Chapter 21: Chapter 21, An Unintended Economic Crisis

Translator: Nyoi-Bo Studio Editor: Nyoi-Bo Studio

Unable to persuade a few old foxes, Hamm was not angry; he knew they were already tempted, but it was their timidity that kept them from voicing it.

He was no revolutionary himself; he had only mingled with the Revolutionary Party for the sake of profit. If their goals could be achieved by peaceful means, only a fool would consider rebellion, right?

After all, this was the European Continent. Even if the rebellion were successful, what then?

Would princes and generals yield to mere seeds of men?

The answer was: Yes!

If successful, at best one would become the president of a Bourgeois Republic, a position probably not as comfortable as his current life.

If the attempt failed, exile would likely be the best outcome.

Faced with harsh reality, Hamm’s already limited enthusiasm for revolution dwindled even further.

Like the vast majority of capitalists, they could support the Revolutionary Party, but personally leading a revolution? Forget about it; they had no desire to be president.

…

It is difficult to keep a banquet a secret. The story that took place at the Meiris manor in the suburbs of Vienna quickly found its way to Metternich. Of course, the content of the subsequent secret meeting was not included.

But Prime Minister Metternich was a man of principles. He adhered to the bottom line of political struggle and refrained from flying off the handle and arresting the capitalists who attended the banquet on charges of colluding with the Revolutionary Party.

Because he was principled, he was troubled.

Well aware of the capitalists’ secret plotting, his only option was passive defense, leaving Prime Minister Metternich anything but happy.

To describe his situation as being beset with internal and external troubles couldn’t be more apt. Inside he faced restless nobility, and outside, capitalists were eyeing him hungrily; everyone shared the common goal of ousting him.

By the winter of 1847, the people of Vienna had a palpable sensation: prices were rising, and they were climbing at a visibly alarming rate.

By the end of December 1847, the cost of living in Vienna had risen by forty-seven percent, with the capitalists probing the limits of what the public could bear, little by little.

At this point, all eyes turned to the Vienna Government, in the hope that they would present a solution.

Clearly, they were to be disappointed. The Vienna Government simply did not have the ability or the function to intervene in the prices. Despite Prime Minister Metternich’s repeated efforts, they proved minimally effective.

For instance: the government posted notices ordering merchants not to jack up prices, which proved to be fruitless.

Or for example: the Prime Minister’s numerous unsuccessful features with the capitalists.

The government also hustled to procure goods from overseas to Vienna in an attempt to stabilize prices. Sadly, these efforts failed due to obstructionists among the capitalists and the corruption of the nobility within.

Of course, it wasn’t entirely without effect. At the very least, the rise in prices was repressed and did not surge to a peak all at once.

After the previous failure, there was little internal trust among the capitalists. Sensing profitability, many small capitalists with limited strength did not wait for prices to reach their peak.

People are inherently selfish. Franz was fully aware that behind the significant rise in Vienna’s prices, nobility played a part, yet their involvement was purely driven by profit, not as part of any joint action with capitalists.

Initially, these people might have just wanted to make a quick fortune, but now, as wealth gradually dazzled their eyes, many fell into its trap, unable to extricate themselves.

Unfortunately for them, they happened to encounter the European economic crisis.

Starting in 1845, crop failures became prevalent across the European Region, and international grain prices soared. As the cost of food climbed, Europe’s already impoverished populace diverted a significant portion of their funds to sustenance, causing a continual contraction in the consumer market.

In 1846, the price of American cotton and cotton textile products nearly doubled, and the excessive price hike led to a decline in sales.

As trade volumes decreased, capitalists naturally opted for layoffs. Unemployment in the United Kingdom grew steadily, rail freight volumes constantly hit new lows, many railway companies fell into deficit, and by the fall of 1847, the British railway bubble burst.

In the capitalist world, a tug in one part can affect the whole. With the railway bubble burst, ongoing construction ground to a halt, and the demand for steel dropped.

This crisis quickly spread to the steel and coal industries; out of 137 iron smelting furnaces in Staffordshire, 58 ceased production. Cast iron output dropped by a third within one to one and a half months, and coal production also plummeted by nearly twice that.

In November 1847, in one of United Kingdom’s textile industry hubs, the Lancashire area, out of 920 cotton textile mills, 200 closed down entirely, and the remaining operated only 2-4 days a week. Over 70% of workers faced unemployment or partial unemployment.

The industrial crisis erupting in the United Kingdom failed to alert Austrian capitalists. Neither the 1825 economic crisis nor the 1837 one had reached Austria.

As a non-industrialized nation, even if it wanted to experience an industrial crisis, it wouldn’t qualify, and likewise, the possibility of experiencing an economic crisis was extremely low.

Many had forgotten that modern-day Austria was no longer the Austria of old. As a semi-industrialized nation, Austria could no longer remain unscathed in an economic crisis.

The French were the first to suffer, caught off-guard by the British economic crisis. To get through it, British capitalists began dumping goods overseas, making the French the first to be hit.

By 1848, France’s industrial output had fallen by fifty percent.

Germany Region was no exception. Due to its weak industrial capacity, the impact was even greater.

During the winter of 1847, 3000 out of 8000 looms in Kleinfeld were idle, and in the first half of 1848, only 3 of the 14 factories in Cologne were operational. Industry in Erfurt was nearly wiped out.

The capitalists in Austria were in tears, and the nobility hoping to profit from the crisis were also crying. To calm the prices, the Vienna Government lowered import duties, and a tide of cheap British goods overwhelmed them; they simply couldn’t cope with the deluge.

Even inflating prices cost money. Faced with a developed industrial nation’s dumping, Austrian capitalists declared they were not fools; the shrewd among them chose to retreat at the first opportunity.

In January 1848, except for stable grain prices, all industrial and commercial product prices in Vienna suffered a collapse. In times of crisis, everyone was too preoccupied with their own survival to worry about others.

Those capitalists who fled quickly could still mitigate losses through timing, but those who lagged were stuck. With supply exceeding demand, the market prices of industrial and commercial products in Vienna plummeted below their production costs. The capital inflating prices and the involved nobility were forced to cut their losses bitterly.

Everyone knew the economic crisis had arrived. To minimize losses, capitalists began to lay off workers. More capitalists, due to severe losses in this crisis, even opted to close their factories entirely, resulting in a sharp spike in unemployment in Vienna.