The Importance of Information

Government guidance still could not curb capital's enthusiasm. Profit was always apt to make people lose their way and overlook the risks.

If they could not obtain government support, they would find ways to cut costs—for example, by placing factories in the suburbs or in small towns with convenient transport, immediately saving more than half on land costs.

No tax breaks? That was no matter either. Prussia and Russia were both buying, buying, buying. Factory profits were now abundant; they did not care about those few percentage points.

"Fine words cannot persuade a soul bent on dying; great compassion cannot save one who chooses self-destruction."

Watching capital swarm in like moths rushing into a flame, Franz could only choose to turn a blind eye.

Beyond greed, an even more serious social problem lay behind the market frenzy. The capitalist world economy had once again developed excess capacity, with the United Kingdom and Austria suffering the most severely.

The crisis had not erupted because of the international situation. From 1873 to 1878, the Second Near East War broke out in succession, along with colonial wars launched by the United Kingdom, France, and Austria to divide up the African Continent.

War consumed enormous amounts of wealth and supplies, while market prosperity concealed the crisis of excess capacity. If the Prusso-Russian War had not broken out, a new economic crisis would have erupted by next year at the latest.

After so many years of accumulation, it was no longer merely production capacity that was excessive; even capital itself had become excessive.

As the saying went, only money spent was truly money; money lying in banks was merely a pile of numbers. With most industries already saturated and overcapacity rampant, capital needed new channels for investment.

Following the usual script of courting disaster, this