international competition was the systematic planning and organization of large scale laboratory scientific research. The quasi monopoly in the world trade of organic chemicals was first and foremost a monopoly of knowledge, which was both reflected and ensured by the central position that scientists like Carl Duisberg occupied within the management of German firms. The most important advantage, however, that Germany's chemical industry enjoyed in comparison with companies in other countries was the availability of highly-trained scientific personnel. Only in Germany could companies rely on so steady and sufficient a supply of well trained scientific experts as was provided by the German universities and Technische Hochschulen.39

The amazing success of the German electrical industry in many ways paralleled the development of the chemical industry. Again, we can trace a tremendous growth of both output and people employed within the last decades of the nineteenth century, and see the crucial importance of Research and Development units and of academically educated personnel. Even more than the chemical industry, the German electrical industry up to 1914 experienced a rapid concentration process. In the case of the electrical industry, this development was fostered by the peculiarities of the market for electrical power, which in the beginning comprised mainly municipal lighting systems and municipal transport systems, and involved a huge amount of time and money in each contract, as well as heavy initial investments and a high degree of standardization. By the turn of the century, the German electrical industry was fully dominated by only two big players: SiemensSchuckert, resulting from a merger of two companies in 1903, and the Allgemeine Elektricitäts-Gesellschaft (AEG), founded in 1883 by Emil Rathenau. Before the First World War, Siemens-Schuckert and AEG together accounted for three-quarters of the output of German electrical industry. Both companies maintained numerous foreign branch offices and in many ways acted like modern multinational enterprises. With 81,745 people employed (18,348 outside Germany), Siemens in 1913 was the largest electrical industry employer worldwide. On world export markets, and again parallel to the chemical industry, the German electrical industry after the turn of the century attained an unchallenged top position. In 1913, German electrical exports accounted for 46 percent of total world exports, twice as much as Britain and three times as much as the United States.40

Germany's ever-extending integration in the evolving world market increasingly put pressure on its trade policy. On the one hand, by the turn of the century, Germany had become highly dependent on the global economy. As to imports, a good deal of German industrial production relied on the supply of foreign raw materials and semi-finished products. As to exports, not only the stars of the chemical and electrical industries, but also many companies from the engineering and iron and steel branches (p. 349) sold a substantial share of their products outside Germany, thereby achieving economies of scale which would not have been attainable on the comparatively small domestic market. On the other hand, the world market endangered other, less competitive industrial branches and, above all, agriculture. Here, the situation even worsened at the end of the century. Whereas before mainly grain farmers were effected, now large amounts of meat from overseas, which could more easily be transported due to improvements in refrigeration, began to enter the European market. Under these preconditions, the political dilemma of trade was obvious: whereas the maintenance of exports and high speed industrialization demanded a trade regime that was as liberal as possible, the agrarian pressure groups vigorously called for protection from the forces of the global economy. After years of harsh political conflicts, the case was settled with the so called Bülow tariff of 1902, a classic compromise that, however, evoked little enthusiasm on either side. Agriculture was awarded a notable increase in protection, which established German prices for agricultural goods significantly above the world market level. Protectionism, though, was not increased to the point where it could severely hamper German export by provoking retaliatory measures from other countries.41

Among historians and social scientists, there has been a long and still ongoing discussion on the question of whether in Germany a distinct model of capitalism had begun to evolve in the 1880s. The proponents of this view claim that in Germany toward the end of the nineteenth century, a new and stable production regime had developed, which in the 1970s was called ‘organized capitalism’42 and is now commonly referred to as a ‘coordinated market economy’ or ‘corporatism’. The German model of capitalism is regularly contrasted with an Anglo-Saxon style ‘liberal market economy,’ with its strong commitment to the principle of unimpeded competition. Two overriding elements characterize the ‘coordinated market economy.’ First, it is dominated by big economic players—large scale, vertically integrated enterprises and universal banks—who interact less in a spirit of competition, but in one of collaboration and co-operation. To a significant extent, the components of this production system, such as sales syndicates and export cartels emerged as a reaction to the economic crisis since 1873. The same applied to business associations and pressure groups, which gained increasing influence in the realm of politics. On the enterprise level, the German model of capitalism was reflected by the dual structure at the top level of joint-stock corporations. Whereas the management board exerted the operational control, the supervisory board was used to build up networks by appointing external representatives, above all from the investing banks, thus facilitating long-term modes of financing. All in all, the German production regime is said to have been ‘based on long-term perspective and co-operation.’43

