A Twist of Fate and an Economic Crisis

Chapter 21: A Twist of Fate and an Economic Crisis

Unable to persuade the old foxes, Ham wasn't angry. He knew they were already tempted; they just didn't dare say so because they were cowards.

He wasn't any kind of revolutionary, either. He'd gotten mixed up with the revolutionaries for the sake of profit. If he could achieve his aims by peaceful means, only a fool would want to start a rebellion.

This was the European Continent. Even if a rebellion succeeded, what then?

Do princes and generals have some special birthright?

The answer was: yes!

If successful, at most he'd become president of a bourgeois republic. Once he took that position, he probably wouldn't live as comfortably as he did now.

If it failed, exile overseas would likely be the best outcome.

In the face of cruel reality, Ham's already limited enthusiasm for revolution dwindled even further.

Like most capitalists, he was willing to support the revolutionaries, but personally lead a revolution? No thanks. They didn't want to be president, after all.

It was hard to keep a banquet secret. The story of what had happened at Veris Manor outside Vienna soon reached Metternich, though the secret meeting that followed wasn't mentioned.

However, Prime Minister Metternich was a man who played by the rules. He stuck to the limits of political struggle and didn't seize the opportunity to fly into a rage and arrest the capitalists who had attended the banquet on charges of colluding with revolutionaries.

Playing by the rules meant trouble.

Knowing full well that the capitalists were plotting, yet being able to do nothing but defend against them, naturally left Prime Minister Metternich in a foul mood.

"Internal and external troubles" described his predicament perfectly. The nobility was restless within, while the capitalists watched him like tigers eyeing their prey from without. They all shared one goal: to make him leave.

Since the winter of 1847, the people of Vienna had noticed one thing: prices were rising, and climbing at a dizzying, visible pace.

By the end of December 1847, prices in Vienna had risen by 47 percent. The capitalists were testing the limits of what the public could bear, bit by bit.

At this point, everyone turned their eyes to the Vienna Government, hoping it would come up with a solution.

Clearly, they were in for a disappointment. The Vienna Government had neither the power nor the authority to control prices. Although Prime Minister Metternich took measures time and again, they achieved little.

For example, the government posted notices ordering merchants not to drive up prices. They were utterly useless.

Another example: the prime minister repeatedly tried to meet with the capitalists, but to no avail.

The government also hurried to bring supplies into Vienna from elsewhere, hoping to bring prices down. Unfortunately, it was thwarted by the capitalists and undermined by the nobility within the government. In the end, it failed.

Of course, its efforts weren't completely useless. At least they slowed the rise in prices, preventing them from immediately reaching their peak.

After their previous failure, the capitalists had little trust in one another. Seeing an opportunity to profit, many small-time capitalists with limited resources couldn't wait for prices to hit their highest point.

People were selfish. Franz knew full well that the nobility was also involved in Vienna's soaring prices. They were simply acting on their own to pursue profits, though; they hadn't joined forces with the capitalists.

Perhaps at first, they'd only wanted to make a quick profit. But by now, wealth had gradually clouded their eyes, and many had fallen in too deep to pull themselves out.

Unfortunately, their luck was poor. They'd stumbled right into Europe's economic crisis.

Beginning in 1845, poor harvests became increasingly common across Europe, and international grain prices began to soar. As grain prices rose, Europeans who were already far from wealthy had to spend a large share of their money on food, and consumer purchasing power kept shrinking.

In 1846, the prices of American cotton and cotton goods nearly doubled. The steep prices caused sales of cotton goods to fall.

As trade in goods declined, the capitalists naturally chose to lay off workers. Unemployment in the United Kingdom continued to grow, railway freight volumes repeatedly hit new lows, and many railway companies fell into the red. In the autumn of 1847, the British railway bubble burst.

In the capitalist world, a single tug could set the whole body in motion. The railway bubble burst, construction on railways still under development came to a halt, and demand for steel fell.

The crisis soon spread to the steel and coal industries. Of Staffordshire's 137 iron furnaces, 58 shut down. Pig iron production fell by a third in the space of one to one and a half months, while coal production dropped by nearly 20 percent.

In November 1847, Lancashire, one of the United Kingdom's centers of textile manufacturing, had 920 cotton mills. Two hundred had shut down completely, and most of the rest operated only two to four days a week. More than 70 percent of workers were laid off or forced into part-time work.

The industrial crisis in the United Kingdom failed to draw the attention of Austrian capitalists. Neither the British economic crisis of 1825 nor the one in 1837 had affected Austria.

As a country with no industrial base to speak of, Austria wasn't even qualified to suffer an industrial crisis. The chance of an economic crisis breaking out there was likewise vanishingly small.

Many had forgotten that Austria was no longer the Austria of old. As a semi-industrialized country, it could no longer stand apart from economic crises.

The French were the first to suffer. After the economic crisis broke out in the United Kingdom, British capitalists began dumping goods overseas to weather the storm. The unprepared French became the first victims.

By 1848, France's total industrial output had fallen by 50 percent.

The German states were no exception. Their industrial capacity was weak, so they were hit even harder.

In the winter of 1847, 3,000 of Krefeld's 8,000 looms stood idle. In the first half of 1848, only three of Cologne's fourteen factories were operating, and Erfurt's industry was almost completely wiped out.

The Austrian capitalists were in tears, and so were the nobles who had hoped to take advantage of the turmoil. To bring prices down, the Vienna Government lowered import tariffs, and a flood of cheap British goods swept in. It was more than they could handle.

Driving up prices took money, too. Facing a flood of goods dumped by an industrial power, Austria's capitalists weren't fools. The sharpest among them withdrew at once.

In January 1848, apart from grain, whose prices remained firm, the prices of all manufactured goods in Vienna collapsed. When crisis struck, everyone was scrambling to save themselves. Who had time to worry about anyone else?

Capitalists who were quick on their feet could limit their losses by getting out in time. Those who moved too slowly were trapped.

With supply outstripping demand, the prices of manufactured goods on the Vienna market had fallen below their production costs. The capitalists and nobles who had driven up prices were forced to take painful losses.

Everyone knew an economic crisis had arrived. To reduce their losses, capitalists began laying off workers. Many had suffered such heavy losses that they simply shut down their factories, and unemployment in Vienna surged.

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