Holy Roman Empire

The dazzling and splendid sun high in the sky, the gentle and refreshing breeze that stirs the heart, the ancient and lingering chimes, the vast, silent night sky, and the brilliant, radiant stars—all these come together to adorn the vibrant splendor of early summer.

A concert was taking place at the Vienna Palace, one of the few forms of entertainment of the time and the most prestigious musical event in Austria.

Originally, Franz had planned to hold an awards ceremony, but after considering his own tastes, he decided to abandon the idea. Judging music is notoriously tricky, as personal preferences vary widely, and a misstep could easily lead to embarrassment.

Following the Revolution of 1848, Austria was experiencing a golden age of music composition, with many classic pieces emerging.

Franz wasn’t very familiar with the Western music scene. He couldn’t distinguish which pieces originated in the original timeline and which were products of the butterfly effect.

But he was content to simply enjoy the music. The privilege of performing at Vienna Palace was itself a mark of recognition. This occasion wouldn’t be complete without mentioning the late Marshal Radetzky as every concert’s signature piece was the Radetzky March.

Composed in 1848 by Austrian composer Johann Strauss Sr., the march celebrated the Austrian army’s victory in the Austro-Sardinian War, composed to honor this triumph.

The piece carried an undertone of Habsburg military pride, and combined with the late marshal’s legacy, it also conveyed political significance.

Thanks to the Austrian government’s promotion, the Radetzky March had already spread across much of the world, becoming a symbol of Austrian music.

Franz was also very fond of this march. It was the closing piece at every concert in the Vienna Palace, highlighting its significance in Austrian music.

With an economic crisis looming, Franz had little mind to enjoy the concert. The high-ranking officials of the Austrian government were similarly occupied and had to regretfully miss this musical event.

They couldn’t entirely miss it, though, as they were meeting next door, where they could still hear the music, even while in discussion.

Franz asked in a serious tone, “Has the situation spiraled out of control?”

Prime Minister Felix replied, “Domestically, the situation is still relatively stable. The strike incidents are calming down, and most companies have reached agreements with workers, allowing production to resume.

Internationally, however, things are in turmoil. Several countries have already deployed their military to suppress strikes, making the situation very tense. Now, with the stock market crash on top of it, an economic crisis seems unavoidable.”

Using military force to suppress strikes was not unusual in the 19th century as it happened often. Bismarck, known as the “Iron Chancellor,” had earned the “iron” part of his reputation by suppressing strikes.

There were many complexities in these incidents. They couldn’t be judged simply as right or wrong. Unlike Austria, which had strong control over its regions with police arriving immediately to maintain order, other countries were often unresponsive when strikes broke out.

They let the capitalists handle it on their own, and escalating conflicts became almost inevitable, eventually leading to incidents of smashing machines, destruction of infrastructure, and more.

Some strikes were brutally suppressed by the capitalists, while others ended in victory for the workers. But victory didn’t mean the end as human nature often falters under such trials.

If there were someone among the workers to restrain the crowd, they could rationally pursue their rights. However, once that restraint is lost, even one or two impulsive people could cause the situation to quickly spiral out of control.

To stabilize the situation swiftly, the government would likely resort to suppression. At that point, questions of right or wrong become irrelevant; officials simply need to quell the chaos and restore order.

Later, when blame is assigned, it’s often the ordinary workers—who lack any voice—who suffer. Even if some in the government sympathize with them, they’re likely overwhelmed by the capitalists’ influence.

In Franz’s view, the main culprit behind such tragedies is often government inaction or deliberate favoritism toward capitalists.

Due to his influence, most European countries now have labor protection laws. If governments intervened early to mediate labor conflicts within a legal framework, major upheavals could likely be avoided.

But this makes it harder for capitalists to seek greater profits, as most companies do not meet labor law standards. Otherwise, a strike wave wouldn’t be sweeping across Europe.

Austria managed to curb its strike wave, not only because capitalists feared disruptions in production but also because they feared the government would intervene and find them in violation of labor laws.

