Holy Roman Empire-Chapter 1067 - 81: Campbell Reforms

Chapter 1067 -81: Campbell Reforms

International tensions were swirling, yet Franz nestled at home, doting on his children and grandchildren, seemingly oblivious.

It was, of course, impossible for him to be unaware. With so many countries that the British sought to woo, there were bound to be a few turncoats.

In international politics, it’s always a minority that sticks to one path come hell or high water; playing both sides like a snake and rat is the standard maneuver.

The contention between Britannia and Shinra wasn’t lopsided, and before the situation cleared, most nations wouldn’t tie themselves exclusively to one side.

Shinra could rely on its land power advantage to coerce the nations of Europe to come aboard; the British, similarly, could use their maritime supremacy to gather allies worldwide.

Prevention was impossible; fence-sitters would only fall with the wind and could only do so, as this was the way of survival for small countries.

...

The Vienna Government wasn’t powerless to act. The main issue was the limited force projection, unable to compete with the British overseas.

The British had operated overseas for centuries, whereas Shinra had entered the Age of Sail less than forty years ago; their influence abroad was far behind that of the British.

Besides, vassals were not so easy to control. Overseas countries were not united, and there were plenty of deep-seated hatreds between neighbors—winning one over would inevitably alienate another.

Adding allies was easy, the trouble was getting entangled in regional conflicts while doing so.

Over-involvement in regional discord only bred animosity, and had no meaning for Shinra.

Forget about the gratitude of allies. In the realm of international politics, tangible benefits were all that mattered; “gratitude” was worth the least.

In this context, rather than take the initiative and suffer for it, it was better to watch the British perform and strike after.

If anyone sided with the British, then support their enemies; Shinra would never be short of allies.

Calm days always passed in the blink of an eye. With the progression of the era, the discord between Shinra and Britain became increasingly acute.

Unawares, “trade friction” suddenly heated up, becoming a darling term of the media for a time.

With the benefits brought by the Second Industrial Revolution and the cost advantage in industrial raw materials, Shinra’s industrial and commercial products increasingly gained an edge in international competition.

In the increasingly harsh market competition, the once “workshop of the world” now struggled in many sectors.

The “free trade” once prided upon by Britain, under the impact of Shinra’s industrial and commercial products, had now become a complete joke.

Unsurprisingly, the Conservative Party, proponents of free trade, lost in the 1902 general election. The Liberal Party candidate Henry Campbell-Bannerman, succeeded in entering Downing Street.

As the victor, Campbell had hardly had time to rejoice when the mess in his hands left him stunned.

Britain was still the world’s hegemon, but a hegemon riddled with flaws and leaks everywhere.

To be frank, the Government of Robert Cecil had done a great job, achieving significant results in political and diplomatic fields.

For instance: annexing French Indochina Peninsula, expanding Britain’s colonial territory; successfully diverting trouble eastward, drawing the Russians into the Far East and creating rifts in the Russian-Austrian Alliance; establishing the Anglo-Japanese Alliance, repairing relations with the American countries, and setting up strategic partnerships with multiple nations…

But no amount of diplomatic success could conceal Britain’s economic difficulties. The Second Industrial Revolution was taking its toll, and Britain, having failed to keep up, was now paying the price.

Not only was the overseas market squeezed by Shinra’s goods, but the local market also faced impact, and even Britain’s flagship textile industry could not escape unscathed.

There was no other way, who asked the London Government to choose to court the United States?

Sensing the danger, the United States couldn’t help but gravitate towards Shinra. Then, with the support of Shinra, the United States also launched their Industrial Revolution.

Like the majority of countries, the beginning of the Industrial Revolution for the United States lay in the textile industry. Now that the regions producing raw materials were weaving their own textiles, how could Britannia, which was established on its textile industry, cope?

After all, the textile industry was Britannia’s largest economic sector, with over a third of the British population connected to this industrial chain in some way.

As the world’s largest cotton producer, the United States had unparalleled advantages in developing its textile industry; they easily outperformed British textile companies in terms of cost.

Once there were issues with the textile industry, Britannia’s economy could collapse in minutes, and the British naturally became restless.

Because of the courting of the United States, which caused the United States to lean towards Shinra, it was seen by the public as the greatest diplomatic error of Robert Cecil’s government and also one of the main reasons for the Conservative Party’s defeat in the elections.

