International Division of Labor & Second Industrial Revolution
The International Division of Labor
This period is characterized by a profound transformation of the global market for manufactures and agricultural products resulting from the addition of new suppliers and technological advances.
1. Agriculture
- Northwest Europe: Germany, Scandinavia, and France. The traditional agricultural sector entered a deep crisis. These countries were subjected to an external supply of grain cheaper than what they produced. Each country adopted a different measure:
- Great Britain: Abandoned the agricultural system. There were riots, but the political weight of the industrial sector prevailed.
- France: Protected its agricultural sector through tariffs that matched the rational price.
- Other countries: A restructuring process continued, growing more profitable products.
- European Periphery: Monopolized the grain market by reducing the costs of goods. The European Periphery increased its offer primarily because of the availability of land, labor costs, and better development of land transport and rail, which improved communications, resulting in enhanced trade.
- Overseas: Different countries specialized in different products. In these countries, the economic system boosted economic growth. Overseas countries began a period of productive specialization based on their geographical location. The result of specialization was not the same for all countries, and economic growth depended on the degree of elasticity, factor endowments, and the effects of drag.
2. Second Industrial Revolution
In addition to changes in the agricultural sector, there was a transformation of industrial structure, known as the Second Industrial Revolution, associated with the emergence of new industries and new energy sources, among which we highlight electricity and oil. What characterizes this new phase of the Industrial Revolution is the chemical industry for its ripple effects on a multitude of activities.
New Areas:
- Electrical systems: Began to be used after 1882, when the dynamo was invented. It was vital, not only as an energy source, but also allowed the incorporation of new countries. It had ripple effects in the chemical industry, electrochemistry, metallurgy, transport development, and facilitated the development of cable communications (telegraph). This resulted in an increase in welfare due to the extension of lighting, domestic and industrial.
- Oil: Its use came later, although it was previously known due to the travels of Marco Polo. Its implementation began in the late 19th century, coinciding with the invention of the combustion engine.
- Aluminum: Not exploited as it was very expensive to isolate, but technological innovations allowed for lower costs.
- Chemistry: The main character because it generated enormous ripple effects:
- In the textile sector: it allowed the use of dyes for clothing; nylon appeared.
- The rubber industry: new products were supplied.
- In agriculture: fertilizers, pesticides, etc., appeared.
- New industries were generated, such as pharmaceuticals, which contributed to improved population health.
Traditional Industries:
Traditional industries also attended a development:
- Iron and steel industry: Improved with the replacement of iron with steel by the introduction of new types of blast furnaces that also allowed for increased production and a cheaper price. Hence, steel became the base metal in the Second Industrial Revolution and especially the basic metal in urban growth in the improvement of construction and transportation.
- In the textile sector: Although it has inelastic demand, it contributed to improving the sector.
- Copper Industry: Even if used since prehistoric times, it became of great importance due to the discovery of electricity and its use as a metal conductor.