Chapter 13 Germany's economic miracle

〖The strong rise of Germany's manufacturing and shipping industries has the potential to win the world and replace Britain.But the fragile financial system made her road to world hegemony bumpy and difficult. 〗 After 1873, the economic depression of the British Empire formed a sharp contrast with the thriving industrial economy of the European continent, and the contrast with the German Empire was even more obvious. This was the background of the outbreak of the First World War in 1914.Oil had become the focus of contradictions and conflicts, which only a few elites in London and New York banking and financial circles realized, and others did not realize it until years later.

Before 1890, British banking and political elites issued two warnings against the rapid development of German industry.The first warning was the emergence of an independent, modern merchant and naval fleet in Germany, which undoubtedly posed a mortal threat to Britain.Since the Congress of Vienna in 1815, the British navy has dominated the seas unrivaled.The second warning was against Germany's ambitious railroad plans to build a line linking Berlin to Baghdad, then part of the Ottoman Empire. Regarding the naval confrontation between Britain and Germany and the construction of the railway from Berlin to the Persian Gulf, for both Britain and Germany, it is certain, if not publicly stated, that it is all about oil.The British authorities believe that this is the real reason why Britain and Germany went to war at the turn of the century.We'll see why.

By the 1890s, Germany's industry and agriculture were developing rapidly, and the resulting technological progress surpassed that of Britain in both speed and quality.At the same time, after the Civil War, the United States focused its energy on domestic development.Thus, in the last decade of the nineteenth century, Britain saw the rise of German industry as the greatest threat to its global supremacy.For decades, Germany has adopted Friedrich List's economic reform measures step by step, built a modern national railway transportation system, and provided corresponding tariff protection for the developing domestic industry, coupled with the stability and unity of the German Empire after 1871 political environment, its economic success has been evident since the 1870s.

By the 1850s, emulating the successful British model became the main strategy of the German economy.In addition, in German universities, the free trade theory of the British economists Adam Smith and David Ricardo was also revered as a sacred truth. The British economy fell into depression in the 1870s, affecting both Germany and Austria.Germany gradually realized the serious drawbacks of continuing to follow the British economic model.In order to develop its own industry and agriculture, Germany began to gradually abandon the British free trade model and adjust its economic strategy.This led to a marked improvement in the German economy.

After abandoning the British model, Germany's GDP increased fivefold between 1850 and 1913 (on the eve of World War I), and per capita national income increased by 250 percent over the same period.Real wages doubled between 1817 and 1913, and people's living standards improved steadily. But the essence of the German Industrial Revolution was explosive technological progress.In order to cultivate scientific and engineering talents for its own industrial development, Germany followed the French multidisciplinary technical school model and established a national technical school and college system. With the support of domestic chambers of commerce and industry associations, Germany established vocational training for cultivating business talents. system.In addition, German university education focused on natural sciences, so engineering and natural sciences began to flourish.At the same time, Germany has also established a nationwide vocational training system to train skilled trade personnel.As a result, Germany's technological capabilities increased substantially after the 1770s.

In the 1870s, German start-ups looked remarkably small compared with the large British industrial companies.However, in the ensuing thirty or forty years, this pattern has changed dramatically.In the decades before 1914, coal was the dominant source of fuel for world industry and transportation. In 1890, Germany produced 88 million tons of coal, and the United Kingdom produced 182 million tons of coal, more than twice the amount of coal produced in Germany.By 1910, however, Germany's coal production had grown at a staggering rate to 219 million tons, while Britain's coal production of 264 million tons was only slightly ahead of Germany.

The steel industry leads the way in Germany's economic growth, followed by electricity and chemicals.Using the high phosphorus ore in Lorraine, Gilchrist Thomas innovated the steelmaking process. During the 20 years from 1880 to 1900, through the use of the new process, Germany's steel production increased by 1000%, far exceeding that of the United Kingdom.By 1890, Britain's iron production was still ahead of Germany. Britain produced 7.9 million tons of pig iron, while Germany produced only 4.6 million tons; by 1910, Germany's pig iron production reached 14.6 million tons, compared with Britain's 10 million tons. Tonne production increased by 50%.At the same time, steelmaking costs in Germany were 90 percent lower than in the 1860s.By 1913, Germany produced almost twice as much pig iron as Britain.

The rapid development of industrial products greatly increased the demand for transportation, and the railway infrastructure became the main driving force of Germany's first economic miracle.The first expansion of the German railway system began from the 1840s to the 1850s. Under the influence of the Liszt Zolnik Union and the National Railway Plan, from 1870 to 1913, the track length of the state-supported railway system was fully extended in kilometers. doubled. Driven by the technical inventions of Oscar von Miller and others, centralized power generation and remote power transmission and transformation capabilities have been greatly developed. The German power industry has grown from a small industry with only 26,000 employees in 1895 to 1913, accounting for the entire international power industry. The leading industry with half of the trade volume.Under the impetus of talented researchers such as Justus von Liebig, the German chemical industry also developed from being far behind Britain and France to become a world giant in aniline fuels, pharmaceuticals and fertilizer products.

Von Liebig and others also introduced the concept of agricultural chemicals, which greatly improved the productivity of German agriculture during this period.In the early 19th century, Germany was still suffering from famine and insufficient agricultural production, and had to import cheap food from Russia and Argentina.By the 1890s, however, Germany began imposing protective tariffs to control cheap food imports. In 1882, there were only 20,000 harvesters in Germany. In 1907, the number increased to 300,000, and the pace of agricultural mechanization was greatly advanced.The use of chemical fertilizers has greatly increased yields, despite the poor quality and high sand content of Germany's soil.Germany began to use chemical fertilizers on a large scale in 1887. By the time of World War I, Germany's grain production had increased by 80% compared to before.As a comparison, we consider that in the year the war broke out, Russia used 3 million more acres of arable land than Germany, but harvested 19 million tons less grain.By 1913, Germany was 95 percent self-sufficient in its own pork production, even though per capita pork consumption had tripled from 1870 levels.In contrast, 45% of the UK's pork needs are imported. At the beginning of the 19th century, Germany was still an immigrant exporting country. Thanks to the vigorous development of industry and agriculture, by the end of the century, Germany had become a country with a relatively fast population growth. Between 1870 and 1914, Germany's population grew from 40 million to 67 million, an increase of almost 75%.In terms of industrial development, Germany has created a new "German model", that is, large banks and large industrial enterprises share mutual shares. The symbiosis and co-prosperity relationship between banks) has been accelerated.

For a period of time after 1870, a large number of "bank-enterprise symbiosis" appeared in Germany.What came to be known as industry recovering from the devastation of war or from the economic depression of the 1950s was, for the most part, a restoration of the industrial base laid between the 1880s and 1914 .