The Second Industrial Revolution (1870-1914): Steel, Electricity, and the Modern World

The Second Industrial Revolution, conventionally dated from about 1870 to the beginning of the First World War in 1914, was the second great wave of industrialization that transformed the economies and societies of the late nineteenth and early twentieth centuries. While the First Industrial Revolution was largely a British phenomenon centered on textiles, steam, and iron, the Second Industrial Revolution was a global event, with new industrial powers rising in Germany, the United States, France, and Japan, and with new industries that had not existed in the earlier period, including electricity, the internal combustion engine, oil, chemicals, and the modern corporation. The Second Industrial Revolution created the material basis of the modern world, from the skyscrapers of the great cities to the automobiles that filled the streets to the electrical appliances that transformed daily life.

This pillar page provides a comprehensive account of the Second Industrial Revolution. It covers the key industries, the new technologies, the leading firms and industrialists, the geography of industrialization, and the social and political consequences of this second great transformation. More detailed coverage is available in the linked cluster pages and their associated articles.

What the Second Industrial Revolution Was

The Second Industrial Revolution is the term historians use to describe the wave of industrialization that began in the 1870s and accelerated rapidly in the 1880s and 1890s. The wave was driven by a series of new technologies, including the Bessemer process for making cheap steel, the dynamo for generating electricity, the internal combustion engine, oil refining, the telephone, the wireless telegraph, and many others. The wave was also driven by new forms of business organization, including the great industrial corporations and the modern system of corporate finance.

The Second Industrial Revolution differed from the First in several important ways. It was not concentrated in Britain but was a global phenomenon, with the United States, Germany, France, and other countries all making major contributions. It was based on scientific knowledge to a much greater extent than the First Industrial Revolution, with the new industries often developed in research laboratories by trained scientists and engineers. And it produced a much wider range of consumer goods, from the electric light bulb to the automobile to the phonograph, that transformed daily life in ways that the earlier industries had not.

The Second Industrial Revolution also produced new forms of economic organization. The great industrial corporations of the late nineteenth century, including the Carnegie Steel Company, Standard Oil, the German electrical firms Siemens and AEG, and the great chemical companies like BASF and Bayer, were among the first modern multinational corporations. They developed new methods of management, new ways of raising capital, and new relationships with the state.

The Key Industries

The Second Industrial Revolution was driven by a small number of industries, each of which experienced a dramatic transformation.

Electricity and the Electrical Industry

Perhaps the most important new industry of the Second Industrial Revolution was the electrical industry. The development of the dynamo, a machine for generating electricity by rotating a coil in a magnetic field, made it possible to produce electricity on a large scale, and the development of the electric motor made it possible to use that electricity to power machinery. The result was a new industry that produced both the equipment for generating and distributing electricity and the equipment for using it, including electric motors, electric lights, and electric streetcars.

The electrical industry was closely tied to the development of new scientific knowledge, especially in the field of electromagnetism. The pioneering work of Michael Faraday, James Clerk Maxwell, and others had laid the theoretical foundation, and the practical development of the industry was carried out by a generation of inventor-engineers, including Thomas Edison, Nikola Tesla, George Westinghouse, and Werner von Siemens. The article on electricity and the electrical industry describes this important development in more detail.

Steel and Mass Production

The Second Industrial Revolution was also the age of cheap steel. The development of the Bessemer process by Henry Bessemer in 1856, and later the open hearth process and the basic oxygen process, made possible the mass production of steel in quantities that would have been unimaginable a few decades earlier. The article on steel and mass production describes this transformation in detail.

The availability of cheap steel transformed many other industries. Steel rails replaced the older iron rails on the railways, steel hulls replaced iron hulls in the shipbuilding industry, and steel frames replaced iron frames in the construction industry. The demand for steel was a major stimulus to the iron ore and coal industries, and the great steel companies of the late nineteenth century, including the Carnegie Steel Company in the United States and the Krupp steelworks in Germany, became some of the largest and most powerful corporations in the world.

The Automobile Industry

The development of the internal combustion engine and the automobile was one of the most important technologies of the Second Industrial Revolution. The internal combustion engine, which burned fuel inside a cylinder, was more compact and more efficient than the steam engine, and it was particularly well suited to transportation. The automobile, first developed in the 1880s and 1890s, became one of the defining products of the twentieth century, transforming the way people lived, worked, and traveled.

