Holy Roman Empire

Changes in the grain futures market directly impacted grain prices, and capitalists raised prices in unison.

However, this price hike was limited to trading prices, while the purchase prices of grain remained largely unchanged. It would take time for the effects to trickle up from the downstream market to the upstream market.

The primary reason for raising grain trading prices was to profit. Since last year, the long-term slump in grain prices has severely affected everyone’s interests.

The slight recovery in prices had no real significance, as the issue of overproduction had not been fundamentally resolved. The capitalists merely sought to take advantage of the situation to make a quick profit and recover their losses from the agricultural crisis.

Franz was not optimistic. If the grain market was dominated by grain capitalists, stabilizing and keeping prices high for their own benefit would make the most sense for them.

Unfortunately, Europe’s three major grain futures markets were mostly controlled by financial capital, except for Austria, where grain capitalists had a relatively strong presence and some influence.

Even then, Austria’s grain capitalists, combined with agricultural processing industry capitalists, barely had enough power to control the market.

As for Britain and France, unless the entire industrial capital sector worked together, financial capital would always dominate the futures markets.

Quick profits were always the primary goal of capital, and settling down to do real business was not the intention of financial players. This meant the grain market could collapse again at any time.

For now, they were all working together to drive up grain prices. But once prices reached a high enough level and enough speculators had entered to hold the bag, the crash would come.

…

In the Vienna Palace, Franz summoned the Minister of Agriculture, Holz.

“Grain prices are currently recovering, but the problem of overproduction remains unresolved. The Ministry of Agriculture’s next task is still to reduce production.

Don’t worry about a grain shortage. Even in the event of an emergency, we have enough strategic reserves to handle it.”

The government couldn’t easily interfere in the market, and as for the futures market, which is an international game of capital betting, it’s beyond the control of the Austrian government. Unless the governments of Britain, France, and Austria intervened together, any action would likely have side effects, leading to greater losses.

Due to the agricultural crisis, Austria also faced a grain surplus. The government’s minimum price protection policy quickly led to the purchase of a large amount of grain.

The Austrian government itself was a major consumer of grain, with no fear of stockpiling too much. Government agencies, schools, and the military altogether fed millions of people.

Under Franz’s influence, the government had long been accustomed to storing grain. Beyond what was needed for its own use, the government would often buy when prices were low and sell when prices were high.

Of course, this only applies during normal times. With the full onset of the agricultural crisis, the Austrian government couldn’t afford to continue buying recklessly, as that could lead to bankruptcy.

Minister of Agriculture Holz responded, “Your Majesty, we are planning an agricultural summit, inviting Europe’s major agricultural capitalists and large farm owners to participate. By combining everyone’s efforts, we hope to stabilize grain prices together.”

Franz paused, then quickly understood. This was the proper approach. As the world’s leading agricultural exporter, how could Austria remain passive in the face of an agricultural crisis?

It should be remembered that before the crisis, Austria held the international pricing power for agricultural products.

However, when the Russians broke the rules and played the loan-bundling sales game with the British, they shattered Austria’s monopoly on pricing, causing grain prices to plummet.

After this wave, the capitalists naturally became aware of the terrible consequences of such unregulated competition, and forming alliances again at this time was almost inevitable.

The Ministry of Agriculture’s involvement in this plan likely couldn’t happen without the influence of capital. Whether it’s nobles engaged in agricultural production or capitalists in related fields, they might be the ones behind the scenes pushing for this.

Though aware of this, Franz had no intention of probing deeper, as such matters are unavoidable. There are many ways in which capital can influence government decisions, and often, the people involved don’t even realize they’re being led until it’s too late.

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“It sounds good, but how will it be enforced? Even if the agricultural summit achieves a great deal, without mandatory enforcement, how effective will it be?

If that problem can’t be solved, it might be better to raise tariffs on raw grain trade, increasing the costs for competitors.

Engage more with large farm owners, as I’m sure they would share the same interest, and encourage them to mobilize the broader farming community to pressure the government.”

This idea was quite sneaky and very disadvantageous to countries with underdeveloped industries. In the long run, it could even lead to the imposition of tariffs on all agricultural products.

However, Franz wasn’t worried at all, as the only industries that would be affected were those dealing with low-profit, primary processing. In the short term, Austria might feel some impact, but in the long run, it would help further industrial advancement.

You can’t expect to grind grain forever, right? Low-tech industries like these, which are unwilling to advance, will eventually find themselves squeezed out of profitability.

If they don’t develop higher value-added products, such low-tech, stagnant processing industries won’t survive long in this cruel world.

Of course, these are only surface-level considerations. Without other benefits, this would be a self-damaging tactic, hurting Austria’s own economy as well. Franz would never employ such a strategy unless there were additional gains.

The biggest sector impacted by higher grain prices would be industry. With rising prices, companies would be forced to pay higher wages, as workers couldn’t survive otherwise.

This was Franz’s fundamental objective. In the short term, the impact of such policies might not be obvious, but over time, as tariffs on agricultural imports increase, the side effects will start to surface.

High labor costs would make labor-intensive industries unprofitable. Capitalists would inevitably redirect their investments into more lucrative financial sectors in pursuit of higher returns.

In the original timeline, the French were the first to collapse under this pressure. After the Franco-Prussian War, without government restrictions on capital, France embarked on a relentless path toward becoming an empire of usury.

