3 - Austria-Hungary's economy in World War I

Summary

Introduction

When World War I had ended, more than 1 million of the 8 million men mobilised in the Austro-Hungarian armed forces had died in action or as prisoners of war. More than 1.8 million had been wounded, 3.5 million had become ill and hospitalised, while between 1.5 and 1.7 million soldiers of the Habsburg armies were taken prisoner (Gratz and Schüller, 1930: 161–4; Rothenberg, 1976: 218; Winkler, 1930: 23–4). The Monarchy's defeat after more than four years of fighting was followed by its dismemberment: confirmed in the Treaties of St Germain (1919) and Trianon (1920), the lands that for centuries had been in a multinational empire under Habsburg rule were divided into new nation states or ceded to neighbouring countries. Austria and Hungary were reduced to small rumps, while Czechoslovakia, Yugoslavia, and Poland emerged as independent states.

That was the horrendous price Austria-Hungary paid for her folly of going to war as a means of solving the Serbian crisis once and for all, even if that meant risking military conflict with Russia. While the Habsburg authorities may have gambled on a short military conflict that could be fought on the basis of material stocks, from an economic perspective the empire was ill prepared for the long, resource-intensive industrial war that was to start in August 1914. Some basic observations underline the point. Judged by its commitment to spending on armaments, Austria-Hungary was, perhaps ironically, the least militaristic of the six major European combatant nations.