Over the course of the nineteenth century, Denmark became a modern, class-divided society. Material growth was not distributed equally, and the different classes in the towns and cities experienced considerably different living conditions and ways of life. The boundaries between classes were fluid, however, and a degree of upward and downward social mobility was possible.

A significant feature of the period in Denmark was population growth, which in relative terms was one of the largest in Europe. The population grew from around 900,000 in 1800 to 2.7 million in 1910. One of the reasons for this was the declining infant mortality rate, which was linked to better sanitation, living conditions and nutrition. Infant mortality was highest among the most socially disadvantaged. There was also a high level of emigration; approximately 390,000 people left Denmark between the middle of the nineteenth century and the outbreak of the First World War. These emigrants were replaced by 81,000 Swedish immigrants who arrived between 1850 and 1910, mainly taking up work in agriculture, and by Polish immigrants, who helped to cultivate sugar beet. In 1914, 14,000 Polish women worked in the sugar beet fields on the islands of Lolland and Falster.

Urbanisation meant that large parts of the population moved from the countryside to settle in the towns and cities. In 1814, 20% of Denmark’s population lived in urban areas, but this figure had reached 49% by 1911. Almost half a million people – corresponding to 19% of the population – lived in the capital in 1911, compared with only 120,000 in 1840. By 1911 Aarhus had become the country’s second largest city, with 52,000 inhabitants, compared with 4,000 in 1840. A number of provincial towns had increased their populations to around 10,000.

Urbanisation was connected to overpopulation in the rural areas, where employment opportunities were lacking, and to the industrial and commercial development of the towns. Craft businesses and industry proliferated in the cities, where there was a more varied occupational structure and diverse labour market, along with generally higher wages. Urban growth also increased opportunities for work in construction, trade and services.

Economic development

The period 1840–1914 saw general economic growth interrupted only by short-term setbacks. After around 1880, agriculture became increasingly industrialised and new industrial enterprises emerged in the towns and cities. It was also at this point that the first multinational companies appeared in Denmark.

All sectors of the economy had to adjust to new conditions. Urban industries and agriculture were integrated in the market economy and thus exposed to the effects of market forces – which were not always positive. Seen over the entire period, there was a continual shift from agriculture to the industrial and service sectors. This went alongside a continual technological development, which affected industry in particular.

Agriculture remained an important sector throughout the period due to exports and foreign currency earnings, but by 1914 most of the country’s production value was created outside agriculture. Industry grew at the expense of agriculture, and became the most important sector for economic growth, together with the tertiary sector. The traditional structure of the Danish economy, in which the majority of the population was involved in food production and the country was largely self-sufficient, no longer existed. By the end of the period, Denmark had an advanced economy in which sales-oriented production was specialised and relied on the division of labour. This was the basis for the growing importance of the trade and service industry, which, along with the division of labour, is the mark of the modern capitalist economy.

The state and the economy

The state set the political framework for development. After 1814, the absolutist regime no longer attempted to control trade and industry directly. This was because the right to own property, which also applied in the countryside, had turned land into a commodity that could be traded freely. From the 1830s, a liberal policy was pursued, which emphasised the division of labour, free competition and the market economy.

At the same time, the absolutist government pursued a cautious policy in relation to the long-established rights of city merchants. The market towns’ monopoly on trade and the guilds’ monopoly on crafts were retained. In practice, craftsmen were able to establish businesses outside the market towns, even though it was forbidden, since this was seen as beneficial to agriculture. After the end of absolutism in 1848–1849, the liberal government did not feel bound by the vested rights of the merchants and guilds. With the Freedom of Trade Act (Næringsfrihedsloven) of 1857, it repealed the privileges of the market towns and guilds, marking the final breakthrough for economic liberalism.

Apart from this, the state played a hands-off role in the regulation of business and industry. It ensured the preconditions of economic growth through education, and, perhaps more importantly, by expanding infrastructure.

