Chapter 275: Stuck economy

The development of the colonies only involved a small part of the energy of the Vienna government, and the focus is still domestic.
After the end of the Near East War, it is logical that the speed of Austria's economic development should decline, but capitalist free economic markets are often irrational.
The entire economy of the New Holy Roman Empire was like a runaway horse carriage, racing forward all the way. At this time, the brakes could no longer be pulled, only to watch the carriage run farther and farther on the road of no return.
Government intervention in the market economy? Franz didn't want to carry the pot that ignited the economic crisis, nor could he bear it.
The overall overcapacity in the capitalist world determines that no matter what measures are taken, the economic crisis will erupt.
Taking measures can only prolong the time when the crisis erupts, and then the longer the crisis erupts, the more destructive it will bring.
This is not a problem for one country of the New Holy Roman Empire, but for all capitalist countries. Unless everyone intervenes in the market together, it is possible to survive the crisis smoothly.
Vienna Palace Economic Conference
Franz took out a document and sent it out to everyone, seriously saying, "This is the latest economic report. Everyone has taken a closer look.
The situation of blind investment in our country is very serious. Many industries have overcapacity, and a large number of products have been backlogged.
In the short term, we will not be able to find a new market to absorb these excess capacity.
Newly developed Balkans and African colonies, although some of the capacity was consumed.
However, the speed of new markets is far less than the madness of the domestic capital market.
The same is true in foreign countries, where major capitalist countries have overcapacity in varying degrees. At present, the situation is the worst for us and the United States.
This is a risk that must be borne when large amounts of foreign capital are introduced. Once the economic crisis breaks out, Anglo-French capital will definitely allocate funds to leave the market. If we cannot properly handle it, the consequences will be very serious. "
Minister of Finance Carl said: "Your Majesty, the free flow of capital, we cannot directly interfere, and the best way now is to lead them to the real economy.
When capital becomes real estate such as factories, railways, and infrastructure, it is difficult for them to leave. "
When capital becomes real estate, and you want to leave the market, you must cut meat. These industries are worthless during the economic crisis, and you ca n’t even find a buyer.
No one took over the market, and the capital invested in it was locked up by the market. If you want to unwind and wait for the economy to pick up!
However, once the economy has recovered, many of these industries have become high-quality assets, and capitalists have no need to abandon these industries.
Prime Minister Felix frowned and said, "This is too big a problem. If more foreign capital is invested in the real economy, the situation of overcapacity will become more serious.
Even if these capitals are retained, the scale of the economic crisis will be exacerbated, and the ultimate harm will be borne by us. "
Chancellor of the Exchequer Carl explained: "Everything has two sides. If you want to minimize the crisis, it is best to let them invest in urban infrastructure.
For example: Now we promote urban safe drinking water projects, drainage official website reconstruction, urban road construction ...
There is no overcapacity in these industries, and the New Holy Roman Empire has more than 300 cities. Because of government funds, we are currently only rebuilding infrastructure in big cities.
These areas can accommodate a large amount of capital, but once the economic crisis breaks down, capitalists' capital chain will break, there will be a lot of bad projects, and the government still needs to take over. "
Felix first asked intently: "The takeover is a small problem. The biggest problem is the construction of urban infrastructure, which is always funded by the government. These projects are basically not profitable.
In order for capitalists to invest, they must first see a profit point. The city's safe drinking water project is just fine. Waterworks can collect water charges. What other profits do the infrastructure depend on? "
Finance Minister Carl explained: "Of course there is no profit point. The investment in infrastructure construction is too large, and most projects are of public interest nature. It is impossible to make money from the project itself.
Therefore, we must take a roundabout way, for example: bidding to the society, the early government only took out a small part of the money, let the capitalists advance the construction, and after the project is completed, it will be accepted and the project funds will be settled.
None of these projects can be completed in a short time, and the amount of investment is very huge. Once the economic crisis breaks down, banks tighten their money, and most capitalists' economic chains are broken.
As long as it is stated in the contract that we will not pay the bill if there is a bad project, we can save a lot of money.
If these consortia behind foreign capital are willing to inject funds to continue to complete these projects, then it would be best.
With the influx of new capital, the continued construction of these projects will inevitably drive the economy of many industries, and the economic crisis will pass.
Anyway, the money for this infrastructure construction will be paid out sooner or later, and we will be able to survive the economic crisis smoothly. "
Franz's eyes brightened. Isn't this a copy of Roosevelt's new economic policy? It's just that the scale is not so large, and the initial basic starting point was not to survive the economic crisis, but to lock in foreign investment.
