Labor Shortage Panic

The prosperity of the market likewise fueled a booming stock market. With nothing but favorable news, everyone's confidence had reached its peak.

Compared with dumping physical industries, retreating from the stock market was much easier. There were buys and sells on the market every day anyway; an increase of a few percentage points was perfectly normal market fluctuation.

This was not an economic crisis. Such minor fluctuations were entirely within what the market could bear, most notably as stock prices continued to rise.

Frankly speaking, stock market speculation yielded far more than manufacturing. But where there were benefits, there were naturally drawbacks; high returns came with high risks.

Without leverage, there was not much money to be made. But leverage carried enormous risks, and many times, a chance fluctuation in the market would sweep away a whole wave of speculators.

By comparison, physical industries were much more stable—at least in the nineteenth century.

No matter how the market changed, as long as there was nothing wrong with the company itself, losses remained controllable. If business was poor, it could simply cut production capacity.

"Bankruptcy" usually happened because the company itself had problems—for example, excessive debt that required massive profits to repay loans; management failures, such as not replacing equipment in time, causing products to lose their market competitiveness; or excessively high inventory tying up large amounts of capital...

When a company itself had no problems, being squeezed into bankruptcy was still rare. Put plainly, everyone did business to make money.

Blindly slashing prices, losing money just to make a name for oneself—capitalists were not that foolish. Unless they wanted to monopolize the market. Losing money to seize the market alone could only be counted as an upfront investment.

For most industries, however, the conditions for monopoly simply did not exist.