Austria Essay ⋆ Business Essay Examples ⋆ EssayEmpire

This European country has a population of 8.3 million (2007), and a land area of 83,872 square kilometers. Although now a relatively small country, historically it was a dominant power in central Europe with Austria and then the Austro-Hungarian Empire being one of the major economic, political, and military forces in Europe from the Napoleonic Wars until the end of World War I in 1918.

Wine was produced in the region since early medieval times, and probably earlier. There has also been a printing industry in the country since 1482, and Austrians have been important in the central European book trade. Vienna and Salzburg were centers of music, and both cities were seen as cultural capitals of Europe. Musical instruments made in Austria were sold throughout Europe. There was also the state tobacco monopoly established in 1784 by which war victims and the disabled were able to earn income from selling tobacco products.

During the 19th century, because of its position in central Europe, the Austrian railways became important for trade just as their waterways had previously seen much international commerce. The Donau Dampfschiffahrts-Gesellschaft (Danube Steam Navigation Company), founded in 1829, flourished with an Imperial Charter, giving them a monopoly on Danube trade for 15 years, and they continued in a monopoly position up to 1880 during which time they had to carry government mail free of charge. In 1847 they were transporting some 850,000 passengers and 200,000 tons a year on their 41 vessels. The company continues to operate to this day, as does Austrian Lloyd Trieste, which used to operate from the AustroHungarian port of Trieste. In 1873 Vienna hosted the World’s Fair and 10 years later the Austro-Hungarian Postal Savings Bank was established. It introduced the world’s first postal check system.

The Austro-Hungarian Empire was broken up at the end of World War I, and most of the German-speaking region, which also included Vienna, the former imperial capital, became the Republic of Austria. The major industrial center of the Austro-Hungarian Empire had been in what became Czechoslovakia, and the Republic of Austria was initially in a perilous economic state. Indeed, it did not have enough coal for its industry and went through shortages of food. This led to the League of Nations establishing a process of helping the country in 1922 as economic reconstruction took place. There was significant hardship and unemployment before the Great Depression, and Austria was badly hit in the early 1930s, leading to Austria being annexed by Germany in March 1938. This led to economic recovery and the establishment of many new industrial complexes, but the economic infrastructure was badly damaged in World War II.

After World War II, Austria was initially divided into four zones run by the Allied forces, and these differences were to lead to major problems for the economy for many years. Its economy had been badly damaged by the war, and the black market flourished. Widespread nationalization took place in 1946 and 1947. This included iron and steel plants, smelting works, factories, and also the three largest credit institutions and the main electrical energy installations. Compensation to the previous owners was paid in 1954 and in 1959, and the economy gradually improved with foreign investment and became a stable economy.

For much of the postwar period, Austria enjoyed a Socialist economic outlook, although mention should be made of the influential Austrian-born economist Friedrich von Hayek (1899–1992). However, the country was badly affected by the oil crisis in 1973–74. Since 1965, the Organization of Petroleum Exporting Countries (OPEC) has had its headquarters in Vienna, and it was there that OPEC oil ministers were conferring in 1975 when the meeting was attacked by Carlos “The Jackal.” Some of the major Austrian companies involved in the export trade are Agrana (fruit juices, sugar), AVL (automotive engineering), Plansee (metallurgy), Red Bull (beer), Silhouette (glasses), and voestalpine (steel). There has also been a burgeoning electronics industry.

Many migrant workers came to Austria in the 1960s, and by 1973 they constituted some 227,000 people, about 8.7 percent of the workforce. Many of them were from Eastern Europe, but some were from Turkey and, in recent years, migrants from China have also arrived in Austria. During the 1970s and 1980s, Austria had a good reputation for taking refugees, although during the 1990s there was some resentment toward them. Tourism has been very important to the Austrian economy, with many coming either for music-related events or for skiing. The sale of winter sports equipment is now significant in world terms.

Bibliography:

Sven W. Arndt, The Political Economy of Austria (American Enterprise Institute, 1982);
Steven Beller, A Concise History of Austria (Cambridge University Press, 2006);
International Business Publications, Austria Banking & Financial Market Handbook (International Business Publications, 2007);
Eugen K. Keefe, Area Handbook for Austria (Foreign Area Studies, American University, 1976);
Anton Pelinka, Austria: Out of the Shadow of the Past (Westview Press, 1998);
The Europa Year Book (Europa Publications, 2008);
Rolf Steininger, Günter Bischof, and Michael Gehler, eds., Austria in the Twentieth Century (Transaction Publishing, 2008).

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