Germany-The Economy and Population Growth Political Parties

Germany experienced an economic boom immediately after unification. For the first time, the country was a single economic entity, and old impediments to internal trade were lifted. The federal chancellery published a new commercial code and established a uniform currency. The indemnity that France had to pay Germany after losing the 1870-71 war provided capital for railroad construction and building projects. A speculative boom resulted, characterized by large-scale formation of joint-stock companies and unscrupulous investment practices. This period of intense financial speculation and construction, called by Germans the Gründerzeit (founders' time), ended with the stock market crash of 1873.

Despite the crash and several subsequent periods of economic depression, Germany's economy grew rapidly. By 1900 it rivaled the more-established British economy as the world's largest. German coal production, about one-third of Britain's in 1880, increased sixfold by 1913, almost equaling British yields that year. German steel production increased more than tenfold in the same period, surpassing British production by far.

Industrialization began later in Germany than in Britain, and the German economy was not a significant part of the world economy until late in the nineteenth century. Germany's industrialization started with the building of railroads in the 1840s and 1850s and the subsequent development of coal mining and iron and steel production, activities that made up what is called the First Industrial Revolution. In Germany, the Second Industrial Revolution, that is, the growth of chemical and electrical industries, followed the enormous expansion of coal and steel production so closely that the country can be said to have experienced the two revolutions almost simultaneously. Germany took an early lead in the chemical and electrical industries. Its chemists became renowned for their discoveries, and by 1914 the country was producing half the world's electrical equipment. As a result of these developments, Germany became the continent's industrial giant.

Germany's population also expanded rapidly, growing from 41.0 million in 1871 to 49.7 million in 1891 and 65.3 million in 1911. The expanding and industrializing economy changed the way this rapidly expanding population earned its livelihood. In 1871 about 49 percent of the workforce was engaged in agriculture; by 1907 only 35 percent was. In the same period, industry's share of the rapidly growing workforce rose from 31 percent to 40 percent. Urban birth rates were often the country's highest, but there was much migration from rural areas to urban areas, where most industry was located. Berlin, by far the country's largest city and a major industrial center, grew from almost 1 million inhabitants in 1875 to 2 million in 1910. Many smaller cities, especially those in areas with much industry--such as the Ruhr region, the upper Rhine Valley, the Neckar Valley, and Saxony--tripled or quadrupled in size during this period.

Data as of August 1995

Six major political parties were active in imperial Germany: the Conservative Party, the Free Conservative Party, the National Liberal Party, the Progressive Party, the Center Party, and the Social Democratic Party of Germany (Sozialdemokratische Partei Deutschlands--SPD). Only the SPD survived both the empire and the Weimar Republic (1918-33) and came to play a vital role in the Federal Republic. Even though the German Empire lacked a genuinely democratic system, the six main parties accurately reflected the interests and hopes of most of its people.

The most right-wing of the six parties was the Conservative Party, which represented Prussian nationalism, aristocracy, and landed property. Many of its members remained opposed to German unification because they feared Prussia's gradual absorption by the empire. The Conservatives also detested the Reichstag because it was elected by universal suffrage. The Free Conservative Party represented industrialists and large commercial interests. The views of this party most closely matched those of Bismarck. Its members supported unification because they saw it as unavoidable. The National Liberal Party was composed of liberals who had accepted Germany's lack of full democracy because they valued national unity more. They continued to favor a laissez-faire economic policy and secularization. In time, National Liberals became some of the strongest supporters of the acquisition of colonies and a substantial naval buildup, both key issues in the 1880s and 1890s.

Unlike the members of the National Liberal Party, members of the Progressive Party remained faithful to all the principles of European liberalism and championed the extension of parliament's powers. This party was in the forefront of those opposed to the authoritarian rule of Bismarck and his successors. The Center Party was Germany's Roman Catholic party and had strong support in southern Germany, the Rhineland, and in parts of Prussia with significant Polish populations. It was conservative regarding monarchical authority but progressive in matters of social reform. Bismarck's brutal campaign against the Roman Catholic Church in the 1870s--the Kulturkampf (cultural struggle), an attempt to reduce the church's power over education and its role in many other areas of German society--turned the Center Party against him. By the late 1870s, Bismarck had to concede victory to the party, which had become stronger through its resistance to the government's persecution. The party remained important during the Weimar Republic and was the forerunner of the Federal Republic's moderate conservative parties, the Christian Democratic Union (Christlich Demokratische Union--CDU) and the Christian Social Union (Christlich-Soziale Union--CSU).

