Chapter 3
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Chapter 3: Redel Economics
In the evening, at Rheinische Post newspaper office in the city of Koln, in the province of Rhine in the Kingdom of Prussia.
The newspaper’s work for the day was done, and most of the staff had left. Only the editor-in-chief Karl and deputy editor Friedrich remained in the office.
The two men were engrossed in a novel, reading and exchanging thoughts.
This was the fourth work by the famous science fiction writer Leader One, titled "1962 AD." It told a story set in a fictional world called "Earth" from 1945 to 1962, mainly focusing on the Red League, spanning from the victory in the World War to the Cuban Missile Crisis.
Karl, "I didn’t expect him to have time to write novels."
Friedrich, "A novelist should certainly write novels."
Karl, "Leader One is just a pen name, the real identity of this writer…"
Friedrich, "What is the real identity?"
Karl didn’t say anything, quietly continued reading his book.
Karl graduated from university with a bachelor’s degree in law and a doctorate in philosophy. He initially wanted to stay and work at the university, but due to some conflicts with philosophical theories, he was ostracized and unable to become a university teacher.
Karl then tried to pass the bar exam, but unfortunately failed both times.
Unable to become a university teacher or a lawyer, it meant he had to serve in the military. Karl was troubled by this.
He settled in a small town in the western Rhine region of Prussia, where he wrote for a newspaper. Due to his outstanding talent, he quickly became the editor-in-chief and made a new friend, Friedrich.
Friedrich was born into a family of merchants, similar to Karl’s background. They quickly found that they shared similar ideals and got along well no matter what they talked about.
Karl and Friedrich worked together as newspaper editors and attended The Justice League Party events and demonstrations supporting the rights of the working class.
Last year, they represented The Justice League Party at the Frankfurt National Congress, but Karl soon realized that many people there were narrow-minded, so he decided to leave.
Currently, Karl and Friedrich are both publicly working as newspaper editors while secretly supporting The Justice League Party. They are colleagues, comrades, and friends.
Sometimes Karl remembers Leader One, no, he should call him Redel now.
Karl has complicated feelings for Prussian Prince Regent Redel. He wrote in his diary, "I used to think he shared the same ideals as me, but later it seemed not true. I feel a sense of betrayal, sadness, and helplessness. However, from some of his policies, I can see he hasn’t forgotten his past ideals. Perhaps he truly wants the people to live better lives, but as a king, he is already on the opposite side of the suffering… In short, my feelings towards him are conflicting, and I feel he is conflicting too."
Nevertheless, the friendship from their university days no longer exists.
Redel is not a trustworthy companion for Karl, Friedrich is the one who walks the same path as Karl.
Karl sends a letter to Redel every month, sharing his suggestions for reforms and criticizing some of Redel’s policies, but every letter receives no response.
Today, Leader One released a new book. Karl went to the bookstore right away and bought it. After work, he read the book together with his friend Friedrich.
In the book "1962 AD," it explains in more detail about the fictional country Red League. They won the war by uniting as one, quickly rebuilding a new society on the ruins. The country’s power grew rapidly, entering a period of industrial and technological boom.
The book also mentions a very new thing – "planned economy."
Friedrich focused more on the ideological issues in the novel while reading, especially the gripping Cuban Missile Crisis at the end. Karl’s attention was completely on the planned economy.
"Friedrich, don’t you find this interesting? Maybe we should discuss it in detail," Karl pointed to the page and said.
"I read that part, it feels like a reinforced version of the Redel economy. The book says that to achieve a planned economy, it requires a terrifying level of mathematics, almost at a national level of math genius. I think it’s very difficult to achieve."
Karl, "Is the math level in Prussia low? Our mathematicians are like drops in the ocean, you can’t even begin to count how many there are."
In "1962 AD," there is a simple description of planned economy, explaining the three basic economic questions: what to produce, how to produce, and for whom to produce.
The writer Leader One said in the footnotes: If someone can design a perfect planned economy system, not only can they win top awards in the economic field, but also become a great mathematician.
The planned economy section in the book sparked discussions among many economists and mathematicians, including philosophers like Karl and Friedrich.
Most economists dismissed it, while mathematicians tried to create a mathematical model for the planned economy system. However, everyone agreed that it was a huge task and difficult to achieve at the moment, acknowledging writer Leader One’s imagination.
Karl, "I don’t know how his brain works, creating one new theory after another."
Leader One’s four science fiction novels are like encyclopedias, covering almost all fields. He introduced countless innovative ideas, encompassing scientific, philosophical, military, political, and economic thoughts, all considered "great."
Leader One’s four novels share a common trait – they stop short, describing things in a general way. Indeed, these are novels telling stories, not academic papers.
Leader One was simply telling stories, but scholars of the time analyzed them deeply, attributing their theoretical findings to him, making Leader One seem like an all-knowing and all-powerful "god."
Friedrich quickly finished reading this 110,000-word new book. He planned to go through it again in detail when he had more time. After closing the book, Friedrich sighed, "Why doesn’t this person go into politics? With Leader One’s talent, being a prime minister wouldn’t be too far-fetched."
