HIST2128

Germany, 1871-1933: From Empire to Republic

Kaiser Wilhelm II.

and the ‘New Era’

Lecture 10

23 February 2012

Domestic politics, 1890-1912

• ‘New Course’: Personal semi-authoritarian regime of Kaiser Wilhelm II

• Permanent opposition of Conservatives vs. reforms of political system AND transformation from agricultural to industrial state (Agrarian League)

• No parliamentary-constitutional reforms and no further democratisation

• Rise of SPD and Progressives (Left Liberals): Major election victory in 1912

Agriculture

• Diverse peasant economy including all main grain, fodder crops, fruit & market gardening, animal raising, dairy farming, wine-growing, tobacco

• Production unbroken success story due to newly-invented chemistry (fertilizers)

• Total value of output doubled 1870-1913 but GNP share fell from 41 to 23%

Year Mill. % Females %

Mill. % Females %

Mill. % Females %

1882 18.8 41,6 30,8 15.8 34,8 17,6 4.2 9,4 19,0

1895 18.1 35,0 33,2 19.9 38,5 18,4 5.7 11,0 24,8

1907 17.5 28,4 46,5 26.1 42,2 18,7 7.9 12,9 26,8

Germany’s work force along economic sectors, 1882-1907

Agricultural sector Industry, mining, crafts Trade and traffic

“Second Industrial Revolution”

= Period of economic prosperity & rapid technological development:

• Expansion of heavy industry (iron & steel: 25% of global production)

• Advent of chemicals, electrics, precision instruments, optics

• Highly prestigious foreign inventions made operational: First overhead electrical transmission + first car (Benz / Daimler)

• Expansion of consumer branches (milk, sugar, beer)

Concentration of industries

Large & giant concerns: Primarily mining, heavy industry, new technologies but also spinning, weaving, shoemaking

→ 10 largest coal concerns = 59% of total output

→ 5 largest dyestuff manufacturers (Bayer / BASF) = 90% of total output

→ 2 electrical firms (Siemens / AEG / Bosch) incl. subsidiaries = Over 50% of total output

= International phenomena but accompanied by creation of powerful cartels & market agreements between firms

Cartels (1)

• Minimize competition + maximize stability• Maintain price levels + prevent fluctuation• Strive to plan investment on long-term basis

→ ‘ Horizontal’: Linking firms in same branch→ ‘Vertical’: Linking firms with consecutive production

processes (coal-iron-steel)

• 1893: Rhineland-Westphalia Coal Syndicate one of strongest cartels

• 1905: Over 350 cartels in major industries

Cartels (2)• Created in both good & bad economic times:→ Response to falling profit rates & sense of anxiety in depression

years→ Growing demand for capital investment→ Lowered costs of technical innovation→ Freed industrial concerns from reliance on banks as source of funds

☻Many frictions inside cartels: Collapse of some☻ Weakened by strategic advantage enjoyed by ‘mixed’

concerns

= Aggressive as well as defensive= Influence on market varied from minor to very substantial= None of them exercised complete control of markets

► Less economic power than often presumed but very important for Germany’s strong economic performance

Economy 1890-1914

• Germany’s rise to 3rd most important global industrial power (after USA + GB)

• Surpassed GB ca. 1900-10 in production of iron, steel, electrics, chemicals to become greatest industrial nation in Europe

• “Made in Germany” as international symbol of high quality

= Passed from GB’s favourite market to GB’s major industrial competitor

Organised interests (1)

• Pressure groups & lobbies: Self-organisations of economic interests & politics

• Interlocking with political parties + state

= General global trend but unusually strong in German economy

► Organised capitalism & corporatism

Organised interests (2)

Confederation of Industrialists (Centralverband Deutscher Industrieller), 1876 → Promoted interests of industrial sector

Agrarian League (Bund Deutscher Landwirte), 1893

→ Promoted interests of agricultural sector

→ Reflected growing anxieties of rural population

= Pressure groups operating at variety of levels

= Mass agitation: Strong impact on public

= Cooperation & conflict: Strong impact on government

Organised interests (3)

☼ Reinforced economic affairs in public debate & political life

☼ Sign of ‘modernity’ & reflection of pluralist industrial society

☻ Helped to deform parties + created powerful public distaste for system of ‘cow-trading’ (Kuhhandel)

☻ Responsible for long-term consequence as public dislike of parliamentary system

Domestic situation, 1912-14

• Outdated political system ≠ economically & scientifically most-advanced and mostmodern nation worldwide

• Increasing perception of being ‘encircled by enemies’ in domestic & foreign politics

• Growing feeling of blockade and ‘siege’ in leading political & military circles