Abstract
After the dissolution of the Habsburg Empire, leaders in successor states were eager to become economically independent from the former capital Vienna. They therefore quickly implemented a set of neomercantilistic measures, especially nationalization programs. Nevertheless, the 1920s saw a reestablishment of the common market in the former territories of the Habsburg Empire in terms of interregional trade and interlocking directorates, mainly because of the business strategy of international financial syndicates that were based on the traditional Viennese commercial relations with the successor states. The international credit of Jewish bankers like Louis Rothschild, Rudolf Sieghart, and Max Feilchenfeld and others mattered. After the “Big Bang” at Wall Street in 1929, the industrial holdings of the Viennese banks and the maturity problem (short-term borrowing, long-term lending) in their relations to East European debtors and Western financiers caused the Creditanstalt-crisis of 1931 and put an end to Vienna’s position as a financial hub in East Central Europe. However, even during the crisis of the 1930s, the share of the successor states in the bilateral balances of trade indicates path dependency on a smaller scale.
Highlights
After the dissolution of the Habsburg Empire, leaders in successor states were eager to become economically independent from the former capital Vienna
If we look at the successor states in total, the picture was quite similar
If we look at the output of the industrial production in the whole region, the figures were roughly similar to those of interregional trade
Summary
The military defeat of Austria-Hungary in autumn of 1918 triggered the rapid collapse of the Monarchy and caught by surprise politicians, economic experts, and entrepreneurs, most of whom could hardly envisage the emerging multinational market in East-Central Europe replacing the former domestic market. The majority of contemporary experts were of the opinion that Austria-Hungary had been one of Europe’s backward economies in the years before the outbreak of World War I; still strong enough to survive in a protected common market, but too weak in terms of global competitiveness. This assessment was adopted by economic historians in the 1920s and went unchallanged for several decades, as Alexander Gerschenkrons influential studies on economic backwardness that were published in the 1960s and 1970s reveal [6,7]. Total disintegration was to become from on the final solution to the “national question,” despite the fact that all of the successor states consisted in reality of multiple national groups
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