Austria-Hungary

Austria-Hungary as a political entity came into being after the defeat of the older Austrian Empire in 1866 by the Prussian armies at the Bohemian town of Königgrätz. The conflict with Prussia was over supremacy within the Germanies. The military defeat settled the question in favor of Prussia, but the Habsburg family did not abandon its plans to regain its traditional position of leadership.

The greatest problem for the Habsburgs' ambitions in the age of the nation-state was that their empire was not predominantly German. The Hungarian population was approximately the same size as the Austro-German population, and the empire contained several million each of Czechs, Poles, Romanians, and Ruthenians, as well as a handful of smaller nationalities. In the eyes of the liberals—in those days the strongest political force in the Germanies—this hodgepodge of nationalities disqualified the Habsburg family from leadership of the German Reich. After the defeat in the 1859 Italian campaign, various Austrian governments sought ways to make the empire more German and more liberal to emulate the ideal of a liberal nation-state.⁴²

A constitutional reform in February 1861 under Prime Minister Schmerling addressed the nationalities problem through the introduction of estate parliaments (Kurienparlamente). The idea was to use parliamentary representation as a means to settle political conflicts between different ethnicities and different social classes without resorting to the nefarious one-man-one-vote principle. The constitution guaranteed a majority of seats to the political and economic establishment. Primarily, it guaranteed the ethnic Germans and their allies a majority of seats, even where they were in the numerical minority.

The Schmerling constitution tried to make up for Austria's lack of German character. But with the military defeat at the hands of Prussia, a more pressing problem suddenly appeared: separatism. The Habsburgs felt they had to secure their power base by finding a way to guarantee the continued loyalty of the Hungarians. This was done in the so-called Ausgleich (“settlement”) that was hurriedly crafted and ratified within weeks after Königgrätz.⁴³ The Ausgleich established the principle of political dualism in Habsburg lands—the subdivision of the empire into two spheres of influence, one under German rule, the other Hungarian. The Ausgleich granted far-reaching autonomy to the Hungarian gentry and made them de facto rulers over other peoples within the confines of “Hungary.”⁴⁴ In exchange, the Hungarian establishment did not contest German hegemony in the other lands of the empire, and they consented to the continued existence of a common dynasty, a common foreign policy, and a common army. The Ausgleich also guaranteed the economic unity of the empire.

From its very inception, however, the Ausgleich was prevented from securing internal peace because its stipulations were interpreted in fundamentally different ways. In the eyes of the German side, the Ausgleich was an agreement reached between the different nations of the empire, which implied that the signatories from the very outset conceived of themselves as parts of a larger political entity. The emperor was not one of the contracting parties; rather, he presided over the whole political entity and the contract was between different parts of that whole. In contrast, the Hungarians saw the Ausgleich as a bilateral affair between themselves and the king of Hungary (who also happened to be the ruler of Austria and various other foreign countries). It was only incidental that the agreement with their monarch was mirrored by a parallel agreement between the Austrians and their emperor. In short, the Hungarians considered themselves a sovereign nation on its way to full autonomy, and the Ausgleich merely one step on this path.⁴⁵

For this reason alone, the Ausgleich failed miserably in providing a basis for the continued peaceful coexistence of the various Austrian nations, and thus for Habsburg power. Year after year, the Hungarians presented new claims and reached new compromises at the cost of the rest of the empire. German Austrians interpreted these ever-increasing demands as political extortion. They despaired of the disputatious behavior of the Hungarians, which undermined the very existence of the empire. But the Hungarian campaign did not suffer the slightest trace of remorse, and it steadily gained ground.

How successful it was can be inferred from its impact on political language. The words “Austria” and “Reich” were increasingly abandoned to suit Hungarian-style political correctness. Common institutions of the empire were no longer called by the prefix Reich- (as in Reichskriegsminister), but by the prefix “k.u.k.” (kaiserlich und königlich—Imperial and Royal), thus “k.u.k. Kriegsminister.” By contrast, Hungarian state institutions were prefixed with “k.” as in “kingly” (referring to the Hungarian crown), and the state institutions of the other, non-Hungarian territories, which shared a common parliament under German supremacy (the Reichsrat), were prefixed with “k.k.” (Imperial-Royal). Curiously, these other territories did not even have a common name. They were only the “kingdoms and lands represented in the Reichsrat.”⁴⁶ In a great satire on this abbreviation orgy, Robert Musil, in his famous fin de sièclenovel The Man without Qualities called the country of his hero Kakanien (“k-k-land”) and said it was the only country that declined for lack of a name.

The Ausgleich also provoked resistance from others, most notably from the Croats and the Czechs.⁴⁷ Both saw the Ausgleich—correctly—as a scheme to perpetuate the current political privileges of Germans and Hungarians. The Czech radicals, calling themselves the Young Czechs, became famous for their ruthlessness in adopting the Hungarian strategy. Their representatives boycotted the sessions of the Reichsrat (the parliament of the “Austrian” half of the empire) and claimed to be one sovereign nation, which would deal only with its own King of Bohemia (who happened also to be the emperor), and they would do so only to secure more liberties for the Czechs.

