19th Century European Industrialization and Imperialism
The Dominant Europe
The rise of industrialization during the nineteenth century, and especially the huge technological development in Europe, led to the 2nd Industrial Revolution. This meant the fragmentation of the world into two poles: the industrialized countries and non-industrialized ones. In the early twentieth century, the former were imposed on the latter, who were under the direct or indirect influence of Europe, due to its demographic vitality, its commercial and technical superiority, and its financial strength. Europe imposed its economic model, its ideals, and its culture on the planet.
Between 1873 and 1890, an economic crisis developed in industrialized Europe, which originated in an agricultural crisis. In the 1870s, the arrival of wheat from Europe, America, and Russia reduced domestic cereal prices and triggered a general decline in prices. However, this decrease was not accompanied, initially, by a fall in production. Soon, a crisis of overproduction began in all sectors. Stocks of goods piled up, prices fell further, profits decreased, competition increased, and many industries closed.
The industrial world responded to the crisis by renewing products through technical innovation and business remodeling, and by expanding their markets. The imposition of protectionist policies in many European countries was essential. To have markets and resources elsewhere in the world, industrialized countries had to go to other unexploited territories in Asia, Africa, or Latin America.
Economic Grounds
Economic explanations link the expansion of contemporary imperialism to the needs of developed industrialized countries. In the last third of the nineteenth century, Europeans sought new economic spaces for the following purposes:
- Establish export markets for industrial production, often under a raw material monopoly.
- Secure energy resources in abundance and at low cost.
- Use unskilled labor and low wages to reduce the cost of extracting raw materials.
In settled territories where European settlers lived, infrastructure (railways, ports) was built to facilitate the entry and exit of products. It has also been emphasized that the expansion of capitalism needed to seek new territories for capital investment. The financial capitalism of the late nineteenth century had limited expectations of profits in their own countries because market and price control by a small number of companies did not allow for profitable reinvestment of profits in the same sectors and markets. Therefore, capitalists sought other places where their investments were profitable, finding areas with abundant raw materials, cheap labor, and weak competition because colonial laws established a system of monopoly.
Subsequently, it was found that, with the partial exception of Great Britain, foreign capital investment from industrialized countries was not directed towards these new areas, which led to the phenomenon of imperialism. Thus, foreign investment in developed economies was oriented toward other industrialized countries undergoing rapid industrialization, such as the United States. On the other hand, most foreign trade, both in industrial and agricultural products, continued to take place between the industrialized countries themselves. Thus, recent research does not give any special prominence to economic causes in imperialist expansion.
In addition, the economic viability of empires, such as the British Empire at the end of the nineteenth century, is also questioned. It appears that the costs of maintaining the colonial administration and the army did not justify the benefits obtained. It is also stressed that imperialism did not benefit the entire UK population equally. The main beneficiaries were the economic sectors that invested in colonial enterprises, as their contribution towards the cost of colonial administration was very small. By contrast, the middle classes contributed decisively, through taxes, to cover these costs, although the benefits were very modest, or even zero.