Austria's Mercantilist Legacy: Past And Present

Austria is a federal parliamentary republic with a chancellor who is the head of government and a president who is the head of state. The country has a rich history, having been a powerful force in Europe for centuries, particularly during the Habsburg reign. Austrian economic policy has been influenced by mercantilism, especially during the 18th century under Joseph II, whose active industrial and commercial policies were comparable to those of Peter the Great of Russia, Frederick the Great of Prussia, and Charles III of Spain. Today, Austria is a member of the European Union, ranking fifth in the EU in terms of GDP per capita.

Austrian mercantilism and the Habsburgs

Mercantilism is a nationalist economic policy that seeks to maximize exports and minimize imports. It promotes government regulation of a nation's economy to bolster state power at the expense of rival nations. Mercantilism was dominant in Europe from the 16th to the 18th centuries, with the bulk of mercantilist literature appearing in Great Britain in the 1620s.

Austria's economic regime received a strong mercantilist impulse while the House of Habsburg enjoyed the elective headship of the Holy Roman Empire. During this time, Joseph II was notable for his active industrial and commercial policy, which can be compared to that of Peter the Great of Russia, Frederic the Great of Prussia, and Charles III of Spain.

The Habsburgs, also known as the House of Austria, were one of the most prominent and important dynasties in European history. They ruled a collection of empires, kingdoms, duchies, counties, and other polities. The name "Habsburg" comes from Habsburg Castle, a fortress built in the 1020s in present-day Switzerland. The family moved its power base to Vienna in the 13th century and ruled there until 1918.

The Habsburg monarchy was a union of crowns, with only partial shared laws and institutions. The various territories were united only by a common monarch. From the 18th century, it is also referred to as the Austrian monarchy or the Danubian monarchy. The Habsburg realms were unified in 1804 with the formation of the Austrian Empire, which later split into the Austro-Hungarian Compromise of 1867.

The Habsburgs expanded their influence through arranged marriages and by gaining political privileges. They often profited from the extinction of other noble families, such as the House of Kyburg. They also gained high positions in the church hierarchy for their members.

The Habsburgs held the title of Holy Roman Emperors intermittently from 1273 until 1806. They were also rulers of Austria (as dukes, archdukes, and emperors), kings of Bohemia, Hungary, Croatia, Slavonia, Dalmatia, Spain, Portugal, Sicily, Lombardy-Venetia, and Galicia-Lodomeria, and rulers of several principalities in the Low Countries and Italy.

The Habsburgs sought to consolidate their power through frequent consanguineous marriages, which resulted in health impairments and specific facial deformities in some members of the family. The gene pool became so small that the last of the Spanish Habsburg line, Charles II, possessed a genome comparable to that of a child born to a brother and sister.

The Habsburg dynasty achieved its highest position when Charles V, grandson of Maximilian I, was elected Holy Roman Emperor in 1519. Charles formally became the sole monarch of Spain upon the death of his imprisoned mother, Queen Joan, in 1555. After his abdication in 1556, the Habsburg dynasty split into the Austrian (or German) branch and the Spanish branch.

The Austrian branch, led by Ferdinand, included the Holy Roman Empire, Hungary, Bohemia, and various other lands. This branch itself split into different family branches in 1564 but reunited in 1665. It became extinct in the male line in 1740 but continued through the female line as the House of Habsburg-Lorraine with the marriage of Maria Theresa and Francis of Lorraine.

The Austrian branch of the Habsburgs continued to rule until the end of World War I, when the monarchy began to fracture and ultimately disbanded with the proclamation of the Republic of German-Austria and the First Hungarian Republic in 1918.

Austrian mercantilism and the EU

Mercantilism is an economic system of trade that was dominant in Europe from the 16th to the 18th centuries. It is based on the principle that the world's wealth is static, and that governments must regulate trade to build their wealth and national power. Mercantilism promotes government regulation of a nation's economy to augment state power at the expense of rival nations.

