5.6G: The Governments Role in Industrialization

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Learning Objective 5G

Explain the causes and effects of economic strategies of different states and empires.

Historical Development 1

As the influence of the Industrial Revolution grew, a small number of states and governments promoted their own state-sponsored visions of industrialization.

Historical Development 2

The expansion of U.S. and European influence in Asia led to internal reform in Japan that supported industrialization and led to the growing regional power of Japan in the Meiji Era.


State-led Industrialization

Main idea

Fearing conquest by stronger nations, some governments pushed their societies into industrialization. These governments planned out and led the industrialization process.

Some non-colonized governments led programs to industrialize their societies using government money and planning. The goal was to prevent their domination by the industrialized nations.  

Significant attempts at industrialization happened in





The Ottoman Empire

State-led industrialization was not communism. 

  • Private property was encouraged.

  • Private business was promoted.
  • Private profit and investment were encouraged. 

State-led industrialization happened differently than industrialization in Europe and North America.  

Industrialization in Western Europe and America
State-sponsored industrialization
Industrialization was a naturally occurring change.
Industrialization was planned and managed by the government.
Private individuals and businesses owned industrial factories.
Both the state and private companies owned industrial businesses.
Industrial planning and business were left to industrialists and business leaders.
The state used government money to invest in industrialization.

Russian Industrialization

Main idea

Russia successfully industrialized by focusing on the building of heavy industry and infrastructure.

In the 1850s, the vast Russian Empire, which started in eastern Europe and spread across northern Asia to the pacific, was still primarily agricultural and feudal. A lack of industrialization left Russia weak compared to its industrial rivals Britain, France, and Germany. In the 1860s, Russian Czar Alexander II (1818 – 1881) began a series of state-led reforms that pushed Russia into the industrial age.

The causes of Russian industrialization

The primary reason for Czar Alexander’s decision to focus on industrializing Russia was his defeat in the Crimean War (1853 – 1856) to the Ottoman Empire, supported by the British and French. This loss exposed Russia’s lack of modern development.

  • Russian factories could not produce enough weapons to compete with industrial powers. 

  • Russia was too dependent upon importing industrial goods from those they were fighting. 

  • Russia lacked the railways necessary to effectively move soldiers, weapons, and military supplies.
Industrialization in Western Europe and America
State-sponsored industrialization
The government planned industrialization.
Industrialization was a natural result of merchant and business activity.
Industrialization was quick and took place in just a few decades.
Early industrialization happened slowly over 150 years.
The government focused on building heavy industries like steel and military technology to strengthen the state.
Industrialization happened in heavy industry and consumer goods like textiles.
Foreign money funded industrial factories. By 1900, half of Russia’s heavy industry was foreign-owned.
Local elites and merchants wealth financed early industrial factories.
Comparing Russian and western industrialization

The effects of Russian industrialization

Russian industrialization was a remarkable success. Within thirty years, Russia went from having little industrialization to being one of the most industrialized nations in the world. Unfortunately, the Russian governing and business elite also enforced a brutal form of industrialization that exploited workers far worse than in other industrialized nations. The speed of change also made it difficult for Russian society to adapt. By the early 20th century, dissatisfaction within the Russian masses exploded into a revolution.  

Economic effects

By 1900 Russia was an industrial power. That year, Russia was the world’s second-largest petroleum producer and the fourth-largest steel producer. Russia had increased its railroad track from 570 miles in 1855 to 31,623 by 1905. The longest rail line was the 5,772-mile Trans-Siberian Railway, which opened in 1904, and connected Moscow in European Russia to Vladivostok in the far east.

Political effects

Industrialization had a significant role in destabilizing Russia. While all industrialized states helped business leaders keep wages low and resist union activities, inside Russia, union activities were labeled a criminal offense and harshly repressed, often using violence. With no legal way to fight to improve their lives and working conditions, urban workers in Russia broke out into two revolutions in 1905 and 1917.

  • The 1905 revolution resulted in Czar Nicholas II (1868 – 19118) promising various social, political, and economic changes. The Czar kept his power but did not deliver the promised reforms.
  • The 1917 revolution resulted in a communist takeover of Russia. Communist authorities murdered the Czar and his family in a bloody basement execution in 1918.

Social effects

Czar Alexander’s earliest reforms in the 1860s ended Russia’s old aristocratic agrarian system. He began by freeing Russia’s serfs—Russia was one of the last places in Europe to allow serfdom. Unfortunately, the serfs received no land with their freedom, just debt payments to their former landowners and the government to pay for their emancipation. Conditions in the city were no better. In addition to the suppression of workers’ rights, the rapid growth of urban populations resulted in urban living conditions that were harsh and unsanitary. Like in other industrial societies, the size of the Russian middle class increased—although it remained significantly smaller than in Europe and North America.   

Japanese Industrialization

Main idea

Japan successfully industrialized by focusing on building heavy industry and consumer goods. Japan became an Asian power.

On July 8, 1853, American Commodore Matthew Perry (1794 – 1858) arrived in Tokyo Bay with four heavily armed warships. Perry made it clear that there would be conflict unless Japan agreed to open its ports to American ships. Rather than risk military defeat, the Japanese decided to accept American demands.