The integration of the country

The expansion of infrastructure in the form of roads, harbours, railways and postal and telegraph communication was a prerequisite for the development of a specialised and market-oriented economy. While at the beginning of the period there was only 8 Danish miles (approximately 51 km) of road with solid foundations in Jutland, by the end of the period there was an extensive road network across the entire country. Steam power was important throughout the entire period. Steamships connected Denmark to international markets and also linked areas of the country to each other, aided by the expansion of the railway network and steam locomotives.

In 1847, the country’s first 37 km of railway opened between Copenhagen and Roskilde, and by 1870 most of the larger towns and cities were connected by 868 km of main lines. By 1910, local private railways had extended the network to 4,044 km. Railway ferries started operating between Jutland and Fyn in 1872 and between Fyn and Sjælland in 1883.

In 1868, a new state port was built in Esbjerg, underlining the state’s interest in promoting business infrastructure. As a consequence of its 1864 defeat, Denmark had lost Tønning Harbour in Schleswig, which until then had served as a shipping port for exports to Britain. With the expanding British market, the new harbour, which was connected to the railway network in 1874, became essential for sustaining Danish exports.

Agriculture, 1814–1840

The period after the Napoleonic Wars was marked by economic crises caused by falling grain prices, which had a significant impact on the mainly grain-producing agricultural sector. A number of bankruptcies followed, but the sector survived the crisis by increasing its production and sales in the domestic market, where population growth had led to a rise in the demand for food commodities. The increase in production corresponded to the increase in population. At the same time, new markets opened in the Netherlands and Britain, where merchants from the provincial towns sold Danish products.

It was possible to increase grain production by improving the soil quality, cultivating new land and also growing new commercial crops – such as potatoes, clover and legumes – whilst retaining the same traditional technology. Animal production also increased, mainly to cater for the domestic market. The fluctuations that hit the agricultural sector came from the export market, which accounted for about 20% of total production in 1830.

Agriculture, 1840–1870

The years between 1840 and 1870 are known as the ‘corn period’ (kornsalgsperioden) in Danish history. Animal products for the domestic market still made up the majority of agricultural production, but there was major growth in grain production for the international market. The increasing grain prices were stimulated by the repeal of the Corn Laws in Britain in 1846.

In contrast to the previous period, the increase in production was now linked to new technologies in the form of new tools and machines, especially ploughs and harrows, produced by the dozens of iron foundries that were built in the Danish provincial towns. New methods to improve the soil were also employed, such as spreading lime, growing new crops and refining grain varieties. The establishment of the Royal Veterinary and Agricultural University (Den Kongelige Veterinær- og Landbohøjskole) in 1858 was essential for promoting a more scientific approach to agricultural production.

Agriculture, 1870–1914

From the beginning of the 1870s, cheap grain from the USA and Russia led to a sharp fall in prices and ended the lucrative Danish trade in grain on the international market. The agricultural sector responded to this challenge by converting from grain to animal production. Grain was no longer exported but was instead used as animal feed; some feed was also imported for use in cattle production.

The income from animal production was largely used to construct industrial premises to process milk. The construction of new agri-cultural industries took place in close connection with the introduction of the co-operative business model as an organisational innovation. The first co-operative dairy was founded in 1882 and became the model for the hundreds of co-operative enterprises that followed. In 1909, there were 1,157 co-operative dairies in Denmark.

Co-operative dairies were established, managed and owned by producers, who agreed to deliver all their milk to the co-operative for a certain number of years. The members of the co-operative shared economic liability according to the number of cows they owned; in other words, both profits and losses were divided between the co-operative’s members depending on the number of cows they owned and supplied milk from. However, each member had only one vote at the annual general meeting, where strategic decisions were made.

The by-products from butter production were used for pig feed. This led to an increase in pig production, and bacon became a major export and a huge success on the British market. Between 1887 and 1914, forty-four slaughterhouses and pork-processing plants were built across the entire country, the majority of which were set up according to the co-operative dairy model.

The co-operative movement

The efforts of the farmers to organise themselves resulted in a network of associations, of which the co-operative movement (andelsbevægelsen) was a central part. In such economically precarious times, the co-operative model was the only financially sustainable way for farmers to operate their dairies. The farmers had no intention of leaving the processing of agricultural products to urban capitalists. Wealthy merchants from the towns attempted to get a foothold in the meat-processing industry, but they encountered fierce resistance from leading farmers, who were reluctant to allow outsiders to take profits.

