Political Economy in the Habsburg Monarchy 1750–1774

The Contribution of Ludwig Zinzendorf

Simon Adler

• Publisher: Palgrave Macmillan
• Year: 2020
• ISBN:
  9783030310073
• Topic: Economics
• Subtopic: Economic History
• Index: Economics

Political Economy in the Habsburg Monarchy is an important study of the contribution of Austrian Enlightenment economist Ludwig Zinzendorf to the political economy of the Habsburg monarchy in the mid eighteenth century. Simon Adler provides the first comprehensive analysis, and first ever study in English, of the development of Zinzendorf's thinking on the economy, commerce and, above all, state finances. Political Economy in the Habsburg Monarchy shows the extent to which Zinzendorf's insights were part of the wider European movement dedicated to understanding political economy as an independent and important activity. It establishes Zinzendorf, a protégé of the State Chancellor Wenzel Anton Kaunitz, as a pivotal figure in the development of Austrian economic and financial policies during the 1750s and 1760s and explains how he challenged cameralism using the most advanced European economic ideas, notably from French writers around Vincent de Gournay.This bookis based upon wide-ranging research of primary sources and comprehensive coverage of secondary literature and adds significantly to the ongoing historiographical turn towards political economy in the eighteenth century.

© The Author(s) 2020

S. AdlerPolitical Economy in the Habsburg Monarchy 1750–1774Palgrave Studies in the History of Financehttps://doi.org/10.1007/978-3-030-31007-3_1

Begin Abstract

1. Introduction

Simon Adler¹

(1)

Visiting Research Fellow, Austrian Academy of Sciences, Vienna, Austria

Simon Adler

Email: [email protected]

End Abstract

Scholars have used the concept of fiscal–military state to study the importance of finance in the development of the states in Europe between the sixteenth and eighteenth centuries. The term was first used in the late 1980s by John Brewer in a study on eighteenth-century Britain.¹ It has since been employed widely, notably in a comparative context.² The term was apposite to describe the evolution of states and their fiscal systems to meet the demands of larger armies and more expensive equipment. A central question was the effectiveness with which economic resources could be mobilised. For Brewer, to cover the increasing costs of warfare, a fiscal–military state had to be able to raise funds through both credit and taxation. Further, a good administrative structure was necessary to support its fiscal and military activities.³ This became particularly relevant in the eighteenth century when the costs of warfare in Europe increased significantly. Recently, the relevance of a fiscal–military state has also been examined for the Habsburg monarchy in the eighteenth century.⁴

For the monarchy, funding was of utmost importance. It had fought several wars and at the beginning of the eighteenth century had dramatically extended its power. In addition to the Nine Years Wars (1689–1697) and the War of the Spanish Succession (1701–1714), the monarchy had fought two expensive military campaigns (1683–1699 and 1716–1718) against the Ottoman Empire. In the late 1730s, it had been involved in the War of the Polish Succession (1733–1738) and in renewed fighting with the Turks (1737–1739).⁵ To finance the rapidly rising military commitments, the government was dependent on tax revenues (contribution) paid by the Estates.⁶ In addition, with military expenditure well exceeding the income from taxes, the government needed to borrow heavily. Between 1700 and 1740, the monarchy’s debt had quadrupled. At the beginning of Maria Theresa’s reign, borrowings had surpassed 100 million florins. At the same time, however, the income side had deteriorated. Total state revenues had fallen to approximately 20 million florins, and the cash available had dwindled to 87,000 florins.⁷ At the time of her father’s sudden death on 20 October 1740, the empress had quickly recognised the desperate situation. In her memorial of 1750, Maria Theresa lamented that she had been left ‘without money, without credit and without [an] army’ and had been lacking in political experience and competent advice. In her second memorial of 1755/1756, she complained anew about the poor financial state of the monarchy when she became empress. She deplored the difficulties of inheriting a country that had had only a few thousand gulden left as reserves and almost no domestic and foreign credit.⁸ Early in her reign, the combined pressures of keeping a standing army and servicing government debt, to which was added the armed hostility of Prussia, forced Maria Theresa to decide on significant reforms. The military expenditure of the Seven Years War (1756–1763) demanded financial commitments on a new scale.⁹

