Vol 4 Chapter 46: , Wealth distribution

Constantine went on to say: "Your Majesty, this is the plan of the Ministry of Communications on the Greek Peninsula. In order to connect the Greek Peninsula with our mainland as soon as possible, the Ministry of Communications plans to build a railway from Ioannina to Athens.
Including the seven branch lines, the total length of the railway is about 2,300 kilometers. It is planned to invest 80 million levs and the construction time is expected to be 5 years! "
Ferdinand nodded and agreed. The railway network connecting the Greek peninsula and strengthening the control of the Greek peninsula are now one of Bulgaria's established national policies.
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Well, Ferdinand has only left for more than two months, leaving such a big mess, it can only be said that the king is not good!
If Ferdinand doesn't ask questions, perhaps many things will be directly classified by the bureaucrats below as non-critical ones. This is also a common problem of bureaucrats all over the world, who is anxious for the boss and worry about the boss!
Although Bulgaria's current moral standards have reached a high level, Ferdinand has never believed in the bureaucrats under his hands.
Maybe they won't make big mistakes, but it's hard to say whether they will be passive and sabotaged. After all, there are so many things about the Bulgarian government!
Too much they don’t have time to engage in political struggle! They are also human beings. If there is a chance to be lazy, how can they give up?
As for giving them a holiday? Ferdinand said: This is impossible! In this era, there is no popular saying that taking annual leave is popular. The whole Bulgaria is a single rest system. Is there no exception for this king?
And it's not the busiest time yet, when the world war breaks out, that's really busy!
People who have experienced the first Balkan War know this. In order to win the Ottoman Empire, Bulgaria has invested all its strength in the country. Many government officials have not entered the house once in a few months!
Well, except for special circumstances, no matter how busy government officials are under normal circumstances, they are easier than the workers at the bottom?
With a higher income, except for ten hours of work every day, in principle, no overtime is allowed!
Oh, now the Bulgarian government is restructuring and is preparing to implement an eight-hour work day, but Ferdinand has never agreed!
This is a problem that affects the whole body. If the government changes working hours, should other industries and industries also reform?
Don't suffer from lack and unevenness! It is universal all over the world. Now no one in Bulgaria raises questions about the ten-hour work system and the single break system. The most important thing is that everyone, including Ferdinand, implements this set of standards!
Of course, this is what Ferdinand thinks! His working hours are arranged freely. If there are no important things, there is nothing to him!
The cabinet government does not eat plain rice. It is enough to ask Ferdinand to make resolutions with a lot of questions. If he can't handle even trivial matters, Ferdinand would have been replaced!
The most important thing is that the productivity of this era is limited. If working hours are forced to be reduced, then capitalists will inevitably also lower the wages of workers.
In order to keep their income, everyone still has to work overtime obediently. Doesn't this tossing like this mean doing nothing?
Don't mention work efficiency. It's all nonsense. Ferdinand has been in the 21st century in his previous life. Isn't there still so many people working overtime?
Are capitalists all idiots, don't they know that working too long will reduce production efficiency and increase the defective rate?
Why are so many people working overtime?
The reason is simple. Except for some precision industries, it is completely acceptable for most factories to have slightly flawed products!
Needless to say in this era, capitalists dare to let workers work 15 or 6 hours a day. That is also considering all factors, and they do it in order to maximize profits!
What if working hours are forcibly reduced without lowering wages?
That's even worse, just prepare to face the economic crisis!
Productivity in this era is limited. If the value of a product produced by a worker for ten hours is 1 lev, the cost of raw materials, machinery, and plant is 45 lev, the government tax is 1 lev, and the sales channel is 2 lev For the capitalists, the capitalists took away 10 lev, the management cost was 5 lev, and the workers' salary was 1 lev.
If the working hours are now eight hours, the value of the products produced will be only 80 levs, the cost of raw materials, workshops, and machinery may be 38 levs, and the government’s tax revenue may be reduced to 8 levs, and the sales channel costs may be That is 16 levs, the management cost remains unchanged at 5 levs, and the workers' wages remain unchanged at 10 levs, then only 3 levs are left for the capitalists.
(The reduction of production capacity will inevitably increase the amortization of plant and machinery costs! The law of the market determines that the more products are produced, the lower the unit cost!)
Obviously this is unacceptable. It is impossible for all of the 10% of capitalists to be profit. Most people invest part of their money and then use bank loans to expand production capacity!
Now Bulgaria’s bank funds interest rates are all above 5%. If capitalists make a 10% profit, after excluding the interest on the funds, they will still make a profit!
If this profit is reduced to 3% or even lower, there is no doubt that the company will not survive!
The capital cost alone may not be able to be recovered, let alone the expansion of production capacity! It is impossible for all capitalists to invest in full, right?
Even if there is so much money, it is estimated that no one will do that!
For example, the total investment in this project is 10,000 levs, you invested 30% of the capital 30,000 levs, and borrowed 70,000 levs from the bank at an annual interest rate of 5%.
The profit is calculated as 10% of the total investment. The annual profit is 10,000 levs, the loan repayment is 35,000 levs, the net profit is 65,000 levs, and the return on capital is 21.7%.
This figure can also stimulate the enthusiasm of capitalists to produce. If they are allowed to invest 10,000 levs in full, then the rate of return on capital will only be 6.5%. What else does this rate of return on investment talk about expanding production?
As for rising production costs, can it increase in sales prices? Obviously, the consequences are even more serious. International trade now accounts for 20% of Bulgaria’s industrial production. If the prices of goods are increased, will they be competitive?
Not to mention the loss of the international market for product price increases, it will also cause domestic inflation and cause a chain reaction!
Just think about the terrible consequences, Ferdinand dare not act rashly!
Either the productivity has reached a certain level, or Bulgaria has enough colonial market to be plundered, otherwise it is better not to mess around!
At the beginning of the 20th century, the wealth created by the whole society was limited. No matter how it was distributed, it was impossible to achieve high welfare. Ferdinand would not violate the laws of the market!
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