From The Shortest History of Germany (James Hawes, 2018) p126-7
One thing that made re-investing so attractive was the highly-educated but poor workforce. German literacy rates were far above those in Britain or France and the working-class were accustomed to military discipline and low wages. One American observer from 1902 sounds very like someone explaining China’s success today:
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It is probable that no civilised workman in the world would change places with the German. Few indeed work longer hours for smaller pay, eat coarser and cheaper food, live in more crowded homes, and none gives more time and substance to the government which in return hems him in with an infinite multiplicity of rules and regulations, and curtails right of free speech… a carpenter in the ship yards will receive about 90 cents per day for 11 hours’ work. In America, a carpenter commonly expects $2.50 to $3 for 8 hours’ work.
R. S. Baker, Seen in Germany, New York, 1902
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A low-wage, low domestic consumption, state-disciplined, state-aided, tariff protected economy needs a fat, rich consumer economy without its own tariff barriers, to buy its exports. In the 1890s, that great consumer market was Britain. Such one-sided trade relationships, though, are liable to cause friction, just as now between the US and China. To Britons, the mark Made in Germany already carried a chill warning of economic threat and in this first age of mass-electorates, popular emotions were beginning to decide how nations lined up. The other problem with a low-wage, export-driven economy is that your own working class, seeing no hope of any trickle-down, is liable to become radicalised. In the 1890s, Germany became the great bastion of socialism. The Social Democratic Party’s Erfurt Programme (1891) aimed to unite the workers for a Marxist struggle as necessary by the laws of nature (zaturnotwendig). It began to score major electoral success. All over the world, revolutionaries looked to Germany as the place from which the communist millennium would soon take off.
The classic way for governments to keep the working class happy is to keep staple food cheap. For booming, export-driven industrial Germany, the obvious answer was to import cheap grain from the American plains or the black earth region of Russia. And since Germany’s industrialists were perfectly sane, that’s indeed exactly what they wanted. But they didn’t get it. Because however rich they now were, they still didn’t run things. The Prussian Junkers in East Elbia did, thanks to their guaranteed domination of the Prussian Parliament, of the higher civil service, and of the army.
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