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the 19th century saw a drive to reorganize the world economy on new principles

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instead of the mercantilist empires pulling the parts of the world together

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empires began reaching into the hinterlands

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now what we see are different relationships emerging based on the flows of labor, capital, and commodities dictated by market forces

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a global economic system which was reinforced by a deepening industrial revolution

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intensified the process of specialization around the world

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a shift from organic to inorganic energy sources

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beginnings of factory production

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the expansion of markets

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creating whole new frontiers

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opening the way and opened by railroad and credit expansion

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markets were no longer local and coastal

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now penetrating deep into interiors

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the second industrial revolution

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after 1850, this process intensifies

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a shift from the first industrial revolution to the second industrial revolution

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this expansion into the hinterlands is a second phase in the development of capitalism

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a shift from textile and steam to iron and steel

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Bessemer Steel

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by the 1870s a technical method was developed which puddled iron into steel

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made metal tougher, more resistant and more malleable

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perfect for a new machine age

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now energy because of the scale of these new steel plants, energy had to be brought to the production location

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before that we located our production where the source of energy was: windmills, and factories around sea ports

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oil, coil and electricity gave factory location much more flexibility

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more centralized pattern of ownership

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from families owning textile plants

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much more vertically integrated companies

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by late 19th century dominant companies come into being

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Westinghouse Electric (1886, Pittsburgh)

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General Electric (1889, New York)

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U.S. Steel (1901, Pittsburgh)

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AEG (1883, Berlin)

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Siemens (1847, Berlin)

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Zaibatsu (late 19th century, Japan)

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large family-controlled vertical monopolies consisting of a holding company on top, with a wholly owned banking subsidiary providing finance, and several industrial subsidiaries dominating specific sectors of a market, either solely, or through a number of subsidiary companies

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iron corporations of Britain could no longer compete with steel

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economic driver of the second industrial revolution

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wars

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the Lee–Enfield rifle

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much of science driven by military logistics

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Crimean war (1853-1856)

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the ability to take out your enemy depended as much on your ability to field new war machinery as it was on military tactics

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this also began leading up to the ability for societies to wage total warfare, wars of annihilation

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once you harness the second industrial techniques and technology

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consumer goods

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people scarcely imagined existing before

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machinery to build machines had to be created

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industrialization goes more global

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United States, Germany, Russian, Japan became industrial nations

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fanning out to the rest of the world

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industries move to other global locations

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change global markets of labor

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provide new set of demands for energy

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coal and petroleum became very important inputs for this process

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the gulf between the cities and countries grows

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conglomerate companies would run production of coal and petroleum all the way to consumer goods

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steel

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Andrew Carnigie (1835-1919)

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oil

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John D. Rockefeller (1839-1937)

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the new economic titans of this new age, replacing the old mercantile elites

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mass production

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changed the ways in which work was conducted

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or a deepening of a process from the first industrial revolution

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the assembly line

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Ford's Model T

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works are all tasked with doing one thing

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specializing in one part of the process

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brought increasing productivity

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in a similar way, entire societies were becoming specialized producers of specific commodities