Second Half of the Century
Despite the vast economic expansion of new industries the second half of the century was not a period of uninterrupted or smooth growth. The years from 1850 to 1873 saw a general boom in both industry and agriculture. The last 25 years of the century witnessed economic advance but of a much slower nature. Bad weather and foreign competition put grave pressures on European agriculture, which in turn put a drag on the economy. Many emigrants who left Europe during these years came from the countryside in those parts of Europe where industrialization was least advanced.
In 1873 a number of major banks failed, and the rate of capital investment slowed. Over the next twenty years, Europe was immersed in what can arguably be called an extended depression; industrial stagnation and a fall in wages, profits and prices occurred. Real wages, however, for the most part remained strong, as the simultaneous fall in wages and prices offset one-another. To be sure, there were pockets of unemployment—a word that was coined during this period—and there were frequent strikes and other labor unrest. Economic difficulties fed the growth of trade unions and socialist parties throughout Europe.
Despite the depression, it is important to remember that the general standard of living in the industrialized nations improved over the course of the half-century. Indeed, what helped to bring the economy out of stagnation by the end of the century was a new expansion of consumer demand. The new industries of the late century were largely directed toward consumer goods, and urbanization naturally created a large market for these goods. People in the cities were bombarded by those willing to sell their junk: retailing techniques changed; department stores, retail chains, new packing techniques, mail order catalogues, and advertising were developed. Marketing itself was creating a new demand. The foundations of a consumer economy and a society bent on acquiring new things were being laid. Furthermore, the overseas imperialism of this period also opened new markets for European consumer goods—but we will have to wait until the next lesson to investigate that aspect of European change.
The sixty or so years before the outbreak of the First World War definitely represent the age of the middle-classes—the bourgeois. The Great Exhibition of 1851 held in the Crystal Palace in London had displayed the products and the new material life they had forged. Thereafter, the middle class had become the arbiter of much consumer taste and the defender of the status quo. You will recall that after the revolutions of 1848 the middle classes ceased to be a revolutionary group: most of their political goals had been attained, even if imperfectly. Once the question of social equality had been raised, large and small property owners across the continent moved to protect what they possessed.
The middle classes that had never been perfectly homogeneous now became even more diverse. Their most prosperous members were the owners and managers of great businesses and banks. They lived in a splendor that rivaled and sometimes surpassed that of the aristocracy. Some, such as W.H. Smith, the owner of railway newsstands in England, were made members of the House of Lords. The Krupp family of Germany was a pillar of the state and received visits from the German emperor and his court.
Only a few families achieved such wealth. Beneath them were the comfortable small entrepreneurs and professional people, whose incomes permitted private homes, large quantities of furniture, pianos, pictures, books, journals, education for their children, and vacations. There were also the shopkeepers, the teachers, the librarians, the clerks, etc., who had either a bit of property or a skill derived from education that provided respectable, non-manual employment. Finally, there was a whole new element: The white-collar crowd. These included secretaries, retail and bank clerks, and lower-level bureaucrats in business and government. The white-collar labor force was often working class in its origins and might even belong to unions, but its aspirations for lifestyle were middle class. The lower middle class, or petit-bourgeois, element in society consciously sought to set itself off from the lifestyle of the working class. People from the lower middle class actively pursued educational opportunities and chances for even the slightest career advancement for themselves and their children. They also tended to spend a considerable portion of their disposable income on consumer goods, such as stylish clothing and furniture that were distinctively middle class in appearance.