By Frank B. Tipton, Robert Aldrich
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Extra resources for An Economic and Social History of Europe, 1890–1939
Contemporaries recognised that the system distributed its benefits narrowly, and increasingly so the further from the centre one had the misfortune to be. It was best to be a European, better to be a western European, and best of all to be a member of western Europe's privileged upper class. At the same time the system was expanding, not only in the amounts of goods and services exchanged, but also in penetrating previously isolated and inaccessible regions of the world. For upper-class western Europeans, the profits accruing to the owners of property not only appeared morally unexceptionable, but also seemed to provide the crucial motor of expansion which would benefit not only the rich but also the poor both in Europe and overseas.
Compensation paid to the old Turkish landlords had left a heavy burden of debt, however, and population increase and the equal distribution of inheritances had resulted in extreme fragmentation. A 1908 survey estimated that nearly half of all holdings were too small to support a family. Poland Poland had been divided among the eastern powers in the late eighteenth century, and the more virulent nationalism of the late nineteenth century added active discrimination to the facts of division and dependence to hamper economic advance.
High tariff protection was combined with government investment in strategic industries, particularly railways and those heavy industrial sectors crucial to the military power of the state. The necessary foreign loans were paid for by exports of grain and petroleum products and by heavy taxes levied on the peasantry, and Russian maintained a consistently positive balance of payments. The government's programme achieved impressive results during the 1890s, with rapid increases in industrial output and employment.