Austria received a strong mercantilist impulse while the House of Habsburg enjoyed the elective headship of the Holy Roman Empire. Joseph II, in his active industrial and commercial policy, was one of the most arresting of the mercantilist reforming monarchs of the 18th century. The mercantilist spirit persisted, though with no real national basis in the heterogeneous Habsburg dominions, after the abolition of the Holy Roman Empire.

Austria has been a member of the European Union (EU) since 1995. The EU is a supranational organization that works to reduce tariffs globally. Austria ranks fifth in the EU in terms of GDP per capita, with €46,200, well above the EU average of €37,600. It accounts for 2.8% of the EU's total GDP.

Austria's economic policies, as a member of the EU, are likely to be influenced by the organization's goals of promoting free trade and reducing tariffs. However, it is important to note that mercantilist ideas have persisted in some countries even after joining the EU. For example, Italy, another EU member state, raised its tariff rates to about double what they were before World War I in the years following the war. Additionally, Russia and China, which are not members of the EU, still use a mercantilist system.

In conclusion, while Austria's economic policies may have been influenced by mercantilist ideas in the past, its membership in the EU suggests a move towards free trade and away from mercantilism. However, the persistence of mercantilist ideas in some EU member states and other parts of the world highlights the ongoing debate between free trade and protectionist economic policies.

Austrian mercantilism and the Zollverein

Mercantilism is a nationalist economic policy that seeks to maximise exports and minimise imports. It promotes government regulation of a nation's economy to increase state power at the expense of rival nations. It was dominant in Europe from the 16th to the 18th centuries.

Austria's economic regime received a strong mercantilist impulse under the House of Habsburg, when Joseph II implemented an active industrial and commercial policy. However, there was no real national basis for mercantilism in the heterogeneous Habsburg dominions after the abolition of the Holy Roman Empire.

Austria was excluded from the Zollverein, or German Customs Union, due to its highly protectionist trade policy, its unwillingness to split its customs territory, and the opposition of Prince von Metternich. Prussia, which was the primary driver behind the creation of the Zollverein, used a comparatively low tariff as a means to keep protectionist Austria out of the union. The Zollverein was a coalition of German states formed to manage tariffs and economic policies within their territories. It was not part of the German Confederation and included most German states by 1866.

The Austrian regime was modified during the period of liberalised tariffs in Europe, and the country entered early and fully into the succeeding protectionist reaction. However, more significant for Austria's fortunes than its own protective policy was its subservience to the mittel-Europa scheme, whereby German neo-Mercantilism sought to obtain control over the region from the North Sea to the Persian Gulf. This subordination helped bring Austria into World War I, precipitating the break-up of its empire.

Austrian mercantilism and the Thirty Years' War

Mercantilism is a nationalist economic policy designed to maximise exports and minimise imports. It aims to increase the accumulation of resources within a country and use those resources for one-sided trade.

Austrian mercantilism was influenced by the Holy Roman Empire, which was led by the House of Habsburg. The Habsburgs were interested in mercantilist policies, but their vast and decentralised empire made implementing these ideas difficult.

Austrian mercantilism was also influenced by the ideas of the Austrian lawyer and scholar Philipp Wilhelm von Hornick, who wrote "Austria Over All, If She Only Will" in 1684. In this work, von Hornick outlined a nine-point program for an effective national economy, which included maximising the use of a country's soil, labour and raw materials, as well as restricting imports and encouraging exports.

Austrian mercantilism was closely linked to the Thirty Years' War, which took place between 1618 and 1648. The war was fought primarily in Central Europe and resulted in the deaths of an estimated 4.5 to 8 million soldiers and civilians. Although it was ostensibly a religious conflict between Protestants and Catholics, the rivalry between the Habsburg dynasty and other powers, such as the French House of Bourbon, was a more central motive.

The Thirty Years' War had a significant impact on Austrian mercantilism. The war caused widespread devastation and population decline in Germany, which was a key area of conflict. The Habsburgs also became embroiled in the war due to their rule over Bohemia, which was one of the primary sites of fighting. The conflict led to increased centralisation of power in the Holy Roman Empire and strengthened the position of the Habsburgs within it.

