Industrialization Expansion
By the turn of the century, Great Britain, whose industrial superiority had been taken for granted by the British, was clearly being surpassed in some of the critical indexes of production by the United States and Germany. Although the economy did continue to expand, its state of health became a serious issue in English public life. Britain's relative industrial decline was due to many of the same factors that are resulting in U.S. industrial stagnation or "retrenchment." Plants and equipment were old and the cost of modernizing or replacing them was so expensive that owners balked at doing so.
Well-established companies could often prevent smaller companies from succeeding. British schooling gave little emphasis to technical subjects or applied science, and British business and commercial leaders had become complacent. Remember I said that the Germans went out with sales literature in local languages? The British rarely did this, nor did they bother to convert prices to local currencies or put measurements in local units. As for that new fangled thing called credit, God forbid! The British refusal to arrange local credit did much to lose them important business in the 1890s.
Industrialization no longer depended absolutely on possession of critical natural resources like coal and iron ore, but rather benefited from foreign investment and imported technology. As a result, industrialization spread to countries like Japan and Italy. Industrial expansion in this period was closely tied to new technology. By 1890 Europe was producing even more steel than iron, using the Bessemer converter developed in the 1850s, which permitted far higher temperatures in smelter furnaces, and subsequent discoveries made lower grade ores profitable. British, German, and French maritime shipping, which doubled between 1870 and 1914, depended on faster and larger steamships, and refrigerated container ships came into their own, making the transport of perishables over long distance possible.
New chemical processes and synthetics led to improved products ranging from dyes, textiles and paints to fertilizers and explosives. A whole new industry developed to produce and supply electricity. Electricity was the most versatile and transportable source of power ever discovered: it could be used in place of the more cumbersome steam to run factory machinery. The incandescent lamp created a demand for large generating stations to distribute power over a wide area, and by 1900 the manufacture of generators, cables and motors, in turn, allowed increased and cheaper production in scores of other fields. The first major public power plant was constructed in Britain in 1881, and soon electric poles, lines, and generating stations were littering the European landscape. Electric lights were soon being used in urban homes, and urban transportation was made easier and cleaner by virtue of the electric streetcar and newly constructed subway systems.
The turn of the century also saw the emergence of the first large European demand for petroleum. The internal combustion engine was invented in 1886, and when Gottleib Daimler put it on four wheels in 1887 the automobile was created. France quickly took the lead in auto manufacturing, but for many years the motorcar remained nothing more than a novelty—an expensive toy that only the rich could afford. It was only much later that Henry Ford realized his dream of making the automobile a commodity that was within the reach of the average person. The automobile and the new industrial and chemical uses for oil greatly expanded the demand for petroleum. Before the 1890s, petroleum had been used primarily for lighting; it soon became the basis for transportation and much of the new chemical industry. This new reliance on oil prompted the discovery of new, more efficient methods of refinement or "cracking," which made lower grades of oil usable. But remember that many of the important oilfields that we recognize today were not yet discovered so oil was a precious commodity. It does not take long before a rivalry between the world's major producers—Standard Oil, Royal Dutch, and Shell—to develop.
As striking as the new technology itself was the speed with which it was adapted to commercial uses. The telephone, invented in 1879, became a business necessity and an established private convenience within a few decades. The steam turbine was widely employed for a variety of tasks, and soon it was fueled by oil as well as coal. Home sewing machines and bicycles were created directly for the consumer market—in itself a significant reflection of the growing purchasing power of the masses. Inventions were now expected to change people's lives; the automobile in the 1890s, the airplane in the 1900s, and the radio a decade later were all greeted with enthusiasm even before their commercial possibilities were established.