Holy Roman Empire

The market’s prosperity has also driven a stock market boom. Amidst a wave of positive news, market confidence has reached its peak.

Compared to liquidating physical industries, withdrawing from the stock market is much easier. After all, buying and selling occur daily in the market, and an increase of a few percent is considered normal market fluctuation.

This isn’t an economic crisis. Such minor fluctuations are well within the market’s tolerance, especially when stock prices are steadily rising.

Frankly speaking, speculation in the stock market yields far higher returns than manufacturing. However, high rewards naturally come with high risks.

Without leveraging, profits are limited, but with leverage, the risks are immense. Often, a single accidental market fluctuation can wipe out a large group of speculators.

In comparison, physical industries are far more stable, at least in the 19th century.

No matter how the market changes, as long as a company doesn’t encounter internal problems, losses remain controllable. If the market performs poorly, production capacity can simply be reduced.

“Bankruptcy” usually occurs when a company faces internal issues, such as excessive debt requiring significant profits to repay loans, outdated equipment reducing market competitiveness, or excessively high inventory tying up capital…

When no such internal issues exist, being forced into bankruptcy is relatively rare. After all, everyone does business to make money.

Blindly lowering prices and operating at a loss just to maintain market share isn’t something capitalists are willing to do unless their goal is to monopolize the market. In that case, losses are seen as an initial investment.

For most industries, monopolies are nearly impossible to establish. The barriers to entry are too low. If one wave of competitors is crushed, a new wave will quickly emerge, making true monopoly unattainable.

Business isn’t about battles influenced by emotions. Capitalists usually won’t engage in “mutually assured destruction,” where harming competitors comes at their own significant expense.

Market competition is indeed brutal, but it typically just means thinner profit margins. If an entire industry starts operating at a loss, it signals that the industry itself is on the verge of being phased out.

Under normal circumstances, even during an economic crisis or a great depression, only a portion of businesses suffer outright losses. Most simply see performance decline and profits shrink.

As long as a business operates efficiently, maintains low debt, and remains competitive, it can still survive tough times.

After all, this is still the late 19th century. Fewer than ten countries worldwide have completed industrialization, and there are only two and a half true industrial powerhouses. The market is still in a phase of wild growth, and competition isn’t as fierce as it will be in the future.

Under the law of the jungle, weaker players are naturally eliminated, and the market stabilizes. Until the victors have fully digested their gains, a new round of economic warfare is unlikely to erupt.

This can truly be considered the golden age of capitalist economies. For those who can seize opportunities, the chances to amass wealth are abundant.

…

The market was thriving, factories were springing up one after another, and recruitment advertisements covered the streets. Yet, there were very few applicants.

As the largest city on the Austro-Italian border, Milan was the primary choice for Italian laborers seeking work in Austria. Its proximity to home and higher wages attracted large numbers of Italians every year.

Despite Britain’s dominance in the textile industry, Milan managed to rise against the odds to become one of the world’s three major textile centers, thanks in large part to the availability of cheap Italian labor.

Austria had restrictions on foreign laborers but did not ban them entirely. Passing a language exam and securing a job offer from an Austrian company were sufficient to gain entry.

However, this process was cumbersome. Cross-border recruitment was challenging, and teaching foreign workers German took too much time.

But where there are policies, there are workarounds. Many foreign laborers were brought in by friends or family members, finding jobs only after entering Austria.

Compared to other regions in Austria, the Kingdom of Milan had more relaxed oversight of foreign workers due to its unique status.

Many laborers started working first and learned the language later. After all, factories were semi-closed environments. As long as workers avoided drawing police attention, no one would investigate too deeply.

Under these circumstances, an underground labor recruitment market emerged. Newfoundland Street on the outskirts of Milan became one of the hotspots for factories to hire cheap labor.

In normal times, this street would already be bustling with activity, with long lines of people eagerly waiting for a chance at employment.

