by Mises
[Introduction and the Context of the 1912-1913 Economic Crisis]: Mises introduces the severe economic crisis in Austria-Hungary during 1912-1913, arguing that while global market shifts exacerbated the situation, the primary causes were internal to the Monarchy. He notes that the crisis began in early 1912, predating the Balkan Wars, and was signaled by the Austro-Hungarian Bank's tightening of credit policy in February 1912. [Public Debt and the Theory of Overconsumption]: Mises discusses Eugen von Böhm-Bawerk's thesis that the Monarchy's passive trade balance was caused by public bodies living beyond their means. He details the massive increase in state debt between 1902 and 1912, the worsening conditions for government loans, and the shift from 4% to higher interest rates due to capital scarcity. [Administrative Inefficiency and State-Socialist Enterprises]: This section critiques the bloated and inefficient Austrian administration and the failures of state-owned enterprises, particularly the state railways. Mises cites Georg Günther's analysis comparing Austrian and Prussian railways to demonstrate that Austrian lines suffered from excessive staffing and low individual productivity, leading to deficits covered by taxes. [Agricultural Backwardness and Industrial Stagnation]: Mises analyzes the low productivity of the agricultural and industrial sectors, blaming protectionist grain tariffs and anti-large-business legislation. He provides statistical comparisons of crop yields between Germany, Austria, and Hungary, and argues that a 'capital-hostile spirit' and lack of entrepreneurial drive have hindered economic expansion. [The Credit System and the Culture of Indebtedness]: Mises examines the pervasive system of long-term consumer and trade credit (Borgsystem) that allowed citizens to live beyond their means. He explains how the lack of cash payments and the reliance on constant debt prolongations created a fragile 'chain of debt' from consumers to producers, which eventually collapsed into a wave of insolvencies in 1912/13. [Export Statistics and the Path to Recovery]: The final section provides data on rising textile and sugar exports as a sign of recovery and a necessary step to balance the nation's payments. Mises concludes that the only real solution to the Monarchy's economic woes is the radical removal of political and economic obstacles that hinder the development of productive forces.
Mises introduces the severe economic crisis in Austria-Hungary during 1912-1913, arguing that while global market shifts exacerbated the situation, the primary causes were internal to the Monarchy. He notes that the crisis began in early 1912, predating the Balkan Wars, and was signaled by the Austro-Hungarian Bank's tightening of credit policy in February 1912.
Read full textMises discusses Eugen von Böhm-Bawerk's thesis that the Monarchy's passive trade balance was caused by public bodies living beyond their means. He details the massive increase in state debt between 1902 and 1912, the worsening conditions for government loans, and the shift from 4% to higher interest rates due to capital scarcity.
Read full textThis section critiques the bloated and inefficient Austrian administration and the failures of state-owned enterprises, particularly the state railways. Mises cites Georg Günther's analysis comparing Austrian and Prussian railways to demonstrate that Austrian lines suffered from excessive staffing and low individual productivity, leading to deficits covered by taxes.
Read full textMises analyzes the low productivity of the agricultural and industrial sectors, blaming protectionist grain tariffs and anti-large-business legislation. He provides statistical comparisons of crop yields between Germany, Austria, and Hungary, and argues that a 'capital-hostile spirit' and lack of entrepreneurial drive have hindered economic expansion.
Read full textMises examines the pervasive system of long-term consumer and trade credit (Borgsystem) that allowed citizens to live beyond their means. He explains how the lack of cash payments and the reliance on constant debt prolongations created a fragile 'chain of debt' from consumers to producers, which eventually collapsed into a wave of insolvencies in 1912/13.
Read full textThe final section provides data on rising textile and sugar exports as a sign of recovery and a necessary step to balance the nation's payments. Mises concludes that the only real solution to the Monarchy's economic woes is the radical removal of political and economic obstacles that hinder the development of productive forces.
Read full text