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8 November 2021

From the NS archive: Under the Austrian counter

12 August 1950: The Occupation has provided an ideal excuse for social sins.

By Helen Grosse

In the aftermath of the Second World War, Austria was divided into four zones to be shared by the United States, the Soviet Union, the United Kingdom and France. Under joint occupation by the Western Allies and the Soviet Union, Austria was earmarked for economic exploitation; or as Helen Grosse describes, to become “Europe’s finest blackmailer”. Grosse explains that at the time of writing in August 1950, Austria had received nearly $450m in Marshall Aid. This US foreign aid initiative had intended to assist Austria in “modernising her industries” but instead “constituted as an effective bribe against ‘going Communist’”. Meanwhile the “endless delays and difficulties” entailed by the Four-Power administration had made “illegal and highly profitable short-cuts become an irresistible temptation to traders”. Concerned that this “prevailing atmosphere of ‘underground’ business” will “inevitably affects Austria’s vast, underpaid and traditionally bribable civil service”, Grosse argues that as long as Austria is under control of four foreign armies, there will be “no real motive for Austrians to put their house in order: business ‘under-the-counter’ pays better.”


British visitors here in Vienna are often shocked at the contrast between the nylons, cakes with whipped cream, bananas, and the profusion of imported luxury goods stacked in the shop windows, and the tragic legion of one-armed and one-legged ex-soldiers in the streets. A leading Austrian economist said to me bitterly: “There’s no profit in supplying false legs; but there’s plenty in covering two sound ones with sheer nylons. My country has not yet developed a feeling of social responsibility.” He went on to talk depressingly of the Babbitt snobbery which leads, among well-to-do Viennese spivs, to hot competition in “fiddling” permits to purchase large shiny American cars. “Fifty-five makes of car are being imported at present. Waste of dollars? Of course; but then the country believes that the Americans will always keep on paying up.”

[See also: From the NS archive: Keeping corruption at bay]

Unkind critics declare that Austria has become Europe’s finest blackmailer. As a pawn in the Cold War, the country has received Marshall Aid on so generous a scale – nearly $450m so far – that it might seem to have been assessed, not in proportion to its size or needs, but in order to constitute an effective bribe against “going Communist”. It is only fair to observe that, thanks to dollar aid, industrial production has risen encouragingly from 88 per cent, in 1948, to 130 per cent of its pre-war level. Moreover, the E P A officials have done a fine job in teaching new methods to the peasants; and, if the old system of strip farming could be abolished, and a greater degree of peasant co-operation introduced, Austria would have a chance of regaining its pre-war ability to grow 80 per cent of the food the country eats. But without entering deeply into high Occupation policy, a visitor cannot help noting that nearly 40 per cent of Austria’s food is now bought from abroad, that far too much Marshall Aid has been spent on luxuries, and that the country badly needs a moral spring-cleaning.

No one, least of all the Austrians themselves, would dream of denying this. Unfortunately, the Occupation has provided an ideal excuse for social sins. Until the four foreign armies depart, there will be no real motive for Austrians to put their house in order: business “under-the-counter” pays better. With the endless delays and difficulties entailed by Four-Power administration, illegal and highly profitable short-cuts become an irresistible temptation to traders, while smuggling is bound to flourish as long as the lorries and goods trains of four armies continue to cross frontiers with immunity from customs control. And the prevailing atmosphere of “underground” business inevitably affects Austria’s vast, underpaid and traditionally bribable civil service.

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[See also: From the NS archive: The autumn climax]

The shabby Austrian civil servant, sitting in his magnificent office, with its high ceilings and double doors dating back to the heyday of the empire, is a national joke, a national disease. It is not difficult to see the causes of financial frailty. An under-secretary of state earns about £40 a month (though they and their family may live in a palatial apartment costing only £2 a month in rent), and a first secretary’s monthly salary is about £15. Moreover, an official nearing the age of retirement will have sworn loyalty to five different regimes. Each time they have changed their allegiance, it has been more important to disguise the nature of their real political views, should they have any left. Time after time they have seen their savings disappear in currency collapses, and they have probably never outgrown the belief that Austria, truncated, cannot survive. All this makes for cynicism; and they are unlikely to be either surprised or pained if they find that his junior colleague, earning little over £10 a month, has come to rely on small bribes for the butter on their bread. After all, they are rarely extortionate.

Responsible businessmen – not to mention worried rank and file members of the Socialist Party –with whom I have talked in Vienna are almost unanimous in the view that, when the empire went, Austria’s only chance was to become the main “market town ” for central and south-eastern Europe. Today even that chance seems to have gone; and, even with American assistance to modernise Austria’s industries, the country (they said) has little prospect of being able to compete successfully in Western markets. Long-term pessimism in business circles is such that there is a serious flight of Austrian capital abroad; and people are unwilling to invest capital in new plant – especially anywhere near the Soviet Zone. The Korean situation has increased this reluctance to a marked degree. Indeed, Korea produced conditions resembling panic: government officials bought gold, their wives rushed out to buy food to hoard, and the Nazis talked more loudly than ever of the chance of getting back into uniform. “German machines are better than American, and Germans are not afraid to die. This time we are bound to win.” This was said in a friend’s hearing by a young railway porter; and he was expressing a disquietingly common view. Revival of National Socialism in Austria is an ugly by-product of the Cold War.

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[See also: From the NS archive: Thirteen years soft]

At Linz, I visited the great steel works now managed by Richter-Brohm. At the gate stood a smart guard in soldierly uniform with black boots. To the casual eye he might have been a particularly well-set up Austrian policeman. He was not. Brohm is permitted to recruit a private police force for his works – Austria’s largest industrial asset. As I passed the guard, I noticed that his belt still showed a mark where the Swastika had been.

Read more from the NS archive here, and sign up to the weekly “From the archive” newsletter here. A selection of pieces spanning the New Statesman’s history has recently been published as “Statesmanship” (Weidenfeld & Nicolson).