The automobile industry required a wide range of supporting industries, including oil, rubber, glass, and steel, and it was one of the major drivers of the modern economy. The article on the automobile industry revolution describes the development of the automobile in more detail.

Chemicals

The chemical industry was another defining industry of the Second Industrial Revolution. The development of new processes for producing chemicals, including the Solvay process for soda ash, the contact process for sulfuric acid, and the Haber process for ammonia, transformed the production of chemicals and made possible a wide range of new products, including synthetic dyes, fertilizers, explosives, and pharmaceuticals.

The German chemical industry, led by firms like BASF, Bayer, and Hoechst, became the world leader in the late nineteenth century, and the German success in chemicals was a model for the development of modern industrial research. The article on the chemical industry describes this important development in more detail.

Communication

The Second Industrial Revolution also saw a revolution in communication. The telegraph, developed in the 1830s and 1840s, was the first major electrical communication technology, and it was followed by the telephone in the 1870s, the wireless telegraph in the 1890s, and the radio in the early twentieth century. Each of these technologies transformed the way people communicated and the way businesses operated.

The article on communication innovations describes the development of the new communication technologies in more detail.

The New Industrial Powers

The Second Industrial Revolution was a global phenomenon, and the leading industrial powers were no longer concentrated in Britain. The United States, Germany, and France all made major contributions, and new industrial powers were emerging in Japan, Russia, and elsewhere.

The United States

The United States emerged as the world’s largest industrial economy in the late nineteenth century, surpassing Britain in 1890 in total manufacturing output. The American success was based on a combination of factors, including a large domestic market, abundant natural resources, a chronic shortage of labor that encouraged the development of labor-saving machinery, and a permissive political environment that favored industrial growth. The article on the American Industrial Revolution describes this transformation in more detail.

Germany

Germany emerged as the leading industrial power in continental Europe in the late nineteenth century. The German success was based on a combination of factors, including a strong tradition of scientific research, a close relationship between industry and the state, and the development of new industries like chemicals and electrical equipment. The German chemical and electrical companies, including BASF, Bayer, Siemens, and AEG, became some of the largest and most innovative firms in the world.

France and Belgium

France and Belgium were the first continental European countries to industrialize, beginning in the early nineteenth century. The French industrial economy was particularly strong in luxury goods, fashion, and engineering, and French firms played an important role in the development of the automobile industry in the early twentieth century. The Belgian industrial economy was based on coal, iron, and textiles, and Belgium was the first continental European country to build a railway.

Japan and Russia

Japan and Russia began to industrialize in the late nineteenth century, with very different results. The Japanese industrial revolution was driven by a deliberate policy of modernization, with the Meiji government of the 1870s and 1880s actively promoting industrialization through the import of Western technology and the establishment of state-owned enterprises. The Russian industrial revolution was driven by foreign investment and state-led development, with a particular focus on heavy industry and the railway.

The Great Industrialists

The Second Industrial Revolution was shaped by technologies and industries and by particular industrialists whose decisions and ideas helped to determine the direction of the transformation. The great industrialists of the period, including Andrew Carnegie, John D. Rockefeller, Thomas Edison, Henry Ford, and Alfred Nobel, were among the first modern business leaders, and their careers illustrate the combination of technical innovation, business ambition, and social upheaval that defined the industrial age.

Andrew Carnegie, the Scottish-born American steel magnate, built the Carnegie Steel Company into the largest steel producer in the world before selling it to form the United States Steel Corporation. The article on Andrew Carnegie and the steel industry describes his career in more detail.

Thomas Edison, the American inventor, established the first industrial research laboratory at Menlo Park in New Jersey, and he developed a wide range of important inventions, including the phonograph, the electric light bulb, and the early motion picture camera. The article on Thomas Edison and the electrical industry describes his work in more detail.

John D. Rockefeller, the founder of Standard Oil, became the richest man in the world through his control of the American oil industry, and his career shows both what the modern corporation could do for output and what it could do to competition.

The Corporation and the Modern Economy

The Second Industrial Revolution saw the rise of the modern corporation. The great industrial firms of the late nineteenth century, including the Carnegie Steel Company, Standard Oil, and the German chemical companies, were organized as corporations with many shareholders, professional management, and a focus on growth and market share. The corporate form allowed the firms to raise the vast amounts of capital required for the new industries, and it allowed them to develop the research laboratories, the marketing organizations, and the global supply chains that the new industrial economy required.

