Living in a Social Democracy

For most of this year, I was fortunate enough to live in the beautiful Republic of Austria. It wasn’t the first time I could lived there, and I hope it won’t be the last. But as much as I love Austrian Economics and limited government, I can’t pretend that Austria actually subscribes to either of those philosophies. Living in Vienna, I could see the vast structure of the state everywhere, as I crossed street car tracks, watched a concert at the Musikverein, or watched the Polizei checking the permits of a busker on Kaerntnerstrasse.

The state is everywhere in Austria. And I wish I could say that it is clearly a failure; that the only reason I put up with their nonsense is that it isn’t my country. I’m just visiting, I can ignore it. But I would be lying.

See, Austria isn’t a failure. Despite its high taxes, Austria has one of the healthiest economies in Europe. It boasts both low unemployment rates and low sovereign debt. The heavily-subsidized arts, near-free university education, nationalized healthcare, and extensive public transit system have somehow not dragged them into a pit of economic despair. When I discussed their government with Austrians, they never complained about their taxes. I did get close once, when a friend lamented the high salaries soldiers receive with her tax money (since Austria is bound by treaty to maintain neutrality, they tend to consider their army a superfluous leech of public funds).

I recently read Daniel Hannan’s post in the Telegraph trying to understand how Austria hasn’t collapsed on itself. He brings up some good points, and a few possible answers to this conundrum, but I’d like to add my own observations.

Historically speaking, Austria is a world power that got cut down to size and castrated, and Austrians accept this. “I Am from Austria,” a song so popular it is all but the national anthem, actually has a line that translates to “the high time is behind you”. Today, Austrians are self-actualized. This wasn’t always the case, however. The “Anschluss” — Austria’s willing entry into the Third Reich in 1938 — guaranteed them a brief revival of supremacy, followed by terrible losses of life, property, and freedom in the second world war. Like the rest of Western Europe, they received American money through the Marshall Plan to help reconstruct their economies. The total destruction of their infrastructure during the war allowed them to start afresh and modernize much quicker than countries that never experienced landwar or airstrikes (like the United States).

Austrians have a small, well-run state, and they are willing to spend lots of their hard-earned money to keep it that way. Today, one of my professors described Austrian mentality as  deferential to state authority, a carry-over from hundreds of years under the Hapsburg monarchy. But in general they are also industrious, efficient, conscientious, cautious people. Besides, with an area about the size of Maine and a population roughly equivalent to Virginia, public policy doesn’t have to cover vastly different types of land or a very wide demographic of people. Although Austria has seen its fair share of immigration, the majority of those who live there are still Austrians, coming from families who have been Austrian for hundreds of years.

This is the first post in a series I plan to run throughout the summer, exploring what it is actually like to live in a successful social democracy — the good and the bad. I hear a lot of “don’t knock it till you try it” approaches coming from advocates for social democratic policies like those in Austria. Now that I’ve tried it, I’d like to give my two cents. So stay tuned!



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