Germany features one of the largest economies in the entire world. If we’re focusing only on Europe, then Germany has the biggest economy within that region. To say that, Germany is one of the major movers and shakers of the global markets would not be an exaggeration in any way.
So, how did Germany become the global powerhouse that it is today?
It obviously didn’t happen overnight. Events that took place centuries ago laid the foundation for the German economy to become a diverse, resilient, and powerful force.
Throughout this article, we will take a look back at those events that shaped Germany’s economy. We will come up with answers to the question of how did Germany become an industrial giant in the late 1800s.
Join us as we take a step back in time and take a closer look at Germany’s economic history.
Table of Contents
What to Know about Germany’s Economic Boom in the Late 1800s
The latter half of the 1800s in Germany was a period of great change for the nation economically. The time between the late 1860s all the way up through the 1870s saw remarkable highs and lows for the country.
It started with a big boom period in the 1860s that was made possible by changes instituted by Otto Von Bismarck together with his political allies. Their focus was mainly on promoting a unified economy and encouraging Germans to throw their support behind it.
A central bank was created in order to facilitate the growth of the more unified German economy. Regulations were also eased to allow for the creation of corporations that could take advantage of the new economic climate.
Germans were also on the same page with their government regarding the efforts being made. That was evidenced by the significant investments they were making into the new economies.
Of course, answering the question of how did Germany become an industrial giant late in the 1800s was not going to be this simple. Unforeseen circumstances would abruptly put an end to that period of prosperity.
The onset of an economic downturn that affected the entire world also did a number on Germany. Numerous companies that were formed during the boom period went bankrupt. Germans also held on to their money, which was perfectly understandable at the time.
It was on the German leaders to do something and they responded to the call of the collapsing economy. Economic changes were again communicated to the German population.
More regulations were instituted and agreements with cartels were forged. Those agreements proved immensely helpful as they helped solidify the production industry inside Germany.
Growing Germany with the Help of the Railway System
How did Germany succeed in the 1800s? We cannot tell that story in its entirety without discussing the role the railway system played.
Moving further back into the 1800s, the states in Germany weren’t always on the same page during that time. Differing political ideologies created rifts between the states and there was a strong inclination on the part of each to just keep to themselves.
The lack of unity among the states was an issue that undermined the growth of Germany. Something had to be done about it. The creation of a more robust railway system was seen as a potential solution.
The decision to invest in the railway system proved to be a smart one on the part of Germany. Although Germany relied on British talent and technology to start their railway projects early on, the nation’s workers learned quickly.
Soon, they were able to handle the projects on their own.
Connectivity was vastly improved after the railway system in Germany was upgraded. The sharing of resources and talents among the German states changed along with the improvement of the railway system. The revamped railways also helped stimulate the economies in the different German states.
If you want to understand how did Germany become an industrial giant in the late 1800s, you must become familiar with the development of their railway system.
The German economy in the late 1800s grew in large part due to the rapid development of certain industries. Among those were the industries focused on the production of building materials.
Major industries in Germany specialized in the production of cotton, iron, and steel during that time. Those industries were able to grow as large as they did thanks to the renewed emphasis the German government put on becoming a more industrialized country.
Remember those cartels from earlier? They contributed a lot to the industrial revolution that took place inside the country.
The German government made agreements with those cartels and the cartels, in turn, helped organize the market. Those cartels were in charge of establishing standards for the production of goods. They also set prices for the manufacturers.
The production of building materials improved quickly thanks to the partnership formed by the government and the cartels. Germany didn’t just become another force to reckon with on the global stage of production. In Europe, they even became the leading producer of steel.
Along with strengthening the economy, the increased industrialization also boosted the country’s infrastructure. Railways, towns, and so many other elements of infrastructure were improved because of the way Germany focused on its industries.
The Value of the Sugar Beet
There are other reasons that help explain how did Germany become an industrial giant in the late 1800s. They still go beyond the matters we’ve discussed already.
For instance, the contributions of the agricultural sector cannot be ignored if you want to understand Germany became such a powerful force on the global stage from an economic perspective.
The nation adopted a different approach when it came to agriculture. Different crops took on a new level of importance within Germany’s agricultural sector. Those crops included potatoes and turnips.
A particular crop of interest for Germany during that time was the sugar beet.
Sugar was being extracted from beets as far back as the 1700s, but it wasn’t a major process at the time. It took Napoleon Bonaparte realizing the usefulness of the sugar beet for it to become a major crop.
France dedicated factories to cultivating sugar beets, but they would not be enough to propel the crop to the global stage. The rest of Europe had to understand the value of the sugar beet for it to become utilized as well as possible.
Germany took notice of how valuable the sugar beet was. It became a primary crop for the nation. Farmers in different states including Saxony devoted more resources to sugar beets.
The investment in sugar beets proved immensely beneficial to Germany. Even to this day, the aforementioned crop remains vital to global sugar production.
Germany’s economy benefited immensely from their adoption of new primary crops. That alone doesn’t explain why their agricultural sector was able to contribute so much to the expansion of their economy.
How did Germany become an industrial giant in the late 1800s? Their willingness to take an innovative approach to growing their crops definitely played a factor.
Crop production techniques in Germany were greatly affected by the works of famed chemists. The research they produced gave people better insight into how fertilizers affected crops. Thanks to their efforts, German farmers were able to grow their crops more efficiently.
The German farmers also deserve some credit for how well they embraced the innovations being introduced. Upon being shown that the methods they were using previously were inefficient, they did not hesitate to make the switch. Making a big change such as that is not always easy, but they were more than willing to do so.
During that time, German farmers were also given new tools to further improve upon the way they worked. Those tools proved similarly helpful in terms of ramping up production.
Germany became one of the leading producers of crops throughout all of Europe during that period of time.
The Foundation of the Future
Now that we know more about Germany industrial history, it’s easier to understand how the nation became such a force economically. We no longer have to wonder how did Germany become an industrial giant in the late 1800s. Given how Germans perceived innovation, the rise of their nation was likely inevitable.
The way the German economy developed during the late 1800s paved the way for the growth of new industries at the turn of the century. Previously budding industries became more important parts of the new German economy. The development of those new industries was quite remarkable as well.
Research that went into fertilizers allowed Germany to become one of the leading developers of chemical products. Certain products and processes they pioneered remain hugely beneficial up to this day.
All of the resources that went into industrialization led to further developments down the line. Not long after Germany embraced the industrial revolution, they also became leading manufacturers of automobiles and other electrical products.
How did Germany become an industrial giant in the late 1800s? We now know the detailed answer to that question.
Germans have not forgotten the lessons they took from that period in time. Today, the nation remains as one of the leading innovators in the modern world. They have not forgotten how instrumental innovation was to their growth as a nation.
A unified Germany has done amazing things in the past. There’s no doubt that it will continue to be a beacon for innovation and efficiency moving forward.