Karl remained silent by the side.
He’s more than just a prime minister; he’s even become a prince regent! Not just saying it, he’s actually accomplished many things.
In his new book, Leader One wrote about planned economy, while in reality, the prince regent is implementing Redel economy.
Prussia’s distinctive market economy, also known as Redelism economics, has three core concepts, belonging to the first school of macroeconomics, standing in opposition to classical economics, liberal economics, and microeconomics.
Firstly, adopting expansionary economic policies to promote economic growth by increasing demand.
Secondly, government intervention, macroeconomic regulation, and strategic planning.
Thirdly, state-owned enterprises and private enterprises constitute a production community, achieving benign monopolies domestically and possessing strong competitiveness in the international market.
The achievements of Redel economics are evident, with Prussia experiencing explosive development, with an average annual economic growth rate of 20%, and government fiscal revenue growth reaching 30% at one point, pulling far ahead of the growth rates of other countries.
An example of this is the chemical industry in Prussia, where the prince regent guides capital inflow into the chemical industry through low-interest loans, land rent reductions, and other means, uniting all domestic small and medium-sized enterprises to form a Prussian chemical industry complex centered around state-owned chemical enterprises. By relying on state-guided planning to achieve integration of the chemical industry chain, combined with massive low-interest loans from state-owned banks, local technology research and development, and patent fee reductions, product prices are kept very low.
Prussian chemical products are shipped to the United States, even with tariffs, they are very cheap. Local US chemical companies cannot withstand price wars, either being acquired, turning into joint ventures, or directly closing down.
By the time the United States reacts, more than 80% of the chemical market has been taken by Prussia. After the price war, they have monopoly control over pricing, and chemical product prices skyrocket… Turning the US market into the leeks for Prussia’s chemical industry’s spontaneous industrial upgrade, then continuing to compete in other international markets.
The President of the United States, Van Buren, looked very confused. He had just announced many new economic laws, including ending trade protection and tariffs, and the Independent Treasury Act.
As a result, the tariffs were too low, causing products from Prussia to flood in at very low prices. The Independent Treasury Act also led to a decline in the banking industry. American chemical companies couldn’t get loans, lacked unified leadership, and couldn’t compete with Prussia’s strong chemical industry.
United Prussian companies dominated the international market, while other countries’ companies were isolated and quickly defeated.
Due to an economic crisis in England, by the end of 1839, England began demanding the worldwide abolition of previous trade protection and tariffs, promoting free trade. The powerful Royal Navy enforced this decision.
Prussia took advantage of this window of free trade opportunity. England benefited from free trade but Prussia also benefited. In some areas, Prussia even outperformed the English.
Prussia’s sudden economic growth and industrialization were not only due to wise leadership but also to favorable timing. Thanks to England’s economic crisis and the adoption of free trade, Prussia thrived. If England could sell cheap raw materials from its colonies… If they could open up markets in England’s sphere of influence… Ah, that would be something.
England acted unjustly by promoting free trade globally while maintaining protectionist policies for itself, including trade barriers and even military interventions. Other countries were not allowed to buy cheap raw materials from English colonies or sell goods within England’s sphere of influence.
Prussia had to resort to smuggling within England’s sphere of influence, while outside of it, Prussia monopolized markets through aggressive pricing, as seen in the United States, the Near East, and the Apennine Peninsula.
Leveraging Redel’s "shameless" economic theories, Prussia’s unique form of capitalism was thriving. The nation was experiencing rapid growth, but many feared it might not be sustainable.
But the Regent Your Highness had already seen everything clearly. As long as Great Britain maintained world dominance, they would continue their free trade policies because free trade benefits the stronger at the expense of the weaker. As long as Prussia and England remained in friendly relations, Prussia could continue to thrive and keep up its rapid development.
This is why Prince Regent Redel strongly advocated for the alliance between England and Prussia. There are indeed benefits to following Great Britain.
At the same time, Redel also recognized the hidden dangers. As Prussia grew stronger, there would come a time when Great Britain’s scythe would turn towards Prussia. There needed to be a formidable enemy that would make Great Britain anxious in order to ensure the stability of the alliance between England and Prussia.
France? France was not seen as a viable threat. Although Napoleon III’s France was rapidly developing and held the title of continental hegemon, it did not pose a significant threat to Great Britain.
The Regent Your Highness pondered… Only those two giants had the potential to pose a significant threat.
Either a powerful United States or a Great Ming Empire embarking on industrialization and modernization could pose a high enough threat to Great Britain’s world dominance, preventing them from exploiting Prussia.
While the United States had potential and capabilities, Prince Regent of Prussia was strongly against America’s rise and was determined to curtail its growth.
The Great Ming Empire held potential, but could the Ming Empire truly undergo industrialization and modernization? The historical Ming Dynasty of China had no chance of achieving this, though there might be a one percent possibility with a Han-led Ming Empire.
Perhaps a one in a thousand chance.
