Holy Roman Empire - Chapter 486

Chapter 486: Chapter 59, The Essence of the Industrial Revolution – Cost
 

After Christmas, the Anglo-Austrian two countries recognized the Greater French Empire in succession, effectively acknowledging France’s annexation of the Italian Area.

Influenced by this, European nations also recognized the legitimacy of the Greater French Empire one after another in 1871, restoring diplomatic relations with France, and Napoleon III finally escaped the diplomatic dilemma.

The international tension triggered by France’s annexation of the Italian Area thus came to an end. However, the impact was profound.

Undercurrents began to surge, and careerists grew active; expansion became the theme of the era, and many small European countries lost their sense of security.

The Imperialist era had fully descended, and this time the French set a new precedent for the great powers. From now on, a strong country could annex a sovereign state without any pretext.

The fig leaf was no longer needed, and the law of the jungle had never been so vividly demonstrated; the rules of the game became even more disadvantageous to weaker nations.

It was unclear who leaked the news of a Tripartite Alliance between England, France, and Austria, but it made the recently eased international situation tense once again. At this moment, the remaining European countries could no longer sit still, and the foreign ministries of England, France, and Austria became exceptionally busy.

Even Alexander II, who was busy with internal reforms, sent a personal telegram to inquire. Keeping it a secret was impossible, as both England and France had publicly acknowledged that they were in alliance negotiations.

Having intended to use this alliance to increase Austria’s influence in the world, Franz naturally would not foolishly deny it.

As for what Alexander II would think, it was no longer important. Not just the ailing Russian Empire, but even the Russian Empire at its peak would have to give way to the Tripartite Alliance.

The official treaty of the alliance hadn’t been signed yet, but discussions on constructing a new international order had already begun.

Faced with interests, everyone was tempted to establish a set of rules beneficial to themselves, which was indeed the greatest benefit.

Even Franz, who had little interest in the Tripartite Alliance, was very interested in establishing a new international order.

Austria had experience in this area, having led the establishment of the Vienna System twice. A set of rules favorable to oneself could bring benefits no less significant than those from any colony.

Now everyone needed a stable Europe, the British needed balance on the European Continent, the French wished to consolidate their gains, and Austria needed time to continue developing.

The other countries were no exceptions, the Kingdom of Prussia needed to digest its conquests, the Russians were busy reforming, and small countries, needless to say, all wanted a stable Europe.

Under the common wishes of all, a new international order was about to emerge. This time it would be crueller than ever before; the three great powers made the rules, and the other nations just needed to follow.

Second-tier powers like Prussia, Russia, and the Nordic Federation still had a say, but many smaller countries had completely become echo chambers.

As one of the beneficiaries, Franz had no intention of pleading their case.

Now he was busy with economic reform. Compared to the first industrial revolution, the second one was subject to change, and certain economic policies of the past had become outdated.

The renowned “Austrian School of Economics” was beginning to emerge, although it was still in its nascent stage. Perhaps due to the butterfly effect, affected by the environment, it had undergone changes.

What exactly happened, Franz couldn’t clarify. He wasn’t an economist and wasn’t very clear about these issues.

In an era where the free market economy was prevalent, Austria’s economic policies could be considered proactive, though this proactivity was very limited.

Mainly, the market was free to develop, and the government only provided complete infrastructure and would set encouraging policies when necessary.

As long as you had money, you could enter any industry, but whether you could survive was your own problem.

As a pragmatist, Franz always followed the belief that “what’s most suitable is the best.” Within a large framework, economic measures differed in various regions of Austria.

Different areas had different directions of development, and the policies needed varied. If everything were managed by the Central Government, they would be overwhelmed.

In the Vienna Palace, the economic report meeting that would decide Austria’s economic future for the next ten years was being convened. This economic reform was only a minor adjustment.

Overall, the previous economic policies were still in use, and only a few industries required changes, affecting a small scope.

Economic Minister Andrew analyzed, “In the past two years, the domestic economic development has generally been in good condition, maintaining a growth rate of 7.8%.

Of note is the new energy industry, particularly the electricity industry, which has seen especially rapid growth, skyrocketing from an industry scale of fewer than ten million Divine Shields in 1868 to the current two hundred million Divine Shields.

The industry chain has extended to many fields, driving upstream industries including copper smelting, rubber, and power generation equipment manufacturing, as well as downstream industries such as hardware accessories, electrical machinery equipment, and transportation.

It has created 638,000 new jobs, making a significant contribution to overcoming the economic crisis. The most typical are the copper smelting industries in the Saxon region and the Balkan region, both of which have achieved remarkable breakthroughs in capacity.

The Economic Department believes that electric power will become the biggest economic growth point in the future.

Currently, only Vienna has achieved comprehensive electricity lighting, and although cities such as Frankfurt, Munich, Venice, and Milan have initiated projects, some time is still required for completion.

In Africa, we have discovered several copper mines that are rich with high ore quality, far exceeding the total reserves of copper mines currently being mined on the European Continent.

