Page - 112 - in Otto Bauer (1881–1938) - Thinker and Politician

112 chapter 3 ingdependentonotherEuropeancountries.His commentson the causesof structuralcrisis from1921–2becamethefoundationfortheSocial-Democratic party’seconomicrecoveryprogrammeforAustria,whichit introducedin1922 whendebatingthegovernmentontheresultsofthe‘GenevaConvention’(also known as Upper Silesian Convention). The Social Democrats, Bauer in par- ticular, protested against the economic andpolitical dependency that resul- ted fromtheconvention, aswell asdreaded(justifiably) theconsequencesof the ‘recoveryprogramme’ for thepoorest layersof thepopulation.Theminis- ter of finance,Dr Spitzmüller, hadworkedout a programmedrawing on the economic thoughtofKeynes: economic recoverywouldbebrought aboutby increasingthedemandforinvestments(i.e.developingthemunicipaleconomy and introducingpublicworks financedby the statebudget), andovercoming thecrisisbyutilisinginflationpolicies.75 In thosedays,BauerwascriticalofKeynes’s theory.76Becauseof thecoun- try’ssmallsizeandeconomicweakness,hedidnotbelievethat itcouldbeput intopracticeinAustria. InOctober1921,heformulatedhisownprogrammefor savingtheAustrianeconomy.Itdrewonthetheoryofcyclicalcrises,andalsoon Hilferding’snotionof the stateasa force thataccelerates theprocessofover- comingcrisis.Asmentioned in the first part, this programmewaseffectively asuggestiontowinfinancialmeansbytaxingwealthiersocialgroupsandfor- eignbankaccountsheldbyAustriancitizens.Inaddition,astatefrontofpublic works–comprisingroad,watersupplyline,railroadandpostalserviceworks– wastobesetupandfinancedbydomestic loans.Forall theirdifferences,both programmesnoticeablycontainedacommonelement: theyplacedemphasis onstimulatinginvestmentbythestateforthepurposeofcreatingalabourmar- ketthatmighthelptoovercomethecrisis.77Thegovernmentreactednegatively tothedemandthat thecostsofcrisisbesharedacrossall socialclasses,andit 75 JohnMaynardKeynes (1883–1946)–aBritisheconomist, financeexpert,politicallyded- icatedpublicist, initiatoroftheInternationalMonetaryFundandtheInternationalBank forReconstructionandDevelopment.Headvocatedapoliticsofstronginterventionofthe capitalist state intoeconomic life inordertopreventcrises. Inhis theory,hestressedthe roleof investment inmaintaining thebalanceof capitalist economy(employment rates dependondemand,anddemanddependsoninvestmentrates). 76 He strongly protested against one element of this theory in particular: the proposition topreventcrisesbyregulating thevalueofmoney inrelationtogold, thusattemptingto maintainthebalancebetweentheconjunctureandtariffs.BauerthoughtKeynes’stheory hadapoliticalcharacter: inhisview, it servedtodefendBritain’s financial independence fromtheUnitedStates.SeeBauer1976h,p.253. 77 It isworthmentioningthatthefoundationsoftheeconomicregenerationproject, i.e. the creationofa labourmarket in thesenseofanti-cyclicaleconomicpoliciesconductedby