For the next 10 years Francis Joseph and a succession of ministers attempted to govern the Monarchy along 'neo-absolutist' lines. The Stadion constitution was theoretically the legal basis of government, but as the months passed it became obvious that the young emperor himself was disinclined to abide by any constitution. The whole point of neo-absolutism was to preserve the Monarchy's position as a great power, and for this purpose, it was reasoned, the monarch had to have at his disposal a completely centralised, unconditionally subordinate, modern state machinery. Every corner of the Monarchy must be brought under the direct supervision of an expanded bureaucracy controlled from Vienna, and preferably with German as its administrative language.
The neo-absolutist regime is sometimes referred to as the 'Bach system', after Alexander Bach, who took over from Stadion as interior minister in 1849. Bach was an 1848 liberal, but he was also an Austrian German patriot committed to the preservation of the Monarchy and hence to the maintenance of order and efficient administration. It was Bach who implemented the centralising goals of neo-absolutism with an army of bureaucrats, many of them Germans, but an increasing number bilingual Czechs. The government also, inevitably, reimposed a strict and pettifogging censorship and disposed of an equally large number of police informants.
From 1849 to the end of 1851 Francis Joseph appears to have been content to rule the Monarchy by administrative decree. Finally, at the end of 1851, Francis Joseph abolished the Stadion constitution outright. This made explicit the intention of governing absolutely in future: all representative institutions, whether Reichstag or Diet or local assembly, were abolished; the principle of equality of nationalities and languages was set aside; and Austrian law would henceforth apply throughout the Monarchy, including Hungary. The latter was divided into five administrative units, the county system sidelined and German made the language of state. No one nationality, however, was favoured, despite the support non-Magyar nationalities had given the Monarchy in 1848—9; as one Hungarian put it, non-Magyars received as reward what Hungarians got as punishment. After 1852, when Schwarzenberg died unexpectedly, Francis Joseph dispensed even with a minister-president; henceforth he alone coordinated the work of his ministers.
This was centralisation with a vengeance; the question was, would it work? One of the ironies of the neo-absolutist period is that, although it was ultimately a self-defeating failure, the regime, freed for the moment from the tiresome necessity of consulting local sensibilities, did much economically to haul the Monarchy into the nineteenth century. The foundations of this economic development were laid earlier; nor was peasant emancipation as decisive a factor as previously thought. There was certainly no great jump in agricultural productivity after 1853, when the commutation of labour services began in earnest. In most of the Austrian' half of the Monarchy emancipation may even have retarded economic efficiency by creating a larger class of struggling peasant proprietors; in Galicia and Hungary the effect was to drive many peasants off the land entirely or into an expanding class of immiserated landless agricultural labourers.
Nevertheless the period of neo-absolutism undoubtedly saw the continuation and intensification of economic growth. Such reforms as the abolition of the customs barrier between Austria' and Hungary in 1851, a uniform currency, credit institutions and above all the creation of a modern infrastructure of railways, roads and canals all contributed to the establishment of a native manufacturing base, with the predictable knock-on effect of generating further growth.
Politically, however, neo-absolutism was a resounding failure. The reason, paradoxically, was precisely the preoccupation of the regime with maintaining its great power position, which in the eyes of the monarch and his advisers justified neo-absolutism in the first place. From a still fundamentally weak economic base, the Monarchy was trying to project its power too far and exceeding its resources. Revenue simply failed to keep pace with the costs of being a great power, such as keeping the army mobilised during the Crimean War as a means of putting pressure on Russia, or fighting the Italian War of 1859. By 1859, 40 per cent of the government's income was devoted to servicing the interest on the state debt.23 Just as crippling was the cost of maintaining thousands of troops in Hungary, in peacetime as well as wartime, for fear of an uprising. So it was neo-absolutism itself which, by making it impossible to muster the necessary resources, vitiated the Monarchy's ability to prosecute an aggressive foreign policy or even to hold on to its existing territory.