Co-operative businesses were thus organised more democratically than the traditional capitalist business models found in the towns and cities. However, despite the principle of ‘one member, one vote’, the wealthier farmers (gårdmænd) dominated the management of the co-operatives; as major suppliers, they could quickly threaten the existence of the dairy if decisions went against them. Nevertheless, the fact that an increasing number of smallholders joined the co-operative dairies meant that all parties enjoyed economies of scale.

Savings banks and credit unions, also organised by the farmers and inspired by similar banks and unions in Germany, supported the co-operative movement economically. Their aim was to facilitate saving and to finance small land purchases and investments at low risk.

Modernisation of agriculture

The re-organisation of the agricultural sector entailed not only new co-operative institutions but also new technology for primary production and processing. Such technologies were promoted by farmers’ associations, which disseminated research results and new operation methods, and by agricultural schools, which trained farmers in more efficient, technological and long-term production. A system for knowledge collection and quality control was established, which was channelled back to the producers and ensured products of a high standard. Efforts were made to increase productivity through refining, better feeding and an increased use of fertilisers and agricultural machinery. Processes that had previously been carried out by hand were taken over by machines for sowing, mowing and threshing, in addition to harrows to remove weeds and new steel ploughs, which increased productivity within the animal feed industry.

In 1914, agriculture made up 60% of Denmark’s exports and accounted for most of the country’s foreign currency earnings; it was thus of great importance for the country’s overall economy. Livestock production quadrupled between 1870 and 1914. Pork production rose from 50 million kilograms in 1870 to 229 million kilograms in 1914. In the decade before the First World War, two products in particular – butter and bacon – accounted for two thirds of the agricultural sector’s production value and exports, with markets primarily in Britain and Germany.

Agricultural production became increasingly intensified, with an overall increase of 40% in yields per hectare between 1860 and 1914. During the same period, the area available for agriculture increased by 25%, due to damming, drainage and the cultivation of heathland. In terms of production, growth was massive and generated revenues that could be used for further investment in modern tools and production facilities. As such, the impact of livestock farming on the natural environment was huge, but there is no evidence that this impact – and its implications for nature and livestock – was discussed at the time.

Overall, the modernisation of Danish agriculture in the late nineteenth century gave Danish exports in semi-processed agricultural products a strong competitive edge in international markets, which accounts for agriculture’s very high export quota. At the same time it also made the country’s exports vulnerable in the long run due to this specialisation, especially when, from the 1930s onwards, agricultural markets were hit by increased protectionism.

Industrialisation in the provincial towns

Development within the agricultural sector was linked to small industrial enterprises in the provincial towns, which produced industrial processing equipment and agricultural machinery to support the continued industrialisation of farming. This machinery was often developed in England or the USA and presented to the Danish agricultural community by salesmen at various exhibitions around the country. This made it possible to produce local versions of the different machines at the factories that sprang up all over Denmark.

Smaller companies emerged, earning a profit from servicing and repairing the machines. Transport and service industries also had a markedly more significant role in creating value – a further indication of the transition to a capitalist society based on the division of labour and specialisation.

The Copenhagen business community

The business community in the capital operated according to a top-down model. Private investment banks put money into projects with potentially high profits and high risk. Inspired by the British model, companies were set up as joint-stock companies, where each shareholder was only liable for the capital originally invested, so that the investor did not lose everything if the project failed. C.F. Tietgen played a central role in the development of this sector. He became the director of Privatbanken (Denmark’s first investment bank) in 1857. His education gave him close ties to the British business and banking world; he also had an international perspective on the new business opportunities created by new technologies within the communication and transport sectors.

With Privatbanken behind him, Tietgen was the driving force behind the creation of the United Steamship Company (Det Forenede Dampskibs-Selskab, or DFDS) in 1866, which controlled steamships within Denmark and Danish shipping abroad. In many ways, DFDS was exemplary of developments after 1870. First, it was part of the transition from sail to steam, which was the dominant technological achievement of the period between 1870 and 1914, based on technological innovation, the economic climate and the ability of the shipping industry to adapt to new conditions. It was not until the end of the period that diesel-powered motor ships arrived, at which point the steamship fleet was five times larger than the sailing fleet, which had been almost totally dominant until 1850.

