The Rise of Industrial Capitalism and its Impact on Society
Banking and Finance
The conversion of banking into an intermediary notified the stockbrokers who delivered their deposits to industrialists who needed to invest. The integrity of the companies required large capital for their operations, which they alone could not supply. Thus emerged the corporations, with fractional shares. These shares could be acquired or sold to a specialized institution.
The Expansion of Industrial Capitalism
Industrialization spread to France, Belgium, and Russia. Between 1850 and 1870, the USA, Australia, and Japan also industrialized. In southern Europe, industrialized regions coexisted with essentially rural areas. Eastern Europe remained almost entirely on the margins of the industrial process until the twentieth century.
The Second Phase of Industrialization
The Second Industrial Revolution, from the late nineteenth century, saw Great Britain’s economic leadership begin to be shared with new industrial powers like Germany, the USA, and Japan.
New Energy Sources and Industries
Electricity and oil ousted coal. The invention of the dynamo (1869) allowed hydroelectric plants to produce electricity, while the alternator and transformer made it possible to transfer it. Oil began to flow in the United States from the mid-nineteenth century. The invention of the internal combustion engine (1885) enabled its use as fuel, fundamental for transportation in the 20th century. The diesel engine greatly enhanced the speed and capacity of ships. Aviation was another major innovation made possible by oil. The Wright brothers made their first flight in 1903. Metalworking was boosted by the production of new metals such as stainless steel and aluminum. The automobile industry expanded with Henry Ford’s invention of the assembly line. The chemical industry developed in Germany thanks to new fertilizers, plastics, and reinforced concrete. Finally, the first skyscrapers were built.
New Industrial Organization
In the late nineteenth century, production was oriented toward mass production to increase productivity, reduce turnaround time, and reduce costs. The new method of work (Taylorism) consisted of a chain of very specific tasks. Ford’s factory was the first to employ it. The high investments required by technological innovations stimulated industrial concentration, and companies grew increasingly larger.
The New Industrial Society
The old society gave way to a class society, mainly structured by two groups: the bourgeoisie and the proletariat.
The Bourgeoisie
It became the hegemonic group, owning the businesses and industries. There was a high bourgeoisie composed of bankers, financiers, and factory owners. A middle bourgeoisie composed of liberal professionals, officials, and merchants. And a petite bourgeoisie of employees and shopkeepers.
The Workers
The manufacturing workers formed the industrial and urban proletariat. They constituted the necessary manpower for the factories. Initially, there was no labor legislation, so working hours, wages, and holidays were set arbitrarily by the employers. The workday lasted 12 or 14 hours, and wages were insufficient to support a family. Additionally, factories lacked hygiene, increasing disease among workers.
Marxism, Anarchism, and Internationalism
Marxism and Socialism
Karl Marx and Friedrich Engels denounced the exploitation of workers and defended the need for a revolution to overthrow capitalism. They proposed the creation of socialist workers’ parties. Their objective was the proletarian revolution, but they also defended worker intervention in political life through participation in elections and parliament. Socialist deputies promoted laws favoring workers.
Anarchism
Anarchism assembled thinkers who shared three basic principles: the exaltation of individual liberty and social solidarity; criticism of private property and defense of collective ownership; and the rejection of authority, mainly the state. Anarchists opposed participation in political organizations and workers’ parties.
Internationalism
Marxists and anarchists defended the need to unite the working class worldwide against capitalism. Marx created the International Workingmen’s Association in 1864, which joined Marxists, anarchists, and trade unionists. In 1889, socialist leaders founded the Second International in Paris. Unlike the former, it was a uniquely socialist organization. The Second International established symbols of the labor movement, such as the Internationale anthem and May Day.