Economy, Imperialism, and War: Lecture Notes on Remak, Obery, and 19th–20th Century Capitalism

Class logistics

• Reminder to upload lecture notes to the accessibility services website for accommodation needs; invitation will be circulated by email.
• Questions about the material before we begin.

Reading focus: Remak vs. Obery

• Essay focus: Perspectives on the causes of the First World War; readings include Remak’s piece (early $19^{th}$ century) and the prologue to Obery’s piece in your Learn section.
• Remak (a diplomat-focused historian):
  • Examines diplomats and their mistakes; emphasizes triggering mechanisms for war rather than long-run causal factors.
  • Analyzes immediate diplomatic interests of the great powers: Britain, France, Germany, Austria, Russia.
  • Argues that failures to develop a rational foreign policy lead to catastrophe; he lists (and rejects) various underlying causes as being decisive.
  • Core claim: politics and competence of leaders matter more for the triggering of WWI than grand structural causes.
  • Signature maneuver: downplaying long-term causes to highlight triggering events.
• Obery (a different kind of historian):
  • British, empiricist, avoids a strict causal hierarchy; oscillates between imperialism (political economy) and ideological factors (Darwinism, racism).
  • Argues against a single key causal chain; emphasizes multiple interacting forces in the late 19th century.
  • Links between economic developments and ideological racism/ Darwinian ideas are debated or denied as a simple link by Obery.
  • Focus tight on two or three factors but avoids clear linkages between them.
• Lectures (this course): the economy as a dynamic, transformative factor with broad reach across political and social life.
  • The economy is not just background; it shapes domestic politics, international relations, and ideologies.
  • The narrative: a decisive shift in the 19th century, where capitalism becomes a powerful, dynamic, and global force.

The economy as context and driver (the big argument)

• The economy is the context within which all other historical developments occur; historical development feeds back into the economy.
• The heart of the great divergence: industrial capitalism (from the British Industrial Revolution) creates new possibilities and pressures that reshape politics, society, and international relations.
• Marx’s key idea invoked: capitalism is a highly dynamic, productive system that continuously redefines production and labor; the phrase "solid melts into air" signals the volatile, transformative nature of capitalist development.
• The point to keep in mind: economy affects and is affected by racism, nationalism, parliamentary politics, and international relations.
• The contemporary relevance: we are in a system where the dominant economic role in global politics is up for grabs (e.g., China’s reemergence; American concerns about falling behind in industrial capacity).
• Britain’s historical advantage: free trade since the $1840s$, backed by vast imperial resources (e.g., India) that cushion the economy and currency; this underwrites a global role even as industrial prowess declines.
• By contrast, the emergence of a unified Germany in the late $19^{th}$ century with a strong industrial economy unsettles the established order and helps trigger new forms of competition.
• The linkage between economy and empire: economic shifts prompt imperial expansion as a strategic response to resource needs, markets, and geopolitical risk.

Core features of industrial capitalism (the engine of structural change)

• Highly competitive system: every capitalist employer competes to survive, expand market share, and maximize profits; this drives continual reinvestment and growth.
  • Profit accumulation is the central motive to reinvest and outproduce rivals.
• Technologically dynamic: continuous innovation to raise labor productivity; reduce the wage bill; often involves deskilling to facilitate control and cost-cutting.
  • More output per hour of labor; lower skilled labor can replace more skilled labor via machinery.
  • Consequence: sustained growth in output and the descaling (deskilling) of the workforce.
• Spatial expansiveness: expansion of production requires new markets and new sources of raw materials; production outstrips domestic needs, creating global search for inputs and outlets.
  • Example drivers: German capitalists seeking copper, oil, rubber, etc.; overseas colonial investments to secure resources and markets.
  • Spatial expansion interacts with imperialism and territorial ambitions (see later sections).
• Labor-capital antagonism: as production scales, skilled labor is displaced, unemployment rises, and class tensions intensify.
  • Workers seek higher wages and shorter hours; capitalist drive to lower labor costs (deskilling, automation) intensifies management-control dynamics inside factories.
  • Result: growing urban working class; ongoing political mobilization (strikes, unions, socialist movements).
• Urbanization and rural transformation: shift from rural peasantry to urban wage labor; agriculture becomes more productive but less central to livelihoods for many.
  • In some regions (Britain), urbanization is established earlier; elsewhere (Germany, parts of Eastern Europe) the peasantry remains large longer, complicating industrial transition.
• Productivity, capital expansion, and the “age of power”: mid-19th century to late-19th century see a shift from textiles to heavy industry aided by railways and steel; investment in railways drives the growth of heavy industry and power production.
• Intertemporal crises and cycles:
  • The period from $1873$ marks the first major capitalist crisis of overproduction in the modern era.
  • A long interval of depression, investment retrenchment, and reorganization follows, with a dramatic impact on politics and empire.

