Introduction
The aftermath of the Great War during the Interwar period led to significant transformations in Austria and the former territories of the Austro-Hungarian Empire. The Treaty of Saint Germain exploited ethnopluralism to dismantle a major world power, leading to the region's fragmentation into several states. This division lacked a unifying symbol or identity, contributing to ongoing conflicts like the Yugoslav wars and the Ustashe Chetnik conflicts we see today. The treaty effectively disintegrated Austria's relationship with Hungary, whose territories were annexed by Romania, while establishing the new states of Yugoslavia and Czechoslovakia.
While many nations were able to recover post-war, Austria and the newly established states faced severe penalties and struggled to repay them. Isolated and unable to join forces due to the threat of invasion from the Little Entente, these nations found themselves financially strained. Austria, once the central "brain" of its empire, now faced economic ruin. The disruption caused by the Entente led to a Marxist revolution in Hungary, where Marxism seemed like the only viable path forward. Amidst these challenges, a figure named Engelbert Dolfuss in Austria aimed to preserve elements of the Habsburg legacy and navigate a new path for his people through the tumultuous circumstances they faced.
The Early life of Dollfuss
Dollfuss was born into a humble peasant family in the small village of Great Maierhof, part of St. Gotthard near Texingtal in Lower Austria. During childhood, he resided in his stepfather's home in Kirnberg, a neighboring village, where he attended elementary school. The support of local parish priests was crucial in financing Dollfuss's education, as his parents lacked the means to do so independently. This assistance proved significant, granting him access to education when most individuals had limited mobility beyond their immediate community. Dollfuss later pursued his studies at a high school in Hollabrunn. Following his high school graduation, he initially aspired to enter the priesthood and began theological studies at the University of Vienna in 1912. However, after a brief period, he shifted his focus to law. To sustain himself during his student years, Dollfuss provided lessons and became involved with the Students' Social Movement, a student group dedicated to social welfare efforts among laborers.
At the outbreak of World War I, Dollfuss attempted to enlist in Vienna but was turned down due to falling two centimeters short of the minimum height requirement. Standing under 5 ft 0 in (1.52 m) tall as an adult, he earned the nickname "Millimetternich," blending "Millimeter" (German for millimeter) and Klemens von Metternich. Undeterred, on the same day of his rejection in Vienna, Dollfuss traveled to St. Pölten, where the local recruiting commission was located, and insisted on joining the military to serve his empire. Despite not meeting the height criteria, he was eventually accepted as a volunteer and allowed to select the regiment where he would serve; Dollfuss chose the Tyrolese militia, also known as the Kaiserschützen. Rapidly rising through the ranks, he was soon promoted to corporal and served 37 months on the Italian Front south of Tyrol. His dedication and skills led to a promotion to lieutenant by 1916.
Following the war, while still a student, Dollfuss found employment with the Lower Austrian Peasants' Union, which provided him with the means to sustain himself. It was within this organization that Dollfuss embarked on his initial foray into politics. Working with the union, he mobilized peasants to aid in their post-war recovery efforts and safeguard them from the influences of Marxism. Dollfuss's skills were noted within the Union, leading to an opportunity to pursue further studies in Berlin. However, his time in Berlin exposed him to a predominantly liberal and Marxist academic environment, fostering a growing discontent with some of his professors. Despite this, Dollfuss immersed himself in the Christian principles of economics during his studies. While in Germany, he joined the Federation of German Peasants' Union and the Preussenkasse, a central bank for member cooperatives, gaining valuable practical experience. In Germany, he met his future wife, Alwine Glienke, a descendant of a Pomeranian family. Dollfuss also engaged with Carl Sonnenschein, a prominent figure in students' social activities and a key figure in the Catholic movement in Berlin.
Upon his return to Vienna, Dollfuss assumed the role of secretary for the Lower Austrian Peasants' Union, focusing his efforts on strengthening the agricultural sector. He was pivotal in establishing the regional Chamber of Agriculture of Lower Austria, where he eventually served as secretary and director. Additionally, Dollfuss contributed to the formation of the Federation of Agriculture, the Agricultural Labourers' Insurance Institute, and the development of a new Agrarian policy in Lower Austria, laying the groundwork for the corporative structure of agriculture. His impactful proposals at the International Agrarian Congress elevated his reputation internationally within the agricultural realm, positioning him as an unofficial leader of the Austrian peasantry. In a significant career shift, Dollfuss was appointed president of the Federal Railways, Austria's largest industrial corporation, on October 1, 1930. Subsequently, in March 1931, he took on the role of Federal Minister of Agriculture and Forestry, demonstrating his versatility and leadership in various sectors.
