Economic Growth in Europe’s Smaller Countries

Much has been written about the economic growth of England, France, and Germany in the nineteenth century, but the economies of a number of smaller European countries also performed impressively in this period, especially those of Belgium, Switzerland, the Scandinavian countries (Sweden, Norway, and Denmark), and, to a lesser degree, the Netherlands. Still, these countries suffered from various handicaps, the first being their geographic smallness: their home markets were narrow, and they were relatively poor in mineral resources. Belgium alone had coal (and in plenty), so it was a leader in the application of electricity to industry from the 1870s onward, but Switzerland, Sweden, and Norway had a rich waterpower potential. In the latter three countries, much of the territory was mountainous or arctic in climate and therefore scarcely populated. In the early nineteenth century, some of these countries were quite poor. The Netherlands, meanwhile, retained high per capita incomes but suffered from a difficult transition from its seventeenth-century golden age of commerce to industrial capitalism.

On the other hand, these small countries developed their educational systems quite early, and their workforces were literate and skilled, while wages (except in the Netherlands) were low. Thanks to the accumulation of valuable knowledge and skills among the workforce, the abundance of either local or foreign capital (money and other assets), and other advantages, such as a quiet political life-with only one short war for each country, except Sweden, which had none-they succeeded in overcoming the obstacles to industrialization. Most of them had an industrial tradition, but any growth of industry had to be driven by exports, and they became heavily involved in international trade. This was particularly true in the case of Switzerland, even though it alone was landlocked and surrounded by neighbors that put up barriers to trade; up to 1914, it was the world leader in exports of manufactured goods per capita. These countries benefited from the demand by the large advanced countries of Europe-especially Britain-for their manufactures and primary products, but they also exported to distant markets like Latin America. The adoption of free trade (allowing trading across boundaries without government interference) by Britain and the general liberalization of trade after 1860 were beneficial, but in order to export, these countries needed to be competitive, and they achieved efficiency by a strategy of specialization adapted to their resources.

Belgium experienced the most complete industrial revolution on the European continent, with an emphasis on heavy industry and large exports of coal and semifinished and finished metal products. In Switzerland, on the other hand, there were mainly light industries making high-quality goods: luxury cottons, watches, machinery (at first for the textile industries, with the manufacture of electrical equipment becoming important later), fine synthetic chemicals such as dyes and drugs (for which the Swiss held second rank, far behind Germany), and processed foods.

Sweden was rather a latecomer. For a long time its exports were mainly of primary and semifinished products-bar iron, cut timber, paper pulp, and iron ore. From the 1880s onward, however, it developed a high- tech engineering industry, often on the base of Swedish inventions. This allowed it to become a large-scale exporter of various specialized products such as ball bearings, telephones, cream separators, and capital goods (machines for making products). Norway specialized in exports of fish, lumber, pulp, and paper, and in shipping services. Its industry was small, but electrochemistry was introduced in the 1900s with the help of French and Swedish capital.

Denmark’s main export was initially grain, but in the face of competition its farmers reconverted to animal products: bacon, butter, cheese, and eggs-mainly for British breakfast tables. Danish agricultural productivity became the highest in Europe, making the country proof that industrialization is not the only road to wealth. The Netherlands also benefited from high-productivity agriculture and from its exports. Industry there, which had suffered in the wars of the early nineteenth century, had a slow but steady recovery, with large-scale industry emerging in the late nineteenth century.

Each country thus had its own specialized products and services. Their growth rates were fast. From 1870 to 1913, the Scandinavian countries outperformed the rest of Europe in the growth rates of individuals and achieved a spectacular convergence with the richest countries, especially in standards of living. Belgium and Switzerland had been “rich” for some time.

The word “relatively” in the passage is closest in meaning to

Aextremely
Bsimilarly
Ccomparatively
Dgenerally

According to paragraph 1, what was one challenge faced by the Netherlands in the nineteenth century?

AIts population was used to unusually high incomes.
BIt had to share its small supply of mineral resources.
CIt had to transform from an economy based on commerce to one based on industry.
DIts workers resisted the arrival of industrial capitalism.

Why does the author state that the smaller European countries “developed their educational systems quite early, and their workforces were literate and skilled” ?

ATo suggest that the handicaps these countries suffered were not actually very serious
BTo explain the high per-capita incomes in some of these countries despite their economic difficulties
CTo support the claim that these countries overcame the obstacles to industrialization thanks to a quiet political life
DTo provide one reason why the economies of these countries performed impressively despite their various challenges

The primary purpose of the passage is to

AThese countries benefited by the liberalization of trade in Britain and elsewhere after 1860, but to become competitive exporters, they specialized in goods adapted to their resources.
BThe adoption of free trade by Britain and the general liberalization of trade after 1860 were beneficial both to these countries and to their competitors.
CEven after the adoption of free trade by Britain and the general liberalization of trade after 1860, these countries lacked the resources needed to support a competitive trade in exports.
DOnly after 1860, when it became possible to trade across boundaries without government interference, were these countries able to adopt a strategy of specialization.

Paragraph 3 suggests which of the following about Germany in terms of industrial activity?

AIt ranked behind Switzerland in the manufacture of synthetic chemicals.
BIt manufactured far more drugs and dyes than any other country in Europe.
CIt had less heavy industry than Belgium.
DIt imported most of its machinery from Switzerland.

According to paragraph 4, one reason Sweden was able to develop a high-tech engineering industry was

Athe help it received from foreign capital
Bits shift from exporting primary and semifinished products to exporting capital goods
Cthe inventions provided by its citizens
Dits position as a large-scale exporter of specialized products

According to paragraph 5, why did Denmark stop exporting mainly grain?

AIts efficiency in grain production had fallen.
BIt had mainly shifted from agriculture to large-scale industry.
CThe market for grain in Britain had declined.
DToo much grain was being exported by other countries.

The word “convergence” in the passage is closest in meaning to

Acontribution
Bstability
Cresult
Dcoming together

Look at the four squaresthat indicate where the following sentence could be added to the passage

This increase in trade with other countries caused its economy to more than triple from 1870 to 1930.

Where would the sentence best fit？Click on a square sentence to the passage.

In the nineteenth century, Europe’s smaller countries achieved high economic growth rates.

AThese smaller, mostly poor countries successfully industrialized by relying on able workforces, focusing on a few products to which they were well suited, and engaging in international trade.
BWhile Denmark and the Netherlands increased agricultural production and exports, Belgium developed heavy industry and exported coal, and Switzerland produced high-quality goods.
CWhile Denmark grew economically by exporting mainly animal products, Sweden and Norway exported primary or semifinished products until they were able to develop high- tech industries.
DAs the populations of smaller countries increased, their workers became more skilled and literate, and wages rose to a level comparable to that of larger, more advanced European countries.
EBecause the Netherlands suffered more from the early- nineteenth-century wars than any of the other small northern European countries, large-scale industry never fully replaced agriculture there.
FBecause they had waterpower, these smaller countries were able to produce their own electricity and apply it to industry earlier than larger and wealthier European countries could.

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