To what extent was German Unification driven by primarily economic forces?
To what extent was German Unification driven by primarily economic forces?
When Germany was formally united in the Hall of Mirrors in the Palace of Versailles on 18th January 1871. She was united through three short but effective wars with Prussia being victorious. At face value, it could be argued that the Second German Reich was created through warfare and the strong diplomacy of Otto von Bismarck, on the contrary economic forces made the unification of Germany possible because it enabled the series of wars and made Bismarck's Realpolitik style of diplomacy viable.
There are many things to consider in this investigation, for example did the economic decline of Austria and the growth of Prussia drive the unification of Germany? Did the Zollverein stimulate unification vision through economics? To gain an interpretation of what extent economics played a part in German unification, one must asses these factors along with others.
J.M Keynes, a leading economist of the 20th century, commented that, “The German Empire was created more by coal and iron than by blood and iron.” This demonstrates that Keynes believes that economic forces, coal and iron, drove the German states towards unification. Does the history support Keynes conclusion? To what extent was German Unification driven by economic forces?
The Zollverein demonstrates to some extent that the unification of Germany was driven by economic means. It shows that Prussia began to take a lead in Germany as early as 1834 as Prussia is the main architect to German Unification this is important because it is the first indication of Prussian dominance. The Zollverein was a customs union that began its existence in Prussian territories. A series of Prussian ministers in the early nineteenth century wanted to unite economically the Rhineland territories and the Prussian heartland in the east. The Zollverein was formed in Prussian territory in 1818 and formed a single system of tariffs and made the movement of goods easier throughout the Prussian Kingdom. This linked the Rhineland with the rest of Prussia economically because the Rhineland could send goods easily to the rest of Prussia and it was using the same taxes and monetary units as the rest of Prussia.
The Zollverein was very successful in Prussian territory and contributed healthily to the Prussian economy. Prussia began to negotiate for an extension of the Zollverein to other German states and by 1834 the Zollverein included many of the states present in the German Confederation. As the Zollverein was dominated by Prussia, it meant that Prussia had significant sway over the economies of states present in the Zollverein. Throughout the Bund, the German states we using Prussian set currencies and tariffs. This shows that Prussia was economically dominant in the Bund from 1834 up until the formal unification in 1871. There were a few states that were excluded by the Zollverein, and these states tried to form rival customs unions to the Zollverein, all ultimately failed and every state apart from one ceded to join the Zollverein. Austria was refused to join the Zollverein when it was created and continued that policy until the 1850’s when she applied to join, Prussia blocked this entry and so Austria remained isolated in the economic decisions of the German states because she was not in the Zollverein.
In regard to the Zollverein, this shows that Prussia is beginning to dominate the Bund in 1834 this domination increases until she is able to challenge Austria in 1866. The Zollverein gives Prussia experience in dominating the German states and so she is more able to control Germany politically when the task arises. The Zollverein shows one way in which unification was linked to economic forces because it makes Prussia considerably richer, powerful and more respected. This is fundamental reason why the Zollverein is important in this question, because as Prussia unites Germany through war and diplomacy, neither of these things would be possible is Prussia wasn’t rich. The Zollverein provides a useful base as an economic force and a template for a later political union.
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Austria was decreasing in power from the years 1840-1870; there is considerable evidence to show this. For example Prussia’s key output of Coal in 1870 was 23.3 whilst Austria’s was considerably lower at 6.3. Also Austria’s decrease in power can be seen in military numbers in 1850 the Austrian military numbered 434,000 but by 1870 it had dwindled to 252,000. These historical statistics show the Austria had fallen behind Prussia in terms of wealth and Austria’s military output was decreasing whilst Prussia’s was increasing. The decline of Austria is driven by the empires failure in economics throughout the 19th century and to some extent Austria’s failure in economics drives the unification of Germany because it allows Prussia to ascend to power throughout the 1850’s and 60’s ultimately resulting in unification.
Austria is weak by 1866 because she had a poorly run economy and not enough public income to afford a larger and more modern army. Austria did not join the Zollverein in 1834 because she wished to protect her economy from cheap foreign products and this protectionist attitude was not compatible with the aims of the Zollverein. By not being a member of the Zollverein, Austria misses out on revenue that could have been gained if she were a member. Without this extra revenue Austria could not have been able to spend money on military reforms and other government projects.