The British soon followed, effectively crippling themselves. Otherwise, during World War II, the German Air Force wouldn’t have been able to ravage the skies over the British Isles, let alone rely on submarines to blockade maritime transport.

Seeing that the Minister of Agriculture didn’t understand, Franz chose not to explain further. These subtle tactics couldn’t be summarized in a few words, and if word got out, it could raise alarms in other countries, which would be counterproductive.

Once the effects were felt, it wouldn’t matter if the strategy was exposed. The government could lower tariffs, but whether domestic farmers would agree was another question.

Even if they forcefully implemented it, could anyone really expect capitalists who had already tasted profits in finance to turn back?

As for those who hadn’t profited yet, they didn’t even need to be considered. Unlike the real economy, in finance, it’s all or nothing, and losing everything is common.

The gains are enormous, but the losses are also substantial. Wealth is just a number—today’s billionaire could be tomorrow’s rooftop jumper. This cycle played out regularly in financial hubs like London, Paris, and Vienna.

Despite these underhanded tactics, the need to reduce grain production remained.

Opening the window and glancing at the sky, Franz added, “These operations should be carried out quietly, not making it widely known.

The Ministry of Agriculture’s priority should still be reducing grain production and promoting the cultivation of cash crops. The government can encourage companies and farmers to sign planting contracts to provide them with peace of mind.

In some areas, I’ve noticed the agricultural cooperatives started by the nobility are a good model. By working together, they can scale up production and negotiate with businesses from a stronger position.

The government could promote the creation of similar semi-official or purely civilian institutions. Participation should be voluntary, and the management bodies should be elected by the people themselves.”

Agricultural cooperatives are not a new concept. In many parts of Europe, these mutual assistance organizations have been around for some time.

In Austria, however, they only really started to flourish after the abolition of serfdom and the land reforms. Initially, the purpose wasn’t mutual assistance but rather for the nobility to maintain their local influence, so they stepped in to establish such organizations.

Even now, not everyone can join. Feudal remnants are evident everywhere—those allowed into these cooperatives are either vassals or former serfs, with others being refused membership.

This became especially true after Austria’s colonial era began. When nobles saw how quickly they could raise private armies through this model, nearly all landed aristocrats recognized the value of “agricultural cooperatives” and began forming them.

It turned out that these trusted, homegrown militias were far more reliable than hired mercenaries from outside.

The African continent is not a forgiving place, especially after wealth is acquired, where betrayal and treachery happen almost daily. Stories of mercenaries killing their employers circulate widely among the public.

Whether it’s due to loyalty or the fact that “the monk may run, but the temple can only remain,” Franz had yet to hear of any noble being betrayed and killed by their own private army.

Loyalty, of course, isn’t free—it comes at a price. Winning hearts and minds during peacetime is essential.

For example, during the grain harvest season, the noble who leads the cooperative negotiates with merchants or directly organizes the sale of the grain, preventing price gouging by the merchants.

Or, they might promote agricultural techniques, mediate local disputes, and sometimes even lend money in emergencies.

In this regard, the old, established nobility tends to do better. They’ve already made their fortune and cleaned up their reputations and are less likely to risk their name by engaging in shady dealings…

Luckily, this is the European continent. Otherwise, with the way these people operate, they’d have lost their heads long ago.

Franz had even thought about whether to get rid of these feudal remnants, but considering he himself was a feudal remnant, he quietly chose to turn a blind eye.

If they want to win people over, let them. After all, they’re only operating within their original territories, not overreaching or trying to rebel, so Franz didn’t bother to intervene.

With these people watching over their regions, they can at least maintain order and security. Bandits, revolutionaries, and the like are dealt with by them in exchange for military merits.

That’s right—in Austria, capturing revolutionaries also counts as military merit. Franz spared no effort in suppressing those who dared to rebel.

Anyone caught harboring or sheltering revolutionaries would face severe consequences—no matter who they were, the only question would be how they would die.

The cautionary tales of those unfortunate nobles exiled to the Arctic still linger. Of course, if, hundreds of years from now, technology advances enough to revive frozen people, they might still have the chance to denounce Franz’s atrocities.

Aside from the organized groups, there were also the unorganized ones. Since these organizations had positive effects, Franz didn’t mind promoting them.

Making adjustments to agricultural structure and persuading large numbers of farmers was too difficult. If the government forced it, things would only get worse.

If farmers are told not to plant grain, they at least need to be told what to plant instead, right? Franz definitely didn’t trust bureaucrats with this task.

Bureaucrats might make decisions on a whim and then walk away, leaving behind the problem of whether the newly planted cash crops could even be sold. No one would then know the answer to that.

The consequences of this could be worse than a grain surplus. If grain doesn’t sell, at least farmers can eat it themselves, ensuring they don’t starve.

But if cash crops don’t sell, they’d just rot in the fields. A single year of crop failure might be bearable, but if it continued for several years, the terrifying outcome made Franz shudder even just thinking about it.

Holz didn’t oppose the establishment of agricultural cooperatives. There were already many successful examples, which had indeed benefited agricultural production. As long as they replicated successful experiences, it would work.

After a brief moment of thought, Agricultural Minister Holz replied, “Yes, Your Majesty.”

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