A photo of Engelbert Dollfuss
The Rise to Chancellor and The Road to Fascism
On May 10, 1932, at the age of 39 and with just a year of experience in the Federal Government, Dollfuss was offered the position of Chancellor by President Wilhelm Miklas, a member of the Christian Social Party. Initially hesitant, Dollfuss spent the night in prayer at his favorite church before responding to the President the following day after a modest meal and bath, accepting the offer. Sworn in on May 20, 1932, Dollfuss headed a coalition government comprising the Christian-Social party, the Landbund (a right-wing agrarian party), and Heimatblock (the parliamentary arm of the Heimwehr, an ultra-nationalist paramilitary group). Despite extending an invitation to the social democrats, their reluctance stemmed from elitist attitudes, primarily influenced by their affluent Jewish backgrounds. This decision would later prove a significant misstep, particularly given that Austro-Marxism represented a nationalist form of social democracy, almost like Ferdinand Lassalle. The coalition faced the daunting challenge of addressing the repercussions of the Great Depression. Following World War I, much of the Austro-Hungarian Empire's industrial base had been located in regions that became part of Czechoslovakia and Yugoslavia under the Treaty of Saint-Germain, placing post war Austria at an economic disadvantage. Dollfuss's coalition held a fragile majority in Parliament, with just a one-vote edge.
In March 1933, Austria faced a constitutional crisis due to voting irregularities in the parliament. Karl Renner, the Social Democratic President of the National Council (the lower house of parliament), stepped down to participate in a vote as a parliament member. In response, the two vice presidents from other parties resigned to cast their votes. The parliament could not proceed with its session with no president in place. Dollfuss used these resignations as a pretext to declare that the National Council was no longer functional. He advised President Wilhelm Miklas to issue a decree indefinitely adjourning the parliament. When the National Council attempted to reconvene following the resignations, Dollfuss ordered the police to block access to the parliament, effectively suspending democracy in Austria. Subsequently, he ruled by emergency decree, acquiring dictatorial powers and eliminating democratic processes in the country.
Dollfuss expressed deep apprehension about the potential rise of the Austrian National Socialists (DNSAP) following the appointment of Adolf Hitler as Chancellor of Germany in January 1933. He feared that in future elections, the DNSAP could secure a substantial minority. Estimates by fascism scholar Stanley G. Payne suggested that if elections were held in 1933, the DNSAP might have garnered around 25% of the votes. Contemporary analyses from Time magazine hinted at even higher support, with a reported backing of 50%, particularly noting a 75% approval rate in the Tyrol region bordering Nazi Germany. Concurrently, the Soviet Union's influence in Europe rose during the 1920s and early 1930s. In response, party moved decisively by outlawing the Communist party of Austria on May 26, 1933, and the DNSAP on June 19, 1933. Subsequently, under the banner of the Fatherland Front, he established a one-party dictatorship closely resembling the Fascist model in Italy, effectively prohibiting all other Austrian political parties, including the Social Democratic Labour party. As the Social Democrats remained a distinct entity, the prohibition of their paramilitary group, the Republikanischer Schutzbund, on March 31, 1933, significantly weakened their influence against Dollfuss's administration. The Chancellor stated on May 1, 1933, “Our primary objective is to suppress Marxian Socialism.” He believed that the National Socialists would not persist in opposing the government once they realized its determination to eliminate Marxian Socialism and reshape the state based on Christian and German principles. At that time, he could not have foreseen a potential strain in Austrian-German relations when he publicly expressed the goal of fostering friendly ties with all nations, particularly with the German Reich.
