In this short newspaper article, Ludwig Mises discusses the book "Der Selbstmord eines Volkes, Wirtschaft in Österreich" (The Suicide of a People: Economy in Austria) by Siegfried Strakosch and takes it as the occasion for his own diagnosis of Austria's economic situation. His central thesis: the fundamental ill is the de facto dominance of socialist ideas and of Social Democracy, which prevents any consolidation of the state budget so long as state enterprises are not sold off and the eight-hour day is left untouched. Mises argues that socialist fiscal policy amounts to the consumption and destruction of productive capital, and he draws a historical parallel with the fiscal policy of the Jacobins, which, by way of an extended quotation from Stourm, he portrays as pure exploitation of the present at the expense of the future. The text closes with Strakosch's admonition to reverse course completely.
The Austrian Problem
Vienna, 3 February
In a recently published book bearing the title „Der Selbstmord eines Volkes, Wirtschaft in Österreich“, Dr Siegfried Strakosch undertakes a thorough examination of the Austrian economic problem. Dr Strakosch, who is himself active in industry and in agriculture and who has acquired, as a writer on agrarian policy, a reputation extending far beyond the bounds of the German-speaking world, is qualified as scarcely anyone else to treat these difficult and intricate questions. He solves the task he has set himself as well as it can possibly be solved today. Those who come after will be able to assemble more material and to supplement many a detail; in grasping the deeper interconnections and in recognising the fundamental problem, they will not be able to surpass Strakosch.
The fundamental evil from which Austria suffers is the dominance of socialist ideas. The Social Democratic Party rules in fact without restraint, notwithstanding that it holds the majority neither among the population nor in parliament and is formally in opposition. „Fragmented and feeble, the bourgeois parties confront Social Democracy, incapable of bringing to bear their by no means inconsiderable numerical superiority.“ Social Democracy rules because it has the armed forces behind it, because at any moment it is able to impose its will upon the population by shutting down the transport services and the lighting works. So long as this rule persists unbroken, every attempt to put the country in order is bound to fail.
One cannot restore equilibrium in the state budget without divesting oneself of the numerous public enterprises which, with their deficits running into the billions, frustrate every attempt to bring order into the public household. Yet the Social Democrats will not permit the railways, the tobacco factories, the salt mines, the municipal undertakings, the public-economic institutions, and whatever else all these enterprises may be called, to be „handed over to private capital“. The eight-hour day must not be touched, although it is clear that Austrian industry cannot become competitive so long as it persists. All that the economic policy of the socialist parties achieves is the continued steering away of capital, which is converted into consumer goods and consumed. The sole remedy that Social Democratic „financial policy“ recommends is the confiscation of property of every kind, the confiscation of currencies and foreign exchange and of national securities. To consume, to destroy — that is the final conclusion of their wisdom. „We are distributing,“ says Strakosch, „not only the national income, but far more. We are eating up not only income but capital. What we take to be national income, what is presented to us as such, is to the smallest part national income, to the greatest part destroyed productive capital, the legacy of more industrious and more frugal epochs.“
The demagogue thinks only of today, not of the future as well. Almost forty years ago, Stourm, the historian of the French Revolution, characterised in masterly fashion the financial-policy principles of the Jacobins. „The financial policy of the Jacobins consisted solely in exhausting everything for the present and sacrificing the future. The morrow never counted for them; business was conducted each day as though it were the last; that was the truly characteristic feature of all the actions of the Revolution. Herein lies, too, the secret of their astonishing duration: the daily plundering of the accumulated reserves opened up, in a rich and powerful nation, unexpected sources that surpassed all expectations. The assignats flooded the country in ever greater quantity, so long as they still had any value at all. The certain prospect that a collapse must come did not for a single moment hold up their issue. It was not halted until the public absolutely refused to accept any kind of paper money, even on the most unfavourable terms.“ One cannot read the account that Stourm gives of capital levies and forced loans, of the measures against the stock exchange and against currency speculation, of the regulations concerning profiteering and food rationing, without thinking of the policy which Austria has now for years been pursuing to its own detriment. The sombre picture that Strakosch sketches of it is, alas, only too true.
„Thorough self-examination, complete reversal, is indispensable,“ says Strakosch, and lets his book close with the words: „We have no more time to lose.“ May his admonition and his call to awaken be read and taken to heart by all.