CENTRAL EUROPE AND THE AUSTRO-HUNGARIAN EMPIRE: ATTEMPTS AT CREATING A UNIFYING IDENTITY DESPITE RISING NATIONALISM

Brno, Czech Republic

In the last years researchers of Central and Eastern Europe have revised the widespread assumptions of the Austro-Hungarian Empire that comprised a large part of this area and ended in 1918. They no longer see it as an economically inefficient multi-national anachronism to the late 19th century nation states of Europe. New studies focus on the vibrant political cultures and the interesting attempts at interpreting local and regional phenomena in this multi-ethnic and multi-religious empire. General studies of Europe and modern history tend to treat the region of Central Europe as an exceptional corner of Europe due to the presence of several ethnic and religious groups in its societies, but also because of its economic development, often – unjustly – characterised as “backward”. Historians of self-styled nation states might have to think more creatively about cultural differences that may lurk just below the surface of assertions of national homogeneity. This is especially necessary at the time when the European Union is again facing new outbreaks of nationalism and even regions in the established nation states of Western Europe show serious tendencies of separation, e.g. Catalonia or Scotland.

Even some books written recently on the topic of World War I continued the tradition of portraying the Habsburg Empire as a state on the verge of collapse even before the outbreak of the war due to nationalist conflicts. Since the collapse of the empire narratives of nationhood have dominated its history. This interpretation ignores the fact that the Austro-Hungarian Empire was very similar to the other European states of the time, but at the same time pioneered new ideas of nationhood and new practices of governance thanks to its multi-ethnic population of 50 million. Some of the character, the developments and the enduring legacies of this Habsburg Empire are still visible in Central Europe. Therefore it is essential for once to abandon traditional presumptions about the primacy of nationhood in the region and to focus on the Austro-Hungarian institutions such as schools, the judicial system or the Austrian census that managed practical issues surrounding linguistic and ethnic diversity. This research undermines the notion that the existence of language differences dominated social relationships and institutional developments in Central Europe. On the contrary, imperial institutions and administrative practices helped shape nationalist efforts. Furthermore the surviving presumptions of economic backwardness or unbridgeable difference that allegedly made Central Europe different from the rest of Europe were revised in recent decades and historians have pointed out the remarkable creativity and innovation of the empire’s institutions in tackling diversity. Looking at the last decades of the Habsburg Empire might offer different views at subjects like nationhood, multilingualism and indifference to nationhood, especially at times of crisis of solidarity in the European Union.

THE BALKANS: ANCIENT TRADITIONS & SOCIAL STRUCTURES

Belgrade, capital city of Serbia

On the Balkans nationalism has been a significant characteristic of political and social life since the 19th century. There was an ethnic nationalism in former Yugoslavia that is still very powerful and which has to be differentiated from a bourgeois or political nationalism. Bourgeois nationalism is based on the idea of common blood relations, common culture and excludes any kind of multiculturalism. The concept of political nationalism is based on a common territory and the acceptance of the laws in this territory. In contrast ethnic nationalism is founded on myths and legends of a nation that is God-sent. Even nowadays these myths dominate public communication in the Balkans. The fascination with such myths concerning their own nation which are propagated and perpetuated by autocratic and democratic leaders alike is the reason why the people in these countries are often prevented from seeing  future potential and realising it. One famous example is the “Kosovo myth”. The Serbian historian Popovic already stated in 1976 that that was a secondary artificial myth developed by politicians from folklore legend dealing with the historical battle between Turks and Serbs on the Kosovo Polje in 1389. The rather irrelevant defeat escalated in the historical memory of the Serbs to a catastrophe and was scandalously distorted.

 

The various national movements in the Southern Slavonic countries concerned themselves thoroughly with their respective village cultures. In them they sought to find their origins in a world of rapid modernisation. This resulted in a romantic transfiguration and idealisation of rural or village value patterns. These patterns were supposed to be “characteristic” of the nation and should serve as models. The processes of industrialisation and urbanisation fundamentally changed and influenced the existing traditional society. In spite of the growing economic and social differences between the urban and the rural world the influence of the village culture in the development of the nation and society must not be underestimated. These “traditional” values had persevered despite the processes of modernisation in the socialist society of former Yugoslavia. In the Balkans rural traditions had their impact on life in the cities and shaped the cities rather than the other way round. Mass migration to cities led to the urbanisation of the villages, but also to the ruralisation of the cities. Almost all Serbian cities for example, due to centuries under Turkish domination, developed only in the last 150 years from small villages and market communities. Until the 20th century there existed no specific Serbian urban tradition whatsoever. The village roots remained strong, mutual obligations between the family in the city and the kin in the country further strengthened these ties. Children often still spend their holidays in the country and village children move in with their relatives in the city for higher education. The process of urbanisation began very late in former Yugoslavia. In the beginning of the 20th century the urban populations began to grow and then especially after World War II.

