Industrialization in Germany

This included the lack of a single market, the large number of customs duties and currencies and the territorial fragmentation of the Holy Roman Empire, which had collapsed in 1806.

In the Kingdom of Saxony, a highly differentiated trade existed, ranging from rural and urban crafts to cottage industries, manufactories, mining and, soon, the first factories.

In some cases, such as in parts of Hesse or in Lower Silesia, the connection to industrialization was not successful and in the areas of rural trade there were processes of economic decline.

Since the end of the Napoleonic Wars and the lifting of the Continental Blockade, trade barriers fell on the one hand, and on the other, the German economy was now exposed to direct competition with British industry.

An important institutional factor for commercial development was the founding of the German customs union (Zollverein) in 1834, which enabled the duty-free exchange of goods within the treaty area.

Rather, the import of machine-made goods, especially from Great Britain, and the emergence of factories in Germany itself meant a threat to the existing older economic forms.

As a result, if the older trades failed to make the transition to factory industry, they lacked job opportunities and could be subject to deindustrialization and reagriculturalization processes.

Parts of the Sauerland and Siegerland regions, with their traditional iron production, found it difficult or impossible to hold their own against competition from the nearby Ruhr area.

The first comprises clearly industrialized areas such as the Kingdom of Saxony (here primarily the region around Chemnitz), the Rhineland, Alsace-Lorraine, the Rhine Palatinate and also the Grand Duchy of Hesse.

These include the kingdom or province of Hanover, the areas of the Thuringian-Saxon principalities in the Thuringian Forest and southern Thuringia, as well as neighboring Upper and Middle Franconia.

The demand generated by the railroad boosted developments in the three closely interrelated key industries: mining, metal production and mechanical engineering.

On the Saar, Carl Ferdinand von Stumm-Halberg and his family played the leading role in heavy industry, especially when they controlled their competitor Dillinger Hütte from 1827.

An important technical innovation in the first decades of the 19th century was the construction of puddling mills, which, using hard coal, were much more productive and cost-effective than the old charcoal-based smelters.

The expansion of the railroad caused the demand for iron and rails and other mining industry products to implode within a short period of time.

For this reason, plans for the establishment of joint-stock banks emerged in the circles of West German private bankers as early as the 1840s, but these failed due to the Prussian state bureaucracy.

Good harvests made food cheaper, but a high drop in prices led to a loss of income for farmers, which in turn had a considerable impact on demand for industrial products.

The years 1841 to 1845 saw a veritable investment boom in railroads, which attracted capital at hitherto unknown levels within a very short period of time, but then quickly broke off again.

[23] According to historians, a fundamental turnaround was indicated by the fact that crop failures in the early 1850s had only a regional impact, since rail transport in particular ensured an intra-European balance.

Although monarchs and nobility initially still maintained their leading role in politics, this was shaped and challenged solely by the new national and bourgeois movements.

The educated bourgeoisie, which constituted a considerable part of the bureaucratic and legal functional elite, was certainly the most influential bourgeois subgroup politically.

These include, for example, the bourgeois family image of the publicly active man and the wife caring for the home and children, which dominated into the 20th century.

Some of them, such as August Borsig, were social climbers from artisan circles, while a considerable number, such as the Krupps, came from respected, long-established and prosperous middle-class merchant families.

From the 1850s onward, the economic bourgeoisie began to set itself apart from the other bourgeois groups through its lifestyle – for example, by building prestigious villas or buying land.

[27] Since most of the new industries initially provided work for the local lower classes, internal migration still played a minor role in the first decades.

One indicator of this is that from around this time the term proletariat played an increasingly important role in contemporary social discourse, displacing the concept of pauperism by the 1860s.

On a slightly different data basis, the new Imperial Statistical Office counted 32% of the labor force as belonging to the mining, industrial, metallurgical and construction sectors by 1871.

In the course of time, the initially very heterogeneous stratum of the "working classes" grew together; a permanent social milieu developed, fostered by the close living together in the narrow workers' quarters.

Whereas the urban and rural lower classes had largely regarded their hardship as unchangeable, the new opportunities for earning money in industry led to a strengthening of the will to change.

It solved the problems of population growth, under-employment and pauperism in a stagnating economy, and abolished dependency on the natural conditions of agriculture, and finally hunger.

On the other hand, new problems arose, in the form of interrupted growth and new crises, such as urbanisation, "alienation", new underclasses, proletariat and proletarian misery, new injustices and new masters and, eventually, class warfare.