The second element of the ‘coordinated market economy’ is the strong and active state. State influence, however, is less exerted as fairly erratic direct interventions in economic processes, but in the form of a macro-economic frame working through infrastructure and legislation. Again, the economic downturn of the 1870s worked as a (p. 350) trigger here. The swing toward protectionism can be directly related to the depression and the concurring agricultural crisis. In the 1880s, the foundations of the welfare state were laid with the introduction of social insurance schemes for health (1883), accidents (1884), and both invalidity and old age (1889). The nationalization of the railroads in Prussia from the late 1870s onward enabled the Prussian government to open up peripheral regions and thus to pursue classical infrastructure policy. Important parts of the educational system, as already mentioned, were geared toward the requirements of the private

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economy. According to Werner Abelshauser and others who argue that there was a German model of capitalism, these discrete components fit together tightly and allowed for Germany's tremendous economic success before the First World War. What is more, Abelshauser uncovers strong continuities of German capitalism and makes them an important element in his explanation of the economic miracle after World War II.44

This argument, however, has received serious criticism. First and foremost, it has to be asked if the depiction of a corporatist industrial system does not ignore major regional differences and thus falsely reduces German industrialization to only one ‘German model.’ Gary Herrigel has argued that not one, but ‘two distinct, parallel, and internationally competitive systems of industrial organization and practice, located in different regions, have characterized the German experience at all levels of the economy and society since the very onset of industrialization’.45 The first regional system, which he calls ‘autarkic industrial order,’ resembles in many ways the model of ‘organized capitalism.’ It evolved in agricultural regions like the Ruhrgebiet where enterprises had to compensate for the lack of a surrounding infrastructure by incorporating most of the stages of manufacturing and thus developed into large, vertically integrated combines. The second regional system which he refers to as a‘decentralized form of industrial order’ is based on a dense network of highly specialized small and medium-sized industrial firms, which together with local governments created their own savings, and cooperative banks and institutions. Industry, in this case, could rely on a pre-industrial infrastructure of handicraft and smallholder property. According to Herrigel, both regional distinct patterns of industrial development had paralleled one another throughout the nineteenth and twentieth century, and have to be consistently taken into consideration in the analysis of the German economy.

Even if there were substantial regional differences in the organization of German industrial production, however, this does not deny that the above-mentioned features of ‘organized capitalism’ earmarked an important part of the German economy and set it apart from other production regimes. It is a rather different question, though, if this is enough to refer to the German system as a particular ‘model of capitalism.’ A familiar, but nevertheless convincing objection to the Sonderweg interpretation of German history seems to apply also here: there are as many particular ways of industrialization or evolving models of capitalism as there are industrializing countries. Moreover, the construction of different models of capitalism runs the danger of obscuring the elements and dynamics which all capitalist economies have in (p. 351) common. Rather than confronting two different models of capitalism, it seems to be more appropriate to understand the German case as one point on the continuum of possible shapes capitalism is able to take.

15.5

The social consequences of the profound transformations the German economy went through in the second half of the nineteenth century are so manifold and far reaching that they can be only superficially touched on here. As in other countries, industrialization in Germany was accompanied by a shift in generative behavior—away from a society with high birth and death rates toward low fertility and mortality. Since this ‘demographic transition’ took some time—during which mortality decreased, while fertility remained stable—Germany in the decades before the First World War experienced a population boom, boosting the German population from 35.3 million in 1850 to 67.0 million in 1913.46 The resulting population pressure worked as the most important push factor causing several waves of mass emigration, which drove millions of Germans mostly to North America after the middle of the nineteenth century. Due to Germany's rapid industrialization with its expanding labor demand, this situation changed dramatically in the 1880–1890s. From being a country of emigration, Germany within a couple of years switched to become a destination of immigration for migrants from Eastern Europe. Even more important in terms of quantity was the internal migration that amounted to a mass movement from agrarian eastern Germany to Berlin and the industrial centers in middle and west Germany.47 The mass migration from the agrarian regions to the cities contributed heavily to Germany's urbanization, which experienced its ‘take-off’ together with industrialization around the middle of the nineteenth century. Whereas in the newly-founded German Empire, the urban population accounted only for 36.1 percent of the population, this share had risen to 60 percent by 1910. During the same time, the number of large cities with more than 200,000 inhabitants increased from three to twenty-three. However, urbanization did not only mean quantitative growth. It also implied a qualitative change in the life style of the urban population, new social problems, and multiple other unprecedented challenges which the municipal administrations in Germany by and large met by building up effective urban infrastructures.48

