martes, 4 de mayo de 2021

History Repeats Itself

Industrial Revolution vs. Globalization and the Ongoing Digital Transformation of Today.

The current problems endured by the United States, which may seem incomprehensible today, Europe withstood them more than 100 years ago. The technical progress that the industrial revolution brought –invented and financed by Europeans– had as a consequence, a serious social crisis that could well have been the cause of the European upheavals of the 20th century. A progress that encouraged the United States to turn it into what they call the “Exceptional Nation”, took Europe to a second-tier role in current international affairs. It is not surprising then, that the Digital Transformation of our days, created and encouraged by the United States, may end up dethroning this country giving way to Asian leadership.

 

"Not all that glitters is gold"

 

Northern Italy shows that Europe's past, before the world wars, had fierce moles. In the Center of Milan, one can see a landmark of the city since 1866, the Cimitero Monumentale di Milano, a surprising demonstration of the wealth of the Milanese at the end of the 19th century. This Cemetery, rich in palatial mausoleums, sought to immortalize the greatness of the families of the Milanese elite. On the other hand, in Genoa the visitor finds the Emigration Museum.  It portrays the tragedy faced by the "Deplorable" Italians who emigrated massively, at the time when the rich were buried in the Monumental Cemetery of Milan. "The happy and powerful do not go into exile" according to a phrase attributed to Tocqueville. The "deplorables" go into exile.


Today the descendants of Italians residing outside Italy (at least between 60 and 80 million) add up to the number of inhabitants of ItalyThe number of emigrants was very relevant to Italian society at the time. 16 million emigrants between 1861 and 1914 for an average population in the period of 29 million. 

 

What could explain this stark contrast between the Milanese Cemetery and the massive emigration of Italians? Is there any kinship with the situation that society in the United States lives today, a society that was one of equals and that today is blurred with the rise of the “Deplorables” whose life markedly contrasts with the business, political and intellectual elites that populate both coasts of the United States? 

 

The wealth of the Milanese and the poverty of the Italian emigrants were consequences of the modernization of the world economy of the time due to the Industrial Revolution, invented by Europeans and financed by Europeans, which introduced railways, steamships, the telegraph and industrial machines, four developments that radically changed the lives of Europeans. Due to these advances, the United States, Canada, Australia, Argentina and new areas for agriculture in Russia were enabled as modern farming centers. Consequence of the above: the crisis of traditional European agriculture –including in it the traditional regions of European Russia– that did not have the necessary conditions to compete with the new production areas, and concurrently with the crisis, impoverishment and misery for millions of European peasants who were starving in their small towns and small estates, and who were forced to emigrate. Thus, the remarkable European technological development during the 19th century had very serious effects (worsened also due to the increase in population) on a large part of the European population that had to be uprooted, abandoning what was their traditional space, to go on to take their chances in a new and unknown world.

 

 

 

European Emigration

The great emigration was not an Italian peculiarity. It was a collective phenomenon of European countries.

Greater than the Italian was the German emigration. In the United States today, 14% of the population is of German origin, the largest ethnic origin in the United States: 44 million of its inhabitants are of German descent! A plausible reason for the United States to be the country of hamburgers and hot dogs!

 

But there was also a great Scandinavian, Greek, Spanish, Irish, English, Polish, Jewish, Austrian, Russian emigration. They brought with them their great and perhaps only heritage: the ancient European culture. It was a phenomenon that collectively affected Europe with the exception of France, which shows quite lower emigration rates, perhaps because its population grew much less than it did in the rest of Europe and for sure, because France protected the rural world not for economic reasons but for social reasons.

 

Thus, European tragedies do not begin with the two World Wars of the 20th century or with the Communist Revolution in the Soviet Union. Shortly before, Europe suffered the emigration of a substantial part of its populations, a terribly painful situation that could predict great calamities. Wars, revolutions?

 

And the rich Europeans?