We have consulted with domestic shipyards and there are no technical issues in building large ore ships with a capacity of twenty to thirty thousand tons. Transportation costs can be significantly reduced, and the insufficient copper production capacity that constrains the dissemination of electricity can be resolved immediately.

With cheap copper ore supply, the price of copper in the market will soon fall, significantly reducing the cost of promoting electric lighting.

Additionally, there is great potential to be tapped in electrical machinery and equipment, which could even replace steam engines in the future. Some sectors are already using electric machinery and equipment.

Furthermore, another economic growth point is the record-high number of newborns, with the sales of infant products continuously increasing.

This involves too many products to tally comprehensively, so we can only make a preliminary estimate. The market is currently worth about 35 million Divine Shields annually, but the growth rate is rapid, expected to increase by 12% this year.

By contrast, traditional economic sectors have begun to show signs of decline. The last economic crisis has proved that many domestic sectors are already saturated.

In traditional economic sectors, the fastest-growing are steel, mining, shipbuilding, and construction, with growth rates of 13.2%, 9.6%, 10.1%, and 8.9%, respectively. The once rapidly growing textile industry increased by only 3.1% last year.

Our most competitive food processing industry has also encountered a bottleneck; although it still maintains a 5.8% growth rate, a clear downward trend is evident.

These figures suggest that developing emerging industries has become a pillar for future economic growth. The Economic Ministry plans to promote electric lighting nationwide, encouraging innovation in electric power technology.”

This aligns with the habits of the Vienna Government; the spread of electricity cannot be separated from government policies. Without government promotion, it’s unlikely that any power company would altruistically provide a power supply network.

By contrast, infant products are different; there’s no need for government intervention, capitalists will handle it well. The government only needs to supervise and standardize the market.

The composed and prudent Prime Minister Felix took up the topic, “Promoting electric power technology is not a problem. Everyone has experienced its benefits firsthand, one of which is the electric lights above our heads.

However, when promoting it, we must consider the initial costs. Constructing a citywide electric power network is not a small figure.

Not every city can afford it, and the government does not advise lower-income cities to proceed. If someone turns this policy meant to benefit the people into one that harms them, we will hold them accountable.”

Is electric power technology good? The answer is: very good. Sadly, it is too early and costs have not yet decreased.

Large cities with higher local fiscal revenues can follow Vienna’s lead in popularizing electric lighting. If they afford it, they can go ahead.

For some impoverished cities, it becomes a heavy burden. Take Vienna as an example: The municipal government spends 1.2 million Divine Shields annually on electricity and maintenance of the lighting system.

For the prosperous Vienna, this expense can be directly distributed among the city’s merchants, who are the biggest beneficiaries of the City that Never Sleeps, with the night market’s earnings more than covering these costs.

If a small city with little commerce and a yearly fiscal revenue of only a few hundred thousand Divine Shields were to follow suit, even maintaining government operations is difficult.

If they blindly follow the trend, this expense eventually falls on ordinary citizens. For the locals with already low incomes, it would be a disaster.

The lower the population density in a city, the higher the per capita cost of electricity supply, a calculation the Vienna Government has already considered.

To avoid the worst scenarios, Prime Minister Felix proactively dampened enthusiasm to prevent certain bureaucrats from blindly chasing achievements for the sake of their resume.

After hearing Prime Minister Felix’s warning, many local officials at the meeting broke into a cold sweat over their prior thoughts.

Indeed, cheap political achievements are hard to come by; without the necessary conditions, blindly following trends could mean the end of one’s career path once reports are submitted.

Besides a few Sub-States with greater autonomy, the rest of the cities must have the Vienna Government’s approval to embark on such major projects.

So far, only economically developed big cities or those located in coal-producing areas with unimaginably low power generation costs have been approved.

For the vast majority of cities, it is best to wait for technological innovation and further reductions in power supply costs before considering this issue.

The electric revolution in historical Europe started in Germany mainly because Germany had the highest copper and coal production in Europe at the time, making the cost of promoting electric technology lower than in the United Kingdom and France.

The United States had nothing to complain about; they had an abundance of everything. Whether it be copper or coal production, they have as much as they need.

Therefore, from the Second Industrial Revolution onwards, the Americans gradually advanced ahead of Europe in new technological revolutions.

It’s not that European countries lacked technology; the problem was the lack of raw materials and the increased costs due to overseas transportation, which prevented them from promoting the new technologies. The United Kingdom and France could not afford the high costs until the industry technologies matured.

Franz’s high-profile electric power technology revolution is no secret, mainly because Austria’s raw material costs are lower than those of the United Kingdom and France.

Apart from the Russian Empire, Austria’s copper reserves exceed the combined total of all European countries, not to mention production, which accounts for half of the global share.

In rubber production too, Austria holds a very significant share. The colonies in Southeast Asia are not occupied for nothing; almost every island can grow rubber. Coupled with the rubber plantations opened in Africa, Austria is now the world’s largest supplier of rubber products.

For the United Kingdom and France to promote electric technology, they first need to import copper and then rubber. France is in an even worse situation as they also need to import coal.

The cost factor has decided that in this industrial revolution, the United Kingdom and France are at a disadvantage.