The war also contributed to the decline of the Habsburgs' rivals, such as the Spanish branch of the family, and shifted the balance of power in Europe towards France. This had a significant impact on Austrian mercantilism, as France was a rival power with its own mercantilist policies.

In the aftermath of the Thirty Years' War, Austrian mercantilism continued to evolve and was influenced by rulers such as Joseph II, who implemented active industrial and commercial policies in the 18th century. Overall, Austrian mercantilism played a significant role in shaping the country's economic policies and was influenced by a range of internal and external factors, including the Thirty Years' War.

Austrian mercantilism and the Napoleonic Wars

Mercantilism is a nationalist economic policy that seeks to maximise exports and minimise imports. It was dominant in Europe from the 16th to the 18th centuries, and was practised in Austria, which had a strong mercantilist economy while the House of Habsburg enjoyed the elective headship of the Holy Roman Empire.

Austrian mercantilism was characterised by the desire to maximise the accumulation of resources within the country, and to use those resources for one-sided trade. This was achieved through high tariffs, especially on manufactured goods, and the regulation of a nation's economy by the government.

Austrian mercantilism continued into the Napoleonic Wars, which dominated Austrian foreign policy from 1804 to 1815. The Austrian army was one of the most formidable forces that the French had to face. The Austrian economy was burdened by the war, and Emperor Francis I refused to join any further wars against Napoleon for a long time.

In 1805, Napoleon's army surrounded an Austrian army at the city of Ulm, compelling it to surrender. Napoleon then advanced to Vienna, which he took in November 1805. He defeated the Austrians again at the Battle of Austerlitz on December 2, 1805. Austria concluded peace immediately with the Treaty of Pressburg, in which it ceded Venice to Napoleon's Italian kingdom, and Tirol to Bavaria, among other territorial losses.

During the next period of peace, from 1806 to 1809, Austrian preparations for war were directed by Johann Philipp, Graf von Stadion, who believed that Austria could not make any long-term accommodation with Napoleon. He proposed that the Austrians raise large armies, supplemented by trained reserves and militia. Stadion also initiated martial appeals to nationalism, patriotism, love of the emperor, provincialism, and xenophobia, to inspire the militia.

In 1809, Austria went to war with France again. On May 21–22, at Aspern, across the Danube from Vienna, Archduke Charles and the regular Austrian army inflicted Napoleon's first defeat on the field of battle. However, Napoleon regrouped and defeated Archduke Charles in July in the Battle of Wagram. At the Treaty of Schönbrunn, the monarchy surrendered more territory but remained in existence.

After 1809, Austrian foreign policy passed into the hands of Klemens, Graf von Metternich, who believed that the only hope for the continued existence of the monarchy was to seek accommodation with Napoleon. Metternich arranged the marriage of Napoleon and Francis I's daughter, Marie-Louise, and convinced Francis to send troops to take part in Napoleon's invasion of Russia in 1812.

Even after Napoleon's defeat in Russia, Metternich was reluctant to join the other European powers in pursuing the French. He believed that a completely victorious Russia would be just as great a threat to Austria as a victorious France. Metternich sought to arrange an agreement between Russia and Napoleonic France that would restore an independent Habsburg monarchy and Prussia, and create a balance of power in Europe. However, Napoleon would not agree to any concessions, and in August 1813, Austria formally declared war on France.

Austria assumed the leading role in the ensuing War of Liberation, providing the greatest number of troops to the allied forces. Metternich, however, never sought to utterly vanquish Napoleon, as he distrusted Russian ambition. In 1814, Austria took part in Napoleon's defeat and exile to the island of Elba.

In September 1814, the Congress of Vienna was held under Metternich's chairmanship, to conclude the quarter-century of war. Austria regained its lands on the Adriatic and in the area that is now Austria, and won considerable territory in Italy. Metternich also worked to create a German Confederation, comprising 35 states and 4 free cities, with Austria assuming the presidency, to defend against both France and Russia and to keep Prussia under control.

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