Reincarnated as Nikolai II - Chapter 231

Chapter 231: Birth of the Post-War Economy (3)
Now, six years after the Great War broke out in 1914, humanity has entered an unprecedented era of mass production.

Even colonial empires that previously focused trade on their colonies now saw trade between great powers account for 70% of trade, and the reconstruction boom and guarantee of peace seemed to open an era of free trade.

Internal combustion engines, refined and perfected during the crucible of war, completely superseded the aging steam engines that had powered the previous century. This technological leap directly catalyzed a transportation revolution, as trucks, automobiles, and mechanized farm equipment transformed both urban and rural landscapes. The skills gained by mechanics and engineers during the war proved invaluable in this peaceful application of engine technology.

Even without such technological revolutions, multiple factors converged to drive unprecedented growth:

The vengeful resurgence of economies that had been frozen for six long years of conflict now burst forth with renewed vigor, as pent-up consumer demand met expanding industrial capacity.

Infinite labor supply from women and returning soldiers.

Liberalization of domestic capital that the state controlled under wartime pretenses.

Industrial capacity increased through total war.

Driving forces for economic growth were scattered everywhere.

However, only two countries felt this opportunity that went beyond hopeful to greedy in their bones.

The United States and Russian Empire.

The two countries had several commonalities.

First, overwhelming industrial power and labor force.

Though participating nations, unlike France their young population wasn’t deleted, they steadily increased industrial power even during wartime, and had sufficient population to support this.

Surplus for export.

While just looking at France and Britain shows them barely gathering up their collapsing colonies like spilled water from a cup and focusing on reconstruction, these two countries had never had their mainland invaded and didn’t have colonies to protect like them.

Finally, capital.

Though the Russian Empire’s capital power couldn’t compare to the United States, the imperial government replaced such insufficient private investment with policy finance.

And above all.

“Though I hoped they’d all completely collapse, it really happened regardless of friend or foe.”

There were no competitors in Europe.

Germany, which once aimed for Europe’s #1 industrial nation surpassing the British Empire, continues tearful reparations in kind today due to lack of cash.

The Austrian Empire, greatest beneficiary of the Belle Époque era, split like the Five Dynasties and Sixteen Kingdoms period and lost all industrial capacity to the newborn Czechoslovakia.

And so the protagonists of this 1920s seemed set as just Russia and the United States.

Then what is the British Empire, which once encompassed world economy in one hand, doing now?

“High-income tax rates rose to 40%, and the wealthy are paying an average of one-third of their income in taxes.”

“Kokovtsov, as I know, wasn’t that country’s tax rate only 8% even for the wealthy before the war? One-third? Do they even have the will to recover their economy?”

“Despite long-term decline expected in heavy industry, coal, and steel, they’re not lowering tax rates raised during wartime. Isn’t such abnormal taxation surely for political reasons?”

“The British Empire has become quite the Red state.”

Yes. As public sentiment seemed about to burst with dissatisfaction accumulated during the war period, Britain was trying somehow to handle this through welfare.

This means they’re giving up on growth and moving toward becoming the world’s first welfare state.

Another reason the government is sucking up private funds like a vacuum cleaner is…

‘Return to the gold standard.’

It’s to return to the gold standard temporarily abandoned during wartime.

The gold standard originally requires tremendous funds during initial establishment. It’s impossible to implement without enough money to somewhat back the currency issued by one’s country.

Though unintended, this too is a victory for Russia, which maintained the gold standard even during wartime through gritted teeth.

Having weathered the Great War well, the empire’s development path ahead looks smooth.

That’s why now seems like the right time.

“Kokovtsov.”

“Yes, Your Majesty.”

“I see the bureaucracy’s lifespan is ending.”

“…Am I doing something wrong perhaps?”

“How could that be? It’s not your problem but the flow of times raising that Duma’s hand. An era questioning power’s self-purification and legitimacy is approaching.”

The time has come to twist the empire’s structure once again.

==

What is bureaucracy?

Max Weber, who first defined the term bureaucracy, argued that ‘bureaucracy means ruling through knowledge.’

Even Britain, which walked the path of industrialization fastest, had only 1/1300 ratio of unelected civil servants to population until the late 18th century, and France was only a quarter of Britain’s level.

Until the early 19th century, most European countries had less than 1% of population, including families, receiving state salary as judges, guards, bailiffs, tax collectors, priests, etc.

However today, entering the 20th century, society is no longer that era’s small government.

Since industrialization, government has grown larger and social systems are becoming more sophisticated.

Cases of hiring tax farmers because the state can’t collect taxes no longer occur, and giving village chiefs all judicial power also no longer exists.

This phenomenon is because government roles have increased with social development. It’s like a natural phenomenon, like water flowing from high to low.

The 1920s, commonly viewed as development, opportunity, and a final grand party, has arrived.

I felt my own limits to Weber’s argued ‘ruling through knowledge’, and separately, society is becoming more complex and the private sector is expanding.

“Now it’s time to let go.”

If we don’t acknowledge even this and try to maintain a controlling government like a monkey unable to open its hand in a tree hole, how am I different from the Soviet Union?

Since ascending the throne 25 years ago, my purpose was just one – the empire’s safety.

That safety is now protected and furthermore stands before greater growth.

Meanwhile the Duma has ripened sufficiently to expect its role, so passing over leadership doesn’t seem bad.

Unlike when Witte suddenly made small government large or when the central government subjugated each province’s zemstvo one by one, I believe this change won’t be so radical and violent.

Just acknowledging high-level bureaucrats’ right to participate in politics.