Austro-Hungary’s economy was marked by heavily rural agricultural areas, making their economies similar to the French and U.S. economies throughout the 18th and 19th centuries. They grew to have the third largest western population in 1870, behind Germany (number two) and Russia (number one). Capitalism became popular throughout these years, and thanks to the expansion of capitalism, industry and national wealth, the independent cities of Buda and Pest decided to combine into one economic and political powerhouse city in 1873.
In the Austro-Hungarian Empire, proto-industrialization began in 1750 in the northwest region (modern-day Czech Republic, Slovakia and Northern Austria). The Industrial Revolution got its start in this region because of the iron factories that developed due to the region’s location near the Alps mountain range, smaller local mountain ranges and lots of uninhabited forested land that was able to be turned into factory towns. These factories helped push the Austro-Hungarian empire forward in the Industrial Revolution. However, despite this trend by the empire overall, Hungary itself remained very rural and agricultural during the proto-industrialization.
