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Chapter 21 The Austrian Problem In his recently published book The Suicide of a Nation, Dr. Siegfried Strakosch undertakes a thorough investigation of the problems facing the Austrian economy. Dr. Strakosch, who is active in industry and agriculture, and who, as a writer on agricultural policy, has earned a reputation that extends far beyond the borders of the German-speaking world, is more qualified than almost anyone else to deal with this difficult and complicated question. He untangles the problem as best it is 1. [This article originally appeared in German in Neue Freie Presse (February 5, 1923).—Ed.] 2. [Siegfried Strakosch (1867–1933) was a prominent Austrian industrialist and agricultural expert . He was a principled economic liberal who opposed both protectionism and all government subsidies for agriculture. See Ludwig von Mises, “Siegfried von Strakosch (1867–1933),” in Neue Österreichische Biographie ab 1815, vol. 15, Grosse Österreicher (Vienna: Amalthea-Verlag, 1963), pp. 160–65: Strakosch was one of the last representatives of that Austrian upper middle class that, in many ways, provided the character of Viennese life in the era of Emperor Francis Joseph. But his interests included far more [than only scientific and agricultural matters]. He was well acquainted with all the currents in intellectual and artistic life. He counted among his many friends most of the important musicians, writers, and visual artists. He had the gift of creative achievement for all to understand and appreciate. . . . Strakosch clearly understood the contradiction in the economic and sociopolitical ideas in the agricultural circles. Around the declining old aristocracy were found landowners and peasant farmers who supported a socialist program. Their ideal was a conservative state that would support the principle of the self-sufficient farmer. This is what they had in mind when they spoke about the practice of moral values. But what was not explained was how such [agrarian] independence could be preserved with continued involvement of the state. Strakosch stated quite correctly that every measure to “protect” and “favor” agriculture was a step down the road to socialism. . . . In the years after World War I . . . The vast majority of the electorate [in Austria] opposed the plan of a small band of Marxist firebrands who wanted to follow the Russian example. But the key word “socialization” was the dominating spirit of the time, and the government appointed a socialization commission that was entrusted with the theoretical task of preparing for the transformation of Austria into a socialist society. The resistance of the “bourgeois” parties was primarily directed against the general political and cultural program of the socialists. They were less against the attempts to bring about socialization through step-by-step interventionist methods. Inflation had ruined the state budget, but all of the resulting consequences were wrongly interpreted by 272  selected writings of ludwig von mises possible to do today. Those who come later will be able to gather more material and include many more details; but they will not be able to surpass him in his grasp of the deeper connections and his understanding of the basic problem. Austria is suffering from a fundamental problem: the dominance of socialist ideas in the country. The rule of the Social Democratic Party is unrestrained even though it does not have a majority among the population or in parliament; formally it is in the opposition. “The bourgeois parties stand fragmented and weak against the Social Democrats , unable to draw any advantage from their impressive numerical superiority,” Strakosch points out. The Social Democrats rule because they have armed forces behind them, and because at every moment they can impose their will upon the populace by shutting down the transport facilities and the power stations. As long as their unbroken dominance continues, every attempt to put the country back on its feet must fail. The national budget cannot be balanced if the numerous public enterprises are not closed; with their billions in deficits, they frustrate every attempt to put the public budget in order. Yet the Social Democrats do not allow the railroads, the tobacco factories, any of the municipal enterprises, or the cooperative institutions to be handed over to the private sector. The eight-hour day cannot be touched, even though it is clear that Austrian industry cannot become competitive as long as it remains in effect. All that the economic policy of the socialist parties achieves is the taxing away of capital, which is converted into consumer goods and public opinion as being due to the shortcomings of the market order. This...

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