Bismarck Economic Changes

Question 1

What is Regulation?

Answer 1

The imposition of rules by a government on economic activity. Ie health and safety, environmental impact, higher taxation

Question 2

What is Urbanisation?

Answer 2

The increase in the proportion of people living in towns and cities compared to rural areas

Question 3

What is GNP?

Answer 3

Gross National Product
Total value of all goods and services of a country, within its borders + abroad

Question 4

What are Cartels?

Answer 4

A combination of independent business organizations formed to regulate production, pricing, and marketing of goods by the members.

Question 5

What are Exports?

Answer 5

Selling goods and services abroad

Question 6

What are Imports?

Answer 6

Goods or services brought into one country from another

Question 7

What is Industrialisation?

Answer 7

The development of industries on a wide scale,

Question 8

What is Balance of Trade?

Answer 8

The difference in value between a country’s imports and exports
If the value of the imports is above that of the exports, the balance of the payments has a deficit that is often referred to as being in the red.

Question 9

What were the Causes of Economic growth in Germany- 1870 onwards?

Answer 9

• Population growth, increased workforce and market for manufactured goods. Increased younger population, more mobile and willing to learn new skills
• Ample RAW MATERIALS: ie Coal from the Ruhr, Iron ore from Alsace-Lorraine + the Ruhr
• Rivers + flat northern plains good to build railways on
• World-renowned education system providing a skilled workforce. 1870: more science graduates at Munich university than total number of science graduates from all English universities
• Unification + 1878 tariffs introduced
• Expansion of banks free from regulation, encouraging investment + a close relationship between banking and industry
• Development of chemicals and electricals ie synthetic dyes, artificial fibres, photographic materials, drugs, plastics and explosives
• Expansion of overseas trade- provided market for expanding German industry

Question 10

Where did German supplies of Coal and Iron come from?

Answer 10

• The Ruhr: MAJOR INDUSTRIAL AREA OF GERMANY

Question 11

Why was there less transport of Coal and Iron?

Answer 11

heavy, so more expensive to transport

Question 12

How were they able to transport coal and iron around Germany?

Answer 12

Rivers: capable of holding large barges, help to transport coal + iron
Major ports: Danzig, Hamburg

Germany is flat, easy to build railways, transport systems, walking

Question 13

What are some statistics about the economy at the time?

Answer 13

• “Coal production was a success during Bismarck’s chancellorship as from 1871-90 it more than doubled, rising from 29 to 70 million tonnes per year.”
  
  • Steel production was also a success between 1871-90 as output increased from 0.2 million tonnes to 2.2 million tonnes per year
  • The length of the German railway in 1871 was 21,471km which was less than the UK at the time, but by 1890, the length had almost doubled to 42,869km. Whereas the UK length had only increased by around 6000km in the same amount of time
  • Coal output in Germany in 1871 was only 37.7 million tonnes, whereas the UK was at 119.2, and by 1890, the UK was still ahead in output and increased the amount of coal output by 65.3 million tonnes, and Germany only by 51.5, suggesting Germany was not at the forefront of the industry and was behind
  • Between 1871-1890, population increased by 8.4 million, suggesting a growing workforce
  • Urbanisation was successful, as between 1871-90, the percentage of the population in towns with over 2000 people in it from 36.1%-42.5%, suggesting more people were involved in manufacturing and industry
  • Between 1880 and 1890, the visible balance became negative by 827, suggesting imports were more valuable than exports, suggesting goods from Germany were not popular, and industries such as agriculture may have been dying out. However the overall balance is positive as the Invisible balance between 1880-1890 increased by 1081, suggesting Germany’s services such as banking, insurance and shipping became more invaluable as the country became more educated and moved to secondary and tertiary industries
  • In 1875, 49% of the labour force worked in the primary industry (agriculture, fishing, forestry), but this decreased to 42% by 1895, showing the effects of urbanisation and industrialisation
  • Between 1875 and 1895 the percentage of the labour force in the secondary industry (industry, mining) rose from 29% to 34%, as primary decreased, showing the effects of urbanisation and industrialisation
  • Between 1875 to 1895, the total number of workers in the labour force rose from 18.64 million to 23.40 million, showing the larger number of younger people, therefore an increase in the labour force
  • Population between 1871-1890 increased from 41,059 to 49,428, with a decrease of 6.4% of the population living rural areas, and an increase of 6.4% living in urban areas
  • Between 1871 and 1890, the expansion of the German economy by the index of industrial production increased from 21.0 to 40.0