The Austrian Empire also suffered from poor and corrupt bureaucrats and tax collectors. The Austrian economy was poorly organized and the supply and demand was not as efficient because the officials controlling the economy were incompetent for example they did not see the potential of railways to aid the passage of goods as quickly as the Prussians did. Austria also suffered from a poor taxation system, Austria could not quickly raise the amounts of money needed for a series of wars. This is seen when the war of 1859 against France, almost bankrupts the Austrian state. With no steady income, the Austrian economy could not hope to fund a lavish army or maintain a powerful, decadent empire. Inconvenient as these factors were for the Austrian Empire it wasn’t the most paralyzing. What the Austria suffered from most was the lack of resources compared to the other great powers especially Prussia. Prussia was graced with much more in terms of coal and iron than the Austrians and therefore could establish a much better and richer economy. A nineteenth century country needed coal and iron to function, the more coal and iron the more effective and richer the state. So Keynes is quite justified to link the availability of Coal and Iron with the unification of Germany.
Austria’s loss of power is due to economic weakness and the loss of Austrian power contributes to the unification of Germany, so it clear to see the link between economics and the unification of Germany. Austria looses its position as the economic leader in Germany to Prussia and so Prussia is now the leading economic power in Germany, through this Prussia can afford a more powerful military and can afford wars. This result in Prussia overtaking Austria for political dominance of Germany with the Seven Weeks War and Prussia defeating France in the Franco-Prussian War through this Germany is finally united. Through this we can see that to some extent the Austrian economic decline is responsible to the unification of Germany.
Coal and Iron were the driving forces of the nineteenth century; they funded the world’s economies, like oil does in the twenty first century. The German states were no different and Europe was no different. The states that had lots of coal and iron and industrialized became the major powers of Europe by the end of the 19th century and the powers that declined suffered from a lack of coal and iron. Prussia and Austria are good examples of this, with an abundance of Coal and Iron, Prussia and then Germany was able to become the most industrialized nation in Europe but Austria on the other hand lacked coal and iron and she fell in stature until eventually her empire dissolved. I am not going to just attribute Prussia’s success to coal and iron and I am not going to attribute the fall of the Austro-Hungarian Empire to the lack of natural resources, but the strength of a state depends on economics and economics depends on resources. In particular places in the Kingdom of Prussia there were long seams of coal especially in the Rhineland and the Saar but Austria on the other hand had less coal and therefore generated less wealth.
You may ask yourself now, how does the lack of natural resources, a well run economy and a customs union contribute to the unification of a state with more than 40 million people? The answer to this simply is the way an effective economy is applied in statecraft for example military and social reform and application.
This is the extent in which Germany is united through economic forces. This economic force was the power of Prussia to purchase a strong army, to have enough money to wage three wars, to have enough knowledge to see the economic and military benefit of railways. Without the Zollverein, natural resources or strong industrialists like Alfred Krupp it is unlikely that Prussia could have afforded a strong army or waged the wars of unification. All of these things contribute to the unification of Germany and as they are all based on the economic strength of Prussia it is logical to assume that to a substantial extent economics drive German Unification. The second half of my investigation is the key link between economics and the actual process of unification.
With the increased wealth of the Prussian state, she was able to improve the Railway system throughout Prussia. Railways were important because they made supply quicker but also they were very useful in times of war. With good rail links an army could be deployed quickly and efficiently, also they contributed massively to the overall stratagem of a war for example if the battle line was under threat it could be re-enforced quickly by rail or if there was a weakness in the enemy that weakness could be exploited by troops being transported via railways. Railways contribute to the unification of Germany because they enable Prussia to become richer but also because they are used against the Austrians to quickly defeat them in war and they were also used against the French to defeat them an example of the skill of the Prussian Army to use railways was the impressive isolation of the garrison at Metz in 1870. With Austria and France defeated it becomes easy for the Prussians to dominate Germany and unite her under a Prussian Kaiser.
A strong economy also resulted in improvements of the Prussian army. In 1850 the Prussian military numbered 131000 men but on the eve of unification in 1870 Prussia could call 319000 men to arms. This increase in the amount of soldiers is due to the fact that the Prussian government could fund a larger army through a growing economy. Also the Prussian government could afford the proposed army reforms formulated by General Albrecht von Roon. Von Roon proposed to increase the armies annual recruitment by 63000, he also proposes to change the amount of service required by soldiers and conscripts. More importantly though he proposed to reform the regimental system of the army, he proposed to create thirty nine new infantry regiments and ten new cavalry regiments, this is important because it meant that smaller regiments meant that it would make the army more mobile by nature and this fits hand in hand with railway use because a more mobile army could use railways more effectively. Von Roons reforms contribute to the unification of Germany because the enable a stronger more efficient Prussian army to defeat Austria and France at Sadowa and Sedan and as a strong economy enables the government to fund the army reforms; economics enables the unification of Germany.
