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Gründerzeit building by Arwed Roßbach in Leipzig (1892)

Gründerzeit (German pronunciation: [ˈɡrʏndɐˌtsaɪ̯t], literally: “the Founder Epoch") refers to the economic phase in 19th century Germany and Austria before the great stock market crash of 1873. It deals with the ascent of the second Kondratiev wave. At this time in Central Europe the age of industrialisation was taking place, whose beginnings were found in the 1840s. No precise time for this phase can be given, but in Austria the March Revolution is generally accepted as the beginning for, in contrast to the political reforms, the economic changes were not reversed. In Germany, as a consequence of the large influx of capital from the victorious Franco-Prussian War of 1870-1871, there followed an economic boom, giving rise to the description of these years as the "founding years".

These years in Central Europe were also the time that citizens increasingly influenced cultural development. Therefore this time is also the epoch of classical liberalism, even if the political demands of the time were only partially met, and then only in the later period. Industrialisation also posed aesthetic challenges, above all in the fields of architecture and craftsmanship. This was expressed in a development of existing forms, rather than innovation as such. Therefore in common parlance the term Gründerzeitstil is often confused with Historism, which was the predominant style after 1900, leading to a blurring of the terms. In historical context therefore the later decades are often called Gründerzeit, and for this reason, Gründerzeit can refer to several periods, for example 1850-1873, 1871-1890, sometimes 1850-1914 or even just the years 1871-1873.

Economy

The German term Gründerzeit refers to the massive economic upswing in the mid-19th century, when the founders of business (Gründer) could apparently become rich overnight. Of particular importance for speedy economic development was the rise of a developed railway system. Not only was it a major factor in its own right on the business scene of the time, but it also permitted further development through improved communication and migration. Rural migration to the cities assisted the development of a proletariat, with an attendant increase in social problems.

The huge stock market crash of 1873, combined with economic overheating due to massive French reparations from the war, put an abrupt end to this upswing, referred to in German as the Founding Epoch Crisis (Gründerkrise), resulting in a twenty-year phase of economic stagnation. This crisis caused the theory of economic liberalism to lose ground, and it was also this time which saw the introduction of business control mechanisms, as well as protective customs tariffs.

The Vienna stock market crash led to the panic of 1873 in the United States, resulting in the Long Depression.

Façades in Karlsruhe Südstadt

Design and Architecture

Main article in German: de:Historismus

The need for housing rose in consequence of industrialisation. Complete housing developments in the so-called Founding Epoch Architecture style arose in previously green fields, and even today in Central European cities large numbers of buildings from this time can be found together along one single road or even in complete suburbs. These 4- to 6-story buildings, often constructed by private property developers, often sported richly decorated façades in the form of Historism such as Neo-Gothic, Neo-Renaissance, German Renaissance and Neo-Baroque. The span of construction served not only for magnificent palaces for nouveau-riche citizens, but also the construction of infamous rental ghettos for the expanding urban lower classes.

This phase was important also for the integration of new technologies in architecture and design. A determining factor was the development of new processes in producing steel (Bessemer process) which made possible the construction of steel façades. A classical example of this new form is found in the steel and glass construction of the Crystal Palace, completed in 1851, revolutionary for the time and an inspiration for future decades.

Gründerzeit in Austria

Image of the neo-gothic Rathaus (City hall) in Vienna

In Austria the Gründerzeit began after 1840 with the industrialisation of Vienna, as well as the regions of Bohemia and Moravia. Liberalism reached its zenith in Austria in 1867 during the Austro-Hungarian monarchy and remained dominant until the mid-1870s.

Vienna, the capital and residence of Emperor Franz Joseph, after the failed uprising of 1850, became the fourth largest city in the world with the inclusion of suburbs and an influx of new residents from regions of Austria. In the place where the city wall had once stood, a ring road was built, and construction blossomed. In contrast to agricultural workers and urban labourers, an increasingly wealthy upper-middle class built itself monuments and mansions. This occurred on a smaller scale in cities such as Graz, but on the periphery, thereby preserving the old city from destructive redevelopment.

Gründerzeit in Germany

In the Germans' mindset, the epoch is intrinsically linked with Kaiser Wilhelm I and Chancellor Bismarck, but it did not end with them (in 1888/1890) but continued well into the reign of Kaiser Wilhelm II. It was the Golden Age of Germany, when the disasters of the Thirty Years' War and the Napoleonic Wars were remedied, German scientists were developing new technologies faster than anyone else, German industrialists were developing new methods and products that no other nation could compete with, and German merchants were once again taking over market after market around the world. This was the time when particularly the German middle class rapidly increased their standard of living, buying modern furniture, kitchen fittings and household machines, of a standard not to be outshone for generations.

The social effects of Industrialization were the same as elsewhere: Increased agricultural efficiency and introduction of new agricultural machines led to a polarized distribution of income in the countryside. The landowners won out to the disadvantage of the agrarian unpropertied workforce. Emigration, most of all to America, and urbanization were the unavoidable outcomes.

Typical Aachen street with early 20th century Gründerzeit houses

In the rapidly growing industrial cities, new workers' dwellings were erected, which physicians of the time already denounced as unhealthy: "without light, air and sun", quite contrary to the then prevailing ideas on town planning. The blame for a marked increase in tuberculosis, spread also to wealthier neighborhoods, came to a great extent to be put on the dark, cramped flats.

However, the working class too saw improvements of living standard and other conditions, for instance social security through laws on workers' health insurance and accident insurance introduced by Bismarck in 1883/1884, and in the long run also through the foundation of a Social Democracy that would remain the model for the European sister parties until Hitler's Machtübernahme in 1933. Even today the model of social care developed by Bismarck in 1873 (Reichsversicherungsordnung) remains the contractual basis for health insurance in Germany.