Innovation & Wealth › The Gilded Age
Second Industrial Revolution: steel, oil, electricity
c. 1870–1914· Event· Innovations & industries
Mostly agreedGood evidence; some details uncertain.
A second wave of industrialization, roughly 1870–1914, built on steel, chemicals, electricity, oil and the internal combustion engine.
See it on the Innovation & Wealth map →What happened
Where the first revolution ran on coal, iron and textiles, this one drew more on science. Cheap steel, synthetic dyes and fertilizers from German firms like BASF and Bayer, electric light and motors, the telephone and gasoline engines all arrived within a few decades. Giant corporations run by salaried managers replaced family firms. The United States and Germany overtook Britain: by 1913 the US made about a third of the world's manufactured goods.
Impact on society and the economy
It created the modern corporation, the industrial research lab and mass consumer goods. Real wages rose, but so did dangerous factory work and unprecedented concentrations of wealth.
How we know
Patent and production statistics, company archives, and economic histories such as Alfred Chandler's The Visible Hand (1977) and Paul Bairoch's estimates of world manufacturing shares.
Still debated
Whether it was a distinct 'revolution' or a continuation of the first is debated; the dates are a convention, not a clean break.
Inside this (6)
Connections (7)
▸The Industrial Revolution was followed by Second Industrial Revolution: steel, oil, electricityWell documented
The connection
The first revolution laid the foundations: coal, iron, steam power, factories, railways and a growing class of engineers and investors. From about 1870 new science-based industries built on them: steel replaced iron, electricity and oil joined steam, and leadership shifted from Britain toward Germany and the United States.
When and how
Britain, about 1760–1840; then Western Europe and North America, about 1870–1914.
How we know
Production statistics show continuous growth across both periods; dividing it into two 'revolutions' is a convention popularized by historians such as David Landes.
Debates
Whether there was a sharp break or one long process is debated, as is why Britain lost its lead: complacency, older plants, or simply others catching up.
▸Limited liability company laws enabled the giant companies of Second Industrial Revolution: steel, oil, electricityMostly agreed
The connection
Steel mills, railways, chemical plants and power networks needed more capital than any family could supply. Limited liability let thousands of passive investors buy shares while risking only their stake, so companies could raise huge sums on stock markets and outlive their founders, the pattern behind giants like U.S. Steel.
When and how
Britain, 1855–62; US states through the 1800s, with New Jersey's 1889 law letting companies own other companies' stock, which drew many giant corporations.
How sure are we?
Company registrations and stock listings rose sharply after these laws, but many big firms began as partnerships; Carnegie Steel itself was one until 1900.
Debates
Some historians argue capital came mainly from reinvested profits and banks rather than share sales, so limited liability's role may be overstated.
▸Second Industrial Revolution: steel, oil, electricity created the fortunes of Robber barons and the great trustsMostly agreed
The connection
Steel, oil refining and railroads had huge fixed costs and big economies of scale, so the largest producer usually won. Price wars ruined smaller firms, and survivors combined into trusts and mergers. Weak regulation and no federal income tax let the winners keep enormous fortunes.
When and how
United States, about 1870–1904, ending with the Great Merger Movement of 1895–1904; similar cartels formed in Germany.
How sure are we?
Industry statistics show rising concentration and estate records document the fortunes; historian Alfred Chandler linked big business directly to scale technologies.
Debates
Whether concentration was needed for efficiency or mainly came from collusion and political favors remains one of economic history's big debates.
▸Second Industrial Revolution: steel, oil, electricity gave rise to The automobileWell documented
The connection
The car combined several new technologies of the era: cheap steel, the internal combustion engine, refined gasoline from the oil industry, rubber tires, electric ignition and precision machine tools. Without these parts, all available by the 1880s–90s, a practical automobile could not have been built.
When and how
Europe, 1876–1900: Nicolaus Otto's four-stroke engine (1876), Benz's and Daimler's cars (1886), Dunlop's pneumatic tire (1888).
How we know
Patents and engineering histories show the car was assembled from existing technologies; Benz built on Otto's four-stroke cycle, whose German patent was overturned in 1886.
Debates
Why gasoline beat steam and electric cars, both popular around 1900, is debated: technology, cheap oil, infrastructure, or chance.
▸Thomas Edison and General Electric industrialized invention for Second Industrial Revolution: steel, oil, electricityMostly agreed
The connection
Edison's Menlo Park lab treated invention as a business: teams of machinists, chemists and draftsmen working toward commercial products on a schedule. He promised 'a minor invention every ten days and a big thing every six months.' Corporations from GE to Bell copied the model, making organized research the engine of science-based industry.
When and how
Menlo Park, New Jersey, 1876–81, then West Orange (1887); GE's research lab opened in Schenectady, New York, in 1900.
How sure are we?
Lab notebooks, payroll records and the Edison Papers document the team method; historians widely credit Menlo Park as a prototype of the corporate lab.
Debates
German chemical firms such as Bayer and BASF built research labs around the same time, so whether Edison invented the model or popularized it is debated.
▸Mass migration to the Americas supplied much of the labor for Second Industrial Revolution: steel, oil, electricityWell documented
The connection
American steel mills, coal mines, meatpacking plants and garment shops depended on immigrants, often unskilled newcomers from southern and eastern Europe. By about 1910 the foreign-born made up more than half the workers in iron and steel and in coal mining, filling dangerous jobs at low wages.
When and how
Pittsburgh, Chicago, New York and the mining regions of Pennsylvania and the Midwest, about 1880–1914.
How we know
The US Immigration Commission (Dillingham Commission, 1907–11) surveyed industrial workforces and found immigrants made up most workers in several key industries.
Debates
Whether immigrant labor sped American industrialization or simply let employers keep wages low and delay mechanization is debated.
▸Meiji Japan and the zaibatsu imported the technology of Second Industrial Revolution: steel, oil, electricityMostly agreed
The connection
Meiji Japan bought machinery, hired thousands of Western engineers and teachers, and sent students abroad to learn railways, shipbuilding, textiles and steel. Zaibatsu such as Mitsubishi used licensed and copied technology to build shipyards and mines, and the state's Yawata steelworks (1901) used German designs.
When and how
Japan, 1870s–1910s: the Iwakura Mission to the US and Europe (1871–73), foreign advisers, Mitsubishi's Nagasaki shipyard (from 1884), Yawata Steel Works (1901).
How sure are we?
Government and company records show heavy technology imports and foreign hires; Japanese output of ships, textiles and steel rose rapidly by 1914.
Debates
Why Japan absorbed foreign technology so fast is debated: high literacy, a strong state, old merchant houses, or wartime demand.