From Mises to Morgenstern: The Austrian School of Economics during the Ständestaat
by Hansjörg Klausinger (Vienna University of Economics and Business Administration)
In the 1930s the Austrian school of economics lived through a crucial phase in its development, which led from the height of its influence at the beginning of the decade to its decline and dissolution after 1945. The rise and fall of the Austrian school and of its liberal wing in general had its counterpart in the fate it experienced in its country of origin. On the one hand, Austria (and especially Vienna) had played a vital role as a center of communication for all the members of the school. And on the other hand the Austrian economists in turn had tried to use their reputation for influencing the course of Austrian economic policy, in particular during the Great Depression – and indeed many observers, contemporary and modern, trace the comparatively weak performance of the Austrian economy back to the harmful power of the Austrian economists’ ideas. Against this background this study tries to examine the development of the Austrian school from 1934 to 1938, that is, from the end of parliamentary democracy in Austria and its replacement by the authoritarian Ständestaat (corporate state) regime to the eventual Anschluss (union) to Nazi Germany.
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