There followed a period of foreign acquisitions on every continent and of laissez-faire capitalism at home, both of which greatly increased the economic wealth of France, then lagging far behind Britain in the industrialization stakes. Foreign trade trebled, a huge expansion of the rail network was carried out, investment banks were set up, and so forth. The rewards, however, were very unevenly distributed, and the regime relied unashamedly on repressive measures to hold the underdogs in check. 

The response was entirely predictable. Opposition became steadily more organized and determined. In 1864, under the influence of Karl Marx in London, a French branch of the International was established in Paris and the youthful trade union movement gathered its forces in a federation. In 1869, the far from socialist Gambetta, briefly deputy for Belleville, declared, "Our generation's mission is to complete the French Revolution."

During these nearly twenty years of the Second Empire, Baron Haussmann , appointed Prefect of the Seine department with responsibility for Paris by Napoleon III, undertook the total transformation of the city. In love with the straight line and grand vista, he drove 135km of broad new streets through the cramped quarters of the medieval city, linking the interior and exterior boulevards, and creating north-south, east-west cross-routes. His taste dictated the uniform grey stone façades, mansard roofs and six to seven storeys that are still the architectural hallmark of the Paris street today. 

The scale of demolition entailed by such massive redevelopment brought the direst social consequences. The city boundaries were extended to the 1840 fortifications where the boulevard périphérique now runs. The prosperous classes moved into the new western arrondissements, leaving the decaying older properties to the poor. These were divided and subdivided into ever smaller units as landlords sought to maximize their rents. Migrant workers from the provinces, sucked into the city to supply the vast labour requirements, crammed into the old villages of Belleville and Ménilmontant. Cholera and TB were rife, sanitation non-existent, and refuse was thrown into the streets.

Far from being concerned with Parisians' welfare, Haussmann's scheme was at least in part designed to keep the workers under control. Barracks were located at strategic points like the place du Château-d'Eau, now République, controlling the turbulent eastern districts, and the broad boulevards were intended to facilitate troop movements and artillery fire. A section of the Canal St-Martin north of the Bastille was covered over for the same reason