This file is a short newspaper report on a public speech delivered by Staatssekretär Joseph A. Schumpeter in Graz on 9 July 1919, before officials, local leaders, financiers, and the “sozialistische Vereinigung geistiger Arbeiter.” Its scope is not a theoretical treatise but a compressed political-economic program for the reconstruction of Deutschösterreich after the war. The report presents Schumpeter’s argument in sequence: first the emergency of public finance and social order, then the dependence of reconstruction on tolerable peace terms and foreign capital, then the Vermögensabgabe, socialization, and finally the tasks of budgetary and currency stabilization.
Schumpeter’s central thesis is that Austria’s reconstruction is possible, but only if collapse is avoided by disciplined public finance, social peace, cooperation between Vienna and the Länder, and access to outside capital. He rejects both panic and complacency: expenditure is defended insofar as it prevents misery and preserves order, yet optimism is explicitly conditional on the Entente not imposing ruinous treaty clauses.
Bei annehmbaren Friedensbedingungen seien die Aussichten nicht düster, wohl aber sei der Zusammenbruch unvermeidlich, wenn die Entente auf den in den §§ 48, 49 und 54 des Friedensvertrages enthaltenen Bestimmungen beharre.
English translation: Under acceptable peace terms the prospects are not bleak, but collapse is inevitable if the Entente insists on the provisions contained in §§ 48, 49 and 54 of the peace treaty.
The conceptual move here is characteristic: Schumpeter translates political survival into fiscal credibility. Reconstruction cannot begin from ideological purity alone; it requires “Ruhe und Ordnung,” especially in Vienna, because foreign capital will not enter a disordered polity. The report also shows him opposing anti-Viennese separatist tendencies by stressing the fiscal interdependence of capital and provinces.
Zusammenarbeit zwischen den Ländern und Wien sei in der ohnehin schwierigen Lage mehr als je notwendig.
English translation: Cooperation between the provinces and Vienna is, in this already difficult situation, more necessary than ever.
The discussion of the Vermögensabgabe is the speech’s core economic passage. Schumpeter frames the levy not as ordinary revenue for current expenditure, but as a reconstruction instrument: it should shorten war debts and, if democratically chosen, help finance socialization. Its legitimacy depends on not being absorbed into day-to-day spending. More sharply, he presents it as the alternative to state bankruptcy, because it affects the state’s creditors in an organized way rather than through collapse.
Daher ist ein Bankerott niemals notwendig.
English translation: Therefore a bankruptcy is never necessary.
This is not a denial of sacrifice; it is a claim about controlled sacrifice. Schumpeter argues that the levy will be painful but less destructive than financial breakdown, even for wealth-holders, because a collapsed state would destroy what remains of their property. Thus the measure is given a double meaning: fiscal sanitation and social justice.
Die Vermögensabgabe sei eine Sanierungsaktion und müsse vom sozialen Gesichtspunkte aus betrachtet werden.
English translation: The capital levy is an act of financial reconstruction and must be regarded from a social point of view.
On socialization, Schumpeter avoids a simple pro- or anti-socialist formula. The report presents him as saying that reconstruction could occur either through socialization or through free economy, but that indecision is fatal. His target is a politics that threatens property and enterprise without actually socializing them, thereby producing paralysis rather than transformation.
Unmöglich sei es aber, alle zu bedrohen und niemanden zu befriedigen, nicht sozialisieren, wohl aber ruinieren dadurch, daß man durch alle möglichen Bedingungen und Schikanen dasjenige hemme, was man gleichwohl nicht sozialisieren könne.
English translation: But it is impossible to threaten everyone and satisfy no one — not to socialize, but to ruin, by hampering through all manner of conditions and vexations that which one is nevertheless unable to socialize.
The final section broadens from emergency measures to a reconstruction ethic. Government must make life bearable, prevent self-impoverishment, restore confidence in cultural existence, strengthen industrial and credit organizations, rebalance the budget within several years, and raise the currency. Schumpeter’s relevance in this report lies in the fusion of social order, fiscal reform, and international finance: postwar recovery is neither purely domestic nor purely economic, but depends on political trust, credible taxation, and eventual coordinated international financing.
Nichts darf getan werden, was zu unserer eigenen Verarmung beiträgt.
English translation: Nothing must be done that contributes to our own impoverishment.
The speech closes with guarded hope. The future is not guaranteed, because peace terms may make recovery impossible; yet if the main tasks are solved—levy, order, cooperation, budget balance, currency stabilization—the report portrays Schumpeter as offering a practical, non-utopian route out of collapse.
Je erfolgreicher die besprochenen Aufgaben gelöst werden, um so früher wird für uns der Tag einer besseren Zukunft eintreten.
English translation: The more successfully the tasks discussed are solved, the sooner the day of a better future will dawn for us.
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