THE END OF THE MULTICULTURAL STATE

Synagogue, Krakov

During the 1920s and 1930s Austrian intellectual life was still dominated by men who had grown up under the empire. Many of them deemed the Habsburg Empire a lost paradise, whose lustre brightened as time passed. In 1938 the last vestiges of cosmopolitanism perished from Vienna and much of the Danube basin as Jews were decimated, saddling their successors with a corrosive guilt. After 1938 for a long time no other forum for debate has emerged to replace what Hitler had destroyed. The demise of intellectual Vienna is a major reason why post-1945 Central and Eastern Europe has produced so few innovative thinkers.

 

With the Treaty of Paris of 1919, i.e. the treaties of Versailles, St. Germain, Trianon and Sèvres, the disintegration process of the whole Danube region, which during the Habsburg Empire had constituted a homogenous economic free-trade area with a well-working division of production and provision of services, was speeded up in a disastrous way. After the break-down of so many regimes, the collapse of the Russian, German, Habsburg and Ottoman Empires, the map of Central and Eastern Europe was redrawn along nationalistic lines. The main aim was the creation of ethnic-linguistic nation states according to the belief of the US President Wilson that nations had the “right to self-determination”, a belief that was easily held by those far from the ethnic and linguistic realities of the regions which were to be divided into neat nation states. The whole attempt was a disaster and triggered the national conflicts that have torn the continent apart in the 20th century. The Balkans wars of the 1990s and the Ukrainian conflict can be seen as the latest “legacies of Versailles”. …

EASTERN JEWS

Jewish cementery, Krakov

Joseph Roth, born to a Jewish family, grew up in Brody near Lemberg/Lvov/Lviv in Eastern Galicia, the eastern part of the Austro-Hungarian Empire. Brody had one of the biggest Jewish populations in Europe and Jewish cultural life played an important role there. He began his studies in Lemberg and then went on to study philosophy and German literature in Vienna in 1914. In 1916 he quit university and volunteered in the Austro-Hungarian Army. The collapse of the empire had a lasting and detrimental effect on him, as on many other Jewish intellectuals. “My strongest experience was the War and the destruction of my fatherland, the only one I ever had, the dual Monarchy of Austro-Hungary.” In 1927 he wrote his famous essay “The Wandering Jews” about the minority of Eastern Jews and their plight. “The Eastern Jew does not know anything about the social injustice of the West; nothing about the reign of prejudice, that governs the paths, actions, customs and ways of life of the average Western European,….nothing of the hate which is already so strong that it is cherished like a life-giving (but life-killing) eternal fire that warms the egotism of every man and every country…. For the Eastern Jew the West means freedom, the possibility to work and to develop his talents, justice and autonomous rule of the mind. Western Europe sends engineers, automobiles, books and poems to the East. It sends propaganda soaps and hygiene, the useful and the sublime….For the Eastern Jew Germany for example is still the country of Goethe and Schiller, of the German poets, who every ambitious young Jew knows better than a swastika-loving grammar school pupil.” They started migrating from the borderlands to the Russian Empire, where “every year there is a war and every week a pogrom”. Some returned, many more continued their journey. “The Eastern Jews have nowhere a fatherland, but graves in every cemetery…. Most give to the West at least as much as the West takes from them. Some give more to the West than the West gives to them. They all have the right to live in the West who sacrifice themselves, in that they venture to the West.” …

JEWISH INTELLECTUAL BOOST IN THE HABSBURG CITIES

Palais Morpurgo, Jewish industrialists and bankers in Trieste

Any study of intellectual life in the Habsburg Empire must single out the Jews for special attention. No other ethnic group produced so many thinkers of transcendent originality, i.e. theorists like Freud, Husserl, Kelsen, Wittgenstein, Mahler, authors like Schnitzler, Kraus, Broch, Roth. In addition to these creative geniuses, a disproportionate number of productive thinkers in every field were Jewish. In some fields like psychoanalysis and Austro-Marxism, Jews constituted an overwhelming preponderance. The Jewish middle class provided a unique forum for discussion and dissemination of new ideas. Newspapers like the “Neue Freie Presse” and “Wiener Tagblatt”, Karl Kraus’ journal “Die Fackel” were mainly Jewish.…

IDENTITY CRISES AND ASSIMILATION

The Austro-Hungarian Empire in those days was characterised by ambivalence: on the one hand the multi-lingual international aspect, on the other hand increasing nationalism. This atmosphere formed the basis for the famous cultural climate that produced outstanding artistic, philosophic and scientific results. These cultural and political clashes, multiple identities and this special way of life created lots of contradictions that triggered innovative solutions. This atmosphere also produced the founders of national mass movements of the Jews and the Czechs: Theodor Herzl founded Zionism, Heinrich Füger and Miroslav Tyrs the sports club Sokol, the centre of the Czech national movement.…

MINORITIES IN THE AUSTRO-HUNGARIAN EMPIRE

Not only the Jewish population but all national minorities had to cope with the pressure from the majority population, mostly the German- or Hungarian-speaking majority. Since the 1880s politics and everyday life were dominated by nationalism and nationalistic conflicts in Central Europe. Yet the multinational dynastic Habsburg Empire continued to exist and to make administrative efforts to protect all peoples and religions. All the bigger minority groups in the cities had developed an infra-structural network. In Vienna there were dozens of Jewish and Czech associations, Jewish newspapers, a Hungarian and a Croatian newspaper and several Czech newspapers. Furthermore there were several national mutual loan societies (Kreditgenossenschaften), a Czech private school system, a Polish school, Jewish Thora schools, many charities to support even small communities of emigrants from small rural regions and villages. These societies, associations, clubs and charities compensated for the dispersed living conditions as the minorities in the crammed 2-million capital could not crowd together in special areas. …