The rise of the corporation also created new problems. The great trusts and monopolies of the late nineteenth century, including Standard Oil and the American Tobacco Company, were widely seen as threats to competition and to the public interest. The antitrust movement of the late nineteenth and early twentieth centuries, which led to legislation like the Sherman Antitrust Act of 1890 in the United States, was a response to these concerns.

Science and the Industrial Revolution

The Second Industrial Revolution was the first industrial revolution to be based directly on scientific knowledge. The new industries of the period, including electricity, chemicals, and the internal combustion engine, all depended on the application of scientific principles, and the great industrial firms of the late nineteenth century established research laboratories where trained scientists worked alongside engineers and technicians to develop new products and new processes.

The relationship between science and industry was particularly close in Germany, where the chemical industry was closely tied to the German university system, and where the close relationship between industry, science, and the state helped to make Germany the leading industrial power in continental Europe by the early twentieth century.

The Second Industrial Revolution had important social consequences. The growth of the new industrial cities accelerated, with cities like Chicago, Detroit, Pittsburgh, Berlin, and Tokyo growing rapidly. The new industrial working class was larger and more concentrated than before, and the labor movement grew in response, with new trade unions, new political parties, and new demands for workers’ rights.

The Second Industrial Revolution also saw the rise of the consumer economy. The new products of the period, including the electric light bulb, the telephone, the phonograph, the bicycle, and the automobile, transformed daily life, and the development of department stores, mail-order catalogs, and modern advertising created a new culture of consumption. The standard of living of the industrial working class, while still low by modern standards, was generally higher than it had been in the early nineteenth century, and the period saw the first sustained rise in real wages for industrial workers.

The Long-Term Significance

The Second Industrial Revolution created the modern industrial world. The technologies, the corporations, the consumer products, and the social structures that emerged in this period are still the foundations of the contemporary global economy. The electrical industry, the automobile industry, the chemical industry, and the great industrial corporations are all legacies of this period, and they continue to shape the modern world.

The Second Industrial Revolution also created new problems that the world is still grappling with. The dependence on fossil fuels, the concentration of corporate power, the global reach of industrial capitalism, and the increasing inequality between industrial and non-industrial nations are all in some sense legacies of this period. The debates over climate change, corporate power, and global inequality that dominate contemporary politics are in many ways debates about the legacy of the Second Industrial Revolution.

The most important open scholarly debate about the Second Industrial Revolution is the Chandler-vs-mainstream-antimonopoly question: was the rise of the large American corporation (Standard Oil, Carnegie Steel, U.S. Steel, the railroad combinations) a productive efficiency that the U.S. economy needed, or a predatory monopoly that the antitrust laws rightly tried to break up? Alfred Chandler’s The Visible Hand (1977) made the case for the productive-efficiency reading: the large corporation was the most efficient form of organization for the high-throughput industries of the late 19th century, and the rise of the U.S. industrial economy is best explained by the rise of the modern corporation. The mainstream antitrust literature, going back to Ida Tarbell and given its modern form in the work of legal historian Hans Linde, makes the case for the predatory-monopoly reading: the great corporations used their market power to crush competitors, and the 1911 Standard Oil dissolution was a justified response. The interesting current question, raised in the post-1980s Chicago-school literature and in the recent debates over the regulation of the tech giants, is whether the 19th-century antitrust framework (Sherman Act 1890, Clayton Act 1914) can be applied to the 21st-century platform firms. The honest answer, given the historical evidence, is probably: the 19th-century model was reasonably effective for the industrial corporations of 1900, but the 21st-century context (network effects, data advantages, free services funded by advertising) is sufficiently different that a new framework may be needed.

In this section

Automobile Industry Revolution The development of the automobile industry from the first experimental cars to the mass-produced Model T and the global industry. Chemical Industry Advances The development of the modern chemical industry, from the aniline dyes of the 1850s to the Haber process of 1909, and the rise of the great German chemical companies. Communication Innovations The development of the telegraph, telephone, radio, and wireless communication in the late nineteenth and early twentieth centuries, and their impact on the modern world. Electricity and the Electrical Industry in the Second Industrial Revolution The development of the electrical industry in the late nineteenth century, from the first power stations to the electrification of homes, factories, and cities. Steel and Mass Production in the Second Industrial Revolution The development of the steel industry in the late nineteenth century, from the Bessemer process to the great steel companies of the United States and Germany.