The Capitalist Development of the Last Twenty Years

The speed of the development of capitalism is reflected first in the change in the prices of necessities.

The discovery of gold in California and in Australia, about the middle of the 19th century, as well as the construction of great railway lines and the development of steamships, created that mighty expansion of capitalist economic life, which suddenly ended in the great crisis of 1873. This period of capitalist ‘storm and stress’ was accompanied by a swift rise in prices of the necessities of life. The slowdown in the development of industry – which occurred during the period of capitalist years 1870 to 1880 – coincided with the fall of world market prices. In 1895, the Economist price index reached its lowest point. After 1895 we again experienced ‘storm and stress’, again accompanied by a rise in the prices of necessities.

The swifter development of capitalism during the last two decades has a great many causes.

First of all the development of technology has progressed very rapidly during the last twenty years.

Above all it is an increase in the methods of production of power. The application of superheated steam to the piston steam-engine, the steam turbine, Diesel motors, big gas engines, all these have been made during the last twenty years. Moreover automatic systems of lubrication and heating have lowered working costs.

At the Frankfurt Electricity Exhibition, in 1891, there was for the first time a demonstration of transmission for a considerable distance. Since 1895, the electric motor has begun to be substituted for hydrostatic pressure in elevators and lifts, and in the powering of cranes and elevators for lifting goods it has shown itself superior to steam. In industry the old methods of transmission of power by shafts, steam, hydrostatic pressure and compressed air are being displaced by electricity. Water power finds new uses. Through central generating stations electricity is supplied to wide areas.

Hand in hand with the improvement of the production of power and of its transmission goes too the improvement in the extraction and production of raw materials. In the mining industry the application of natural forces for the transportation of ore and coal has been improved. Analogous improvements have been obtained in the iron-industry. The chemical processes for the extraction of raw iron and ingot-iron are more economical thanks to improvements in technical processes, auxiliary engines, but above all in transport and lifting machines of all kinds, such as cranes, etc. Chemical processes are improved everyday. It is now possible to transform the raw iron coming from the blast furnaces into ingots without new conductors of heat and the ingot-iron thus obtained can be directly laminated. For this reason rolling mills and steel works are now built close to blast furnaces. At the same time, in using the blast furnace gases as motor gas, the production of energy becomes cheaper. The progress of the chemical industry during the last quarter of century has been prodigious, especially the dyestuffs industry and the nitrogen industry.

Still more remarkable is the progress made in metallurgy. The shaping machine, the revolving lathe, the various self-acting machines, the autogenous processes for reheating and cutting, have totally changed. By the use of alloyed quality steels for machine construction, the speed of the latter has been considerably increased, the rapid lathes and borers of great productivity show an enormous increase in the amount produced for the same amount of power.

Transport in general has gone through a total revolution. The electrification of street cars, the building of main line electric railways, the automobile, the revolutionary change in the shipbuilding through the steam turbine, the big Diesel ship engines, the greater size of cargo steamers, the completion of the interurban telephone lines, wireless telegraphy, all these are events in the technological development, which have happened in the last quarter of a century. No less important are the changes which have occurred in the building of houses and in the architecture of cities.

The use of concrete, the construction of central heating systems and of bath rooms, as well as the great transformations in lighting technique, characterise the latest developments.

These examples suffice to show the rapidity of the technical progress during the last twenty years. There is no branch of industry to which this last quarter of a century did not bring either new methods or new engines.

This progress of technology in general has been accompanied by an improvement in public hygiene. Mortality has sunk. The average life span has increased. Whenever this development has not been hindered through a great decrease of the amount of births, there has been a swift increase in population. Thus, in Germany, for each thousand inhabitants there have been

Deaths

More births

1881 to 1890

1891 to 1900

1901 to 1910

The population of the German Empire has grown in the thirty years, from 45 to 65 millions. This increase of population has taken place with still greater rapidity in the countries which were able to draw on great masses of immigrants. Thus the population of the United States amounted to:

Millions inhabitants

In 1880

In 1890

In 1900

In 1910

The countries with the biggest increase of population, above all Germany, the United States and Japan, have had the biggest share of economic development in these last decades.

At the same time the expansion of capitalism has been rapid.

The most important mechanism and a sure sign of this growth is the density of traffic networks. The length of the railways in exploitation amounted to

In 1891

In 1911

Kilometers

Europe

America

Asia

Africa

Australia

Total

In two decades the world’s railway system has grown by 71 per capita, and faster than in Europe in the countries overseas.

The expansion of countries overseas through European and American capital always unlocks new territories for investment and markets for the latter. The growth of imports shows how quickly the market for goods in the countries overseas increases.

According to their value, imports amounted to:

In 1893

In 1912

in million marks

Algeria

Tunis

British South Africa

India

Straits Settlements

Canada

Australia

Egypt

Argentina

Mexico

China

Japan

The imports of Brazil have grown from 813 million marks in 1895 to 1,302.3 millions in 1912; those of Korea, which amounted to 28.3 millions in 1902, have increased to 83.8 millions in 1910; the imports of Persia, from 94.3 millions in 1901 to 181.7 in 1912. We therefore see in all countries, whether directly or indirectly under the domination of European and American capital, that the imports have prodigiously increased. Moreover the outlet territory of capitalism keeps on extending itself.

Finally, the speed of economic development accelerates through the increase in gold production.

The gold production amounted to:

Kilograms

Annual average from

1886 to 1890 ....

1891 to 1895 ....

1896 to 1900 ....

1901 to 1905 ....

1906 to 1910 ....

Year

The tremendous changes in the technique, the rapid increase of population, the accelerated expansion of capitalism and the growth of gold production, these are the main reasons for the faster economic development during the last two decades.

The rapid development of industry has enormously increased its use of raw materials. The following examples show it:

Coal Production

Raw Iron Production

by 1,000 tons

Germany

France

England

Austria

Russia

United States

The working class has taken advantage of the favourable situation of the last twenty years. Through the strength of its unions it has obtained higher wages. In the country, the production for the producer’s own needs is being supplanted by the production for the market: the farmers nowadays buy in the market articles which they used to produce. The rise of educational standard among the people creates new needs. The demand for food articles, for lodgings and for all kinds of goods for the use of the masses goes up.

Likewise, the impetuous development of industry during the last decades, has rapidly increased the needs of industry for raw materials, and the demand for goods to be consumed by the masses has grown. But the development of agriculture has been unable to keep pace with the development of industry. Agriculture has often been unable to increase its production and, when it has, it was only through a rise of the price of its products, in order to cope with the needs of the industry and the growth of its productivity. This disproportion is one of the reasons of the high cost of living.