The achievement of order and concepts of order in economic policy in Austria-Hungary 1897-1910

The Austro-Hungarian dual monarchy was a curious construct, combining elements of a federal state with those of a confederacy. While largely autonomous in their domestic political affairs, both federate states were tenuously linked by their common tasks in areas such as foreign policy and defence. This link was formally strengthened by the existence of a number of imperial financial and economic institutions based on inter-governmental cooperation. They included the customs and trade alliance as well as the joint currency and the central bank. In day-to-day politics these institutions – like the issue of financing common tasks – were a bone of contention between the two confederate states. There was no joint supervision of economic affairs.

Against this background the project asks two questions. Given the significant economic disparities and the conflicts between various nationalities in the Austro-Hungarian Empire, what did this institutional setting – poised between economic integration and autonomy in the sphere of economic policy – contribute to the achievement of order? To what extent did this setting reflect contemporary notions of a sound economy and good economic policy? As understood in the project, institutions have not only social-regulatory, but also subjective-intentional functions. Institutions don’t merely influence what happens in society; they also shape ideas about what constitutes order. Thus the project views economic history as cultural history. Beyond merely enquiring into actual economic output, the project also looks at the non-economic and unintended consequences of a particular institutional setting. One working hypothesis of the project is that the institutions of the Austro-Hungarian Empire were actually quite efficient in spite of their deficiencies. Yet they were increasingly delegitimised as weak and lacking when judged by contemporary concepts of a good system. The project draws on state archival materials (for example documents from the ministries of trade and finance) and contemporary materials on the economy and economic policy (for example journals published by associations which give insights into how industrial associations discussed the dualist economic system and the respective neighbouring state).

Federalism was often seen as a possible political solution – albeit one that was incompatible with economic exigencies – to the conflicting priorities of social integration on the one hand and social diversity on the other. As a sub-project of the Emmy Noether Junior Research Group ‘Ordering Diversity. Concepts of Federalism in the Austro-Hungarian Empire in the Long 19th Century’, this dissertation project is expected to provide new insights into contemporary discussions of the state of affairs in the Austro-Hungarian Empire and alternatives to the dual monarchy.

Björn Lemke