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The 19th Century World Economy: Major Changes & Their Impact

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  • 0:01 World Economy
  • 1:12 Imperialism
  • 3:09 Boer War
  • 4:00 Religion & Imperialism
  • 4:37 Lesson Summary
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Lesson Transcript
Instructor: Patricia Chappine

Patricia has a Ph.D. in Progress, History and Culture as well as a master's degree in Holocaust and genocide studies. She has taught heritage of the western world and U.S. history.

During the late 19th century, changes in industrial production, trade, and imperialism led to a world economy. In this lesson, learn about the important factors that contributed to this system.

A World Economy

Several important changes took place in the late 19th century. First, around 1870, Germany became the new leader in European industry. Germany far exceeded the production of any other European nation in chemicals and electrical equipment. The nation continued to expand its trade networks and soon enjoyed a flood of new plants and factories. Great Britain tried to retake its position as industrial leader, but Germany would not give up its newly acquired title so easily. The United States also enjoyed success during the Second Industrial Revolution. In fact, industry had made the U.S. the richest nation in the world at this time.

The Second Industrial Revolution caused growth in industry and transportation, which allowed increased trade between nations. Combined with a merchant marine capable of transporting goods by sea, a world economy began to form. What exactly is a world economy? Well, a world economy, or global economy, is simply a description of the integration of trade in goods, services, and money worldwide. The spread of trade and investments abroad is linked with a process called imperialism.

Imperialism

Between 1870 and 1900, European imperialism increased tremendously. Historians sometimes refer to this as new imperialism, which basically meant that Europeans were making a mad dash for pieces of Asia and Africa. Why this sudden need for colonies? Well, colonization was basically the domination of Europeans over non-Europeans. A major factor that influenced colonization was competition between different countries.

In a quest for greater wealth, countries, such as Britain, sought colonies in Africa and Asia that would provide ports and perhaps even offer material resources. So, the possible economic benefit of having colonies was a big motivation. Many of the colonies could offer material resources, such as oil, tin, gold, and diamonds.

By taking these areas, European countries cut out the middle-man. They did not need to trade because they now controlled the resources directly. Portugal, France, Britain, Belgium, Spain, and Germany had all set up colonies in Africa by 1914. In Asia, the British, Dutch, Russians, French, and Portuguese had taken pieces, as well.

In addition, since competition between countries was so fierce, sometimes one country would set up colonies in an area just to keep another country out. For instance, France would scramble to set up colonies in an area just to make sure Britain, Russia, or Germany would not have access. Once the colonization process started, all the major powers in Europe wanted a piece of the action. If a country was not taking part in the process, they were viewed as weak.

Of course, everyone did not agree about the benefits of having colonies. In 1852, Benjamin Disraeli said, 'These wretched colonies will all be independent in a few years and are millstones around our necks.' In fact, a common feeling was that colonies were entirely too much trouble to maintain and that the people would eventually rebel for their independence. A well-known example of this was the Boer War in 1899.

The Boer War

Opponents of imperialism were concerned about revolts. These worries were realized when the Boer War broke out in 1899. Trouble began when the British took control of Cape Town, South Africa. Originally a Dutch colony, this area was controlled by the Boers, who were the descendants of Dutch colonists. The British and the Boers struggled for power from the beginning.

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