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Bismarck and the Development of Germany
Volume II The Period of Consolidation, 1871â?"1880
By Otto Pflanze PRINCETON UNIVERSITY PRESS
Copyright © 1990 Princeton University Press
All rights reserved.
ISBN: 978-0-691-05588-6
CHAPTER 1
Consolidation and Cleavage
RUSSIA must do for the whole of Germany what it has done for itself. Once it made the conquered forget the conquest in the regions won from Poland, France, and Saxony, elevating the inhabitants of these regions to a feeling of unity and equality [with the rest of Prussia]. Now it must erase the distinction between victor and vanquished, which no people can tolerate indefinitely, replacing the consciousness of belonging to separate states and peoples [Stämme] with a proud and happy loyalty to a German commonwealth headed by the King of Prussia." By these means Bismarck expected in 1867 to solve the formidable problem of integrating and consolidating united Germany. The population of the North German Confederation, later of the German Reich, was to be welded together primarily through the activity of government and by the dynastic loyalty that such activity, reinforced by time and shared experience, would create. In this way the Hohenzollern had succeeded over two centuries (1640–1840) in building a sense of statehood and Prussianism among the disparate peoples of East Prussia, Pomerania, Brandenburg, Silesia, Westphalia, and the Rhineland. To the end of his life Bismarck clung to the belief that dynastic loyalty was the backbone of German nationalism.
Certainly the imperial tradition, the "nationalization" of Prussian-Hohenzollern history, and the personal charisma of Bismarck and Wilhelm I expedited the psychological integration of the German Reich. Their role in forging a sense of German nationhood was probably as important—and as unmeasurable—as the achievements in German cultural life in the age of Goethe, Schiller, Kant, and Hegel. Yet there were other, material forces that contributed to that end—forces of which Bismarck was aware, but to which he paid little attention in his memoirs. In 1869 he spoke of trade and commerce as "the most fruitful root" from which consolidation (Zusammenwachsen) of the North German Confederation could be expected. In this he was wiser than he knew. Within the frontiers of the empire the German sense of nationhood was consolidated by the continuing growth of industry, the increase and redistribution of population, the new technology of transportation and communication, the steady expansion of German capitalism and of interlocking relationships between giant banks and industrial enterprises. What Bismarck's diplomatic talents and the striking power of the Prussian army created was chiefly consolidated by the activities of German businessmen and laborers.
At the same time the social transformation wrought by industrialization also produced new fissures in German society that the Bismarck regime could not close. The German nation-state became divided internally by conflicting social interests and their matching ideologies, producing fears as well as anticipations of the civil conflict that finally erupted after 1018. But in other respects economic growth tended to consolidate the national union, to bind the nation together with new sinews of self-interest and psychological cohesion. Their cumulative effect was to reduce the significance of internal political boundaries and to build a sense of nationhood that transcended, though it did not extinguish, the particularistic sentiments of an earlier epoch. It is not too much to say that within one decade this economic consolidation made irreversible by any ordinary means what had been decided in 1866–1871. What had been accomplished by political acumen and military prowess could no longer be undone—except by political stupidity and military catastrophe. Growing social and ideological divisions coupled with increasing economic and national consolidation—such was the paradox of Germany's Second Reich.
Germany Enters the Industrial Age
After three decades of acceleration German industrialization reached a momentum during the period of unification that was maintained thereafter despite temporary setbacks. The construction of railways, the main propulsive force during the period of acceleration, reached a grand climax in the early 1870s, by which time the major lines had been built. Although the building of local lines remained important in the German economy until the end of the century, other sectors now assumed the primary burden of sustaining the growth achieved. By 1870 German textile manufacturers had made the transition from hand to mechanical spinning. The acquisition of Alsace-Lorraine, furthermore, doubled the number of spindles operating in Germany. While slower in development, mechanical weaving surged ahead in the 1860s and 1870s. The armament, machine, and machine tool industries reached a level equal to and even superior to the products of foreign competitors (except in farm machinery where the United States was preeminent). During the 1880s public utilities—gas, water, sewers, and streetcars—played a major role in the construction industry. The same period saw a great expansion in German shipbuilding. By the end of the century two new industries—chemicals and electrical equipment—had appeared in which Germany excelled in both innovation and production. These several expanding industries perpetuated the growth previously derived chiefly from railway construction.