A strong economy also enables the purchase of better weapons and new technologies for the state. For example the Prussians were able to afford the new ‘Needle Gun’ designed in 1841 and they could also afford cutting edge artillery produced by the Krupp’s steel works in Essen. Austria did not have new weapons, she only had flintlock muskets and therefore on the field at Sadowa she could not hope to defeat the Prussians with sub-standard weapons. Austria could not afford new weapons because of a failing economy and the fact that Austria was almost a bankrupt state; she could not afford to purchase new weapons with other demands on her economy. France on the other hand did not have the advantage of superb artillery; some historians attribute the Prussian victory in Franco-Prussian war to the superiority of the Krupp artillery. The developments in weapons technologies enable the unification of Germany because it allows Prussia to defeat Austria and then France, which allows Prussia to dominate Germany. Economics contributes to this because without a strong economy Prussia could not have had the budget to afford new weapons which would aid the defeat of Austria and France and so without a strong economy, Prussia may not have been able to defeat these states and ultimately not unite Germany.
Economics also contributes to Bismarck’s diplomacy; Bismarck could not have pursued his aggressive Realpolitik style of diplomacy and governing if he did not have the economy and military to support him. Would it have been wise for Bismarck to antagonize France at Ems if Prussia did not have a strong army and economy to win a war? It would not have been wise and as Bismarck was an intelligent man he wouldn’t have dealt with Austria and France aggressively if he had a weak army and economy. As Bismarck is accredited with much in the unification of Germany, it is important to consider whether he could have accomplished as much with a poor economy. The historian John Breuilly comments, “Indeed, one could argue that any ordinary statesman in Berlin bent on war with Austria would not have done significantly worse.” Why is this? It is because Bismarck was in a strong position when he came to power in 1862 and the reason he was in a strong position was because he had inherited a powerful and growing economy, this is why an ordinary person would not have done significantly worse because the resources were already there.
We must not forget Austria when we consider economics, Austria is often forgotten in this topic when one is describing economic benefits and many become obsessed with Prussia and her success. Austria failed to secure a strong economy in the 19th century and eventually lost her position as the natural leader of Germany because of it because she could not reform her army and she could not match Prussia’s manufacturing power and hence when Prussia and Austria conflicted in 1866, Austria is swiftly defeated.
Economics is not the only force which drives the unification of Germany, nationalism and the skill or failure of individuals play an important role in the unification process. The movement of nationalists in Germany was particularly strong although not as strong as 1789 France. The Frankfurt Parliament of 1848 was seen as drive for nationalism by bourgeois liberals and the Nationalverein organization is another. It is important to consider that many liberals wanted liberal reform not unification. The movement for nationalism was not particularly strong because the power in the German States lied with autocratic monarchs not liberal assemblies hence the movement for nationalism was more idealistic than practical because few liberals had the opportunity to govern but the idea of German unification was there from 1815 right up to 1871, many Germans wanted to be a German citizen. It is important not to underestimate nationalism because although it wasn’t practically changing things, it was changing the hearts and minds of ordinary Germans up until the eve of unification.
Many historians consider Bismarck to be the primary driving force of unification through his diplomatic maneuvering throughout his time in office and how he convinced William I that a war with Austria then France was necessary. He created the diplomatic climate for Prussia to wage three wars and not be outnumbered by a coalition of enemies and so Prussia ultimately wins the wars of unification. Bismarck is a driving force of unification because he creates a diplomatic climate and he engineers wars in order for Prussia to win them and become larger until the Prussian Kingdom is large enough to be called the German Reich like what happens in 1871. So it is not wise to ignore Bismarck’s contribution to the unification of Germany.
To conclude, to a large extent economics play a part in the unification of Germany, not only does a richer Prussia and a poorer Austria cause Prussia to physically annex the German Bund but economics forms the foundations of everything that works toward German unification, this is why economics is so largely responsible for German unification. Behind Bismarck’s poignant speeches was the knowledge that Prussia was economically powerful and could compete with anyone in Europe. Behind the strong army of Prussia was the money gained from coal and iron. Keynes believed that coal and iron were more important than blood and iron. It can be justified because without the coal and iron the wars of unification with Denmark, Austria and France would not have taken place because Prussia would not have the resources to win these wars. The ‘blood’ of Bismarck’s quote is more relevant to the blood spilled by the industrialists, workers and miners throughout the unification process than the blood spilled by soldiers at Sadowa or Sedan because it was the industrialists, workers and miners that united Germany through the extraction and manufacture of raw materials that powered the Prussian economy and financed the Prussian army.
By David Ireland
Germany 1848-1914 Bob Whitfield
The Unification of Germany 1815-90 Stiles and Farmer