Second, DFDS was exemplary of the new type of company model and business strategy. Steamships were far more expensive to produce than sailing ships, and the joint-stock company therefore offered a solution. The business strategy was to acquire as many steamships as possible within a single shipping company. This would provide economies of scale, but it also had other advantages. Once the company had enough ships on relatively safe and income-generating domestic routes, it was possible to expand into the far more volatile area of international shipping. The former was designed to support the latter. As the wealthy company acquired new ships, it was able to offer new routes, and during the 1870s and the 1880s most of the small shipping companies were absorbed by DFDS.

DFDS also dominated sea routes to Britain, which increased thirteen-fold in the years up to 1890, due to the export of agricultural products from the new port in Esbjerg. In the 1870s, live animals were transported, but in the 1880s the focus shifted to butter, and from the 1890s to pork rather than live pigs.

This illustrates the growth and importance of the tertiary sector – that is, economic activities not connected with the production or processing of raw materials. DFDS served the agricultural sector, which provided the basis for huge growth, since transport was vital for the development of an international and specialised capitalist economy. Along with the railway and the telegraph, steamships created completely new conditions for trade and communication.

Industry and internationalisation

The business model of international expansion from a domestic base was also used by the Great Northern Telegraph Company (Det Store Nordiske Telegraf-Selskab), which was founded in 1869. Located in a harmless small state on the fringes of Western imperialism, Tietgen managed – with the help of the Danish royal family and diplomacy – to secure large construction contracts in the face of competition from British firms. Tietgen also had the advantage of operating in a new and unregulated sector, which allowed him and Privatbanken to engage in financial transactions in ways that would later become illegal, and to provide information to investors as it suited him. This new industrial empire also included the Danish Sugar Factories (De Danske Sukkerfabrikker), which dominated sugar production, and the shipyard Burmeister & Wain, which became the largest industrial workplace of the period in Copenhagen.

A number of companies outside Tietgen’s empire followed the same model and strategy in the production of margarine, cement, cables and telecommunication. Many of these companies became multinational organisations on the basis of technological development, and engineering now became an essential, state-educated profession. It was this sector that carried the industrial revolution forward after 1870 and into the twentieth century. The period up to 1920 marks a heyday for Danish multinational companies, also by international standards.

Craft businesses

It is worth noting that large, industrial enterprises were the exception. Production in the towns and cities was characterised by many small artisan businesses. In the first official industrial census in 1897, the number of companies was calculated as 77,000 and the number of employees as 274,000 (including owners and salaried employees). One hundred and seventy companies had more than a hundred employees, which represented a doubling from 1870, but the vast majority were small workshops with a couple of employees.

Urban society: the working class

Poverty in the towns and cities

In some working-class districts in the industrial cities, families of up to six lived in one- or two-room apartments, with a shared privy in the backyard. Such conditions were most commonly found in Copenhagen, but they existed in other towns and cities as well, albeit on a smaller scale. The most disadvantaged lived in even worse conditions in basement and loft apartments, and in Copenhagen there were proper slums. There were also several impoverished tenement houses (fattigkaserner) in Copenhagen, where forty-five people lived in a space of one hundred square metres.

In 1853, 5,000 people died in a major cholera epidemic in Copenhagen, which highlighted the poor levels of sanitation for the most deprived in the city. Waste was disposed of through the street gutters, but the drainage was insufficient so sewage often built up. All sewage and rubbish was poured into the gutter – from butcher’s and tannery waste to the contents of chamber pots – and the gutters thus became an unparalleled source of infection. The understanding of contagion at the time was that infection was carried by germs in the air, which was used as the basis to improve the sewerage system. The cholera epidemic also gave rise to housing associations (byggeforeninger), which were set up to improve housing conditions for the urban working population, though these associations enjoyed only limited success.