Despite temporary reverses, German heavy industry set new production records, decade after decade. Coal and pig iron were joined by steel at mid-century, as the invention of new furnaces (by Bessemer in 1856, Siemens-Martin in 1866, and Gilchrist Thomas in 1878) opened the way to its mass production. Because it removed phosphorous from iron ore, the last of these processes was particularly important for Germany, which was scantily endowed with nonphosphorous ores. Although familiar, the advancing statistics (in millions of tons) are still worth pondering.
By Bismarck's death in 1898 Germany had surpassed France and Belgium to become the continent's leading industrial power. By 1914 it had also surpassed Britain and was, after the United States, the second industrial nation of the world.
Despite massive emigration (4,875,300 between 1840 and 1900), Germany also surpassed France to become in Bismarck's time the most populous country in Europe except for Russia. A new wave of fecundity (following that which climaxed in the 1830s) arrived in the 1860s with a steep increase in the annual birth rate that tapered off in the 1870s as new methods of birth control were introduced. Thereafter the birthrate fell, but so did the deathrate. Improved nourishment, sanitation, and medical services increased the average life span. Total population attained 40,059,000 in 1871, 45,234,000 in 1880, 49,428,000 in 1890, and 56,367,000 in 1900. Naturally industrialization produced great changes in the occupations and distribution of this population. Whereas 51 percent of the working force was still employed in agriculture, forestry, and fisheries during the 1860s, as against 28 percent in industrial pursuits, the figures were 38 percent against 37 percent in 1900. Between 1871 and 1910 the population of rural areas (parishes with less than 2,000 inhabitants) sank from 63.9 percent to 29.9 percent, while that of the big cities (over 100,000 inhabitants) rose from 4.8 percent to 21.3 percent. The rural population remained fairly stable in total numbers (about 26,000,000) as the towns absorbed almost all of the increase. Berlin had 826,341 inhabitants in 1870, 1,578,794 in 1890, and 1,888,848 by 1900. Its nearest competitor, the seaport of Hamburg, grew from 239,107 to 705,738 during these three decades. What industrialization meant to the Ruhr region can be judged by the expansion of Essen from 51,513 to 118,862 and Dusseldorf from 69,365 to 213,711 persons in the same period.
The tensions in German society were heightened by the vagaries of the business cycle. The wave of prosperity and expansion in world capitalism that began in the 1840s mounted, with brief interruptions in 1858–1861 and 1866–1868, to a grand climax in 1873. During the early years of the Kulturkampf, of Bismarck's collaboration with the liberals, and of his quarrel with ultraconservatives, Germany was absorbed in a business boom of extraordinary proportions. For example, pig iron consumption rose from 1,374,000 tons (35.8 kilograms per capita) in 1869 to 2,954,000 tons (71.5 kilograms per capita) in 1873, while its price increased from 66.2 to 145.5 marks per ton. Wholesale prices for industrial products generally escalated by 40 percent. The entire capitalist system experienced this trend and these fluctuations, but the final ascent of 1871–1873 was particularly steep in Germany. Several factors were responsible: the removal in 1870 of restrictions on formation of joint-stock companies; the general optimism engendered by the long rise in output during preceding decades, the exhilaration following victory over France and fulfillment of national unity; and the inflationary effect of the 5 billion francs paid by the French as a war indemnity, part of which was used to liquidate the debts of the federal states. Optimism, speculation, and fraud were rampant as millions of citizens from scullery maids to titled aristocrats gambled in securities. The first sign of danger, a crash on the Vienna bourse on May 9, 1873, went unheeded in Germany. In October the overburdened house of paper came tumbling down.
The crash of 1873 introduced a new epoch in German and world capitalism, the exact nature of which is still in dispute. Following the business cycle theories of Nikolay Kondratieff, Joseph Schumpeter, and Arthur Spiethoff it has been popular to dub the period 1873 to 1896 that of the "great depression," a downward "long wave" in economic development that followed and preceded upward waves of approximately the same duration. Further research has shown, however, that the downward "trend period" of 1873–1896 cannot be verified empirically. Although prices fluctuated on a lower plane, industrial output grew steadily after 1879, as German entrepreneurs constantly consolidated, rationalized, and modernized the processes of production. Real wages soon surpassed the peak of 1873–1875 and continued to ascend until 1900. From 1873 to 1893 the number of employed persons grew by 28 percent, the net domestic product (at standard prices) by 58 percent, an expansion that compares favorably with the 36 and 68 percent achieved in the next twenty years. Though the long waves are now disputed, no authority questions that the period 1873–1894 was marked by repeated fluctuations of short duration. We shall see that the brevity of the upswings and longevity of the downswings during 1879–1894 bred a mood of insecurity and pessimism among businessmen that spread out into the society at large.