That's right. For infrastructure projects, as long as the money is invested, it will be locked up. Do not expect the Vienna government to pay in advance until completion.
Either the capitalists and Austria have weathered the crisis together, and everyone has weathered the economic crisis together;
In order to mitigate the damage caused by the economic crisis, pulling people into the water is the best option now. The worst case is nothing more than leaving a bad project, and the Vienna government is responsible for taking over the bid.
In the past, Franz could let the capitalists jump into the huge pit of railway construction, and now naturally they don't care about letting them jump into the pit of infrastructure construction.
This cannot be regarded as a pit. In the period of normal economic development, it is a proper high-quality project, and there is no pit-man nature.
After thinking about it, Franz warned: "The plan is very good, but we must pay attention to that degree.
We must ensure that all successful bidders are capable capitalists. If a group of unreliable households get the project, we will end up with ourselves.
Retaining foreign capital is only a means, not an end. Our ultimate goal is to weather the economic crisis smoothly.
According to the current situation, the capitalist world has experienced severe overproduction and the outbreak of the economic crisis, which is a problem within two years.
When necessary, a margin system can be introduced. Let the capitalists who undertake these projects pay project guarantee funds first, and then return them after the project is successfully completed. "
The outbreak of the economic crisis, in addition to excess capacity, is also characterized by a lack of money in the market. Everyone's funds were concentrated in the hands of a small number of people, resulting in a shortage of liquidity.
This is the age of the gold standard, and it is impossible to issue a large number of currencies. Unless the economic crisis is too severe to bear, Franz will not devalue the currency.
It is very important to keep the capital in the country as much as possible. Coercive means to supervise finance and prohibit capital outflows are the worst means.
Inability to change the rules, it is very necessary to abide by the rules, and blindly breaking the rules is bound to be backfired.
As a member of the vested interest in the rules system, Franz does not think that things that break the rules are suitable for Austria.
In order to retain foreign investment within the scope of the rules, in this case, Franz does not want the second generation of domestic nobles to run out of trouble, if only they have the strength, it is not harmful to others to run the project without money.
This is not a joke, but a fact. The wealth of aristocratic families does not mean that every family member has wealth. Many children of nobles can only share a small portion of property.
Land, title, and core industries will not be divided. Otherwise, these generations will be lost for generations.
Often the eldest son who inherits the family business, they have enough assets to inherit and will not go out and mess around; the second sons who don't have many assets are often active in gray areas.
Franz encountered this kind of dead boy a lot. In the Great Revolution of 1848, I did not know how many noble families, because these children died, and the family behind them was finished.
Afterwards, the major aristocratic families strengthened their children's restraint, and most of the active noble children suffered brutal repression from their parents.
In recent years, they have performed relatively well. After all, they have personally experienced the Great Revolution. One-third of the aristocrats in China have lost their titles, and half of the families have fallen, and everyone has awe.
Chancellor of the Exchequer Carl asked in wonder: "Your Majesty, what is the margin system?"
This is not his ignorance, but that there was no concept of a margin system at this time. The earliest guarantee system did not appear until 40 years later.
It is normal to not understand such an advanced concept. Everyone has become accustomed to the active thinking of Franz, and often put forward some new ideas.
Franz explained: "It's very simple to let the successful bidder pay a sum of money as a guarantee for the project to be successfully completed.
Including labor wage payment guarantee, engineering quality guarantee, and normal completion guarantee of the project. After the project was successfully completed and the workers' wages were clearly settled, the government would return the guarantee in full. "
The Prime Minister Felix asked: "Your Majesty, isn't it the same to deduct the money from the project money?"
Franz shook his head and said, "Differently, the deduction from the project money does not determine the capital strength of the capitalist.
They completely took the contract signed with the government, went out to find bank loans, and relied on bank loans to complete construction projects.
If this does not matter during normal times, it will not affect the normal progress of the project. However, once the financial crisis occurs, the bank's contraction will be different.
Our purpose now is to retain foreign investment, not to create wealth opportunities for some people. Once the project is over, we need to come to the aftermath.
With a deposit, our risk is minimized. If the capitalists do not want to bear this loss, they will have to work through the difficulties with us. "
This is a psychological issue. The more capital invested, the harder it is to let go. The larger the capital that is fastened, the tighter the interests of capitalists are tied to Austria.
In order to prevent the previous investment from being thrown away, capitalists can only allocate more funds to fill the pits to ensure the normal progress of the project.
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