The railroad era, power, and industrial consolidation (the period 1850–1900)

• The railway boom (heavy investment in rails, steel, coal, locomotives) is central to industrial expansion.
  • This boom is financed in large part by British capital and technology, enabling global industrialization.
  • After a buildup, oversupply and collapsing prices hit the sector: large-scale bankruptcies and unemployment.
• The transition to a more diversified industrial base: textiles provide profits and finance, but the heavy industry (iron/steel, machinery) becomes the core engine.
• The depression of 1873–1896 (
  • a global downturn triggered by overinvestment and a misalignment of supply and demand) reshapes economies and foreshadows the strategic moves of states.
• The “age of power” (industrial might and railway expansion) culminates in a more concentrated capitalist structure: larger corporations, cartels, and financial consolidation.
  • Example: Lloyd’s Bank absorbing many smaller banks; US Steel becomes the first $1,000,000,000 corporation (est. $1901$) and dominates output (
  • $61\%$ of US steel output).
• Krystalization of monopolistic tendencies: the rise of large enterprises that dampen competition and coordinate production to protect profits.
  • Coal syndicates (e.g., Westphalian coal syndicate) dominate production (roughly $90\%$ of coal output).
  • USSteel and other mega-cirms illustrate organizational scale and market control as responses to crisis.

Crises, policy responses, and the reorganization of capitalism (late $19^{th}$ century)

• The Great Depression timeline:
  • Triggered by overproduction in key sectors and the collapse of demand; downturns in rail and steel industries, overseas competition, and agricultural price drops.
  • The period $1873-1896$ is marked by deep unemployment and political pressure, prompting state intervention.
• Tariffs and trade barriers as national strategies:
  • Continental Europe imposes high tariffs on imported agricultural goods and on Russian grain (protectionism to shield domestic producers).
  • The United States under the McKinley administration imposes tariffs in the range of $38\%$ to $59\%$ on imports to protect farmers and industry.
  • Britain sticks to free trade since the $1840s$, relying on imperial markets (e.g., India, opium trade) to sustain its economy; silver flows from opium into China help maintain a stable pound internationally.
  • Tariffs exacerbate international tensions and contribute to the conditions leading up to WWI.
• Imperial expansion as a response to crisis:
  • Scramble for Africa (late $19^{th}$ century): imperial powers seek colonies to secure cheap labor, raw materials, and new markets.
  • Imperialism is portrayed as partly a solution to economic stagnation and a way to reassert national power in a volatile global order.
  • The period $1873-1914$ is described by Hobsbawm as the age of empire, characterized by competition for overseas territory and resources.
• Economic concentration and corporate power:
  • The crisis accelerates monopolization and the consolidation of industry; many smaller firms fail and are absorbed by larger entities (e.g., US Steel, banking consolidations).
  • The rise of trusts, cartels, and large corporations changes the relationship between business and the state; capitalists gain political influence that can shape policy.
• The emergence of new management techniques: scientific management (Taylorism)
  • Frederick W. Taylor pioneered breaking down complex production into standardized, repetitive tasks.
  • The production engineer analyzes processes; workers perform specialized, routine tasks by piecework and are deskilled.
  • The result: increased control by management, higher output, and reduced labor costs; the approach spreads in peacetime and wartime production (including WWI weapons).
• Labor organization and socialist politics:
  • Unemployment and economic anxiety fuel labor mobilization and the growth of socialist parties, especially the German Social Democratic Party by the 1890s.
  • The rise of Marxist and labor-oriented political movements challenges existing state structures and capital—shaping policy and public order in crisis periods.
• The synthesis: economic factors as a prerequisite to war
  • By the end of the 19th century, capitalist elites, colliding with agrarian interests, seek new territorial strategies to maintain profits and power.
  • Imperialism, tariff wars, and corporate consolidation create international tensions that contribute to the environment in which WWI becomes likely.
  • The next session will elaborate on imperialism as a more explicit causal factor in WWI.