When in opposition, Campbell had often criticized the government on this issue. Now that it was his turn in power, he found that it wasn’t as simple as it seemed.

It seemed like courting the United States was a diplomatic mistake, but in reality, the British Government had no choice. Regardless of circumstances, the United States would develop their own cotton textile industry—it was determined by interests.

A decade earlier, the United States had already planned to develop its own cotton textile industry but had been forced to abandon the project under pressure from Britannia.

In recent years, as the Holy Roman Empire rose to power, Britannia’s paramount position began to wobble, and the suppressed United States once again harbored ambitions to develop its textile industry.

Unlike the past, with the Holy Roman Empire stirring the pot, Britannia no longer had the capacity to stop the United States from developing its textile industry.

By this stage, rifts had formed between the two sides. No matter how much they valued their bilateral relationship, it couldn’t withstand the conflict of interests.

The Vienna Government could help the United States develop its textile industry, whereas the London Government absolutely could not—if they had, domestic interest groups would have revolted.

Courting a country with core interest conflicts as an ally was far less worthwhile than allying with a country with relatively minor conflicts and stronger power.

After all, Britannia was going to contend with the Holy Roman Empire for supremacy, and might even have to fight a war; having a weak ally was not an option.

“Enjoying the verbal sparring is fun but facing the funeral pyre afterward is grim.”

Prime Minister Campbell had such feelings now. He had enjoyed criticizing in the past, but now in power, he found that he had to continue his predecessor’s foreign policies.

If it were just diplomatic troubles, Prime Minister Campbell would have managed. Politicians, after all, are known for their thick skin—saying one thing and doing another is just par for the course.

What really troubled Campbell was the steadily declining domestic economy and the growing social strife.

Of course, Campbell was not entirely unprepared for these issues. As a leader of the Reformist Party, he had proposed reform ideas several years earlier.

This world has always found it easy to chant slogans, but effecting real change is difficult.

“Reform” has never been smooth sailing; throughout history, only a few reformers have succeeded, with the majority ending in tragedy.

Now in power, Campbell truly realized how arduous the situation was. He understood that it wasn’t that the previous government didn’t want to reform, but rather that the interests involved were so vast that they dared not act hastily.

…

Trade Minister Laohe – George: “This is the trade report for imports and exports in the first half of the year that we’ve put together, and the situation is terribly bad.

Compared with the same period last year, the total exports for the first half of this year shrank by 0.46% compared to the same period last year, while the total imports rose by 2.67%, and the trade deficit grew by 3 percentage points.

This has been the third consecutive year that our export trade has shrunk, and the tenth year that the trade deficit has grown. To be precise, since the end of the Europe conflict, the Empire’s trade deficit has been continuously increasing.

As a result of the shrinking exports and growing trade deficit, the status of the British Pounds in the international arena has also been hit.

Especially in the European world, countries have been increasingly settling trades with Divine Shield and gold, which has marginalized the British Pounds.

The fundamental cause of all this is mainly that domestic industrial products have lost their competitive edge in the international market.

In a range of emerging industries such as mechanical manufacturing, electrical equipment, and the automobile industry, one can hardly find a trace of Empire goods.

Even in our own territory, it is now filled with Shinra manufacturing. If this continues, the Empire’s economy will sooner or later encounter issues.”

Trade deficits are not something new. Ever since France and Austria completed industrialization, Britain has gradually found itself in a trade deficit position in international trade.

With the early advantage secured during the first industrial revolution, this deficit did not spell disaster for the British, but instead pushed the British Pounds into international circulation.

But the good times did not last long. As the trade deficit continued to grow, problems slowly emerged. A significant deficit led directly to an outflow of wealth.

After all, not all countries are willing to settle in British Pounds. If you want to reap the world by printing money, Britain does not have that strength yet.

With the rise of the Holy Roman Empire, the Divine Shield began to snatch the market from the British Pounds, making this situation increasingly apparent.

Everyone is not a fool; seeing Britain’s trade deficit grow larger and larger, no one wishes to hold a large amount of British Pounds and pay for the consumption of the British.

As time passed, more and more European countries were unwilling to accept British Pounds in settling accounts.

The share of the British Pounds in the international currency market shrunk, and to quell the trade deficit, the only option was to fill this gap with real gold and silver.

Although there were colonies to plunder, the continuous outflow of gold and silver still posed a difficult problem for the British Government.

Changing all of this is quite simple. The options are either to recapture the lost markets or to innovate new products to open up new markets.