Shortly after expressing a gesture of goodwill, tensions escalated rapidly as Dollfuss implemented Austrofascism, aligning closely with Italian Fascism and distancing Austria from German unification under Nazi rule. The Austrian Government's ban on party uniforms led to criticism from Dr. Frank, the Bavarian Minister of Justice, who described these actions as "terrorism" and hinted at potential intervention to support German kinsmen. The rift between Austria and Germany deepened, prompting Dollfuss to emphasize the "Austrian Front" against external pressures. In August 1933, amid growing Nazi terrorism, Dollfuss engaged in "Secret Letters" with Mussolini to secure Austrian independence, viewed as a crucial buffer against Nazi expansionism. This marked a critical juncture in Austrian history as Dollfuss sought to counter Nazism and communism by aligning with Italian Fascism, highlighting parallels between Hitler's regime in Germany and Stalin's rule in the Soviet Union. In The Second Danger: A Warning From The Fatherland Front, Dr. Edwin Rollett, a propagandist for the Fatherland Front, delivered a solemn caution to Austrians regarding the imminent peril of National Socialism to their nation, emphasizing these fundamental divisions.
The Janus face of National Socialism. On the German side of the border, the Stormtrooper calls for the “Gagging of the press”; on the Austrian side, for “Press freedom!”
“First and foremost we are Austrians, and we must welcome everything that makes for the preservation of the liberty and independence of our country.”
“We want a German Austria and a free Austria. It is our task to preserve the German spirit in all the variety of its forms, to save it from being molded into a uniformity. Especially we Austrians are called to form a bridge between the Germanic world and other nations. At a time when the world shrinks from a certain German spirit, we want to show the world that we possess a Christian German civilization. Moreover, I am convinced that in this German land of ours it is our duty to refashion social and economic life according to truly German forms, and to give an example to the Germanic people as a whole. It is my conviction that it is our task to give an example of the Christian State. We believe that we are thus doing a service to the Germanic people as a whole.”
— Engelbert Dollfuss quoted in Dollfuss: An Austrian Patriot by Johannes Messner
Upon establishing the Government, Dr. Dollfuss consulted Ignaz Seipel for guidance in stabilizing Austria's economy. Despite securing a loan and balancing the budget, financial challenges persisted, leading to delayed payments and discontent among workers. Efforts to achieve stability through increased duties and spending limits faced opposition from Social Democrats and National Socialists, fueling discord. As tensions escalated, violent clashes erupted, prompting the Government to restrict public gatherings. Despite these measures, false rumors and strikes continued to undermine stability. The Government's attempts to quell dissent were insufficient, allowing Nazis and Communists to exploit the economic failures and sow further discord for their own agendas.
In a bid to dismantle the Social Democrats' Schutzbund, the Dollfuss administration conducted searches of their members' residences and meeting spots for weapons. The Austrian Civil War erupted on February 12, 1934, triggered by the armed resistance from the Linz branch of the Social Democrats against the search of their party headquarters. News of the conflict swiftly spread, leading to further armed clashes, particularly in Austria's industrial zones and Vienna. Despite the Schutzbund's efforts, they were significantly outnumbered by the police and army, who employed artillery against the insurgents. The anticipated general strike to support the uprising failed to materialize. By February 15, the rebellion had collapsed, resulting in approximately 350 casualties, with civilians, insurgents, and government forces bearing equal losses. The Federal government responded by outlawing the Social Democrats on February 12, 1934, leading to the imprisonment or exile of their leaders.
“With no less vigor did the Marxist leaders wage war against the religious heritage of the people, to make room for an atheistic and materialistic Socialism. Everything they pressed into their service, from learning to sports associations, from university to kindergarten.
By threats of unemployment and starvation they persuaded men to leave the Catholic Church, using methods of terrorism which were a disgrace to civilization, violating as they did the most elementary rights of human freedom.
They maintained a systematic campaign to undermine public morality, especially through the cinemas and theaters which they controlled, to say nothing of educating the children of the Socialists to a religious and moral anarchy, instilling a hatred of Church and religion into their childish minds as soon as they were awakened to the light of reason.
The achievements of Social Democracy in this sphere show beyond any doubt what their aims really are. Their propaganda to induce people to apostatize, their efforts to exclude children from religious instruction, show what are the real views of Social Democracy. Under the pretext of defending the interests of the workers, great masses of the population have been brought up to be irreligious; and this is a great crime.”
“To bring up the young to be materialists and egoists, suppressing all mention of the higher power to which they are responsible; to withhold from them the commandments to ‘love your neighbor’ and to ‘honor your father and your mother’; to deprive them of any grounding in religion, is the greatest sin and the most heinous crime that can be committed against the young.”
