Getting Started
The late 19th and early 20th centuries witnessed a dramatic acceleration of industrial change, often called the Second Industrial Revolution. Building on the foundations of the first wave, this period (roughly 1870–1914) was defined by new technologies like steel and electricity, which transformed production, communication, and daily life. These changes integrated national economies, expanded global trade networks, and spurred unprecedented urban growth, creating both immense opportunities and significant economic instability.
What You Should Be Able to Do
Explain how new technologies in communication, transportation, and manufacturing led to economic and social change.
Analyze the ways industrialization created more integrated national and global economies.
Describe the social consequences of accelerated industrialization, including urbanization and changes in quality of life.
Explain why corporations and governments sought to manage markets and how they did so.
Key Developments & Analysis
Causes of the Second Industrial Revolution
The rapid industrial intensification after 1870 was not accidental. It was driven by a cluster of technological and scientific breakthroughs that built upon, and in many cases replaced, the technologies of the first industrial wave.
New Materials & Processes: The development of the Bessemer process made the mass production of steel—a material far stronger and more versatile than iron—economically viable. This enabled the construction of larger buildings, bridges, and more durable machinery.
New Energy Sources: While coal and steam remained important, electricity and petroleum emerged as transformative power sources. Electricity allowed for more flexible and efficient factory layouts and powered new forms of urban transit and lighting, while the internal combustion engine, fueled by oil, would eventually revolutionize transportation.
New Communication & Transportation: The telegraph, telephone, and expansion of railway networks dramatically reduced the time and cost of communicating and moving goods across vast distances. This was the essential infrastructure for creating larger, more integrated markets.
Effects of the Second Industrial Revolution
Economic Effects: Integration and Volatility
The new technologies fundamentally reshaped economic structures, creating a more interconnected but also more unstable system.
Integrated National Economies: Extensive railway systems and telegraph networks knitted together regions within a single nation. This allowed for the efficient distribution of goods from factories to consumers, creating unified national markets where prices and supplies could be coordinated.
A Global Economic Network: Steamships, refrigerated transport, and transoceanic telegraph cables created a truly global economic network. This system connected industrial centers in Europe and North America with sources of raw materials and agricultural products across the world, making global trade faster and more reliable than ever before.
New Industries & Consumerism: Innovations in chemicals, electricity, and steel created entirely new industries. The mass production of goods and improved distribution networks led to the rise of consumerism, a social and economic order that encourages the acquisition of goods and services in ever-increasing amounts. Department stores emerged in cities, offering a wide variety of products to a growing middle class.
Volatile Business Cycles: The interconnected global economy was prone to business cycles, or fluctuations in economic activity with periods of expansion and contraction. In the last quarter of the 19th century, these cycles became particularly volatile, leading to severe financial panics and depressions that wiped out businesses and created widespread unemployment.
Social Effects: Urbanization and Quality of Life
The factory remained the dominant mode of production, but its scale and impact grew exponentially, reshaping European society.
Accelerated Urbanization: The demand for factory labor pulled millions of people from the countryside into cities. Urbanization, the process of population shift from rural to urban areas, accelerated dramatically. Industrial cities like Manchester continued to grow, characterized by crowded housing and new urban infrastructure like subways and electric streetlights.
Enhanced Quality of Life: For many, especially the growing middle class, industrialization brought an enhanced quality of life. New inventions, public health improvements, and access to a wider variety of consumer goods represented a clear material advance. However, for the industrial working class, conditions in factories and crowded city slums often remained harsh and dangerous.
Political & Corporate Responses to Instability
The instability of business cycles prompted both corporations and governments to abandon pure laissez-faire principles and actively manage the market.
Corporate Consolidation: To control prices and eliminate competition, corporations formed large-scale combinations. These included monopolies, where a single company dominates an entire industry, and cartels, where multiple firms coordinate to fix prices.
New Banking Practices: Finance capitalism grew in importance as large industrial banks provided the massive capital investments needed for new industries. These banks often had significant influence over the companies they financed, further concentrating economic power.
Government Intervention: Governments increasingly used tariffs—taxes on imported goods—to protect domestic industries from foreign competition. This marked a significant departure from the free-trade policies that had dominated earlier in the century.
