Continental Europe

The Industrial Revolution on Continental Europe came later than in Great Britain. In many industries, this involved the application of technology developed by Britain in new places. Often the technology was purchased from Britain, or British engineers and entrepreneurs in search of new opportunities abroad. By  1809,  part  of the Ruhr Valley in Westphalia were being called “Miniature England” because  of  its  similarities to the industrial areas of England. The German, Russian, and Belgian governments did all they could to sponsor the new industries by the provisions  of  state funding.

In some cases (such as iron), the different availability of resources locally meant that only some aspects of the British technology were adopted.



In 1871, a group of Japanese politicians known as the Iwakura Mission toured Europe and the U.S. to learn western ways. The result  was a deliberate, state led industrialization policy to prevent Japan from falling behind. The Bank   of Japan, founded in 1877, used taxes to fund model steel and textile factories. Education was expanded and Japanese students were sent to study  in  the west.

A brief discussion of how IR spread to France and Germany is important to understand and internalize the overall history of industrialization. Major improvements in cultivation were introduced in many regions of France especially  in the north east, i.e. French Flanders (where innovation in agriculture in Holland and Belgium had  initially  made  their  way  to  England  and were now quickly disseminated). Knowledge of “improving methods” which were prevalent in England and elsewhere came to be known through publications such as Duhamel du Monceau’s 6-volume introduction to improving agriculture, through cheap literature and by word-of-mouth. Partly as a result of the application of “improving” techniques, substantial increase in agricultural production was  registered  during  1725-1789.

Since much cultivation on peasant land was still based on the three-field rotation in an open field, improvements were difficult to initiate on smaller holdings and strips. Hence, on the standard and smaller peasant holdings, where  the open field was less known, land was increasingly insufficient to provide the requirements of a growing family. Although commercialization in agriculture was substantial, and major surpluses of grain were available for growing urban population, large fluctuations and disparities in income levels were a feature of the French countryside, as was dire poverty in certain  quarters.

A rapidly-growing internal market for manufactured goods, though,  was not a feature  of initial manufacturing development; for this was prevented by major problems of trade within the country, and the problems of industrial organization and capital availability. The country was far from uniform in its administration, and could not strictly be treated as a well integrated market by traders and producers. Industry was curbed by guild restrictions. Country banks were not available in the country. Unlike England, the practice of trade and manufacture attracted social disapproval among the French elite, among whom status by privilege, either through venal offices (i.e. official positions which could be bought), or through titles of    nobility.

A considerable portion of the political and social reconstruction of France during the 1789- 1815 periods had major economic repercussions, and affected the position of industrial capitalism within the country. These include the attack on privilege and the consequent changes in land tenure, and the abolition of guild structures; and equally important, the impact of war and expansion  of  trade  and production.

The sudden influx of cheap goods from England  after  the  end  of  the  Napoleonic Wars


immediately led to decline in demand for many items of French manufacture on the Continent, and confronted producers with the possibility of bankruptcy. It was almost natural, therefore, that the government of the country’s Restoration rulers (Louis XVIII and Charles X), turned to a continuation of Napoleonic and pre- Revolutionary policies to “protect” national industry.

Demands for free trade coincided with the industrial growth of the 1830s and 1840s.  But  still much production focused in small units, which explains the popularity of protection until 1848; and that production was dependent on less productive water power. Beyond international circumstances, much of the increase in production in France was the consequence of the interventionism of the Bonapartist state under the Second Empire. Here government encouragement of growth, prompted by Napoleon Ill’s Saint Simonian principles, was evident in the official assistance to the creation    of the Credit Foncier (a national mortgage bank) and  the  Credit  Mobilier  (a  joint-stock bank).

Following the defeat of France in the Franco- Prussian War (1870-71), a general impression prevailed for several decades that the country experienced a decline. However, the impression always bore reference to comparisons with Germany  and  the  United States.

France showed substantial headway in research and development in the fields of chemicals production and the electrical industries.

e.g.        Solvay process for soda, dyestuff research, electrical      and telegraph and telephone manufacturing research are some areas where France showed considerable growth. In general, the loss of Alsace and Lorraine in 1871 (to Germany) was less significant for French industrial  capitalism  than  may  initially appear.

In Germany, many circumstances hindered economic growth of a more substantial nature. Availability of labour was poor for much of the eighteenth century in certain areas – the consequences of heavy mortality during the wars of the time (the War of the Austrian Succession and the Seven Years’ War). The territory of the German states, moreover, did not provide manufacturers with a well-integrated market, since  each  state  had  its  tolls  and  duties,  and transit  required  the  payment  of these.

Other problems of significance were: quality, for instance, of the coal and iron deposits in the region. In the East of the region, labour mobility was severely restricted by the prevalence of serfdom. Capital supply was, unlike Britain and like France, limited to the wealth of powerful traders and manufacturers, and could  not  call  on a wider network of availability of capital

Such problems became of decreasing significance with the Serf Emancipation in the 1800s, the creation of the Zollverein (the Prussia- centered customs’ union) in the 1830s, the dismantling of paternalist conventions in  1848- 49, and the creation of joint-stock banks on French model in the 1850s. Together,these developments lay the foundation of the industrial boom of the middle decades of the nineteenth century, and, following the formation of the German empire, industrial capital systematically developed  on  this basis.

The character of capitalism in the region was decisively influenced by official measures that were taken in the area during the period 1789- 1815. In the first case, the industrial settlements   of the Rhineland underwent the dismantling of the guilds, and the abolition of their privileges – which improved the status of competitors in a number of industries and gave greater scope to innovation. The Continental system increased demand for the products of this region. The impact of serf emancipation, though, in Prussia was limited but decisive and    ubiquitous.

Crucial also to economic growth after 1815 was the gradual development of large regional markets in the 1820s, before the formation of the Prussia centered Zollverein (Customs Union) in 1834. Within such a system of trade agreements, the development of railways in the German states acted as a major stimulus to production and innovation in the enclaves of iron and coal production in Silesia and in the Rhineland. Railway lines allowed the extension of a home market which was reasonably well-knot around the internal river system based around the Rhine, the Elbe and the Oder, all of which had canal networks  working  off them.

In total it can be said that the France and German industrial capitalism was constrained by a   peasantry  tied  to  land  on  the  one  hand


(fragmented holdings held by customary rights in France and serfdom in Germany) and the dominance of big landed institution, on the other. As a consequence of the above, the   state played a crucial role in (a) creating uniform legislative measures, (b) financing of industry and (c) creating a common market. In France, however, an important role was played by the period of French revolution when the attack on privilege loosened the tight grip of nobility and the  guilds.

The growth of industrial capitalism in Russia struggled with the country’s persistent backwardness. In the process a major role was played by the state which tried to mobilize a labour force by ‘emancipation of serfs,’ took policy initiatives like bringing in foreign capital for investment and took major initiative in setting up centres of industry. Insufficient growth in the agricultural sector tended to reinforce backwardness.



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