The Long Depression: 1873–1893

This chapter examines the assumption that there is a relationship between innovations and economic criseseconomic crises, with a particular focus on the economic crisiseconomic crisis that began in 1873 and continued until 1879 in the USA and until 1893 in EuropeEurope. The following question is examined: Is there a relationship between innovations and the economic crisiscrisis of 1873–1893? The purpose of the chapter is to determine which innovations triggered the social mechanismssocial mechanisms that led to the economic crisis in 1873. The findings that emerge are that the following innovations fed through social mechanismssocial mechanisms that led to the crisiscrisis: Railway constructionRailway construction (economic, technological innovationinnovation); new creditcredit facilities new credit facilities (economic and financial product innovations); the electric telegraphthe electric telegraph (economic product innovationproduct innovation); the steamsteam engine the steam engine (economic product innovation); the unification of Germanythe unification of Germany (institutional, political innovationpolitical innovation); and free tradefree trade, a political idea that emerged as the dominant economic model in the 1850s and 1860s (institutional, cultural innovation).