No one knew exactly when it started, but suddenly, everything became quiet. Not just on Newfoundland Street, labor recruitment markets across Austria had turned eerily calm. In some areas, there were even more recruiters than applicants.

Mirko was one such recruiter, employed by the Daniel Group Machinery Factory. Normally, he would avoid Newfoundland Street. It was Milan’s lowest-tier labor recruitment market, primarily catering to foreign workers.

These applicants not only lacked sufficient education but also required significant time for skill training. After investing considerable effort, most of them would only qualify as basic industrial workers.

By contrast, Mirko preferred the recruitment centers outside the city. While the wages there were higher, the applicants were also of better quality. After a few years of training, the most capable among them could become junior skilled workers.

For a machinery factory, semi-skilled workers were far more valuable than pure manual laborers.

Only industries with massive labor demands for repetitive, low-skill jobs would heavily rely on such unskilled laborers.

Despite his distaste for the chaotic Newfoundland Street, recent expansions in many companies had created a severe labor shortage, sparking intense competition for workers.

After attending several recruitment fairs in the city without meeting his hiring targets, and with equipment already calibrated and ready for production, Mirko had no choice but to lower his recruitment standards.

Looking at the scene before him, Mirko could hardly believe his eyes. Was this really Milan’s busiest recruitment market? Why were there so few people?

Having worked in recruitment for a long time, Mirko had built an extensive network. It didn’t take long for him to run into a familiar face from the same industry.

“Ferren, what’s going on here? Did you guys snatch up all the workers?”

The middle-aged man rolled his eyes and retorted, “Do I look like someone who’s had any success today?”

Mirko nodded and replied, “Honestly, with the wages your textile factory offers, it must be tough to attract workers. But you could always trick some clueless outsiders.”

Ferren’s brows furrowed in irritation.

“Enough, Mirko. We’re both in the same business. Saving costs for our bosses is part of our job. Every time I recruit someone, I explain the terms clearly and sign contracts according to the law. How is that trickery?”

Mirko smiled faintly and let the topic drop. If he didn’t know this middle-aged man well, he might have actually believed Ferren was a decent guy.

Back when Mirko was fresh in the recruiting game, he had nearly been tricked into signing an exploitative contract himself. Fortunately, being a local and a high school graduate, a rarity in this era, he recognized the trap. Once Ferren realized Mirko knew his rights, he backed off to avoid trouble.

Although Milan was an autonomous region, the ongoing legal integration meant that labor protection laws had to be respected.

Contracts with blatant exploitation clauses could be ignored if no one complained, but if someone reported them, companies would face serious consequences.

Compared to locals, tricking foreign workers was far less risky. As long as the contracts were signed outside Austria, they became cross-border legal issues subject to foreign laws. The Milan government rarely had the time or resources to pursue such cases, and at most, they’d declare the contract invalid without further consequences.

Having avoided being tricked in the past, Mirko and Ferren’s relationship remained distant. They interacted mostly out of professional necessity, gradually becoming familiar with each other but still falling short of friendship.

Mirko changed the topic, saying, “Ferren, I heard your boss just opened two new branch factories. With such a huge labor shortage, what’s your plan? Are you interested in teaming up to recruit workers from the inland regions?”

Recruitment budgets were tight in those days. To cut costs, it was common for several companies to pool resources and organize joint recruitment trips.

Without hesitation, Ferren shook his head and said, “Mirko, you’re being overly optimistic. The reality is that there’s a labor shortage across the entire country, honestly, across all of Europe.

You don’t come to Newfoundland Street often, so you might not know this. In the past two months, the number of workers coming into Milan from Italy has dropped by nearly 70%.

I’ve asked around, and apparently, many new factories have opened in Italy itself. People can now find jobs close to home, so they don’t bother coming here anymore.

If that’s the case in Italy, you can imagine how it is domestically. The labor shortage reported in the newspapers isn’t an exaggeration. I’ve already suggested to my boss that we delay plans for the new factories.

