Holy Roman Empire-Chapter 1070 - 84, Evil Free Trade

Chapter 1070 -84, Evil Free Trade

The spring breeze of reform filled The British Isles, but Britannia failed to renew itself. It wasn’t that the reforms were ineffective, the crux of the issue was how to reform.

The domestic economy continued to decline, agitating the British, and the elite knew that Britannia had reached a crossroads and had to undertake social reforms.

Despite economic problems, Britannia still remained at its peak. The notion of prosperity followed by decline was not popular in the European world; flipping through the history books of Britannia, they had only had this kind of prominence once.

Had it not been for the rise of the Holy Roman Empire adding pressure, the majority of the British probably wouldn’t even have been aware of the crisis.

In fact, even now, the British didn’t have a strong sense of crisis and didn’t believe that the mighty Great Britain Empire was at risk of collapse.

There was no helping it; Shinra had been too compliant. Even when they came out with the Super Battleship, it was merely shown around before being put away.

...

The anticipated arms race wasn’t pursued because the Vienna Government did not follow up in time, causing the British to lose interest.

After all, Britannia had a load of old battleships, and provoking a “dumpling-making contest” now would render all the older battleships obsolete.

Even the landlord’s house had no surplus grain, especially during a domestic economic downturn; government revenue was falling rather than rising, and the budget had to be spent sparingly.

As long as they were protected by the Channel and the Royal Navy maintained its advantage, everyone felt relatively secure.

With insufficient external pressure, unity internally was naturally hard to achieve. After all, reform is a double-edged sword. While some benefit, others suffer losses.

Those with vested interests were unwilling to relinquish their benefits, and so conflicts arose. From the inception of reforms, the British Parliament had been in uproar.

At that time, the power of the British Government was still very limited. It was not only constrained by the parliament, but also suppressed by the King.

As the Monarch of Britannia tasked with reshaping the glory of the monarchy, Edward VII was by no means a mere figurehead. It was impossible for the Cabinet Government to meddle as it pleased.

With a powerful Conservative faction and such substantial internal restrictions, the pace of reform in Governor Campbell’s government was naturally slow.

For a great nation, reforms naturally needed to proceed cautiously rather than hastily. It was okay to be slow, as rushing could lead to serious problems.

However, for enterprises, the situation was starkly different. Traditional industries were okay since they already had protective moats, and could survive despite challenges.

The truly unlucky ones were the emerging industries. Hindered by Britannia’s narrow domestic market and inherently disadvantaged, and with a slow start, they hadn’t fully developed before competitors came over.

The most typical were in mechanical equipment manufacturing and the automotive industry chain, where related companies were either already bankrupt or teetering on the edge.

…

Stepping out of the government office building, Michael’s smile had vanished. As the owner of Britannia’s leading high-end machine tool production, Michael’s days should have been quite comfortable.

However, reality was quite the opposite; because of a misjudgment during the second industrial revolution, Michael had focused solely on traditional areas in his machine tool factory.

Not just his company, but Britannian machine tool manufacturers had all plunged into the steam engine field and hadn’t positioned themselves in the emerging electric power sector.

With the widespread adoption of electricity, electric power made a striking rise, gradually taking a dominant position in industrial production.

A step slow was slow at every step.

By the time Michael realized it, his competitors’ products had already invaded The British Isles. With superior performance and low operating costs, they quickly took away a large share of the market from them.

Thanks to British capital’s conservatism, which was not diligent in replacing equipment, and with steam engines still having some merits and not completely phased out, Michael’s factory survived.

However, with the strong entry of competitors, they had still lost a significant portion of their orders, especially almost the entire overseas market.

As market shares diminished, to survive, the wrongly chosen path forced British machine tool enterprises into a brutal price war.

Even the leading enterprises were no exception. After all, now they were only the leaders in Britannia, not world leaders. Compared to international competitors, Michael’s company was behind in comprehensive technology.

