Chapter 40: Chapter 40 – Wartime Economic System

After dealing with the nobles, Franz ordered martial law in Vienna to stabilize the situation. Then, he had the rebel nobles and capitalists’ properties searched and their wealth confiscated. In addition, he ordered the distribution of relief supplies throughout the capital.

For a few days, food, coal, and other necessities were distributed for free before the distraught citizens finally settled down. Anyways, the relief supplies came from the confiscated wealth, so Franz didn't mind giving them away to earn the goodwill of his subjects.

For political reasons, Franz also termed the revolution into a rebellion incited by the capitalists and placed the blame on them. All the newspapers in Vienna had to pass strict censorship, so it wasn’t hard to spread his propaganda. Soon, many articles with titles such as “Beware of the capitalists’ conspiracy!!” “The role of foreign manipulators in the Vienna rebellion!!” “Capitalists on the run!!” were published.

The only other headlines in Viennese newspapers were “Confiscation of property!!” “Confiscation of property!!” and “Confiscation of property!!” After all, at the moment, the most important task of the interim government was to conduct property confiscation. Since many capitalists and nobles who were involved in the rebellion had escaped from Vienna, the completion of this task had a long way to go.

Before Franz could appoint a new cabinet of ministers, a major event took place on March 18: a rebellion broke out in the city of Milan. This came as another heavy blow to the conservative nobles. Franz’s warning had come true and the nobles had to accept the reality that reform was inevitable.

The next day, on March 19, 1848, Franz appointed as Austria’s Minister-President; as Austria’s Minister of Finance; as Austria’s Minister of Education; Archduke Louis as Austria’s Minister of the Interior; Count Franz von Kolowrat as Austria’s Minister of the States; and Prince Klemens von Metternich as Austria’s Minister of Foreign Affairs.

With regard to political reform in Austria, Franz took a slightly conservative approach for the sake of stability. The political stances of the ministers of the new cabinet were quite clear: a Minister-President who strongly advocated for suppression of the revolution, a Finance Minister who advocated for financial reform and an Education Minister who advocated for education reform, and an Interior Minister and a States Minister who were conservatives.

For the sake of checks and balances, Franz even reappointed the infamous former State Chancellor Metternich as the Foreign Minister. In fact, the main reason was that there was no one better than Prince Metternich at international diplomacy in Austria or the rest of the world, for that matter.

 

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The first priority of the new government was to deal with the aftermath of the rebellion in Vienna. Normally, distribution of relief supplies was only required for a few days, but most of the capitalists in Vienna had been involved in the revolution, so they had escaped. Naturally, this made it impossible to resume production of daily necessity goods.

In addition, with the factories and businesses closed, more than half of the people in Vienna were left unemployed. If not for the relief supplies provided by the government, Vienna would have already been embroiled in another revolution. Nevertheless, the government couldn’t continue to provide free relief supplies to the people, indefinitely. Thus, a cabinet meeting, presided by Franz, was held to come up with a solution. 

“At present, the rebellion in Vienna has ended, so the post-war reconstruction must be started immediately. There are nearly 40,000 prisoners in urgent need of resettlement. What plans does the cabinet have?”

Considering the situation at this critical moment, the new ministers had to perform their duties as soon as they took office.

Minister-President von Schwarzenberg replied, “Your Imperial Highness, I suggest that we adopt a form of wartime economic system; the government will take over the closed factories and resume production to provide employment to the public.

We can start slowly and remain flexible so that we can adjust according to the situation. We can also rearrange the production lines in the factories according to market demand to avoid waste!”

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Historically, Austria had adopted a similar wartime economic system to survive the crisis following the revolution in Vienna. The current situation was better than in history because Franz had acted quickly and decisively to confiscate the factories of the rebel capitalists.

Not to mention, if Austrian industries were to be dominated by state-owned businesses, the people would be joyful since state-owned businesses could not unscrupulously exploit them the way privately-owned businesses had.

“At present, the situation inside the Empire is very dire. There has been a rebellion in Milan, and Hungary is also stirring with unrest, which necessitates the need for a wartime economic system. However, if we confiscate so many factories and resume production, labor costs will greatly rise!” Finance Minister von Bruck, cautioned.

The government had to maintain its reputation and honor its promises which meant that the Labor Protection Act, which had been indefinitely suspended, had to be enacted and observed in the state-owned factories.

Franz shook his head and said, “The labor cost will not rise too much. The wages will be set on the basis of the average wages of the workers prior to the rebellion. In many industries, we can also allow the workers to choose . More money for more work will also stimulate the enthusiasm of the workers. As the labor costs increase, the production rate will also increase.

In addition, like Lord Minister-President stated, the waste caused by market competition will also cease to exist in a wartime economic system. As long as the management is decent, there should be no losses!”

This, however, didn’t mean that state-owned businesses were a good choice. They had one huge disadvantage: they were prone to corruption and decay at the hands of the bureaucrats. Nevertheless, Franz had no plans to implement a planned economy in Austria for too long.

It would take two or three years at most to suppress the rebellions in various regions. It would take much longer for the bureaucrats to become corrupt. Once the Crimean War breaks out, he would use the profits from the war to repair the damages brought about by changing the economic system.

Finance Minister von Bruck’s eyes lit up. If they provided wages based on piece work, the labor costs could indeed be controlled at a reasonable amount.

“Your Imperial Highness has made a wonderful suggestion. I believe all the industries can provide wages based on piece work. The industries which require more than one worker on a single product can group the workers into teams. This can greatly increase the efficiency of production!” Finance Minister von Bruck cheerily replied.

Franz gave a charming smile and replied, “Unfortunately, I’m not the one deserving of your praise, Your Excellency. It’s the experts who came up with this suggestion after thorough research, not me.”

Franz severed his involvement with his own suggestion and passed on its credit to the non-existent “experts.” No matter how beautifully he put it, the piece work system was essentially a more advanced method of exploitation. Naturally, he didn’t want his reputation to be besmirched in the future.

Thus, it was a better idea to allow the ministers to implement it while leaving his name out of it. Even if they were chastised, the ministers were used to being blamed or chastised, so they wouldn’t care about taking on a little more blame. Being thick-skinned was a requirement for politicians after all.

 

-TO BE CONTINUED-

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