Storm Clouds

Meanwhile Austrian foreign policy had taken a fateful turn in 1908. A revolution in Turkey had smashed a theocratic establishment that had been unable to enact real reforms for decades, and swept into power a group of ambitious young men who came to be known as the Young Turks.⁴² These Young Turks pursued a radical reform program designed to make Turkey more like the secular democracies of the West. European leaders were amazed to see the Young Turks putting their ideas into practice so quickly. Many of them believed that Turkey would soon regain formidable strength, with drastic consequences for the political map of southeastern Europe.

The hawks in Vienna immediately began agitating for the annexation of Bosnia and Herzegovina. The Austro-Hungarian army had occupied these territories since 1878, but they had not been formally incorporated into the empire. The advocates of war insisted that Austria-Hungary could not afford to wait until the Turks were strong enough to reclaim their former colonies. When it became obvious that the hawks would have their way in Vienna, war nearly broke out with Russian-backed Serbia. In the so-called annexation crisis, a great number of troops, Ludwig von Mises among them, were mobilized and dispatched to the southern and northern borders of the empire. The war was averted, however, when the Russians withdrew their support for the Serbs. After a year of negotiations, Bosnia was constituted as a part of Austria-Hungary. But the event had a lasting negative impact on foreign relations. Austria-Hungary's hawkish Minister of Foreign Affairs, Aehrenthal, successfully lobbied the governments of Russia, France, Italy, and Great Britain to approve the annexation, but the old trust that Austrian statesmen had enjoyed abroad had been destroyed. Rudolf Sieghart, a high government official at the time, said in retrospect that the annexation was “the overture to the World War.”⁴³ An increasing number of crises entangled the major European powers over the next several years. Austria-Hungary mobilized its troops again in 1912 against another Russian-Serb coalition. Once again, the Russians withdrew at the last minute, but two years later they would stand fast.

The annexation campaign had a profound impact on domestic policy as well. The liberal Prime Minister Beck had resigned in November 1908 to protest the annexation. The last phase of bourgeois-liberal rule in Austria ended with his administration. Beginning with Koerber's administration in 1900 (which included Böhm-Bawerk as finance minister) Austria had been ruled for eight years by governments that found their main support in the liberal press and in business and finance. Every prime minister since 1900 had risen to his position through a career in the Austrian bureaucracy, and each ruled on the basis of emergency laws that allowed the emperor to appoint governments without parliamentary approval. But Koerber had pioneered the method of “governing through the press,” and his successors Gautsch and Beck skillfully continued this approach. They were not mere administrators for the emperor, but could initiate political change through direct communication with the citizenry, thus bypassing political party organizations.⁴⁴

The succeeding governments could no longer rely on the support of the liberal establishment, especially the press, and for this reason alone were unable to address any pressing political problem before the outbreak of war. National conflicts and suppressed democratic longings continued to alienate the citizenry from the empire. Under relentless centrifugal forces, the country was ready to break apart.