The Industrial Revolution brought an important development of Finance, necessary for the new investments that not only Europe, but the World as a whole required, and obviously a development of the industry based on new technologies. Industries and Finance, two activities that require the concentration of the population in cities, so that along with immigration came urbanization, a movement of population to large cities. That explains the wealth of cities like Milan, with families that earned considerable income from investments in the new centers of the world where agriculture started to develop; and also from the incipient industries that went hand in hand with new mining operations, from finance and from real estate activities of the growing cities. Hence the apparent paradox: extremely wealthy people in the cities, as evidenced by the Cimitero Monumentale in Milan; and very poor people, in misery, who had to look for a place that would allow them to survive, the one that is shown today in its exhibition at the Museum of Emigration in Genoa. In current terms of the United States, the elite, the very wealthiest of the cities, and the “Deplorables”, the people who have seen the companies in which they worked succumb and who have, in many cases,  been forced to accept employment in service activities acceptable to survive, but not at the status of their former jobs. 

 

Industrial Revolution 19th century 

Today it seems that life has taken on a satanic rhythm, but it must have been very similar to the one experienced by the generations that saw the normal course of their lives interrupted to immerse themselves in the frantic rhythm brought by the Industrial Revolution of the XIX Century that, in a short time, radically changed the life of Europeans. As an example the growth of the railways in two countries is shown below.

 

Russian Railways Development. In miles. (Wikipedia)

 

1855

570

1880

14,208

1890

19,011

1905

31,623

1917

50,403

 

 

Railroad Development in the United States. In miles

 

 

Rail Mileage Increase by State Groups 9

Region

1850

1860

1870

1880

1890

New England


3.660

4.494

  5.982

  6.831

Midwest States


6.705

10.964

15.872

21.536

Southern states


8.838

11.192

14.778

29.209

Western States


11.400

24.587

52.589

62.394

Pacific States


      23

  1.677

  4.080

  9.804

Totals


30.626

52.914

93.301

129.774

 

 

As Europe adapted to the changes imposed on it by the Industrial Revolution of the 19th century, new countries emerged and the world's horizon widened. It is the moment in which the growth of the United States explodes hand in hand with the tens of millions of European emigrants who came to carve out their future as immigrants, but who carried with them the richness of European culture. The increase in the population of the United States shows it: in a century, between 1800 and 1900, the population multiplied 15 times, from 5 million to 76 million! In Europe in the same period of time, the population only doubled: from 203 million it went to 408 million. But the matter did not end there: between the years 1900 and 1920 the population of the United States increased almost 50% more, growing from 76 million to 106 million. Without the European emigration of the nineteenth and early twentieth centuries, the United States would not have reached anywhere near the importance it has today.

The development of agriculture in the United States is reflected in the following information.

 

United States Agricultural Exports 1860-1920s  (Wikipedia)

 

1860-1869 $ 182 million / year or 75% of total exports

1870-1879 $ 453 million / year or 79% of total exports.

1880-1889 $ 574 million / year or 76% of total exports.

1890-1899 $ 703 million / year or 71% of total exports.

1900-1909 $ 917 million / year or 58% of total exports.

 

(The United States had almost no inflation  in the period. The economists classify it as a deflationary period. The base price index 100 in 1860, reached 110 in 1910).

 

The brutal increase in agricultural exports from the United States had a natural market: Europe. Like Australian, Canadian, Argentine and Russian agricultural exports. An avalanche enough to crush European rurality. In 19th century Europe the rural economy gave way to the industrial and urban economy.

Europe showed in the 19th century that modern technological progress advances at a speed that is impossible for human societies to follow. How could Europe have solved the agricultural crisis and the destruction of rurality? What timely solution could the European countries have found to stop the departure of the masses of emigrants?

The Industrial Revolution was a blow that Europe delivered to itself. For the United States to take over from Europe and become the leader of the West was inevitable. Millions of Europeans with thousands of years of culture to their credit met there, in a very rich territory, with European capitals in search of a worthy destination, and of course, with new technologies developed by Europeans. 


Thus, the Industrial Revolution in Europe was the Founding Mother for the United States.


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