Shocks and aftershocks

4: And then the world ended.

As the 19^th century progressed, reforms were minor and grudging, doing little for the great mass of the people. Finally, in 1914, the edifice collapsed.

Cheap labour fed the profit motive

The intensely complex events leading to the outbreak of war in August 1914 formed some of the most exhaustively studies periods in the whole field of historical scholarship. The basics are well-known: a web of international treaties, military and economic rivalries, nationalist yearnings and a bullet fired in Sarajevo.

But the origins of that turmoil go back much further, to a world which was moving fast, a political and social system that no longer functioned, and a European power elite that was arrogant, entrenched, inept and utterly out of touch.

In the century between the end of the Napoleonic Wars and the beginning of the First World War, the government of Britain was divided almost equally between Whig-Liberals and Tory-Conservatives. As the century progressed, the philosophical tenets of liberalism were adopted by both sides, with differences in emphasis more than in substance.

Broadly, the established colonies in Canada, Australia and New Zealand regarded themselves as British and adhered to British policy. Far away from the rigidities of English society and politics, a more egalitarian culture had developed. Liberalism dominated, with a new flavour: more fair-mindedness, less respectful towards established power. Extension of the franchise, the secret ballot and votes for women were established much earlier than in Britain.

Europe was different, divided between ultra-conservatives in Germany, Austria and  Russia, and more liberal regimes in France and Italy. But everywhere, new forces were emerging that would sweep away the old order. Just not yet.

Between 1860 and 1914, the railway boom transformed not only the economies of industrialised nations but also their societies and politics. In that time, railway lines in Britain more than doubled and, in the US, increased more than eightfold. In Australia, over 2,000 kilometres of track had been laid by the time of federation in 1901. Steam replaced bullock-drays and mule-trains. New towns and cities appeared, then grew. 

As industrial production grew, so did overall economic growth. GDP per capita rose in bursts, separated by frequent recessions. The most innovative and dynamic economies – the US, Britain, Australia and Canada – did best. Outputs of industry and agriculture both rose spectacularly but the US had the advantage of both. Russia and Italy lagged, and even Germany failed to benefit adequately from the new economic paradigm.

But boom-and-bust cycles disrupted national and international economies throughout the 19^th century. It was an inevitable result of liberal orthodoxy: that government should keep out of the way and let free, largely uncontrolled markets get on with the job of creating wealth.

The increased wealth went disproportionately to those who were already wealthy. In Britain, the share going to the top 10% increased and the share going to both the bottom 50% and to the growing middle 40% fell.

In the US, inequality in the period was somewhat less severe, though only in the top half of society. The bottom half benefited from overall growth but their share of total income only achieved British levels at the end of the century. These figures mean that the middle 40% of Americans – those who were reasonably comfortable but by no means rich – were better off than their counterparts in Britain.

Everywhere, though, the relative position of the lowest echelons remained dire. The share of the population of the leading European countries who were living below the level of subsistence fell only slowly. Economic growth from industrialisation helped  but as incomes grew, so did prices. And because populations were growing quickly, the total numbers of people living below subsistence level almost certainly increased.

A proxy for the way nations treated their most vulnerable citizens can be found in the statistics for child labour. The proportions of British children aged 10 to 14 who were working fell between 1860 and 1914 but remained high even then.

But the load was not evenly spread. Child labour was concentrated in the industrial North. In 1892 Lancashire had 93,969 children working half-time. Yorkshire had just under 45,000 and Cheshire almost 10,000.

After the Factory Act of 1844, which attempted to control some of the worst abuses, children of 12 and older would spend eight hours a day at work and another three hours at school. A teacher in Bolton, Allen Clark, wrote: “I have seen them fall asleep over their lesson-books or tasks, after they have been in the factory all morning (six hours). They were generally dull and sleepy ... the half-timers, as a rule, hamper and hinder the progress of the rest of the class.”

From the 1880s, campaigners tried to end the system grew but were opposed by employers and by the unions. At a time when adult wages were below subsistence level, the income from children’s labour could make a difference between eating and starving.

In Italy, it was far worse and took even longer to end. By the outbreak of the First World War, half of all boys and over a third of girls were working.

Despite massive improvements in public health between 1860 and 1914, rates of child mortality in Britain and France barely changed. Australia and New Zealand were much healthier places for children, even though one child in 10 still died before their fifth birthday.

Something more might have been done about the bitter class divide if effective democratic processes had been in place. They were not.