Unfortunately, when the competitor is the Holy Roman Empire, the use of military threats has no effect, and normal commercial means are simply not enough to recapture those markets.

Developing new products is even more unrealistic. If British enterprises were that powerful, there would be no shrinkage in export trade volumes.

Minister of Labor Burns said, “Affected by the economic downturn, domestic labor-capital conflicts and employment issues have become acute.

According to our survey data, the unemployment rate has risen by another 0.3 percentage point in the first half of the year. It may seem insignificant, but this has been the trend for five consecutive years.

Not to mention labor-capital conflicts, just take a look at the crowds of strikes and processions outside. This year has seen a noticeable increase in such events.

Take London as an example, there have been 16 strikes involving more than a thousand people in the first half of the year, with demonstrations and protests occurring almost every month.

If I weren’t sure this was London, I would suspect I had accidentally entered Paris. The frequency of these strikes and protests is simply beyond…”

It is clear that Burns is truly concerned with solving the problem. As the first representative of the working class to join the cabinet, even if only for his political career, Burns still needs to make achievements.

Before he rose to his position, he thought that it was enough to protect labor interests through legislation and prevent capitalists from running wild.

After accessing firsthand information, Burns doubted his own eyes for a moment.

Now the problem with Britain was not just that capitalists were recklessly overstepping, but rather, the larger trouble lay in the challenge to enterprise survival.

Emerging industries were shattered by shocks, while traditional industries were facing a series of issues such as brutal market competition, meager profits, and overcapacity.

The choice of British capitalists in the original timeline was to reduce capacity and shut themselves in, playing in the colonies. After all, the British colonial market was large enough to provide for their retirement.

As for updating machinery and increasing R&D investment to face international competition, it sufficed to shout a few inspiring slogans; actually doing so would mean admitting defeat.

Capital is the most pragmatic; if it can make money lying down without risk, why take the risk of competing internationally?

Data doesn’t lie; no matter the country, aggressive, R&D-heavy enterprises die the quickest. In contrast, unambitious, conservative enterprises enjoy longer lifespans.

Perhaps conservative enterprises might be eliminated by the market someday, but before that happens, capitalists would have made their fortune.

By comparison, enterprises that continuously invest in R&D might rejoice in success, but any failure along the way would mean total loss.

Capital detests risk; earning money steadily is the greatest happiness. Those capitalists willing to gamble their fortunes for a bright future for their enterprises have always been in the minority.

Chancellor Herbert Henry Asquith said, “These problems have been around for a while. To solve domestic economic issues, the previous government had twice lowered the tax rates for industrial and commercial enterprises.

Had they not been vetoed by Parliament, they were even prepared to launch an export subsidy plan to increase competitive strength for enterprises.

But these measures can only offer temporary relief. To truly solve the problems, it still depends on the efforts of our enterprises.

We have to admit that we are lagging behind in many fields. Shinra’s goods can be found everywhere. If you take any one of them and compare it with a domestic product of the same kind, our enterprises indeed do not perform well in terms of cost-effectiveness.

The trouble now is that domestic capitalists lack interest in technological innovation, especially in the machinery equipment field, which lacks a spirit of innovation.

What capitalists want is to end free trade and revive trade barriers to protect the market with tariffs.

Of course, they don’t put it so bluntly. Instead, they claim that by adopting trade barriers, they temporarily protect the domestic crippled market, buying time for technological innovation of enterprises.

However, we all know that with the domestic enterprise’s enthusiasm for investment in scientific research, this situation is likely not going to change by the next century.”

No matter what policy it is, in the end, it all comes down to interests. The British Government established a free trade system out of interest; likewise, it is interests that force the British Government to consider ending free trade now.

Even if Asquith detested it all, feeling that these unambitious types were the bane of Britain, he had to carefully consider their opinions.

Seeing the tense atmosphere, Prime Minister Campbell waved his hand and said, “These issues are the realities we will face in the coming days.

Britain has arrived at this juncture as a result of these accumulating problems; reality tells us that Britain is now at the point where it must reform.

If we continue on this path, let alone competing with the Holy Roman Empire, just the internal social conflicts alone could drain half our vitality.

Considering market protection is one thing, but how to protect it, to what extent, and the potential impacts are all things that must be carefully weighed.

These issues are interrelated, and if we adopt trade barriers, other countries will surely follow suit, which will definitely affect our import and export trade.

Domestic…”

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