The Marxist SPD was founded in Gotha in 1875, a fusion of Ferdinand Lassalle's General German Workers' Association (formed in 1863), which advocated state socialism, and the Social Democratic Labor Party (formed in 1869), headed by August Bebel and Wilhelm Liebknecht, which aspired to establish a classless communist society. The SPD advocated a mixture of revolution and quiet work within the parliamentary system. The clearest statement of this impossible combination was the Erfurt Program of 1891. The former method frightened nearly all Germans to the party's right, while the latter would build the SPD into the largest party in the Reichstag after the elections of 1912.

Once Bismarck gave up his campaign against Germany's Roman Catholics, whom he had seen for a time as a Vatican-controlled threat to the stability of the empire, he attacked the SPD with a series of antisocialist laws beginning in 1878. A positive aspect of Bismarck's campaign to contain the SPD was a number of laws passed in the 1880s establishing national health insurance and old-age pensions. Bismarck's hope was that if workers were protected by the government, they would come to support it and see no need for revolution. Bismarck's antisocialist campaign, which continued until his dismissal in 1890 by Wilhelm II, severely restricted the activities of the SPD. Ironically, the laws may have inadvertently benefited the SPD by forcing it to work within legal channels. As a result of its sustained activity within the political system, the SPD became a cautious, pragmatic party, which, despite its fiery Marxist rhetoric, won increasing numbers of seats in the Reichstag and achieved some improvements in working and living conditions for Germany's working class.

The Economy and Population Growth

Germany experienced an economic boom immediately after unification. For the first time, the country was a single economic entity, and old impediments to internal trade were lifted. The federal chancellery published a new commercial code and established a uniform currency. The indemnity that France had to pay Germany after losing the 1870-71 war provided capital for railroad construction and building projects. A speculative boom resulted, characterized by large-scale formation of joint-stock companies and unscrupulous investment practices. This period of intense financial speculation and construction, called by Germans the Gründerzeit (founders' time), ended with the stock market crash of 1873.

Despite the crash and several subsequent periods of economic depression, Germany's economy grew rapidly. By 1900 it rivaled the more-established British economy as the world's largest. German coal production, about one-third of Britain's in 1880, increased sixfold by 1913, almost equaling British yields that year. German steel production increased more than tenfold in the same period, surpassing British production by far.

Industrialization began later in Germany than in Britain, and the German economy was not a significant part of the world economy until late in the nineteenth century. Germany's industrialization started with the building of railroads in the 1840s and 1850s and the subsequent development of coal mining and iron and steel production, activities that made up what is called the First Industrial Revolution. In Germany, the Second Industrial Revolution, that is, the growth of chemical and electrical industries, followed the enormous expansion of coal and steel production so closely that the country can be said to have experienced the two revolutions almost simultaneously. Germany took an early lead in the chemical and electrical industries. Its chemists became renowned for their discoveries, and by 1914 the country was producing half the world's electrical equipment. As a result of these developments, Germany became the continent's industrial giant.

Germany's population also expanded rapidly, growing from 41.0 million in 1871 to 49.7 million in 1891 and 65.3 million in 1911. The expanding and industrializing economy changed the way this rapidly expanding population earned its livelihood. In 1871 about 49 percent of the workforce was engaged in agriculture; by 1907 only 35 percent was. In the same period, industry's share of the rapidly growing workforce rose from 31 percent to 40 percent. Urban birth rates were often the country's highest, but there was much migration from rural areas to urban areas, where most industry was located. Berlin, by far the country's largest city and a major industrial center, grew from almost 1 million inhabitants in 1875 to 2 million in 1910. Many smaller cities, especially those in areas with much industry--such as the Ruhr region, the upper Rhine Valley, the Neckar Valley, and Saxony--tripled or quadrupled in size during this period.

Data as of August 1995