Joseph Alois Schumpeter, “Rede in der 9. Sitzung der Konstituierenden Nationalversammlung für Deutschösterreich am 4. April 1919” — Summary

This file is a parliamentary speech by Joseph Alois Schumpeter as finance minister, defending an emergency bill to fund bread relief through a “Brotauflage” connected with land and income taxation. Its main thesis is that, in postwar Deutschösterreich, a fiscally imperfect but administratively workable burden-sharing measure is necessary to keep bread socially affordable, protect state finances, and avert political breakdown.

Denn was bedeutet dieses Gesetz anderes, als den Ausdruck unserer Not, den Ausdruck der furchtbaren Not in den arbeitenden Schichten, die ihr Brot zu dem Preise, zu dem es ihnen der Markt liefern würde, einfach nicht bezahlen können?

English translation: For what does this law express other than our distress — the expression of the terrible distress among the working classes, who simply cannot pay for their bread at the price at which the market would supply it to them?

Schumpeter begins by conceding almost everything to his opponents: the bill violates clean fiscal principles, joins taxes awkwardly, and arises from misery rather than policy ambition. But that concession is strategic. He reframes the question from tax purity to social survival: refusing relief would mean accepting hunger among workers and the dangers that follow.

Meine Damen und Herren! Unser Geld steht heute in Zürich auf 16%. Woher kommt das? Das kommt zum großen Teile eben von jener Ausgabenpolitik, in die wir durch die Notwendigkeit der Dinge hineingedrängt werden und die wir bisher nicht bremsen konnten. Das ist der tiefste Grund.

English translation: Ladies and gentlemen! Our currency today stands at 16% in Zurich. Where does this come from? It comes largely from that very expenditure policy into which we are being forced by the necessity of circumstances and which we have so far been unable to check. That is the deepest cause.

His core conceptual move is to connect bread policy, exchange depreciation, import costs, and deficit finance. Food relief is not merely charity; it is part of a vicious circle in which necessary expenditures weaken the currency, a weak currency makes flour imports dearer, and dearer imports deepen the fiscal crisis. Hence the proposed tax is presented as the least dangerous way to sustain consumption without unlimited state subsidy.

Jetzt aber, nach drei Monaten würde – selbstverständlich nach Durchführung der allgemeinen Mehlpreiserhöhung – der Fehlbetrag aus den Mehl- und Brotpreisen schon 351 Millionen betragen und wir hoffen nun, 100 Millionen davon durch die beantragte Brotauflage aufzubringen, den Rest muß – so schwer es fällt – der Staat tragen.

English translation: Now, however, after three months — of course after the general increase in flour prices has been carried out — the shortfall on flour and bread prices would already amount to 351 million, and we now hope to raise 100 million of this through the proposed bread levy; the rest — however hard it may be — the state must bear.

The speech then turns from diagnosis to distribution. Schumpeter accepts that bread prices may have to rise, but insists that such increases must be softened: by improving the flour quota and by making those better able to endure the crisis contribute more. Yet he argues that Austria’s social structure, with many small incomes and limited large fortunes, prevents the state from raising enough solely from the rich. This leads to the controversial claim that land must bear part of the burden.

Aber es ist gar nicht zu leugnen und niemand von Ihnen kann und darf das leugnen, daß der Besitz von Grund und Boden gegenwärtig eine sehr erhebliche Erleichterung des Lebens gewährt.

English translation: But it cannot be denied — and none of you can or may deny it — that the possession of land at present affords a very considerable easing of life.

This is the speech’s pivotal distributive argument. Landownership is treated not simply as taxable property but as a practical shelter against inflation and scarcity: it may provide food, fuel, or windfall gains from timber. Schumpeter does not demonize farmers; instead he argues that acknowledging this advantage is in their own political interest.

In dieser Situation, wo wir zusammenhalten müssen, um einen vollständigen Zusammenbruch zu verhindern, in dieser Situation, wo wir alle Augenblicke an den Rand des Abgrundes gestellt sein können, gibt es einfach kein zurück mehr, gibt es kein Handeln um ein paar Kronen, da müssen alle mit, nicht etwa deshalb, weil man dem Bauernstand etwas schlechtes tun will, sondern um ihm zu helfen.

English translation: In this situation, in which we must stand together in order to prevent a complete collapse — in this situation, in which we may at any moment be brought to the brink of the abyss — there is simply no turning back, no haggling over a few crowns; here everyone must come along, not because one wishes to do the peasantry any harm, but in order to help it.

The later sections answer objections. Hail-damaged land, he says, is already covered through corresponding tax relief. Progressivity is attractive in principle, but the emergency requires speed, and an object tax cannot reliably identify poverty, since small holdings may belong to wealthy townsmen or war profiteers. The practical concession is to reduce the burden for those below the income-tax threshold.

Gewiß könnte man es; aber es ist eine Notmaßnahme, die schnell und prompt durchgeführt werden soll und es ist technisch unendlich einfach, wenn man es nicht so macht.

English translation: Certainly one could do so; but it is an emergency measure that must be carried out quickly and promptly, and it is infinitely simpler technically if one does not do it that way.

Schumpeter finally rejects amendments that would exempt or reduce too much lower cadastral yield, because most taxable land income lies precisely in those bands; relying on large estates would leave too little revenue. The speech’s relevance lies in showing Schumpeter as a crisis administrator: he subordinates doctrinal fiscal preferences to monetary constraint, administrative feasibility, and social peace.

Ich muß den Antrag ablehnen und muß das hohe Haus bitten, die Regierungsvorlage anzunehmen.

English translation: I must reject the motion and must ask the honorable House to adopt the government bill.