Turning to the internal structure of the German society, it is evident that economic interests and conflicts became increasingly important. The first and major societal change entailed by industrial capitalism was the advent of class society. According to Max Weber, in contrast to status groups (Stände), classes are formed by people who share the same economic position and interests, based on the marketability of their skills or property.49 More and more, after the middle of the nineteenth century, the (p. 352) income, the living conditions and the prestige of an individual came to depend on his position in economic markets. This is neither to deny the long-lasting legacies of the society of the ancien régime, such as the enduring privileges of the nobility. Nor does it mean to underestimate the importance of non-class differences such as gender, confession, or region. In general, however, the trend toward class formation as the dominating principle of society is all too clear. It can be followed in the emergence of classes of urban professionals with their own associations and market strategies, as well as in the countryside where landed gentry and peasants developed into capitalist farmers and the diverse categories of agricultural labor, remaining differences notwithstanding, became increasingly a landed proletariat.

The most important and politically relevant development, though, was the evolving antagonism between the capitalist bourgeoisie and the rapidly growing industrial working class.50 There is no need to downplay the sharp differences between the diverse groups of industrial workers. In terms of payment, mentality, and lifestyle there was a huge divide between the ‘aristocracy’ of skilled workers, and the mass of unskilled and day laborers. In the long run, however, the homogenizing effects of class formation prevailed. Among them, the everyday experiences of physically exertive labor and subordination on the factory floor loomed large. The dwelling in particular working-class quarters, sharply segregated from the residential districts of the middle classes, and the emergence of a proletarian subculture with its own clubs, associations, and habits formed another relevant class building force. Most important, however, was the political sphere. Since the

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mid-1860s, strikes became the dominant form of conflict between industrial employers and workers. Strikes and lockouts massively fostered the politicization of workers and the emergence of a proletarian class consciousness. In strikes, workers became aware of their common interests, practiced proletarian solidarity, and could experience the repressive power of the employer-friendly ‘class state.’ No less important for class formation as well as its manifestation was the emergence of trade unions and of an extremely well organized Social Democratic Party. Earlier than elsewhere, Germany witnessed the creation and development of a separate working-class party with a Marxist and strictly anti-capitalist ideology. The government reacted with discrimination, exclusion and Anti-Socialist laws remaining in force from 1878 until 1890 and designed to prosecute the ‘enemies of the Reich’ (‘Reichsfeinde’) with state repression. All this fueled the class consciousness of an ever growing mass of workers and contributed to their identification with the German Social Democratic Party, which, even if its revolutionary potential was limited, remained in strong opposition to the established political system until World War I. It was this social and political situation, which caused the political economist, Johannes Conrad, to deplore in 1906 the ‘lamentable class differences which in Germany are sharper than in every other nation of culture.’51

To the ruptures of German class society, globalization added two further socio-economic cleavages. In both cases, agrarian producers were pitted against other important segments of German economy and society. The first gap that opened up under the pressure of increasing world wide economic integration was that between (p. 353) agriculture and industry. The ‘marriage of iron and rye,’ as the alliance of heavy industrialists and agrarians came to be known, had been decisive in the Bismarckian shift to protectionism at the end of the 1870s. However, already by the beginning of the 1890s, it had been shattered in the conflicts over the Caprivi trade treaties, while at the turn of the century efforts to re-establish the old coalition were wrecked in prolonged fights over the Bülow tariff. Neither light industry, nor the likewise exportoriented West-German heavy industry, as it turned out, were ready to support the drastic rise of agricultural protectionism that the agrarian pressure groups vigorously called for and that would have had the potential to ruin German export opportunities by provoking foreign retaliations.52

The second socio-economic rift brought upon by globalization emerged between agrarian producers and urban consumers. In the election campaigns for the German Reichstag between 1890 and 1903, this latent antagonism of economic interests increasingly became loaded politically. At the same time, tariffs and trade policy moved into the very heart of German politics. More and more, the German government lost its capacity to set agendas, as the propaganda machines on the extreme political right and left came to determine election issues. On the one side of the political spectrum, the still influential agrarian interest groups pounded their drums for walling off German agriculture from the international market; on the other, the Social Democrats launched their powerful protest against the ‘hunger tariff’ (‘Hungerzölle’) and thereby succeeded in establishing themselves as the central party of urban consumers.53

