Joseph Alois Schumpeter · 1919
This file is the transcript of Joseph Alois Schumpeter’s parliamentary speech as finance minister before the Constituent National Assembly for German-Austria on 2 April 1919. Its scope is narrow but politically charged: Schumpeter asks for approval of a credit law while using the occasion to outline an emergency fiscal doctrine for a new state formed amid imperial collapse, debt, unemployment, food scarcity, and administrative disorganization.
Das Gesetz, um dessen Annahme ich Sie bitte, soll dem Staate Mittel zum Leben und dem Volke Lebensmittel geben.
English translation: The law whose adoption I ask of you shall give the state the means of life, and the people foodstuffs.
The speech’s central thesis is that finance policy must first secure survival—state solvency and popular bread—before normal budgeting or constitutional-economic reconstruction can proceed. Schumpeter refuses to stage a full financial debate because the state lacks an orderly budget and reliable data; yet he insists that uncertainty about exact figures does not obscure the gravity of the crisis.
Obgleich uns nun die genauen Zahlen nicht zur Verfügung stehen, so wissen wir doch genug, um uns über die Lage – das heißt, so viel wie über den Ernst der Lage – vollkommen klar sein zu können.
English translation: Although the exact figures are not available to us, we nevertheless know enough to be able to be entirely clear about the situation—that is, about the gravity of the situation.
The argument develops in three movements. First, Schumpeter explains the technical and administrative limits of the moment: provisional estimates derived from the former empire, a budget expected only later, and immediate credit needs tied to food supply and currency measures. Second, he dramatizes the fiscal danger: continuing on the current path would mean billions in deficit for an impoverished population. Third, he presents a program of emergency reconstruction centered on a rapid, energetic wealth levy.
Dies würde bedeuten, daß wir die junge Freiheit zerstören, daß wir dem Abgrunde zueilen: denn ein Niederbruch der Finanzen bedeutet nicht mehr und nicht weniger als einen Niederbruch des gesamten sozialen Organismus.
English translation: This would mean that we are destroying our young freedom, that we are rushing toward the abyss: for a collapse of the finances means nothing more and nothing less than a collapse of the entire social organism.
His core conceptual move is to make public finance the condition of political freedom rather than a merely technical matter. Fiscal collapse would not simply be insolvency; it would be social disintegration. Conversely, taxation and credit become instruments for preserving the “young freedom” of the republic. This is why Schumpeter frames sacrifice as unavoidable and collective, binding deputies to the future of workers, children, and the state itself.
Das erste dieser Opfer ist die Vermögensabgabe, die schnell und energisch gemacht werden muß, die dem Abbau der Kriegslasten, dem Gedanken der Zeit, der Sozialisierung, dienstbar gemacht werden muß.
English translation: The first of these sacrifices is the capital levy, which must be carried out swiftly and energetically, and which must be made to serve the reduction of war burdens, the guiding idea of our time — socialization.
The wealth levy is therefore not presented as ordinary revenue policy. It is a transitional measure meant to liquidate war burdens, stabilize the fiscal order, and align the state with the period’s socializing demands. Schumpeter’s radicalism is practical rather than rhetorical: a deep, prompt intervention is preferable to prolonged uncertainty, piecemeal threats, and fiscal harassment.
Die Finanzpolitik greift ein bis in den fernsten Winkel der ärmlichsten Stube.
English translation: Fiscal policy reaches into the remotest corner of the poorest dwelling.
The relevance of the speech lies in this fusion of budgetary realism, social urgency, and democratic legitimacy. Schumpeter treats finance as a moral and institutional test: a free state must be able to discipline both expenditure and revenue, not for abstract austerity, but to prevent hunger and preserve the republic’s capacity to act.
Wir alle haben nur einen Ehrgeiz, dem auch die Finanzpolitik dienlich sein muß: dem Volke Brot zu verschaffen.
English translation: We all have only one ambition, which fiscal policy too must serve: to provide the people with bread.
The closing emphasis on bread gives the speech its governing criterion. Reconstruction, constitutional choice, and economic design can come later; the immediate task is to keep workers alive through the coming hardship. Yet Schumpeter also warns that reconstruction must not be strangled by fiscal policy itself.
Ich weiß so gut wie jeder, daß nichts so töricht wäre, als das Wirtschaftsleben durch fiskalische Schikanen erschlagen oder drosseln zu wollen.
English translation: I know as well as anyone that nothing would be more foolish than to try to strike down or throttle economic life through fiscal harassment.
Thus the speech balances emergency extraction with economic revival. Its final claim is not simply that the state needs money, but that finance must be disciplined, socially purposeful, and oriented toward recovery. Schumpeter’s concise intervention turns a credit authorization into a program for postwar stabilization: bread first, order next, reconstruction through decisive but not suffocating fiscal action.
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