From Agrarian State to Industrial Juggernaut

In the final third of the 19th century, Germany underwent one of history’s most dramatic economic transformations. Emerging from Bismarck’s unification in 1871, the young empire rapidly surpassed Britain in industrial output by the 1890s, trailing only the United States globally. This industrial revolution reshaped German society – where agriculture had employed 41.6% of the population in 1882, industry and crafts surpassed it by 1895 (38.5% vs 35%). By 1907, the gap widened dramatically to 42.2% industrial workers versus just 28.4% in agriculture. Trade and transportation sectors similarly expanded from 9.4% to 12.8% during this period.

Chancellor Leo von Caprivi, Bismarck’s successor, recognized this shift as irreversible. His famous 1891 Reichstag declaration – “We must export either goods or people” – framed Germany’s new economic reality. Between 1891-1894, Caprivi negotiated landmark trade agreements lowering tariffs with Austria-Hungary, Italy, Belgium, Switzerland, Spain, Serbia, Romania and Russia. These treaties deliberately sacrificed East Elbian grain tariffs to fuel industrial exports, sparking fierce resistance from Prussian Junkers who formed the Agrarian League (Bund der Landwirte) in 1893.

The Political Battleground of Industrialization

The Agrarian League’s rapid growth to 200,000 members by 1900 masked its true nature. While recruiting small farmers and artisans, the organization remained dominated by aristocratic landowners like Silesian estate manager Alfred Ruprecht-Ransern, who demanded protests “loud enough to reach the emperor’s throne.” Historian Hans Rosenberg later exposed this as “pseudo-democratization of the estate-owning class” – using populist rhetoric to defend elite privileges.

Caprivi’s reform agenda – banning child labor, creating labor arbitration courts, introducing progressive income tax in Prussia – faced mounting opposition. His 1892 school policy alienated both Catholics and liberals, while an 1893 military reform bill caused the liberal Free Thought Party to split. When Caprivi clashed with reactionary Prussian Prime Minister Botho zu Eulenburg over anti-socialist laws, Wilhelm II dismissed both in October 1894, appointing 75-year-old Prince Chlodwig von Hohenlohe-Schillingsfürst as chancellor.

The Social Question and Failed Reforms

Hohenlohe’s government attempted dramatic right-wing turns, including the 1894 Umsturzvorlage (Subversion Bill) targeting socialist agitation. When Reichstag moderates added protections for religious doctrine, the bill collapsed in May 1895. Subsequent anti-socialist measures like the 1899 Zuchthausvorlage (Penitentiary Bill) against strike coercion similarly failed, though discrimination persisted, including the 1898 Lex Arons barring Social Democrats from university posts.

Prussian Finance Minister Johannes von Miquel pioneered Sammlungspolitik – a “policy of concentration” uniting conservatives, liberals, industrialists and landowners against socialism. His 1897 trade regulations created compulsory guilds for artisans, but attempts to reconcile industrial and agricultural interests foundered until the navy emerged as a unifying project.

Weltpolitik and the Naval Arms Race

Admiral Alfred von Tirpitz’s naval program became the vehicle for Germany’s world power ambitions. His “risk theory” fleet, designed to challenge British naval supremacy, gained bourgeois support through the German Navy League (Deutscher Flottenverein), which grew to over 1 million members by 1908. The 1898 and 1900 Navy Laws authorized a fleet that could theoretically match Britain in the North Sea.

This naval expansion served domestic and foreign goals. Tirpitz privately admitted in 1895 that world policy would provide “a strong dam against educated and uneducated Social Democrats.” The conservative agrarian elite reluctantly supported fleet bills in exchange for higher grain tariffs, culminating in Chancellor Bernhard von Bülow’s 1902 tariff compromise – the Bülow-Tarif. As historian Eckart Kehr noted, this created an “agricultural-industrial condominium” united against the working class.

The Limits of Imperial Power

Germany’s global ambitions faced mounting resistance. The 1905-06 First Moroccan Crisis backfired when France gained British backing at the Algeciras Conference, leaving Germany isolated. Worse followed in 1907 with the Anglo-Russian Convention completing the Triple Entente. Colonial atrocities in German Southwest Africa (1904-07), where General Lothar von Trotha’s extermination order killed 75% of the Herero people, sparked domestic outrage and the 1907 “Hottentot elections.”

The 1908 Daily Telegraph Affair exposed Wilhelm II’s political incompetence when his unauthorized diplomatic revelations provoked a constitutional crisis. Though Bülow survived temporarily, his 1909 finance reform collapsed, leading to his replacement by Theobald von Bethmann Hollweg. Despite industrial might, Germany remained politically fractured – torn between socialist demands for democracy, liberal hopes for reform, and conservative defense of authoritarian structures.

Legacy of the Wilhelmine Era

Max Weber’s 1895 Freiburg address had diagnosed Germany’s political immaturity, blaming Bismarck’s authoritarian legacy. By 1914, despite economic success, the Reich faced fundamental contradictions: an industrial economy constrained by pre-industrial political structures, global ambitions without reliable allies, and a ruling class clinging to power while society modernized around it. The naval arms race with Britain, the agrarian-industrial compromise, and failed socialist repression all reflected deeper tensions that would explode in 1914. Germany had become Europe’s industrial powerhouse, but its political system remained unprepared for the challenges of world power status.