Switching tracks sounded simple, but trying to establish oneself in the new track was not so easy.

To survive, Michael had no choice but to seek government help.

Forget about slogans like “free economy, oppose government interference in the market”; those were slogans shouted when needed. When they were not needed, they were naturally discarded.

As the “high-tech” industry leader, there were always some privileges. Regardless of whether the technology had fallen behind international competitors, Michael’s factory was still the top one domestically.

As long as the London Government did not wish to see the high-end machine tool sector entirely fall under competitors’ control, supporting domestic enterprises was imperative.

For his own personal interest, Michael, who once was a young man advocating free trade, had now turned into a firm supporter of “trade barriers.”

No way around it, without extreme measures, normal business competition simply couldn’t keep up with competitors.

Even though Michael sternly increased the research and development budget by fifty thousand pounds, it was still far from matching the input level of competitors.

Technologically behind and lacking in research and development input, hoping to overcome competitors with technological breakthroughs was clearly just a pipe dream.

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Continuing to increase investments was possible, but Michael was first and foremost a capitalist. For a capitalist, profit was the top priority. As long as money could be made, surpassing competitors was not essential.

If investments were made without limits, technology might catch up, but the return on investment would definitely be embarrassing.

If money couldn’t be made, even achieving world number one was pointless.

Investors had only one requirement for a company—to make money; and there was only one indicator to evaluate whether a company was outstanding—whether it made enough money.

Michael was long past the age of teenage whims; he naturally wouldn’t gamble everything for a title.

Rather than engage in research and trade, it was better to undertake political lobbying and block competitors directly at the national gate.

Relying solely on the domestic market might not make the enterprise extremely wealthy, but it could at least ensure long-term profits.

As long as there was sufficient time, Michael believed his enterprise would eventually catch up, and then compete for the market with international competitors.

As for how long this would take, nobody knew. Perhaps three to five years, or maybe twenty to thirty years, but hope always existed.

…

No matter how the situation change, as long as life could go on, banquets were always inevitable.

Leaving Government Street, Michael drove a luxury sedan made in Shinra towards the suburbs, heading to a manor named “Peter”.

Tonight, a grand banquet organized by business magnates was being held here. As an important figure in the industry and commerce, Michael was also invited.

Although he arrived early, the manor was still abuzz with voices, clearly demonstrating that many held the same intention.

It was hard to pinpoint when, but “banquets” were no longer just “banquets.” Most of the time, attendees came with their own agendas.

Upon entering the venue, Michael found his own clique. He had once been the center of attention at such gatherings, surrounded by a crowd of flatterers.

Unfortunately, those days were short-lived. With increasing competition in the machine tool industry, their influence in the market steadily diminished.

The era when production orders were backlogged for years, and connections were crucial for obtaining goods, had irreversibly passed.

For the survival of his enterprise, Michael had to set aside his pride and actively engage in social interactions, striving to maintain relationships with clients.

Of course, that alone was not enough. Driven by profit, relationships wouldn’t count for much if the product quality was subpar.

One crucial factor that allowed him to maintain his current foundation was that everyone belonged to the same consortium with a certain proportion of cross-shareholding.

As everyone was part of the same community of interests, and with similar cost-performance ratios, people preferred using products made by their own.

If performance couldn’t compete, then the only option was to cut prices. What was once a highly profitable industry had recently seen prices slashed to the lowest.

The pure machine tool business was now operating at a loss with each unit sold. If it weren’t for profits from after-sales services, Michael’s company might as well have closed down.

Lifting his glass, Michael tapped it with an incoming guest and asked with a smile, “Byron, it’s been a long time. How have you been lately?”

Regardless of the pressure he felt inside, Michael always displayed great enthusiasm towards clients. It was precisely this proactive marketing attitude that enabled him to overshadow domestic competitors and firmly secure the leadership position in specialized market segments.

The middle-aged man shook his head and replied with a bitter smile, “Terrible. Those damned Austrians, like giant rats, continually snatch away our wealth.

