Economic Strengths of the Great Powers

• Factors that made for a successful economy:

  • Plenty of raw material
  • Strong population growth
  • Efficient methods of production
• Reasons for the erosion of Britain's economic supremacy:

  • By 1900, British production levels couldn't compete with Germany and the US due to their larger workforce and better access to raw materials
  • Britain failed to develop new and technologically advanced industries like automobiles and chemicals
  • Unemployment increased in the 1890s and strikes affected industrial production as trade unions became more militant
• The rise of the German economy:

  • Unification of Germany in 1871, with Prussia being the most powerful state
  • Unification allowed for sharing of raw materials across the state and easier transportation of goods with a common currency
  • Substantial increase in population providing a ready workforce and larger market for goods
  • Acquisition of new colonies in the 1880s and 1890s gave Germany access to new raw materials and markets
  • Introduction of tariffs by Bismarck in 1878 to protect domestic businesses
• Economic reforms in Russia:

  • Economic reforms began under Tsar Alexander II after Russia's defeat in the Crimean War
  • Real industrial revolution took place under Alexander III
  • Finance ministers Ivan Vyshnegradsky and Sergei Witte planned for Russia to become a major economic power
  • Expansion of rail network, especially with the Trans-Siberian Railway
  • Growth rate of 8% in the years 1894-1904, but poor living and working conditions for the working class
  • Agricultural economy still small and in the hands of former peasants, with Witte advocating for modernization
• • Despite advancements, Russia was still behind competitors at the outbreak of WWI
• France's economy:

  • French industrial progress was slow with a small industrial workforce, majority in agriculture
  • Discovery of a new source of iron ore
  • Introduction of the Méline tariff for protection on industrial and agricultural imports
  • Boom in new technological advances such as electronics, motor cars, and chemicals
• Austria-Hungary's economy:

  • Dual monarch was slow to modernize, stunting economic growth
  • Smaller player in world trade with rising government debt
  • Agricultural output rose by 85% in the first 13 years of the 1900s but was threatened by cheap crops from the USA