— Engelbert Dollfuss quoted in Dollfuss: An Austrian Patriot by Johannes Messner
In April 1934, Dollfuss orchestrated a limited parliamentary gathering consisting solely of Fatherland Front members to secure approval for a new constitution, making it the world's second constitution to endorse corporatist principles after the Portuguese Estado Novo. This session retroactively validated all decrees issued since March 1933. Effective May 1, 1934, the new constitution abolished the remaining vestiges of democracy and the structure of the First Austrian Republic, establishing the Federal State of Austria. Austria officially transitioned into a one-party totalitarian state. In opposition to the Anschluss, Dollfuss and the Fatherland Front strategically leveraged the Austrian Catholic faith to foster a sense of national identity and resist absorption by Nazi Germany.
A propaganda published in 1936 by the Austrofascists, opposing both Nazis and Communists.
The Ideology of The Fatherland Front
The Federal State of Austria exalted the country's historical legacy, particularly during the Habsburg Monarchy era. This period was portrayed as a time of Austrian greatness, where the nation played a paternal role in guiding its empire and exerting influence on the global stage. In contrast, Adolf Hitler deeply disdained the Austrian empire and its history. He criticized the Habsburgs for allegedly showing favoritism towards Slavic peoples over German-Austrians. Hitler contended that the assassination of Archduke Franz Ferdinand was a result of divine justice, as the Archduke had been perceived as sympathetic towards the Slavs. Hitler's hatred towards Austria was evident in his rejection of the alliance between Austria and Germany, which he deemed as sacrilegious despite his dismissal of cultural nationalism in favor of racial ideology. He denounced the Habsburg rulers for their perceived hypocrisy in presenting Austria as a German state, fueling his intense hatred and disdain towards the monarchy. When World War I erupted, Hitler chose to cross into Bavaria and volunteered to serve there instead of fighting for Austria.
The Catholic Church played a significant role in shaping Austrian history and identity, distinct from the German cultural influence and Hitler's fascination with American concepts like manifest destiny, which he sought to implement in the East. Hitler also drew inspiration from racial science and eugenics promoted by the Bull Moose Progressives in the United States. In contrast to Hitler's secular regime, the Catholic Church held considerable sway in various matters under the Austrian government. The state promoted religious education in schools, mandating it as a requirement for completing the Matura graduation exams. This ideology propagated the belief that Austrians were a superior type of Germans. Embracing the regime's Catholic values, the government endorsed the non-communist and non-capitalist principles outlined in Papal Encyclicals, particularly highlighting Pope Pius XI's Quadragesimo Anno.
"I like the honest man who, free from Marxian ideas and prejudices, shows himself ready to cooperate in the reconstruction of an Austria in which the worker will no longer have to waste his energies in class warfare, since in the corporative State his relation to his employer is fundamentally changed, and capitalism is divested of its essential character."
— Engelbert Dollfuss quoted in Dollfuss: An Austrian Patriot by Johannes Messner
The Austrofascist flag
A key feature of Austrofascism was its implementation of austerity measures. Dollfuss aimed to reduce unnecessary spending and foster a society that embraced a more straightforward way of living, aligning with his Catholic belief in living modestly for God and family. This approach was a response to the encroachment of consumerism in neighboring countries like Czechoslovakia, which threatened traditional values. Dollfuss saw it as a method to trim excess, combat superficial consumerism, and promote a devout and ascetic lifestyle in service of God. Dollfuss advocated for a blend of Christian corporatism inspired by Seipel, a proponent of Catholic social teachings. This ideology called for a "corporated" state to supersede the existing parliamentary system, drawing on encyclicals like Rerum Novarum by Pope Leo XIII, as well as the corporate state concept from fascism. The aim was to establish the Austrian state as the foundation of society, with Catholicism as a guiding principle for political culture and the economy. Under this system, every member of a specific economic sector must join an officially sanctioned interest group. These groups, categorized by industry or occupation, would then hold public status and participate in national policymaking. Consequently, the state would exert significant influence over these corporate groups while the groups would regulate their members.
