- Germany was running a century late to England in IR as it was only in 1871 when it got united properly. Before 1871, its economy was completely disintegrated.
- Most of the German empire was controlled by Austria and France (Napoleon).
- However, in 1815 this area became independent of France but retained some of the economic and institutional reforms of the Napoleonic period. Gradually, Serfdom and the guilds were abolished. Other remnants of feudalism were ended which restricted commerce and industry.
Concept of Zollverein
- 1818: Prussian finance Minister, Bulow conceived the concept to Zollverein (German Custom Union).
- 1 Jan, 1834: through Zollverein treaties, union was formally organised.
Benefits of Zollverein
- Tolls among the members were abolished
- Reduce protectionist barriers
- Improved the transport of raw materials and finished goods (open borders)
- within 30 years, all the major German regions were united on economic front (no sign of detaching now).
- Best advantage was the integration of Rhineland along with Saarland and Ruhr Valley.
Why IR in Germany?
- Unification of Germany in 1871 (under the leadership of Bismarck), led to the socio-political-economic integration with common commercial policies without external control.
- Industrial protection was introduced through high tariffs on imports. Revenues from import duty was spent on Health Insurance, Accident Insurance and Old Age Pension.
Role of Bismarck
- He unified the country.
- He brought the economy into line.
- He made sure it stayed that way and encouraged it.
- He prevented anything from hurting the economy badly.
- Bismarck won the support of both industry and skilled workers by his high tariff policies, which protected profits and wages from American competition, although they alienated the liberal intellectuals who wanted free trade.
- Blood and iron Policy included Iron (which fuelled Industrialization).
- Germany implemented a technical education curriculum (electrics, chemistry, and physics)
- Urbanisation began so is the immigration of labour from other states. This provided regular supply of labour at subsistence wages.
- Agriculture field: New techniques, fertilisers and tools were used. Share of women as work force increased (due to male migration to industries).
- Introduction of railway.
- Presence of natural resources: included coal and iron ore in the Ruhr, the Saar and the Upper Silesia; sodium and potassium in large quantities (this is what enabled a large chemical industry). After the Seven Weeks war with France, Germany got hold of Alsace–Lorraine region where population was German speaking and close to Ruhr valley (currently within France).
- Credit banks: they were set up to provide credit solemnly to the business sector. Different banks formed cartels in different industries.
- Companies like BASF and Bayer raised production and distribution of artificial dyes and pharmaceuticals, making German monopolisation of the global chemicals market at 90 percent by 1914.
- Germany became Europe’s leading steel-producing nations in the late 19th century.