Reform I

Ferdinand knew all too well that capitalists were greedy. If they were beaten down with a single blow, who knew what they might do? At the same time, capitalists were weak-willed. Open up a little room for them, and they would compromise.

In just half a year, no fewer than a hundred thousand people had poured into Bulgaria from abroad. The devious Ferdinand naturally chose to sacrifice their interests in exchange for the capitalists' compromise.

At the same time, he made sure to leave them a way in, encouraging newcomers to learn Bulgarian and become part of Bulgaria. The main goal, of course, was to promote ethnic integration and increase the population.

Apart from winning Ferdinand a wave of public support, the labor law had another benefit that would not be apparent in the short term: it dampened the enthusiasm of the working-class movement.

Bulgaria's worker-based Social Democratic Party had yet to be established, but it was already stillborn. Its founder, Blagoev, had been eliminated by the Stam Cabinet back in 1889, thanks to Ferdinand's butterfly effect.

Because of Ferdinand's arrival from the future, the number of hired workers in Bulgaria had already reached 480,000 by 1890. Foreign laborers accounted for a quarter of them, and the pace of economic development far exceeded that of the same period in history.

The government's heavy investment in infrastructure created jobs and stimulated domestic demand, driving Bulgaria's rapid economic growth.

Although the number of Bulgarian workers had increased substantially, the country's backward industrial development remained unchanged.

Apart from Ferdinand's own industries, most Bulgarian factories still operated like small workshops. Their technology was outdated and uncompetitive, they were scattered and undersized, and they were poorly equipped to withstand risk.

To change this state of affairs, Ferdinand decided to deepen the reforms. A small country with a population of just 3.2 million had more than a thousand large and small factories, all fighting over this narrow market. It was an immense waste of resources.

On September 20, a major debate was underway at the Sofia Royal Palace, one that would determine the future direction of Bulgaria's economy. Besides government officials, the country's handful of economists had also been invited.

At Ferdinand's hint, Konstantin submitted a proposal to the government titled Industry Access Standards. It called for setting entry barriers in each industry, eliminating some weaker capitalists, and deliberately restricting new entrants. In effect, it would support mergers and restructuring, and promote the development of monopoly capitalism.

If the proposal passed, it meant that over the next five years, more than 70 percent of Bulgaria's existing factories would be merged, reorganized, or shut down.

Clearly, the proposal had little support at the moment. In the late nineteenth century, free-market capitalism was all the rage, and the major powers of Europe and America were working to curb monopoly capitalism.

In 1890, with the United States having just passed the Sherman Act, promoting monopoly capitalism seemed like swimming against the tide.

Konstantin launched into a full-blown debate. "Gentlemen, you all know the predicament Bulgaria faces. We are a small country of barely three million people, with few mineral resources. Our industrialization has reached this point, yet we still rely on imports for much of our industrial raw materials. Many of our factories are poorly managed, use outdated technology, and produce goods that are woefully uncompetitive internationally. They can only rely on the domestic market. Last year, our trade deficit reached sixty million lev! If this continues, how can our economy develop in a healthy way?"

"But Mr. Konstantin, the Industry Access Standards plan undermines the free capitalist market. Excessive state intervention in the market economy would disrupt its order and destroy social fairness. The consequences would be unimaginable!" said the economist Vilen Soma.

"Mr. Vilen, you're being alarmist. State intervention in the market economy is meant to ensure Bulgaria's economy develops normally and to eliminate hidden dangers before they grow! If we really leave everything unchecked, what chance do our capitalists have against international capital?" Konstantin replied.

"Mr. Konstantin, we all know that without competition, there can be no progress. Shouldn't we be raising tariffs to protect the development of our national industries, rather than promoting monopoly?" said Kamilaev, the minister of industry.

"Mr. Kamilaev, how big is Bulgaria's market? Can a population of three million really support industrialization? Is that even possible? If not, we have to rely on international markets. Apart from cutting us off from those markets, what good would higher tariffs do?" Konstantin countered.

When no one answered, Konstantin pressed his advantage. "Gentlemen, we have no other choice now. Either we give up on industrialization, or we promote monopoly, reduce wasteful internal competition, and force capitalists to innovate and improve their products' competitiveness!"

"Konstantin is right. Monopoly isn't a good thing for the great powers, but it's the best fit for Bulgaria right now!" said Chekhov.

"What do you mean, 'the best fit'? It's simply what best serves someone's interests!"

"Utter nonsense!"

The two sides traded arguments, each airing its views, and the dispute dragged on. The case for monopoly seemed more convincing, while the opposition had greater numbers. Before long, the debate turned ugly, and tempers flared.

Ferdinand promptly stopped the increasingly heated argument. "Enough! Quiet, all of you! Watch your manners. No personal attacks! This is your one warning. Anyone who does it again will lose the right to take part in deliberations!"

Seeing Ferdinand lose his temper, both sides fell silent. "It's a good thing parliament has been dissolved, or things would have been even livelier!" Ferdinand thought with relief. He also resolved to pass as many controversial bills as possible before the parliamentary elections.

On the one hand, monopoly hindered technological development, as many examples had shown. On the other hand, however, it also contained forces that could promote technological progress.

Under monopoly capitalism, technological progress, improved labor quality, expanded production and accumulation, and the growing social integration of the production process were all inseparable from the development of monopoly competition, production concentration, cartels, and specialized division of labor.

Ferdinand knew perfectly well that monopoly was the best fit for Bulgaria at this stage. But once Bulgaria had grown strong enough, monopoly would become an obstacle to economic development.

The resistance to reform was greater than Ferdinand had imagined. Even the opposition within the government alone was formidable.

After a moment's silence, Ferdinand decided to take the roundabout approach and learn from the American tycoon Shizhiga.

Once he had settled on a strategy, Ferdinand hurriedly ended the government meeting and kept Konstantin behind.

Konstantin felt somewhat uneasy. Judging from the meeting, he had botched the task Ferdinand had assigned him.

Ferdinand looked at Konstantin, who seemed distracted, and asked, "Mr. Konstantin, do you think the Industry Access Standards plan is viable?"

Konstantin answered without hesitation. "It is!"