All in all, due to the forces of industrialization and globalization, the lines drawn by economic interests increasingly structured German society and politics in the decades before the First World War. As a result, an accelerating mutual penetration of the realms of politics and economics can be traced. Deep socio-economic cleavages divided German pre-war society. Why did these growing tensions not have the potential to fundamentally destabilize the German Empire? The answer is two-fold. First, despite the continuing structures of inequality and despite the growing distance between the classes, German society as a whole experienced a significant increase in its standard of living. This trickle-down effect of economic growth can be followed in the rise of real wages, which for industrial workers nearly doubled between 1871 and 1913.54 Together with the reduction in working hours, this not only meant a considerable material improvement, it also fuelled the expectation of most workers that things were becoming better, albeit slowly, and gave them reason to set their hopes on reforming the existing system. Secondly, the emerging active state played a role in cushioning some of the worst blows of economic development. This applied to the accomplishments of the municipal administrations and to the achievements of the early welfare state, both of which contributed to enhance the lot of the urban working classes. However, it also pertained to protectionism, which curbed the effects of globalization on agriculture, a sector that still employed almost forty percent of the German workforce at the turn of (p. 354) the century. As a result, when Germany went to war in 1914, it did so with a fractured, but stable society.

Bibliography

Abelshauser, Werner, The Dynamics of German Industry. Germany's Path Toward the New Economy and the American Challenge (New York: Berghahn Books, 2005).

Berghahn, Volker R., Imperial Germany, 1871–1914: Economy, Society, Culture, and Politics (New York: Berghahn Books, 1994).

Fremdling, Rainer, Technologischer Wandel und internationaler Handel im 18. und 19. Jahrhundert. Die Eisenindustrien in Großbritannien, Belgien, Frankreich und Deutschland (Berlin: Duncker & Humblot, 1986).

Herrigel, Gary, Industrial Constructions. The Sources of German Industrial Power (Cambridge: Cambridge University Press, 1996).

Kocka, Jürgen, Industrial Culture and Bourgeois Society. Business, Labor, and Bureaucracy in Modern Germany, 1800–1918 (New York: Berghahn Books, 1999).

Milward, Alan S., and S. B. Saul, The Development of the Economies of Continental Europe 1850–1914 (London: George Allen & Unwin, 1977).

O'Brien, Patrick (ed.), Industrialisation. Critical Perspectives on the World Economy, 4 vols (London: Routledge, 1998).

O'Rourke, Kevin H., and Jeffrey G. Williamson, Globalization and History. The Evolution of a Nineteenth-Century Atlantic Economy

(Cambridge, MA: MIT, 1999).

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The GreatTransform ation:Germ an Econom y and Society,1850–1914

Pierenkemper, Toni, Umstrittene Revolutionen. Industrialisierung im 19. Jahrhundert (Frankfurt: Fischer, 1996).

——(ed.), Die Industrialisierung europäischer Montanregionen im 19. Jahrhundert (Stuttgart: Steiner, 2002).

——and Richard Tilly, The German Economy during the Nineteenth Century (New York: Berghahn Books, 2004).

Torp, Cornelius, Die Herausforderung der Globalisierung. Wirtschaft und Politik in Deutschland, 1860–1914 (Göttingen: Vandenhoeck & Ruprecht, 2005).

Wehler, Hans-Ulrich, Deutsche Gesellschafts-geschichte, vol. 3 (Munich: C. H. Beck, 1995).

Ziegler, Dieter, Die Industrielle Revolution (Darmstadt: Wissenschaftliche Buchgesellschaft, 2005).

Notes:

(1.) Carlo M. Cipolla, ‘Die Industrielle Revolution in der Weltgeschichte,’ in id. and Knut Borchardt (ed.), Europäische Wirtschaftsgeschichte, vol. 3 (Stuttgart: UTB, 1985), 1.

(2.) See also Patrick K. O'Brien, ‘Introduction,’ in id., Industrialisation. Critical Perspectives on the World Economy, vol. 1 (London: Routledge, 1998), XIII.

