19th Century Capitalism, Depression, and Imperialism
19th Century Capitalist Economy Cycles
The capitalist economy is characterized by cycles of high industrial production followed by crises. These crises often result from excessive industrial production, creating more goods than the market can absorb for consumption. Consequently, prices fall, profits decrease, and unemployment rises.
The Great Depression of 1873-1896
The economic crisis beginning in 1873, known as the Great Depression (1873-1896), was the first major depression under capitalism. Millions of European farmers became victims, emigrating overseas as European markets were invaded by cheaper agricultural products. This invasion caused prices and profits for European farmers to fall by up to 30%. More farmers had to leave the rural sector, leading to increased unemployment in Europe. Industry also suffered, with wages decreasing over the long term. As a result of the crisis, prices fell sharply, and competition intensified, particularly with the United States (where prices fell by 45%). Businesses focused on reducing production costs. Leading industrial powers implemented protectionist economic measures to control domestic markets and secure economic resources.
Rise of Colonialism and Imperialism
Around 1890, economic factors became deeply intertwined with political imperialism. Key drivers included:
- The search for new markets due to excess production and consumption needs.
- Access to suppliers of raw materials.
- Finding secure places for capital investment.
Political and Social Drivers
Political motivations were also significant:
- Nationalism and prestige: Control over territories became associated with national power.
- Competition: Nations did not want to be left behind by their rivals.
- Demographic pressure: European population growth led to large-scale emigration to colonies overseas, relieving social pressures.
- A spirit of scientific exploration and missionary work also played a role.
From 1876 to 1914, approximately a quarter of the planet’s surface was divided as colonies among a few states. Around 40 million Europeans started new lives on other continents.
Colonial Resources and Global Economy
European countries became interested in specific resources from various regions:
- Nearby Eastern regions for oil.
- Malaya for tin.
- South Africa as the main producer of gold and diamonds.
- India and Ceylon (Sri Lanka) for tea.
- Tropical colonies for coffee, cocoa, tobacco, and sugar.
Colonized territories gained increasing importance in the new world economy, both for production and consumption.
British Empire: Colonial Dominance
By the late 19th century, the United Kingdom was the main political and economic power, controlling a strategic network of locations:
- Mediterranean: Gibraltar and Malta.
- Route to India: Cape Town (South Africa), Aden, and Ceylon.
- Route to China: Singapore and Hong Kong.
Settler Colonies and India
Some colonies, known as settler colonies, absorbed surplus population from the United Kingdom: Australia, New Zealand, South Africa, and Canada.
India played a crucial role, particularly as a market for British manufactured cotton textiles. By 1890, the British Crown ruled India’s 300 million people with only about 6,000 British officials, supported by 70,000 soldiers. During this era, British control was extended to Burma (Myanmar).