There was a good deal of pretence. In Britain, the Reform Act of 1897 doubled the franchise – from 5% of the population to 10%. Throughout the century, prime ministers and foreign secretaries sat in the unelected House of Lords and never had to face voters themselves.

In Italy, the electorate was quadrupled in 1882, to 7% of the population. Until 1893, the vote was restricted to under 3%, and then went to 22%, but half got two or three votes.

In France under the Third Republic (1870 to 1940) the National Assembly was elected by universal manhood suffrage but that disguises the impact of the violent repression which defeated the Paris Commune of 1871 and effectively obliterated independent working-class politics and socialism.

In Germany, Bismarck held all ministries personally, appointing delegates to do the work.

“Our epoch, the epoch of the bourgeoisie, possesses, however, this distinct feature: it has simplified class antagonisms,” said the Communist Manifesto. “Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other – bourgeoisie and proletariat.”

Against this disenchanting background, the working-class political movements in Europe, with no experience in politics or government, became more angry, violent and riven by factions. The two main elements were Marxists and Anarchists.

Karl Marx as a young activist

Karl Marx made major contributions to the development of economic theory but the Marxist agenda was dangerously Utopian. The great historical agenda program for revolution and transformation proposed three unavoidable steps: a bourgeois revolution, followed by a proletarian revolution, which would in turn lead to the withering and eventual disappearance of the state itself. Then, a state of communal bliss would inevitably ensue.

The Anarchists believed that if they assassinated enough kings and politicians, they could dispense with stages one and two, and move straight to bliss.

As Utopian visions tend to, the vision of the workers’ paradise led instead to demagogy, tyranny and slaughter. But that was to come.

Socialist economic policy – the collective ownership of the means of production, distribution and exchange – had a longer life. But, as events in the following century unfolded, it would fail also.

In Britain, the character of the people and politics did not fit with the extremist positions of socialists in continental Europe. There, a much more moderate move towards workers’ rights and the nationalisation of industry eventually mutated into the Labour Party. But class warfare continued to fracture politics, society and the economy.

Meanwhile, the increasingly embattled existing leaders held on for the moment, partly by giving some ground to the socialists. An example was Bismarck’s initiative of the first social welfare policy, giving support to the sick and unemployed.

As they resisted an impending, unpredictable and potentially destructive transition, the ruling interests sought distractions. There were two: other people and other nations that could be characterised as the enemy; and the glory of colonial expansion.

In the 24 years between 1880 and 1914, the number of colonies held by European powers almost tripled. At the outbreak of war, Britain had 54, France 21 and Germany 12. Almost all the new possessions were in Africa.

Imperialism had no sound economic basis. Historical research has shown clearly that the empires cost far more than they earned. The imperial nations lost a great deal of money but fortunes were made by some individuals. The historian A J P Taylor wrote: “In almost every case, European countries spent a great deal of money in acquiring colonies which proved to be of little economic value.”

It is a fallacy, Taylor argued, that “policies were conducted for the benefit of all, much as companies are conducted for the benefit of the shareholders. This was not so … The humble investor might lose his money but the mighty company promoter did not go away empty-handed even if the company he promoted went bankrupt.”

If that money had instead been spent more wisely and for the good of the people, the conditions of the bottom three-quarters of society would have been a great deal better and the upheavals which led to war and revolutions might have been avoided.

In all the major European countries, fear and hatred of outsiders was weaponised by politicians and the press for the benefit of those with power. As early as 1877, a scare about Russia produced a music-hall song which served as a kind of anthem for the mood of the times.

We don't want to fight but by Jingo if we do

We've got the ships, we've got the men, we've got the money too.

That dogs-of-war craving for blood and glory characterised Europe for 30 years before war broke out. It powered an arms race between Britain and Germany. Each toiled to manufacture more guns and build more big battleships. There could only be one outcome.

The economic and political liberalism which, in various forms, had prevailed throughout the century was doomed by the blindness, hubris and stupidity of those clinging, with ever-diminishing legitimacy, to power. Their folly and rigidity led the nations of Europe, each trying to secure its own security, to create a network of alliances which ensured any local conflict would result in general war. Francis Joseph, the old and reactionary emperor who had been in power since 1948, thought war with Serbia would remain local.

He was wrong.

NEXT: 5: After Armageddon, rebirth. Socialism turned out to be much worse than liberalism. Then a new way appeared ... for a while.