A few years ago, during the large-scale migration campaigns, much of our surplus labor force moved to Africa. If we want to solve this shortage, the only real option is to encourage farmers to move to the cities.”

Mirko fell silent. Encouraging farmers to leave their land and move to the cities was far easier said than done. Life in the countryside was still relatively stable, and convincing farmers to abandon their land for factory work wouldn’t be easy.

This was something that could only be effectively addressed at the government level, through better policies to accelerate urbanization.

Regretfully, the Austrian government believes there is already an overcapacity problem in the country. The government is struggling to curb the rapid growth of production capacity, so why would they introduce policies that might worsen the crisis?

Urbanization comes with risks, it’s not a process where faster is always better. If a crisis hits, factories go bankrupt, and mass unemployment follows, the burden of dealing with the fallout falls squarely on the government’s shoulders.

Under current conditions, Franz would rather see slower urbanization. Compared to workers, farmers are far easier to govern.

As long as they have land and can grow enough food to feed themselves, they won’t rebel. If the government reduces taxes, it can even earn goodwill from the people.

Workers, on the other hand, are a different story. When unemployment surges, hunger follows, and if their needs aren’t met, revolution could erupt at any moment.

At the current level of productivity, the country simply can’t sustain rapid urbanization. The era of urban economic dominance is still at least fifty years away.

Even in Britain, the most urbanized nation, one-third of the population still works in agriculture. For Austria, an agricultural powerhouse, the reliance on rural labor is even more pronounced.

After a brief pause, Mirko spoke slowly, “Alright, Ferren. I know you have a plan. If it’s workable, you’ll definitely get your share of the rewards.”

Mirko knew Ferren well enough. He wasn’t the kind of person to share plans without seeing clear benefits for himself.

Ferren glanced at Mirko and shook his head.

“It’s not about kickbacks this time. The real issue is that even if we team up, it won’t be enough. If we want to recruit workers from rural areas, we’ll have to deal with the nobles. You should know how things have changed in the countryside over the past few years. With their interference, getting access to cheap labor won’t be easy.”

Mirko nodded. This was indeed a unique feature of Austria. While nobles had given up serfdom and parts of their estates, their influence at the local level remained significant.

If it were just small-scale recruitment, it wouldn’t be an issue. But large-scale hiring inevitably required dealing with these local power brokers. Even now, many traditional nobles still viewed capitalists with disdain.

Whether to assert their authority or enhance their local reputation, they often found ways to get involved.

For example, they might present themselves as worker representatives, negotiate wages, and insist on standardized labor contracts.

It’s easy to fool ordinary workers, but nobles were far more difficult to deceive.

If something went wrong and a conflict broke out, it was the capitalists who would suffer losses.

Following official procedures to the letter would increase labor costs by at least fifteen percent. While this might seem negligible for a few workers, at scale, it became a significant expense.

And the financial burden wasn’t the only issue. If new workers received better benefits than older employees, it would inevitably cause internal disputes down the line.

After some thought, Mirko shook his head and said, “Negotiating with the nobles is too complicated, and the stakes are too high. I can’t make that call. I’ll need to report this to company headquarters, but I’m not sure they’ll approve it.”

Mirko understood his limits. This was far beyond his authority, and even a coalition of companies might not achieve their goals.

Austria might be a capitalist country economically, but politically, capitalist power was still very limited. Taking on the nobles in a power struggle was a high-risk game.

Sensing Mirko’s unease, Ferren quickly backtracked, “No, Mirko, you’ve misunderstood me. I’m not trying to start a fight with the nobles, I’m not that reckless. My suggestion is that we pool our resources and look for solutions abroad.”

As he spoke, cold sweat dripped down Ferren’s back. He had tried to sound impressive but ended up giving the impression he wanted to provoke a clash between capitalists and nobility.

That kind of conflict was a death sentence for anyone involved. Not just small players like Ferren, even his boss wouldn’t survive if caught in that crossfire. It was simply too dangerous.

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