“The guild conception is the foundation of those organizations which the peasantry, with its innate instinct for the natural laws of life, formed for their own protection under the stress of the want and misery which had resulted from the unrestrained freedom of Liberalism: Thus in spite of ourselves we have been led to organize. It was the needs of the time, the needs of an age dominated by unrestricted economic liberty, that gave birth to our guild system which has supported us in good times as well as in bad. The guild was the first organization, whose purpose it was not to deprive individuals of their economic life but to maintain the independence of the individual, cooperating to regulate the markets and the prices, and thus ensuring for him the foundations of his existence.”
“From the beginning the aim to be achieved is the elimination of class warfare and the laying of new foundations for the social structure of the nation: The idea that master and man, the so-called employer and employee, are in opposition to each other must disappear. They must learn that they belong to each other, that they must collaborate harmoniously in human society for their mutual good and for the good of the community as a whole.”
“The task which is to be fulfilled by the establishment of the corporative State cannot be achieved by resuscitating any of the old forms of government. The Chancellor especially emphasizes the fact that the corporative organization cannot be a system of political domination, as it was to some extent in the Middle Ages when the peasantry, for example, were not accorded full rights as an “estate.” All groups must possess complete rights and full recognition. The guild system of later times lost its vitality and became unequal to its new tasks: In the corporative organization of those days the peasant class did not receive due consideration, indeed it was neglected. Trade and industry had become stagnated in their guilds and led only a formal existence. And the reason was precisely that the privileges of single classes were too much emphasized. So the time came when the defenseless individual became the prey of the power of others, and when finally money entered into power the poorer and weaker section of the community was oppressed.”
“Anyone who speaks of “estate” or corporation, and thinks that it means an employers’ organization, a new political Front, misuses the word corporation. A corporation is not only an organization of the employers, rather it is an organization of all those who owe their existence to one particular trade or profession. Evidently the corporative idea recognizes the authority of the master in the trade or craft, for it is he who ultimately bears the economic risk. But the conception also requires that the apprentice and the craftsman should be recognized as colleagues and as men, that ultimately they should also be partners in the business. Apprentices and craftsmen should have an interest in the thriving condition of the business.... For a man his place of work should be his home once more. For this it is before all things necessary that the employer should feel it his duty so to conduct himself as a man that his fellow-workers will feel themselves to be men in their relations with him.``
— Engelbert Dollfuss quoted in Dollfuss: An Austrian Patriot
The economic framework of corporatism frequently clashed with Ludwig von Mises, who advocated for establishing a free-market global economy in Austria, where national identity took a backseat to commodities and competition in the international market. The Fatherland Front did not adhere to a laissez-faire approach, and various factions within the coalition, including conservatives, viewed free market policies as potentially detrimental to the country's financial stability. A significant critique of Dollfuss was his decision to appoint Mises as his government's chief advisor. While some may have viewed this as a Jewish figure exerting influence, the reality was that Mises' push for free market principles failed to gain traction in Austria, facing resistance from both the Social Democrats and Conservative Christians.
Hans Hermann Hoppe sheds light on Mises' presence in the Dollfuss government by explaining:
“During this period, Mises served as the chief economist for the Austrian Chamber of Commerce. Prior to Dollfuss's assassination for his political beliefs, Mises was among his most trusted advisors. The question arises: why was Austria's prominent free-market liberal supporting a militant interventionist? In "The Cultural Background of Ludwig von Mises" (PDF), Erik Ritter von Kuehnelt-Leddihn provides insight: "Facing opposition at the university, Mises sought stable employment at the Handelskammer, the semi-official Chamber of Commerce. By 1920, the Austrian government was largely controlled by the Christian Social Party, a Clerical-Conservative party that later gave rise to Dollfuss's dictatorship and the Patriotic Front. This party had to combat the international socialists and, subsequently, the National Socialists. Although Mises, an agnostic and true Liberal, did not inherently support the Christian Socials, he recognized the necessity of collaborating with the government given Austria's precarious circumstances."
