6.1 Growth of Industry and the Global Economy

Second Industrial Revolution

By the mid-1800s, industrialization spread beyond Britain to Belgium, France, Germany, and later Russia, fueled by new technologies like steel (Bessemer process), chemicals, electricity, and the internal combustion engine. Germany's rapid growth after unification (1871) rivaled Britain's economic power, aided by strong state support, cartels, and investment banking.

New economic structures

Industrial growth encouraged corporations, joint-stock companies, and limited liability, allowing investors to pool capital for large-scale projects like railroads. Cartels and monopolies (e.g., German steel/chemical trusts) consolidated industries, while nations pursued economic nationalism through tariffs to protect domestic industry from foreign competition.

Global economic interdependence

Europe's industrial demand for raw materials (cotton, rubber, minerals) tied it to a global economy, deepening trade with colonies and non-European regions. Steamships, railroads, and the telegraph shrank distances, creating an integrated world market—laying groundwork for imperialism as Europeans sought resources and markets abroad.

Key terms

Second Industrial Revolution

Period of industrial growth (mid-1800s onward) driven by steel, chemicals, electricity, and internal combustion engines, spreading beyond Britain.

Bessemer process

A method for mass-producing cheap, strong steel by blowing air through molten iron to remove impurities.

Cartel

A group of businesses that cooperate to control prices and production, reducing competition (common in Germany).

Limited liability

A business structure where investors are only responsible for losses up to their investment amount, encouraging large-scale investment.

Economic nationalism

Policy of protecting domestic industries through tariffs and subsidies to strengthen national economic power.

Try an AP-style question

Britain industrialized first partly because of…

1. a large peasant army
2. coal, capital, and colonial markets
3. a lack of natural resources
4. isolation from trade