The agrarian sector of the German economy was in even deeper trouble. During the late 1870s the golden age of German agriculture, which began in the 1830s, commenced to fade. For three decades population growth, urban development, the Zollverein, railway transport, and flourishing exports had produced high prices and profits, particularly for the big landowners in the east. Production expanded steadily as new acreage was put to the plow and the Thaer technique of crop rotation delivered increased yields. By 1865, however, most of the arable land was under cultivation, and the Thaer system had attained optimum benefits. There followed a period of relative stagnation in production that lasted until after 1890, when chemical fertilizers became common. In animal production alone significant increases were achieved in these years, and this was made possible only by importing fodder. Before the 1860s agrarian production had increased at a more rapid rate than did population, creating surpluses that trans-Elbian producers sold in foreign markets. But after 1870 the relationship of food supply to population reversed, creating a problem of food supply that required imports; Germany had more mouths than its farmers could feed.
We shall see that this problem was solved by massive imports of foreign grain and other foodstuffs from Russia, North America, and the Argentine. What was beneficial to the urban masses spelled disaster for German agriculture. The flood of grain produced by American farmers on cheap, virgin soil and transported at low cost by railway and steamship depressed prices in European grain markets during the 1870s. The German market was sheltered for a time, but it too began to feel the effects of new competition in the following decade. Stagnating production, high costs, and declining prices produced an agrarian crisis in Germany of serious proportions.
Bismarck unified Germany in a period of general prosperity in agriculture and industry. During most of the rest of his chancellorship he was compelled to govern in a period of economic difficulty in both areas. It was a period, furthermore, that saw a fundamental redistribution of financial and social power in Germany. Falling prices compelled heavy industrialists to cut costs by expanding their facilities and increasing production. Through mergers and takeovers large firms absorbed the smaller. Heavy industry and big banking established their dominance over light industry and mercantile interests. The relative weight of industrial and agrarian capital shifted steadily in favor of the former. Factory labor continued to expand in numbers and prosperity relative to artisan labor. Again the question arose: could the old Prussian-German establishment adjust to the new facts of economic and social life? Could it assimilate the new entrepreneurial elite of heavy industry and high finance and could it prevent the alienation of industrial labor?
During Bismarck's chancellorship Germany made enormous strides in that process of transformation that historians have come to call "modernization." The sheer weight of economic, technological, and population growth contributed in powerful ways to the consolidation of the union he had created by political and military means. Older cleavages of the kind that the Germans called "particularism"—those based on regional peculiarities, historical traditions, dynastic loyalties, and religious affiliation—tended to diminish without disappearing. They were superseded in importance by newer or deepened cleavages of an economic and social nature—based on occupation, interest groups, social status, and class identification. The attack on political Catholicism during the 1870s (the Kulturkampf) is evidence of the lingering existence of the older divisions in German society; the assault on social democracy after 1878 (the antisocialist statute) and the shift from free trade to protectionism (tariff act of 1879) testify to the new. The older cleavages had threatened the achievement and perpetuation of German unity; the newer ones jeopardized the stability of the social-political order.
Demographic Consolidation
As long as water remained the chief mode of transport, Germany had no natural center of commerce and population comparable to London or Paris. In contrast to the river systems of Britain and France, those of central Europe tended to divert rather than concentrate the life of the people. The Danube turned Austrian Germans toward the Slavic regions in the southeast; the Rhine linked southwestern Germany to the low countries; the Weser, Elbe, Oder, and Vistula oriented the northern population toward the Baltic and North Seas. Mountainous areas between the river systems made it difficult to connect their upper basins through canals, whose construction was further hampered by political disunion. Germany did not inherit a system of Roman roads such as were the birthright of England and France. Not until the 1840s did it begin to overcome this handicap by constructing gravel or "metalled" roads. Although 30,000 kilometers of such roads were built by 1857, their immediate value was to expand the trading radius of the cities; they did not provide a national system of communication. The long-distance transport of heavy goods such as coal, iron, and grain was prohibitively expensive.
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Excerpted from Bismarck and the Development of Germany by Otto Pflanze. Copyright © 1990 Princeton University Press. Excerpted by permission of PRINCETON UNIVERSITY PRESS.
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