— Hans Hermann Hoppe, The Meaning of The Mises Papers
In 1934, the Austrian economist Mises parted ways with his position in the Austrian government. A staunch advocate of classical liberalism and free-market economics, Mises increasingly clashed with the authoritarian and corporatist policies enforced by Dollfuss during his regime from 1932 to 1934. Following his departure from Austria, Mises relocated to Geneva in 1934, where he secured a position at the Graduate Institute of International Studies. This marked the beginning of Mises's extended exile from Austria, eventually leading him to the United States in 1940 to escape the growing Nazi influence and the onset of World War II in Europe. While Mises did not depart specifically because of Dollfuss per se, the political atmosphere under Dollfuss and subsequent events certainly influenced his decision to seek a more welcoming environment for his work and ideas. Mises's departure from Austria in 1934 followed the failure of the Fatherland party to fully implement his proposed program, culminating after the adoption of the May Constitution.
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Various pictures of Austrofascist propaganda
The May Constitution of 1934 in Austria, which opens with the phrase "In the name of God, the Almighty, from whom all law emanates," established a totalitarian state with emergency decree powers held by the Federal Government. The goal of this Constitution was to eliminate obstacles to efficient governance, abolish immunity for corporate members, and uphold democratic principles like individual liberties. Democratic representation was structured through corporate entities like the State Council, Federal Council of Intellect, Federal Economic Council, and Provincial Council. These groups provided advice to the Federal Government on legislation, with members appointed by the government or elected through different corporations. This system aimed to ensure diverse societal sectors had input in lawmaking, promoting inclusivity. Chancellor Dollfuss's system, influenced by fascism but deeply connected to Catholicism, sought to harmonize capital and labor interests within a corporative state framework. Dollfuss believed in the importance of the peasantry as the nation's foundation and valued agricultural labor as vital in the face of Liberal Globalization. The State Council and the Fatherland Front played crucial roles in upholding the regime and fostering national development, guided by Dollfuss's vision of spiritual rejuvenation for the nation amidst Austria's industrial transformation and the decline of the empire.
The Chancellor outlined key principles:
Encouraging free development while maintaining state leadership in construction.
Building corporations from the bottom up for genuine autonomy.
Emphasizing a shift in individual perspectives to make corporative organization a true community structure.
In his speeches, Dollfuss emphasized the utilization of existing economic structures for reconstruction efforts, highlighting the importance of vocational associations and the corporate structure. He stressed the need for a sense of community within different professions, advocating for equal rights and cooperation among all members. Dollfuss promoted the idea that work should unite individuals and eliminate class conflicts, emphasizing the importance of solidarity and responsible governance based on selflessness and sacrifice. His envisioned system was heavily influenced by Seipel, leading to a form of Catholic fascism. Seipel viewed the party system in Austria as a source of division that hindered national unity and connection with God. He also saw the Jewish community in Austria as linked to capitalism and a specific merchant mentality that posed a threat to the economic well-being of the population. Seipel expressed concerns about Austria being economically, culturally, and politically dominated by the Jewish population. In addressing the Jewish Question, Seipel proposed acknowledging the Jews as a national minority, necessitating significant state supervision, albeit stopping short of the extreme measures witnessed in Nazi Germany.
The emphasis on religious and moral revival was believed to be essential for the reconstruction of the nation, penetrating all aspects of life including the family, political, economic, and social spheres. Dollfuss's vision for Austria focused on a spiritual reawakening, aiming to create a corporative State that would bridge the gap between capital and labor, moving away from class conflict towards cooperation. The core principle was to infuse Catholic ideals into public and political life, promoting a re-Christianization of society.
"It is not power or riches that will make for the happiness of nations, but interior peace, agreement, and harmony among individuals. For this, we do not need empty piety; but we do intend to be upright, honorable, and resolute men. We do intend to become better and nobler men in accordance with Christian principles, and to behave as such in regard to our fellows."
"Hence arises a hard duty, but a duty which is fine and manly, a duty which brings peace and freedom, that of effective and constructive activity in regard to ourselves and in regard to those around us, especially in the family circle. We must make it our endeavor to become better men. We Catholic Christians have to reform life in Austria in this way. If the rest of the world sees that these people are better and more honest, more self-sacrificing and more devoted, more peaceful among themselves, then we have made propaganda for the Catholic ideal in the world outside our borders and contributed to the re-Christianization of the world."
"We in Austria want to enable Catholicism, over and above its influence upon individual lives, to become inherent in our public and political life, and indeed to manifest itself as the formative factor in the development and life of the State."