Data & Organization Tools
Key Innovations of the Second Industrial Revolution
| Innovation | Description | Economic & Social Impact |
|---|---|---|
| Bessemer Process | A method for mass-producing steel cheaply from iron. | Enabled the construction of railways, skyscrapers, bridges, and more powerful industrial machinery. |
| Electricity | The generation and application of electrical power. | Powered factories, city lighting, and urban transit (trams, subways). Created new industries for electrical goods. |
| Telephone & Telegraph | Electronic communication over wires. | Revolutionized long-distance communication for business and government, helping to integrate national and global markets. |
| Railroads | Expansion of networks using steel rails and more powerful locomotives. | Became the primary mode for transporting raw materials and finished goods, creating unified national economies. |
| Internal Combustion Engine | An engine that generates power by burning fuel (e.g., petroleum). | Led to the development of automobiles and later, airplanes, fundamentally changing transportation and society. |
Evidence Bank
Mechanization: The process of changing from working largely by hand to doing that work with machinery. In the late 19th century, mechanization intensified with electrically powered, complex machinery in factories.
Factory System: A method of manufacturing using machinery and division of labor. By 1914, this system, centered in large urban factories, was the dominant mode of production in Western Europe.
Manchester: An English city that exemplified the industrial city of the 19th century. It was a center of textile production and showcased both the immense productivity and the harsh social conditions of the factory system.
Urbanization: The process where an increasing percentage of a population lives in cities and suburbs. This process was a major social effect of industrialization as people moved to find work in factories.
Business Cycles: The cyclical upswings and downswings in economic activity. The volatility of these cycles in the late 19th century led to calls for greater economic management.
Monopolies: The exclusive possession or control of the supply of or trade in a commodity or service. Corporations formed monopolies or cartels to control prices and eliminate the unpredictability of the free market.
Tariffs: A tax or duty to be paid on a particular class of imports or exports. Governments in the late 19th century increasingly used tariffs to protect their domestic industries from foreign competition.
Global Economic Network: The interconnected system of trade, finance, and labor stretching across the world. New transportation and communication technologies made this network faster, larger, and more integrated than ever before.
Skill Snapshots
Causation:
The Bessemer process for steel production → caused the expansion of railroads and the construction of modern cities.
The expansion of telegraph and telephone networks → caused the integration of national and global financial markets.
Volatile business cycles → caused corporations to form monopolies and governments to implement protective tariffs.
Comparison:
The First Industrial Revolution was powered by steam and centered on textiles and iron, while the Second was powered by electricity and oil and centered on steel, chemicals, and machinery.
British industrial growth was often based on a laissez-faire approach, while German industrialization was more heavily directed by cooperation between government and large industrial banks.
The quality of life for the middle class, with access to consumer goods and leisure, contrasted sharply with the often-precarious existence of the urban working class.
Continuity and Change Over Time (CCOT):
Baseline: In 1815, production was dominated by the early factory system, powered by steam and concentrated in a few industries like textiles.
Changes: By 1914, production was powered by electricity, used advanced steel machinery, and was organized by massive corporations operating on a global scale. New industries in chemicals and electricity had emerged.
Continuity: The factory system remained the dominant mode of production throughout the period, and urbanization continued to be a primary social consequence of industrial employment.
Common Misconceptions & Clarifications
Misconception: The Industrial Revolution was a single, continuous event.
Clarification: Historians distinguish between a First (c. 1760–1840) and Second (c. 1870–1914) Industrial Revolution, each characterized by different core technologies, energy sources, and leading industries.
Misconception: The benefits of industrialization, like a higher quality of life, were shared by everyone.
Clarification: While new technologies and consumer goods became available, the benefits were unevenly distributed. The middle and upper classes benefited most, while the industrial working class often faced poor living and working conditions.
Misconception: The late 19th century was an era of pure, unregulated capitalism.
Clarification: While laissez-faire was an influential idea, the reality was different. Faced with volatile business cycles, both corporations (through monopolies) and governments (through tariffs and regulations) made significant efforts to manage and control the market.
One-Paragraph Summary
The Second Industrial Revolution, from roughly 1870 to 1914, transformed the European economy and society through innovations in steel, electricity, and chemicals. New means of transportation and communication, such as expanded railroads and the telegraph, forged a truly global economic network and fully integrated national economies. This process fueled mass urbanization and the rise of consumerism, enhancing the quality of life for many. However, this interconnected system was also marked by volatile business cycles, which prompted large corporations to form monopolies and governments to use tariffs in an attempt to manage the market's instability, marking a shift away from pure laissez-faire capitalism.