Unit 1: Development of Capitalism and Nationalism from 1815 to 1914

This unit explores the global transition toward industrial capitalism and the rise of nationalist movements that reshaped the map of Europe and North America. It analyzes how economic shifts and political unifications in Italy and Germany altered the balance of power leading into the 20th century. By examining the American Civil War and the decline of the Ottoman Empire, it reveals the internal and external conflicts that defined this revolutionary era.

1.1. Development of Capitalism

• Capitalism is an economic system characterized by private ownership and technological advancement.
• The ideology of classical capitalism is often contrasted with Marxian Economics, the theoretical foundations developed by Karl Marx and Fredric Engels.
• One of the main features of the second half of the nineteenth century was Imperialism, which grew alongside capitalist expansion.

1.2. The Industrial Revolution

• The Industrial Revolution was a period of rapid technological change where “change became the norm”.
• Major factors led to this revolution, resulting in significant global socio-economic changes between 1815 and 1914.
• The revolution produced distinct political and socio-economic consequences that reshaped cultural norms.

1.3. Nationalism

• Nationalism is the political and social sentiment that drove the growth of new nation-states in the 19th century.
• Its character transformed significantly between the 1880s and 1914.
• Factors contributing to its growth included the success of early unification movements and specific salient features of 19th-century political life.

1.4. Unification of Italy

• Italian Unification was the process that united separate states on the Italian Peninsula into a single nation.
• Cavour played a critical role, including stopping Garibaldi’s advance at the River Volturno in 1860 to ensure the army of Piedmont completed the defeat of the King of Naples.
• Favorable factors and obstacles existed, such as regional divisions and the presence of foreign influence.
• The International Red Cross Association was established during this era by Swiss humanitarian Jean Henri Dunant following the Battle of Solferino.

1.5. Unification of Germany

• In the 1850s, Germany was a loose confederation of 39 states known as the German Confederation (the Bund).
• The Bund was presided over by Austria, with Prussia holding the second-most powerful position.
• Obstacles to unification included:
  • Austria, which sought to maintain the status quo.
  • German princes who wanted to keep their independence.
  • Cultural differences between North and South Germany.
• Bismarck used specific strategies to overcome these obstacles and unite the German states.

1.6. The American Civil War

• The war was fought from 1861 to 1865 between 23 northern states (the Union) and 11 southern states that declared their secession.
• The southern states formed the Confederate States of America.
• Divisive Issues:
  • Economic: The South wanted low tariffs for cheap imports; the North wanted protective tariffs to encourage industry.
  • Political: The South emphasized states’ rights, while the North prioritized the National Federal Government.
  • Slavery: This was the primary issue capable of producing civil war and secession.

1.7. The Eastern Question

• The “Eastern Question” refers to the political and economic instability of the Ottoman Empire as its power declined in the Balkans.
• The region was characterized by strategic competition among European Great Powers.
• The Balkan Wars were a major consequence of these tensions.

The Revision of the Treaty of San Stefano (1878)

1. Russia initially gained great influence in Southeastern Europe through the Treaty of San Stefano.
2. The Great Powers, led by Britain, insisted on a revision to reduce Russian advantages.
3. The Treaty of Berlin (July 13, 1878) adjusted boundaries in favor of the Ottoman Empire.
4. Bulgaria was divided into two states (Bulgaria and Eastern Rumelia) to prevent Russian domination.
5. Bosnia and Herzegovina were transferred to Austrian control, an act that later became an immediate cause of World War I.

Key Terminology

• Capitalism: An economic system based on private ownership of the means of production.
• Imperialism: The policy of extending a country’s power and influence through diplomacy or military force.
• Nationalism: Advocacy of or support for the political independence of a particular nation or people.
• Industrial Revolution: The transition to new manufacturing processes in Europe and the US.
• Mercantilism: An economic policy designed to maximize the exports and minimize the imports for an economy.
• Laissez-faire: A policy or attitude of letting things take their own course, without interfering.
• Social Darwinism: The theory that individuals, groups, and peoples are subject to the same Darwinian laws of natural selection as plants and animals.
• Eastern Question: The diplomatic and political problems posed by the decay of the Ottoman Empire.
• Balkan Wars: Two conflicts that took place in the Balkan Peninsula in 1912 and 1913.
• Marxian Economics: Economic school of thought based on the work of Karl Marx and Friedrich Engels.
• Bund: The German Confederation of 39 states.
• Secession: The action of withdrawing formally from membership of a federation or body, especially a political state.
• Protective Tariffs: Duties imposed on imports to raise their price, making them less attractive to consumers and thus protecting domestic industries.
• States’ rights: The rights and powers held by individual US states rather than by the federal government.