Economic, political, and ethical implications (integrated view)

• The economy shapes racism, nationalism, and imperial ideology (e.g., Darwinism and racial theories connected to power) but the exact causal links are debated among historians.
• The state’s role in crisis management becomes pivotal: tariffs, protectionism, imperial expansion, and social welfare policies reflect attempts to stabilize the system and maintain order.
• The reconsolidation of ruling elites (old landed class + new capitalist class) creates a political bloc with the capacity to influence policy and respond to crises.
• Ethical and practical implications:
  • The drive for profits and market expansion often comes at the expense of workers, peasants, and colonized populations.
  • Imperialism relies on coercive power and resource extraction, generating international tension and conflict.
  • The modern welfare-state question arises under conditions of mass unemployment and social unrest; policy responses are varied and contested.

Connections to earlier and related work

• Beckert on the origins of European imperialism (referenced as recommended reading) links the economy to political strategies of expansion.
• Remak’s focus on diplomacy and immediate triggers contrasts with broader systemic explanations; reading with this lens helps identify what each author emphasizes about causation.
• Obery’s approach cautions against a single-factor analysis, urging awareness of multiple, interacting factors (economic, ideological, imperial) that shape history.
• The lectures connect the 19th-century economic transformation to contemporary global dynamics (e.g., shifts in dominant economic powers, globalization, and the reemergence of great-power competition).

Key numerical references (for quick review)

• Major crisis period: $1873$–$1896$ (Great Depression of the late $19^{th}$ century).
• Stock market collapse (1877): $60\%$ decline.
• Railways: $2.5\times 10^6$ tons of rails produced capacity used during the peak; actual collapse followed when demand fell.
• Railways in the US: about $21{,}000$ miles went broke at the start of the downturn.
• British rail/steel capacity and market expansion; the era of railway-led industrial growth.
• US Steel: established in $1901$; dominated $61\%$ of US steel output.
• Major cartel example: German coal syndicate controlled about $90\%$ of coal production.
• Tariffs in the US under McKinley: approx. $38\%$ to $59\%$.
• Global empire expansion as response to crisis (late $19^{th}$ century): intensified during $1873-1914$.
• UK tariff policy: free trade since the $1840s$.
• Industrial productivity and management: shift to scientific management (Taylorism) in the late $19^{th}$ century; widely adopted by the WWI era.

Readings and next steps

• Readings to prepare for the essay:
  • Remak’s piece (early $20^{th}$ century framing; focus on triggering mechanisms and diplomacy).
  • Obery’s piece (empirical, non-hierarchical approach; explore the limits of attributing war to a single cause).
  • Be prepared to discuss how these relate to the economic lens described in lectures (industrial capitalism, imperialism, labor, and state policy).
• Supplementary readings:
  • Beckert on the origins of European imperialism (economic motives, state responses, and colonial expansion).
• Upcoming discussion: the imperialism debate and its causal role in WWI; how the economy, empire, and ideology intertwine to produce global conflict.