Alfred Amonn, Die Krise des Steuerstaates (1919)

Alfred Amonn’s review essay examines Schumpeter’s account of the postwar fiscal crisis and its implications for German-Austria. Its central distinction is between the failure of particular financial policies and the exhaustion of taxation as the state’s economic foundation. Amonn presents the reviewed intervention as especially timely:

Josef Schumpeter war es, der diese Anschauung zum Vorwurf einer kleinen Abhandlung gemacht hat, die unter dem obigen Titel bei Leuschner & Lubensky in Graz erschienen ist und die die Beachtung der weitesten Kreise insbesondere in Deutschösterreich verdient.

English translation: It was Josef Schumpeter who made this view the subject of a short treatise, which has appeared under the above title with Leuschner & Lubensky in Graz and which deserves the attention of the widest circles, particularly in German-Austria.

Although Schumpeter’s calculations concern the former Austrian state, Amonn considers their principles applicable to its successor. Against the contention that wartime indebtedness necessarily demands state ownership and enterprise, he endorses reconstruction through taxation and private production. Fiscal viability nevertheless depends on preserving the activity that supplies public revenue.

The exposition moves from the decline of medieval domain finance to the limits of modern taxation. Those limits cannot be identified simply with society’s total resources: extraction may undermine productive incentives before resources are exhausted. Fiscal capacity also varies with social circumstances and collective motivations:

In Zeiten patriotischer Erregung sind mit äußerster produktiver Kraftanspannung Steuerleistungen vereinbar, die normalerweise die Produktion zum Stillstand bringen würden.

English translation: In times of patriotic excitement, tax burdens which would normally bring production to a standstill are compatible with the utmost exertion of productive energy.

Exceptional wartime sacrifice therefore supplies no reliable standard for ordinary taxation. Amonn follows Schumpeter in distinguishing taxes on entrepreneurial profit, interest, wages, rents, and windfalls. Taxing productive returns can weaken innovation, saving, or effort; apparently less disruptive objects, such as pure rents, remain difficult to isolate in practice. Indirect taxation likewise encounters a ceiling independent of fiscal ambition:

Mehr als diesen — also unabhängig vom Willen des Staates gegebenen — Maximalertrag kann kein Fiskalismus aus den indirekten Steuern herausholen.

English translation: No fiscalism can extract from indirect taxes more than this maximum yield — which is thus given independently of the will of the state.

The argument is not merely that taxation is unpopular, but that its yield depends on economic responses which government cannot command away. State monopolies offer no automatic escape, since they too require capital and face operating constraints.

Amonn next distinguishes the war’s already incurred real costs from its outstanding monetary obligations. Goods have been consumed and productive assets depleted, while money and claims against the state have multiplied. The remaining task is to reconcile financial claims with diminished real wealth. Schumpeter’s proposed one-time wealth levy would cancel currency and public debt rather than establish permanent state management of productive property. It therefore differs from Goldscheid’s proposal for an income-earning state: its purpose is monetary reconstruction, not a new source of spending.

Inflation also means that unprecedented nominal debt figures do not alone establish an unbearable real burden. Amonn discusses Schumpeter’s debt-reduction calculations while stressing the conditions of implementation: competent administration, impartial treatment, and avoidance of measures that provoke capital flight or destroy taxable assets. Demonstrating that recovery is economically possible does not establish that political authorities will achieve it.

Reconstruction presents a related but distinct problem: restoring peacetime production and securing imported raw materials. Amonn follows Schumpeter in treating private initiative, entrepreneurial knowledge, saving, and banks’ international credit connections as available means. Whereas wartime conversion consumed productive capacity for immediate needs, recovery requires rebuilding it. Government should protect capital formation, remove bureaucratic obstacles, and facilitate international transactions, with supplementary assistance where necessary. This is an argument about practical capability under current conditions, not the timeless superiority of private enterprise.

The historical conclusion qualifies the immediate defense of capitalism. Amonn emphasizes Schumpeter’s expectation that economic development and broader social sympathies may eventually prepare a different order. Wartime impoverishment delays rather than fulfills those conditions. Continued reliance on private enterprise and taxation can therefore coexist with a longer-term prospect of socialization.

Amonn closes by applying this analysis to German-Austria. Its financial position is not necessarily hopeless, but prevailing policies may nevertheless produce bankruptcy. Effective fiscal policy requires coordinated tax reform, balancing revenue needs with productive capacity and private economic interests. Recovery thus depends on institutional judgment and monetary stabilization, rather than an unavoidable choice between nationalization and ever-harsher taxation.