The Meiji Restoration: Japan’s highest authority in the Edo period (1603 – 1867) had been the Shogun—a military ruler. There was an emperor, but he held no actual governing power. In 1867, anti-Shogun elites defeated the Shogun, ending the Edo period. The Japanese Emperor was again the highest authority in Japan. The 14-year-old Emperor’s name was Meiji (1852 – 1912). To prevent Japan from falling under the control of western powers, the Emperor’s government launched economic reforms to industrialize Japan.

Industrialization in Japan: Japan focused on building factories capable of producing heavy industry and consumer goods. The Japanese government was active in supporting the transition to industrial capitalism.

The government financed and built shipyards, iron smelters, and textile spinning mills.

The government also built the infrastructure required for industrialization, including coal mines, railroads, a postal system, and telegraph lines.

The government also built the infrastructure required for industrialization, including coal mines, railroads, a postal system, and telegraph lines.

Model factories: The Meiji government set up government-run model factories to promote new industries. The government designed, built, and kept the profits from these factories. The Japanese government later sold many government-run industrial factories to private ownership in the first few decades of the 20th century.

Economic effects

Japan prospered economically as its industrial production expanded. Their first railway opened in 1872 between Tokyo and Sakuragicho. Powering new trains and factories required coal. Japanese coal production increased from 0.6 million tons in 1875 to 21.3 million tons in 1913. Japan also began producing industrial consumer products like silk textiles. Between 1872 and 1914, Japanese raw silk production increased from 1026 tons to 12460 tons. The country’s military also became a significant producer of munitions and weapons.

Political effects

Industrial wealth and the military it built turned Japan into an Asian military power. In 1910, Japan began building a Japanese empire in East Asia when it invaded and conquered the Korean peninsula. They then invaded Manchuria in Northeastern China in 1931. By the 1940s, Japan’s quest for new Asian territory led them to begin attacking the Asian colonies of the United States, Dutch, French, and British during World War II.

Social effects

Industrialization transformed Japanese society. Like in other industrialized nations, the shift from an agricultural economy to an industrial economy resulted in the growth of a new urban industrial class structure.

  • A new middle class of factory managers and service providers like teachers, bankers, and doctors developed.

  • A large group of working poor who produced coal, built infrastructure, or worked in factories developed. The government suppressed union activity amongst these workers. Not until after World War II did unions become legal in Japan. However, unlike in Russia, union activity was not usually violently suppressed.

Some members of the new industrial upper and middle classes gained political representation in Japan when Emperor Meiji introduced a new constitution and democratic reforms to Japan, creating an elected parliament. Japan’s first democratic election took place in 1890. Voting was limited to male citizens over 25 who paid a minimum of 15 Japanese Yen in national taxes. In 1925, men of all social classes gained the right to vote regardless of wealth.

Failed Egyptian Industrialization

Main idea

The Egyptian government attempted to industrialize Egypt but ultimately failed.

In the 1830s, under the leadership of Muhammad Ali (1769 – 1849), Egypt separated from the Ottoman Empire. Ali began a process of industrialization in Egypt to strengthen his state against reconquest by the Ottomans. Ali first increased the production of raw cotton, which he sold to Britain for use in their industrial textile factories. He then invested profits in Egypt’s own industrial production.

Industrialization in Egypt: Ali focused industrial production on weapons and textile production. By the end of the 1830s, Egypt’s war industries had constructed nine 100-gun warships and produced 1,600 muskets monthly. Egyptian factories also produced textiles made of cotton, jute, silk, and wool. Ali allowed foreigners to build and manage big infrastructures like dams, railroads, and canals. This arrangement built big projects cheaply and without much investment of Egyptian money. The European companies that built the projects kept most of the revenue except for the small portion they provided Ali’s government.

The outcome of Egyptian industrialization

By the late 1840s, it looked like Egypt might one day become an industrial power. However, the Egyptian economy began declining in the second half of the nineteenth century. By the 1880s, Egypt was deep in debt to Britain. In 1882, Britain invaded and defeated Egypt during the Anglo-Egyptian War (July – September 1882), leading to a fifty-year British occupation of Egypt.

Egyptian industrialization failed for the following reasons:

Poor leadership: Egyptian leaders focused too heavily on cotton production. When cotton prices fell, the Egyptian economy went into a steep decline, and debt levels rose too quickly. Loans from European banks also paid for Egyptian leaders’ luxurious living standards, further increasing Egyptian debt.

Debt: Debt allowed Europeans to control the policy of the Egyptian government. In exchange for debt reduction or new loans, European countries required Egyptian leaders to change their laws in ways that primarily benefited European economies.

Europeans prevented Egyptian economic success: Europeans worked to make Egyptian goods more expensive and less competitive. One policy forced on Egypt in exchange for continued financial assistance required them to eliminate import tariffs (taxes) on European goods imported into Egypt. At the same time, Europeans charged import tariffs on Egyptian goods coming into their economies. These policies raised the price of Egyptian goods and lowered the price of European goods.