(3.) See Jürgen Osterhammel, Die Verwandlung der Welt. Eine Geschichte des 19. Jahrhunderts (Munich: C. H. Beck, 2009), 910.

(4.) See Dieter Ziegler, Die Industrielle Revolution (Darmstadt: Wissenschaftliche Buchgesellschaft, 2005), 11.

(5.) See Sidney Pollard, Peaceful Conquest. The Industrialization of Europe, 1760–1970 (Oxford: Oxford University Press, 1981); id., (ed.),

Region und Industrialisierung. Studien zur Rolle der Region in der Wirtschafts-geschichte der letzten zwei Jahrhunderte (Göttingen: Vandenhoeck & Ruprecht, 1980); Hubert Kiesewetter and Rainer Fremdling, (eds), Staat, Region und Industrialisierung (Ostfildern: Scripta-Mercaturae-Verlag, 1985).

(6.) Fernand Braudel, Civilization and Capitalism, 3 vols (New York: Harper & Row, 1981/1984/1982); Immanuel Wallerstein, The Modern World System, 3 vols (New York: Academic Press, 1974/1980/1989).

(7.) Cf. Kevin H. O'Rourke and Jeffrey G. Williamson, Globalization and History. The Evolution of a Nineteenth-Century Atlantic Economy

(Cambridge, MA: MIT, 1999); Kevin H. O'Rourke and Jeffrey G. Williamson, ‘When Did Globalisation Begin?,’ European Review of Economic History 6 (2002), 23–50; Harold James, The End of Globalization. Lessons from the Great Depression (Cambridge, MA: Harvard University Press, 2001); Cornelius Torp, ‘Weltwirtschaft vor dem Weltkrieg. Die erste Welle ökonomischer Globalisierung vor 1914,’ Historische Zeitschrift 279 (2004), 561–609.

(8.) Cf. Ziegler, Industrielle Revolution, 1–5.

(9.) Jürgen Kocka, Das lange 19. Jahrhundert. Arbeit, Nation und bürgerliche Gesellschaft (Stuttgart: Klett-Cotta, 2001), 45; Table 1 and beyond.

(10.) Ibid.

(11.) Cf.Reinhard Spree, Wachstumstrends und Konjunkturzyklen in der deutschen Wirtschaft von 1820 bis 1913. Quantitativer Rahmen für eine Konjunkturgeschichte des 19. Jahrhunderts (Göttingen: Vandenhoeck & Ruprecht, 1978); id., Die Wachstumszyklen der deutschen Wirtschaft von 1840 bis 1880 (Berlin: Duncker & Humblot, 1977).

(12.) Cf. Hans Rosenberg, Große Depression und Bismarckzeit. Wirtschaftsablauf, Gesellschaft und Politik in Mitteleuropa (Berlin: de Gruyter, 1967).

(13.) My own calculations follow Carl-Ludwig Holtfrerich, ‘The Growth of Net Domestic Product in Germany 1850–1913,’ in Rainer Fremdling and Patrick K. O'Brien (eds), Productivity in the Economies of Europe (Stuttgart: Klett-Cotta, 1983), 124–132, here 130.

(14.) Holtfrerich, ‘Growth,’ 130; Walter G. Hoffmann et al., Das Wachstum der deutschen Wirtschaft seit der Mitte des 19. Jahrhunderts

(Berlin: Springer, 1965), 392 f.

(15.) Walt W. Rostow, The Stages of Economic Growth. A Non-Communist Manifesto (Cambridge: Cambridge University Press, 1960).

(16.) Toni Pierenkemper, Umstrittene Revolutionen. Industrialisierung im 19. Jahrhundert (Frankfurt: Fischer, 1996), 96.

(17.) William Arthur Lewis, ‘The Rate of Growth of World Trade, 1830–1973,’ in Sven Grass-man and Erik Lundberg (eds), The World Economic Order. Past and Prospects (London: Macmillan, 1981), 11–81, here 48.

(18.) For all figures see Cornelius Torp, Die Herausforderung der Globalisierung. Wirtschaft und Politik in Deutschland, 1860–1914

(Göttingen: Vandenhoeck & Ruprecht, 2005), 85–95.

(19.) Cf. Walt W. Rostow, ‘Leading Sectors and the Take-off,’ in id. (ed.), The Economics of Take-off into Sustained Growth (London:

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