Since they launched their new car model last year, I’ve not had a single peaceful day. To tell you the truth, I’ve had to lay off employees three times since the beginning of the year.”

This was no secret; a glance at the cars driven by many families revealed what British car companies were going through.

The characteristic of industrialization is: the more units of the same product that are produced, the lower the production cost per unit.

The automotive industry in Britain didn’t start late; in fact, it was quite early. As early as 1680, the renowned British scientist Newton had envisioned a jet-propelled car. Although the jet car was not successfully built, the concept of the automobile was introduced.

In 1804, British engineer Richard Trevithick manufactured the world’s first steam-powered car, marking the beginning of the British automotive industry.

Regrettably, what started as a king ended up like bronze. Thereafter, the history of automobile development moved from Britain to France, and then to Shinra.

Steam-powered cars were still cars, albeit not very convenient, but they still held value in specific contexts and thus were produced in limited quantities.

Logically, British car companies, with their industrial heritage, shouldn’t have fallen behind. The crux of the problem laid with the second industrial revolution.

Having missed the wave of the second industrial revolution, the internal combustion engine technology lagged behind, becoming the biggest weakness in the British automotive industry.

With domestic engine performance falling behind, they had to resort to importing foreign engines—after all, it was an era of free trade, and everything was purchasable.

Being at the mercy of core foreign technologies was bound to cost something; the most direct impact was the increase in production costs.

The cost of just the engines being expensive was still tolerable—after all, one could earn a little less.

The problem was that Britain’s automotive production capabilities were very low, which also kept the production of spare parts low, driving up costs.

Most locally produced spare parts were not only more expensive than imports, but also inferior in performance.

Supporting local production was non-existent; capitalists naturally sought the best cost-performance ratio, resulting in British automotive manufacturers essentially becoming assembly plants.

Beyond bearing the name of automotive manufacturers, adding a logo, they could do nothing that couldn’t also be done by an external auto repair shop.

As technology advanced and information became transparent, more and more auto repair shops started crossing into other fields, intensifying market competition.

Domestic competition was already fierce, and unexpectedly, international competitors entered the fray. With superior performance, many Shinra car brands solidly secured their market positions.

High-end brands were the first to fall; one look at the cars within the manor revealed they were all imported.

Including Byron, the car manufacturers, their vehicles were also imports. There was no option; their own products were simply inferior. For the sake of life safety, everyone knew how to choose.

Losing the high-end market was one thing; there was never much sales volume to begin with. Before the influx of imported cars, the main form of transportation for Britain’s upper society had still been horse-drawn carriages.

Now it was different; a large number of cheap cars also surged in. A facility without core technology was naturally not going to have good days; a significant market share was squeezed out.

To keep his company afloat, Byron had no choice but to cut jobs and reduce production. But these measures were only temporary solutions to pressing needs; they were far from enough to weather the crisis.

With customers having a hard time, Michael naturally couldn’t bring up business orders. In a way, everyone was in the same boat now.

To have peaceful days, they first had to bring down the free trade system and protect the market through tariff barriers.

“Stay optimistic, my friend. It’ll get better. The difficulty is just temporary; the main issue is the free trade system.

If we didn’t have this system, we could raise tariffs to protect the market and buy time for businesses to develop.

The Austrians did exactly this back in the day; without implementing trade barrier policies, they would never have become the world’s leading industrial power today.”

Lying is also a science, and as a qualified capitalist, this was a basic survival skill.

Although Michael himself didn’t believe that British industry could simply catch up by relying on trade protection, he absolutely couldn’t show any weakness in spirit.

Raising his glass for a toast, Byron downed it in one go, then said with shared indignation, “My friend, you’re right.

It’s all because of that damned ‘Free Trade Agreement.’ Without it, Britain’s wealth wouldn’t have been plundered.

For the sake of Britain, we must correct this mistake. We absolutely cannot allow this cursed treaty to continue poisoning Britain’s future…”

…

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