— Engelbert Dollfuss quoted in Dollfuss: An Austrian Patriot by Johannes Messner
An Austrofascist political rally
The Death and Legacy of Dollfuss
On July 25, 1934, the Austrian Chancellor Dollfuss was tragically assassinated during an attempted coup orchestrated by a group of Austrian Nazis, including Otto Planetta, Franz Holzweber, Ernst Feike, Franz Leeb, Josef Hackl, Ludwig Maitzen, Erich Wohlraab, and Paul Hudl. The insurgents stormed the Chancellery building, resulting in Dollfuss being fatally shot. Hudl received a life sentence, while the others faced capital punishment for their involvement in the assassination. Dollfuss's final moments were marked by seeking forgiveness from his assailants and requesting religious rites, which were denied to him. The Nazi raid on the Chancery aimed to capture all members of the Government, force their resignation, and eliminate the Chancellor to pave the way for a National Socialist-led government. Dollfuss, known for his bravery, was shot by the insurgents who exploited a moment of vulnerability. Despite being wounded, Dollfuss remained resolute and refused to resign, expressing his desire for peace and the succession of Dr. Schuschnigg. Once more, he found himself in solitude with his two attendants, his strength waning. He wished to convey something to them, so they leaned in closer to hear his words. Expressing gratitude for their loyal service, he pondered aloud:
“Children, your kindness towards me is remarkable. Why do others not follow suit? My desire has always been for peace. We have never initiated conflict; always defending ourselves. May God forgive them."
— Engelbert Dollfuss quoted in Dollfuss: An Austrian Patriot by Johannes Messner
As his breaths grew fainter, he sent final messages to his family. In his final moments, Dollfuss passed away, unaware of the continuation of the government's work by his ministers. Around four o'clock, he passed away. Following the assassination, Mussolini attributed the attack to Hitler and provided support to Dollfuss's widow through Prince Ernst Rüdiger Starhemberg, who returned to confront the assailants with his militia, sanctioned by President Wilhelm Miklas. Despite the tragic outcome, the nation was saved due to the swift actions taken by those loyal to the government.
Mussolini mobilized Italian forces to the Austrian border, warning Hitler of potential conflict if Germany attempted to invade Austria to quash the coup. He staunchly defended Austria's independence and displayed his resolve by replacing a statue in Bolzano, symbolizing the friction between Italian Fascism and National Socialism. Dollfuss's assassination sparked uprisings across Austria, leading to further violence. A failed Nazi attempt to seize power in Carinthia was thwarted by Italian forces, surprising Hitler and prompting him to distance himself from the attack. The conspirators were tried and executed, with Kurt Schuschnigg assuming the role of Chancellor after Dollfuss's death. Hundreds of thousands of Austrians paid their respects at Dollfuss's funeral, highlighting his significance. Even the conservative Catholic novelist G. K. Chesterton condemned the coup d’état and assassination of Dollfuss.
“LAST year, the representative of all that remains of the Holy Roman Empire was murdered by the barbarians. As an atrocity it has been adequately denounced; and it breeds in some of us rather a dumb sort of disgust, almost as if it had been done not by barbarians but by beasts.”
— G. K. Chesterton, AUSTRIA
Dollfuss rests in the Hietzing cemetery in Vienna alongside his wife, Alwine. Dollfuss embodied a unique form of Catholic fascism, standing against racialist ideology, capitalism, and Marxism. His deep connection to Austria and the land shaped his legacy as a defender of his nation's values and identity. Despite the presence of anti-capitalist elements within the Fatherland Front, Engelbert Dollfuss and Kurt Schuschnigg, once in power, implemented measures such as spending reductions, austerity, budgetary equilibrium, and deflation of wages and prices. During this era, Mises maintained an intriguing association with the clerical Austrofascist government. Before the Austrian fascists assumed control, Mises participated in an Austrian governmental economic committee in 1930 to analyze the Austrian depression's causes. The committee's report attributed Austria's inability to attract foreign capital essential for a swift recovery from the depression to inflationary expectations, increased taxation, government expenditure, and heightened wage rates that compressed business profits.
