Continental Europe Undergoes Massive Change
Continental Europe was undergoing massive change during the latter half of the century. The Crimean War had Great Britain and France against Russia; the nation-state of Italy came out of the war with Austria in 1860 nearly united; Prussia launched two wars, the one ending in 1871 bringing "Germany" out to the forefront.
Germany was conceived after the defeat of France. The "Second Reich" was established when King Wilhelm I was crowned German Kaiser in the Hall of Mirrors at Versailles, January 1871. The Second Reich was, from its inception, a powerful nation. "Whoa," you say, "Second Reich??!! Is this a trick question for the exam?" It was called the "Second" Reich because German nationals sought to honor the old Holy Roman Empire as the "First" Reich—remember their romance with patriotic myths? But, back to the Second Reich. Germany in 1871 was already more populous than France, and its rate of demographic growth was the fastest Europe had ever known. Germany's industrial production increased at an astounding rate, and less than half of the population was engaged in agriculture after the first decade of unification. This is significant because what were the other "more than a half" doing? You guessed it, working in factories that were churning out a huge volume of industrial goods. And it gets even better. Because Germany had developed its industrial base later than Great Britain and more rapidly than France—the bulk of whose population was still largely engaged in agricultural enterprises—German industrial equipment was more modern, sort of state of the art. After all, if you wait to buy a product for a few years, after the bugs have been worked out and the product has been tested, improved, produced a bit cheaper, etc.—you can hardly lose, except that you don't have whatever it is you want until then. In other words, you lag behind the times. If you want an example, just think of personal computers!
Well, Germany, now unified, decided to catch up—and did so with a vengeance. The French indemnity (remember that 5 billion francs paid to Germany with the French defeat in the Franco-Prussian war?) added to the available capital, and the government aided industrial efficiency by making heavy investments in railroads, granting tax privileges, establishing tariffs, and encouraging the formation of large combines—the famous German cartels. German universities became the leading ones of Europe in the application of scientific method to every discipline—where do you think the Germans got their national "stereotype" of being "rational?"
Such rapid growth was disruptive in Germany, as elsewhere. The balance of power, previously obsessed with territorial balances, now had to take into consideration other things—such as industrial might and national wealth—as well as the surge of nationalism throughout Europe. Curiously, in Germany, nationalists stressed the traditional values of the Volk, the people, and ironically, were almost anti-materialistic, shunning commercial and urban values; the Germans rejected, or more aptly, attacked urban material cosmopolitanism more intensely than any other European nationality. Anyone here familiar with the works of Richard Wagner? What better way to personify or put a musical face on this conflict. He wrote works of daring musical innovation that were based on ancient Teutonic myths, genius and prejudice. This conflict—or more aptly put, this national schizophrenia of modernity and myth—could indeed stimulate achievements, but it increased the dangerous tensions between powerful conservative circles, a growing but defensive middle class, and workers increasingly aware of their distinct interests. The great achievements of the German state rested in its ability to satisfy industrialists and appeal to nationalists by operating liberal institutions through autocratic means. Sound screwy? Well, listen up.