Many capitalists took timely steps at the first sign of strikes, offering better terms to placate workers.

As for those companies that faced strikes, some failed to recognize the danger, while others hesitated in the face of profits and were too slow to act.

In reality, wages often rise and fall with market trends. If all other factories improve their conditions while one doesn’t, the skilled workers will likely leave before long.

With economic growth, labor costs naturally rise. This pressure drives progress in productivity. Without it, capitalists wouldn’t voluntarily pursue technological innovation.

Strikes affect not only production but also shrink consumer markets. Without wages during strikes, workers must tighten their belts, and purchasing power declines accordingly.

Adding the stock market crash into the mix could lead to broken cash flows and even bankruptcies for some companies, raising unemployment for a time.

The conditions for an economic crisis are all in place. Austria was already in a fragile state, and with international markets struggling, not even divine intervention could prevent a crisis.

Franz glanced out the window and made a hard decision, “The sooner we cut out this malignant tumor, the better!”

The sooner such a tumor is treated, the faster the recovery. Letting it grow uncontrollably could prove fatal.

Economic crises have both drawbacks and benefits. Each crisis brings significant losses but also new opportunities.

In essence, an economic crisis is a market’s way of self-regulating and correcting, bringing an off-course economy back on track.

And with the mass migration strategy just beginning, no matter how many people become unemployed in this crisis, there will always be somewhere for them to go.

…

Following Franz’s command, the Austrian government adopted a conservative economic approach, abandoning its initial plan to bail out the market.

On June 18, 1876, to stabilize the financial market, the Austrian Central Bank announced a tightening of the money supply and raised the benchmark deposit interest rate by 0.16%.

Restricting the money supply during a liquidity crunch was hardly a “bailout.” It was more like adding insult to injury.

Austria had many banks, and the Central Bank functioned similarly to the Federal Reserve in later eras, able to regulate and influence the financial market. While the Central Bank could suggest a rate increase, it couldn’t mandate that all banks raise their deposit rates.

In reality, to attract deposits, most banks offered interest rates higher than the benchmark.

Previously, Austria’s one-year deposit benchmark interest rate was 1%, so even with a 0.16% increase, it only reached 1.16%.

This rate was still below what many major banks offered, yet the impact was profound.

Through the Central Bank’s actions, it became clear that the Austrian government would not be funding a market bailout, leading many investors to despair.

Astute individuals realized an economic crisis was now unavoidable and began gathering funds to brace for a downturn, causing the stock market to decline further.

On June 24, 1876, the Munich Vida Textile Factory, due to a broken cash flow, applied for bankruptcy restructuring with the Munich government, which approved the request—marking the official onset of the economic crisis.

In just a single month, over 200 companies, including 30 publicly listed ones, applied to the government for bankruptcy restructuring, while more than 400 companies declared bankruptcy outright. The economic crisis had fully erupted across Austria.

With companies going bankrupt on a large scale, the wave of strikes naturally came to an end, replaced by a wave of unemployment.

Social opinion became chaotic, with capitalists desperately shifting the blame, attributing the entire economic crisis to the workers’ strikes.

But this had no effect. At the peak of the Second Industrial Revolution, failing to keep up with the times and choosing to go against the flow meant inevitable elimination by the market.

The “strike incident” was merely a trigger. Crises and opportunities inherently coexisted at this juncture of transition between old and new.

Affected by Austria’s economic crisis, the Russian Empire and the German Federal Empire soon followed suit, each experiencing economic crises of their own.

And this was only the beginning as the rest of the European countries were quickly drawn in. By August, the crisis reached London, and every industrial nation in Europe was engulfed.

Seeing everyone suffer together, Franz felt at ease. This was simply the nature of capitalist economic cycles, and it had been nearly a decade since the last crisis. How could the market not encounter issues?

It was clear that problems had long been accumulating, just waiting for a spark to ignite.

Another round of “big fish eat small fish” began. Watching the power of the financial conglomerates grow relentlessly, Franz couldn’t tell if this was a blessing or a curse.