THE VIENNA STOCK EXCHANGE

The Vienna Stock Exchange. Architect: Theophil Hansen, 1874-1877

The Vienna Stock Exchange was founded in 1771 by Empress Maria Theresia as one of the first stock exchanges in the world. Gradually the Vienna Stock Exchange developed into the central capital market of the Habsburg Empire. Originally only government bonds and currencies were traded and the building was open to the public. On some days up to 2,000 people were present. In 1818 The Austrian central bank was the first public limited company that was quoted on the Vienna Stock Exchange. Due to the industrialisation and economic boom in the Habsburg Empire in the course of the 19th century the stock exchange gradually gained international reputation. Consequently a host of companies issued shares there. Due to the empire’s liberal economic policies in the second half of the 19th century unfortunately several unstable businesses were financed via a share issue there, which led to a wave of speculation that culminated in the stock exchange crash of 9th May 1873. In the course of this stock exchange break down nearly half of the public limited companies quoted there disappeared. The recovery took a long time and in the meantime trade was mainly in government bonds. That was the return of the big banks as the main financiers of enterprises. These banks also dominated the capital market and stock exchange trading. Trade on the Vienna Stock Exchange started to pick up once more so that new regulation was needed to. In 1875 the third Stock Exchange Law was passed that guaranteed the complete independence of the Vienna Stock Exchange. Finally in 1877 the new building for the Vienna Stock Exchange was opened, designed by one of the famous architects of the “Ringstrasse”, Theophil Hansen. During this time of consolidation rich financiers dominated the trade in shares there and the bond market was the “playground” of the “privatiers”, the well-to-do upper middle class. During the First World War the Vienna Stock Exchange was closed. At the end of 1919 the trading floors were opened to the public again and immediately experienced a boom which ended in a crash in March 1924. In the following years the shocks of the Great Depression of 1929 greatly hampered trading there. The bankruptcy of banks and the plunge of share prices affected the trade on the Vienna Stock Exchange and the number of visitors declined drastically. Interestingly enough, the New York Stock Exchange crash in October 1929, in fact, had no direct consequences for Vienna.…

INTERNATIONAL CAPITAL FLOW, BANKS AND INDUSTRIAL ENTERPRISES IN CEE IN THE INTERWAR YEARS

Former Länderbank (Vienna), founded 1880, architect Otto Wagner (built 1882-1884)

Central and South-Eastern Europe became one of the most important world markets for capital exports after the First World War. Foreign investors not only invested in the defeated countries, such as Germany, Austria, Hungary and Bulgaria, but also in Poland and Czechoslovakia. From 1919 till 1923 international capital from Britain, France, the USA, Belgium, the Netherlands, Italy and Switzerland acquired substantial shares in the main Viennese banks. The Länderbank and the Anglo-Austrian Bank were turned into totally foreign-owned banks, based in Paris and London. A similar development of Western European capital participation took place in all the joint-stock banks of the successor states of the Austro-Hungarian Empire with the exception of the Zivnobanka in Prague. This bank increased its investment in South-Eastern Europe, often together with Western European financial groups. As the governments of the successor states were in urgent need of foreign investment, they promoted the internationalisation of the banking systems there. So the governments paved the way for the access of international capital to industrial enterprises via the participation in the equity of the big commercial banks. This followed the traditional investment pattern of the region and through the internationalisation of the banks the whole area moved closer to international markets.…

CENTRAL EUROPEAN INTERCULTURAL RELATIONSHIPS: “K & K KAKANIEN”

Central European architecture: Prague, Czech Republic

A question to be asked is whether the historical and cultural entity of the Austro-Hungarian Empire in the Danube basin and special cultural relationships of the past in any way promoted the expansion of Austrian banks, insurances and other businesses in Central, Eastern and South Eastern Europe after 1989.
Robert Musil sarcastically describes in his famous novel “The Man Without Qualities“ the disintegration of Austrian hierarchical society and liberal-rational culture: “Kakania”. “Kakania was the first country at the present stage of development, from which God had withdrawn all credit, all love of life, all belief in itself and the capacity of all cultural nations to spread the useful imagination that they had a task to fullfill.” This Kakania is at the same time a model of an intellectual concept of Central Europe – more imaginary than a real geographically and historically defined area – today. Again Robert Musil: “…after having taken stock of the bulk of Central European ideas, he found out, not only to his regret, that it consisted only of contradictions, but to his astonishment he also realised that these contradictions are melting into each other when you look at them carefully.” “People who were not born then,” wrote Musil about the Austrian fin-de-siècle , “ will find it difficult to believe, but the fact is that even then time was moving faster than a cavalry camel…. But in those days, no one knew what it was moving towards; nor could anyone quite distinguish between what was above and what was below, between what was moving forward and what backward.”…