Throughout Maria Theresa’s reign, public finances and administrative changes to central government in order to gain more fiscal and military control were key concerns. It was in these important areas in the 1750s, 1760s and early 1770s that, with the strong support of the influential Austrian state chancellor and creator of the Staatsrat Count Wenzel Anton Kaunitz, Count Ludwig Zinzendorf became the monarchy’s leading expert. Zinzendorf’s unusual ideas attracted attention and had a significant impact on the economic discussions in government. The only biography of Ludwig Zinzendorf was published in German in 1879.¹⁰ In two sections, the editor Eduard Gaston Pettenegg presented the biographies of Ludwig Zinzendorf and of his half-brother Karl Zinzendorf. Both sections were, in fact, written by Karl.¹¹ Pettenegg was a local Austrian priest whose main interest in compiling the ‘autobiographies of Karl and Ludwig Zinzendorf’ was genealogy. His edition was not primarily intended as a historical account and may have omitted relevant biographical elements on the Zinzendorfs.

Fig. 1.1

The Habsburg monarchy from the 1740s to 1780

As part of their analyses of financial policies under Maria Theresa, scholars have primarily concentrated on Zinzendorf’s proposals on state credit. Adolf Beer, writing his monographs on financial administration and public finance at the end of the nineteenth century, gave significant room to Zinzendorf’s financial plans.¹² Zinzendorf’s theoretical knowledge, Beer pointed out, was unrivalled in the monarchy.¹³ Karl Hock and Ignaz Bidermann’s study on the Staatsrat was based on documents which are now lost and showed Zinzendorf’s forceful presence during the discussions in central government in the 1760s, including his rivalry with Count Karl Friedrich Hatzfeld (1718–1793).¹⁴ The only study specifically dedicated to Ludwig Zinzendorf was published in German more than 60 years ago. The slim monograph Staatsbildung und Finanzentwicklung by Johann Schasching was based on primary material and gave a good exposition of Zinzendorf’s ideas on public finances.¹⁵ As the subtitle of the book indicated, Schasching’s focus was Austrian state credit in the 1760s and his starting point was Zinzendorf’s contribution to war finance. He also set out Zinzendorf’s proposals to unify state credit, to create new financial institutions for the monarchy, and gave an account of the resistance which Zinzendorf faced against his plans. In Schasching’s view, even though Zinzendorf eventually lost the power struggle against other ministers and could not translate some of his important proposals into policies, his new approach and his radical ideas were important for the development of the monarchy’s public finances.¹⁶ Similarly, P.G.M. Dickson’s monumental study on the monarchy threw considerable light on Zinzendorf’s financial proposals and his involvement in policy discussions.¹⁷ For the most part, Dickson was interested in those of Zinzendorf’s plans which impacted financial policy formulation and so he also explained the operations of the monarchy’s audit office (Hofrechenkammer ) which was Zinzendorf’s political brainchild.¹⁸ Franz A.J. Szabo showed the decisive influence of Zinzendorf’s ideas on the financial policies of Kaunitz.¹⁹ On the grounds that Zinzendorf’s plans entailed a significant development of the monarchy’s war efforts, Szabo reported them at some length in his monograph on the Seven Years War in Europe.²⁰ By contrast, in the most recent major publication on the eighteenth-century monarchy, the biography of Maria Theresa by Barbara Stollberg-Rilinger, Zinzendorf is only briefly mentioned in relation to financial reform.²¹

This book, the first in English dedicated to Ludwig Zinzendorf’s writings, builds on these contributions and those of other scholars. However, it offers a different perspective and examines aspects of Zinzendorf’s work which have only partially been dealt with or have been neglected in the literature. A significant part of the study will be devoted to Zinzendorf’s earlier works, written before he was nominated to a senior government post. As such, Zinzendorf’s plans on state credit, which have been the clear emphasis for most scholars,...

Table of contents

• Cover
• Front Matter
• 1. Introduction
• 2. Zinzendorf with Kaunitz in France, 1750–1752
• 3. French Intellectual Influence: Melon and Gournay
• 4. The German Translation of Law’s Money and Trade, 1758
• 5. The Development of Zinzendorf’s Thinking on State Credit
• 6. The Financial Expert of the Habsburg Monarchy
• 7. Conclusion
• Back Matter