10 - Fifty Years of State-Owned Industry in Austria, 1946–1996

Summary

THE REASONS FOR NATIONALIZATION IN 1946

Austria has a long history of state ownership dating back to the mercantilist era. The state controlled monopolies on salt and tobacco for a long time, and at the end of the nineteenth century the water supply, electricity, railways, and city transportation also came under public ownership in various ways. This absorption by the state might have been due to the “relative backwardness” (Alexander Gerschenkron) of the country or, alternatively, might have been a tribute to Austria's close relationship with the German tradition of confidence in the institution of the state as such. The liberal tradition had always been weak. The leftwing Socialist Party (SP) and the conservative Christian Socialists always favored public ownership in certain areas, and private business and public ownership coexisted without friction. The revolutionary period after World War I witnessed the socialist experiment of socialization, which soon failed, partly because of conservative opposition (März and Weber 1978). During World War II the fascist German government established important publicly owned war industries in Austria, and these transformed the economic structure of the country. If public ownership of part of the credit, trade, and agricultural systems (municipal savings banks, cooperative banks, agricultural cooperatives) is also included, it is evident that Austria had for a long time experienced no real problems with public ownership in a mixed market system.

Public ownership, however, reached unforeseen proportions after World War II. In 1946 the Austrian Parliament decided to nationalize seventy-one large business enterprises, 20 percent of the country's industry. These included iron, steel, and oil production, part of the chemical industry, and machinery and mining.