I am the Crown Prince of France

Chapter 112: The Industrial Chain and Market

Mirabeau carefully considered the Crown Prince's words, relating them to France's current situation. His expression gradually became more serious. "Your Highness, the most advanced steam engine technology is currently in the hands of the British. We can barely replicate their models from ten years ago. I've heard they recently produced a new steam engine with the power equivalent to over ten horses."

"You're right," Joseph nodded. "That's why I want to establish an industrial development zone as soon as possible, to attract capital and talent for developing new technologies."

Mirabeau sighed with some disappointment. "I wonder if we can still catch up..."

Joseph's face lit up with a confident smile. "We absolutely can. We're only temporarily behind.

"As long as we build a solid industrial chain and create a positive feedback loop in the industry, technological breakthroughs are inevitable."

Mirabeau looked puzzled again. "Your Highness, what do you mean by 'industrial chain' and 'positive feedback loop'?"

Joseph smiled apologetically. "I might have rushed my explanation. An industrial chain refers to a series of related industries that are involved in developing a particular industry, forming a chain."

Mirabeau could play a key role in advancing France's industrial development, so Joseph patiently explained these concepts and ideas.

"For example, in the past, we spent a lot of money to attract British textile machine workers to help develop our textile industry. But when they arrived, they found that even the simplest tools were unavailable, making it impossible to start production.

"These tools are actually a part of the textile industry chain. Similarly, the cleaning and storage of raw materials like cotton and wool, the manufacturing and repair of looms, the construction of workshops, the transportation and sale of products, and even waste recycling—all of these are components of the textile industry chain.

"When all the links in this chain are healthy and functioning, we have a strong textile industry. We failed to understand this when we assumed that a few looms would allow us to catch up with Britain's textile industry."

Mirabeau felt enlightened, nodding repeatedly. "So, we spent a lot of money, but our textile industry is still dominated by the British. It turns out it's these seemingly trivial things behind the looms that we've been lacking!"

Joseph thought to himself that Mirabeau truly was a man of his era—a quick learner.

He continued, "If we want to develop the steam engine industry, we need to pay attention to the entire industrial chain from the start.

"We should begin with the basics, like coal and iron mining and transportation, then move on to workshops that manufacture basic measuring tools, print blueprints and documents, and build test rigs.

"From there, we can gradually establish workshops for producing small parts, casting machine blanks, and eventually assembling complete steam engines.

"Finally, we need to address the sales, maintenance, and on-site assembly of steam engines, along with other supporting industries.

"With all of this in place, we'll have the true capability to manufacture steam engines. Otherwise, even if we manage to replicate the latest British models, we'll eventually be left behind again."

As Joseph spoke, Mirabeau had already summoned a servant to bring him paper and pen, quickly and carefully jotting down notes. These were concepts he had never heard of or considered before, opening a door to a new world for him—a world called "industrialization."

When Mirabeau paused in his writing, Joseph continued, "The industrial chain is the foundation of an industry, but for an industry to thrive, you also need a 'positive feedback loop.'

"Simply put, it's the process of 'capital-production-market-capital return.'

"In reality, this explanation isn't entirely accurate. The true starting point of the industrial cycle should be the market, which drives production and attracts capital investment..."

These concepts were common knowledge in later centuries, but at this time—only a decade or so after Adam Smith's The Wealth of Nations had introduced basic economic principles—ideas about capital operations were still in their infancy and lacked the refinement and practicality of later theories.

After further elaborating on these topics, Joseph concluded:

"So, for industrial enterprises, the market is always the most important factor. As long as the market is large enough and the profits are high enough, the industry will develop, no matter how significant the obstacles may be."

Mirabeau furrowed his brow. "But, Your Highness, France doesn't have many mines that require pumping, and we certainly don't have automatic looms... The market for steam engines seems rather small."

Joseph shook his head. "Many markets need to be discovered or created by us.

"For instance, everyone currently uses water-powered mills and presses. Replacing them with steam engines would significantly increase efficiency.

"While we don't have many mines, we do have many fields that need irrigation. If each village had one or two steam-powered water pumps, we could increase arable land by several percent and reduce crop losses during droughts.

"And as I mentioned earlier, the stamping machines could be used in almost every metalworking industry."

He paused, his tone growing somber. "Actually, our market's biggest weakness is purchasing power."

"Purchasing power?" Mirabeau quickly noted down the term. He was starting to grow numb from hearing so many new concepts that day.

"It's about how much money people have to spend on goods," Joseph explained.

Mirabeau hesitated. "But, Your Highness, the nobility has plenty of money..."

Joseph couldn't help but feel a bit exasperated—Mirabeau was clearly overlooking the majority of the population who lived in poverty.

"That's not nearly enough. If everyone—whether craftsmen or tenant farmers—had money to spend on industrial goods, that would create the kind of market we need for industrial growth."

Joseph thought to himself that achieving this would require a difficult and extensive reform, as it would inevitably challenge the interests of the old nobility.

Mirabeau was stunned, slowly and firmly nodding after a long pause. "You're absolutely right!"

The two continued their conversation until five in the evening. Joseph felt that he had covered the basic concepts of industrialization and prepared to take his leave. "But for now, we'll have to put industrial development on hold. My priority is dealing with the potato situation. We need to ensure everyone is well-fed before we can focus on industry."

Mirabeau immediately responded, "Your Highness, are you referring to purchasing potatoes? I have a friend who deals in grain and has substantial business interests in the northeastern provinces. I could ask him to assist.

"If I vouch for him, he might even agree to sell on credit and transport the goods to your specified location."

Joseph was overjoyed. "That would be wonderful! Thank you very much, Count Mirabeau."

"It's nothing, Your Highness," Mirabeau replied, bowing slightly. "I'm honored to contribute to the grand vision you've outlined."

...

The next day at noon, a salon organized by Mirabeau was underway at the luxurious Parisian residence of the renowned socialite Madame d'Époulle.

(End of Chapter)

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