The ultimate effect of the Ausgleich was to alienate step by step all nations from the empire. The radical elements in each nation increasingly refused to perceive themselves as parts of a larger whole. They considered disputes with other nations of the Habsburg crown to be matters of their own foreign policy that did not involve the empire or the monarchy. This tendency was reinforced in a fateful way when, in 1878, the southern Slav lands of Bosnia and Herzegovina fell under the dominion of Austria-Hungary.⁴⁸ Rather than granting autonomous status to the new territories, the Hungarians immediately claimed the right to rule them, arguing that at some point in the distant past they had been conquered by a Hungarian king. Bosnia-Herzegovina therefore came under the co-dominion of Hungary and “the kingdoms and lands represented in the Reichsrat.” Over the next thirty years, this divided rule from Vienna and Budapest created fertile ground for southern Slav nationalism and Serb agitation. It was a major factor in the events that eventually precipitated the world into the Great War, and destroyed the Austrian monarchy.

Following the Hungarian strategy, the radicals of all nations eventually refused to deal with any other nation at all. The central government in Vienna made concessions concerning the use of language in the local branch offices of its bureaucracy and so, around the year 1900, German, Hungarian, Italian, Czech, Polish, and Serbo-Croatian were all in official use. But such concessions could not satisfy the aspirations of the radicals. At the turn of the century, many Italians, Czechs, Slovaks, Poles, Ukrainians, Magyars, Romanians, Serbs, Croats, and Slovenes strove for national independence.⁴⁹ They insisted on the sovereign status of their ethnic group and argued that matters of “domestic” policy existed only insofar as they pertained to their relationship with the local monarch.⁵⁰ Franz Joseph slipped more and more into the impossible situation of being the sole embodiment of a political entity scorned by millions of his subjects: the empire.⁵¹ He was still acceptable as a political partner, but only in his capacity as a king, that is, as King of Bohemia, King of Hungary, King of Croatia, etc. In the minds of his subjects, the monarch was the only element that tied together the various lands and nations, who felt no desire or need to come to terms with one another. One of Mises's fellow students recalled:

No more than 300 metres separated the University from the parliament building in the Vienna Ringstrasse; if the young people fought almost daily at the University, the conflicts of the deputies were of equal violence, and were battled with a fanatical passion unknown in other countries. If you went only a hundred steps further on from parliament, you could see every day—and usually more often—a carriage drawn by two horses drive out of the Hofburg. In it sat the old Emperor and his equally elderly adjutant, and they would set out for Schönbrunn at an easy trot, always at the same hour, and always down the same street. There was no security escort ahead of or behind the carriage, no policeman sat in the vehicle itself; any assassin would have had an easy job. But nobody took the opportunity.⁵²

Franz Joseph, who had begun his reign as an arch-reactionary and gave his consent to constitutional government only after two lost wars, eventually became the glorified, almost mystic embodiment of a state that few of his subjects really desired. He presided over the radical transformation of Austria that started after the revolution of 1848, and stretched until the very end of his reign in 1916, a transformation that left no sphere of social life untouched. A contemporary witness, himself a democrat born around the time Franz Joseph ascended the throne, recalls the awe that the emperor inspired in all his subjects:

And the Kaiser had lived through—in fact co-sponsored—truly monumental changes. The almost feudal landed lordship with its peasants subject to the estate, sleepy little towns with their handicrafts organized in guilds, a capital city with concentric walls and bastions, with large ramparts and glacis, a society the ruling intellectual power of which was the Church and the materially moving power of which was still the stagecoach and the horse—all this formed the environment of the beginning reign of Francis Joseph, which was to encounter so many material and intellectual innovations. Almost all laws that created or made possible landed property for citizens, free peasants and country workers, handicrafts and industry, large-scale trade, railroads and steamship transport, and insurance and banking services were signed with his name. The tremendous development of modern capitalism fell into the period of his reign; and thereby the transformation of the absolutistic patrimonial state into a constitutional monarchy, the rise of the free citizenry, the flowering of the citizens' parliament, the cultural unfolding of all nations of the Reich, along with the inevitable frictions of the maturing process and, finally, the rise of the working class, the spreading of the social idea, and the beginnings of social legislation. Whoever met Francis Joseph at my time felt the breath of a long and grand period of history that he has carried on. Seldom a single human life has encompassed such immensity⁵³

But even those who had not inherited sentimental feelings for the emperor could hardly fail to perceive his pivotal role within Austria-Hungary's political system. Ludwig von Mises's contemporary and fellow student Felix Somary recalled his father telling him,

This Empire is quite different from the rest of the world. Imagine the Emperor and his Government gone for even one year, and the nationalists would tear each other to pieces. The Government is the fence that separates the zoo of wild animals from the outside world, and nowhere else are there so many and such dangerous political beasts as we have.

Young lads such as Felix learned early on to appreciate the benefits of the monarchical order in Austria, understanding that

the Monarchy was not some historical relic, but the sole possible institutional framework for holding eight nationalities together on Europe's most dangerous frontier.⁵⁴

It was to no avail. Imitation of the Hungarian strategy mushroomed after 1867 and culminated in the late 1890s, when Prime Minister Count Badeni sought to solve national conflicts between Germans and Czechs through legislation that put the two languages on an equal footing within the Bohemian government. Ethnic Germans saw the ordinance as the “last straw” in an ongoing series of concessions to the Czechs. Badeni was not prepared for the level of animosity the Germans of Bohemia and the rest of the empire directed at him as a result of his legislation. They began disrupting parliamentary proceedings and instigated violent protests. The emperor, frightened by the mass agitation of some of the most important segments of society, dismissed Badeni in November 1897.