On February 28, 1931, Mises delivered a lecture titled "The Causes of The World Economic Crisis" in Czechoslovakia. To address the economic downturn, Mises suggested eliminating unemployment assistance (possibly to incentivize the jobless to accept lower wages), reducing government spending and taxes, and advocating for wage determination independent of labor unions. Hoppe, an Austrian economist, highlighted Mises' significant role as a close advisor to Dollfuss, who fought against the Nazi influence in Austria. Working as the chief economist for the Austrian Chamber of Commerce during Dollfuss' tenure, Mises was deeply involved in advising him. Despite relocating to Geneva in 1934, Mises maintained ties with the Austrian government, periodically visiting Austria and continuing his government-related work.
In February 1938, Schuschnigg even offered Mises the position of Chief of the Department for Monetary and Financial Affairs, demonstrating their alignment with some of Mises' policies.
“In tackling the economic crisis the Dollfuss-Schuschnigg dictatorship pursued harsh deflationary policies designed to balance the budget and stabilize the currency. The government’s program featured severe spending cuts, high interest rates, and frozen wages. In a sense the Christian Corporative regime demonstrated the viability of the Austrian state, but it did so at the cost of alienating a majority of the Austrian people. On the eve of Anschluss a third of the population was still out of work, while those fortunate enough to have jobs were bringing home paychecks considerably smaller than before the Great War. ''
— Evan Burr Bukey, Hitler’s Austria
“Beginning in 1931, [Austrian] unemployment grew rapidly, reaching a peak in 1933–6, with between 24 and 26 per cent of the labor force out of work. When, in 1937 and 1938, there was a modest recovery, unemployment never dropped below the 20 per cent value. This had a devastating effect on the legitimacy of the Austrian system. As the Austrian government sustained its reluctance to apply Keynesian policies, the economic recovery never entered a serious tail-off phase in the second half of the 1930s. Linked to an exhausted determination of the Austrian government to resist the pressures from Germany, the economic crisis of the 1930s should be seen as an additional reason why Austrian society was receptive to the annexation by Germany in March 1938.”
— Peter Gerlich and D. J. Campbell, Austria
The graph depicted below illustrates the efforts made towards spending reductions and budgetary balance in pre-1938 Austria from 1934 to 1938, as shown in millions of schillings.
Source: Die Entwicklung der österreichischen Bundesausgaben in der Ersten Republik
The economic challenges that plagued Austria in the 1930s were marked by weak real GNP growth rates following the contraction. This era of economic hardship is demonstrated in data sourced from Agnus Madison's The World Economy: Historical Statistics, revealing a consistent trend of restrained growth rates over consecutive years. Moreover, by 1937, Austria's real GDP had not yet recovered to its 1929 levels, emphasizing the prolonged economic struggles of that period. High unemployment rates, highlighted in various estimates including those by Dieter Stiefel and Madison, further underscored the economic adversity faced by the country during the 1930s. By 1933, unemployment in Austria had surged to alarming levels and persisted at high rates until 1937, regardless of the measurement used.
Sources: International Historical Statistics: Europe 1750–1988 and Emmerich Tálos’s Das austrofaschistische Herrschaftssystem: Österreich 1933–1938
During the years 1933 to 1939, a compelling historical experiment unfolded before us. While the clerical fascists in Austria pursued austerity measures and wage and price deflation from 1934 to 1937, the National Socialist government under Hitler in Germany implemented a different economic approach. This involved significant government deficits, direct public works initiatives, and rearmament efforts, showcasing a Keynesian fiscal impact. Despite modern attempts to dispute this, the simulative effects of Germany's deficits and policies post-1933 have been acknowledged by scholars like R. L. Cohn, Rainer Fremdling and Reiner Stäglin, and Richard J. Overy. Even though some historians may have underestimated German military spending by 1935, the essence of military Keynesianism remains true to Keynesian principles. It is evident that German economic policy until 1936 encompassed a blend of military and civilian Keynesian expenditures. Therefore, how did the levels of unemployment in Austria compare to those in Germany during this period?
Source: International Historical Statistics: Europe 1750–1988
Throughout this time frame, Austria grappled with persistent high levels of unemployment, while Germany saw a notable decrease in unemployment rates. The decline in public support for the Austrofascist regime in 1938 was primarily attributed to the economic turmoil and escalating unemployment figures. The annexation of Austria by Hitler in March 1938 revealed significant local backing for the Anschluss. This situation underscored the failure of Austrian fascism and hinted at Dollfuss's lack of geopolitical foresight. Hitler's actions in this context seemingly held a form of ironic victory.