The war of 1859 was the breaking point for neo-absolutism. After this defeat and the loss of Lombardy, the Monarchy's richest province, the refusal of the Viennese and foreign banks to continue lending to such a shambolic regime made some form of domestic reorganisation imperative. Francis Joseph reluctantly embarked on a period of constitutional experiment. By November 1859 the emperor had announced the convening of a 'reinforced' Reichsrat, in other words an enlarged council to represent the Monarchy's constituent parts.
Once on the slippery slope of concessions, the emperor found it hard to go back. The mere act of convening a 'reinforced' Reichsrat raised the conundrum of how to add to it without reviving the provincial diets, including Hungary's. The 'reinforced' Reichsrat which met in May 1860 was hardly representative: most of its members had to be appointed precisely because there were no diets. Yet even this apology for a popular assembly managed to extract a promise from the emperor not to raise taxes without its consent. It also produced two distinct factions, each with its own proposal for a way forward. A group of Hungarian, Bohemian and Galician magnates proposed a sort of federated Monarchy, with each province represented by its diet and crowned with a number of overarching central institutions. The other faction was made up largely of Austrian Germans and favoured a unitary system but with greater popular representation.
Francis Joseph was temperamentally more inclined to listen to the conservative, aristocratic faction. The result was the October Diploma of 1860, which restored the diets and provided for a Reichsrat of 100 members, drawn from the diets' members. The key to the Diploma's conservatism, however, was in the electoral system proposed for the provincial diets: this was weighted so heavily in favour of the landed nobility everywhere that the whole scheme was vehemently attacked by all other sections of society. It was no sooner announced than it became clear that it satisfied no group except its conservative authors. Even though the latter were chiefly Hungarians, they found themselves repudiated by mainstream political opinion in Hungary, which reflected largely the gentry class. Ferenc Deak, one of the moderates who had retired from active politics in September 1848, had become the de facto leader of the gentry and insisted that the restoration of Hungary's historic constitutional status, as defined in the April Laws, was the irreducible minimum for a political settlement. The various nationalities in both halves of the Monarchy also denounced the Diploma bitterly. Just as angry were the representatives of the growing Austrian German middle classes, who identified most with the Habsburg state and felt that they should be more obviously the dominant element in it.
Francis Joseph yielded to this argument in December 1860, when he appointed Anton von Schmerling, another 1848 liberal, as 'minister of state'; the emperor also clearly hoped to strengthen his hand in the competition with Prussia for primacy in Germany by thus ostentatiously giving the German element of the Monarchy a dominant role. Schmerling proceeded to issue the February Patent of 1861, which opted for the solution now probably closest to Francis Joseph's preference: the centralised, unitary state but in constitutional form. The Patent provided for a much-expanded Reichsrat of 343 members, in effect a parliament for the entire Monarchy. As with the October Diploma, the deputies were to be drawn from the provincial diets, but this Reichsrat was to have the power to initiate legislation as well as to approve the budget. Matters not concerning Hungary would be debated by a 'narrower' Reichsrat consisting only of the non-Hungarian deputies. What made the Patent a veneer, however, was that the indirect electoral system set in place for all provinces, instead of favouring just the nobility, was this time weighted in favour of the German-speaking element throughout the Monarchy.
The Schmerling system lasted all of four years but proved itself effectively unworkable from the start because of the refusal of the Monarchy's non-Germans to participate. The Hungarian Diet, though elected for the first time since 1848, was dissolved almost as soon as it met, for daring to demand the restoration of the April Laws; under Deak's leadership it also refused to send any of its deputies to the Reichsrat. The Croats and the Italians of Venetia followed a similar policy from the start, as did Poles and Czechs after 1863. The blatantly German-oriented nature of the system alienated all the other nationalities.
The deadlock was finally broken, once again, by a crisis in foreign policy. By the mid-1860s, the looming confrontation with Prussia was beginning to concentrate Francis Joseph's mind. Faced with a continuing budgetary deficit, the emperor gradually recognised the need to do a deal with the Hungarians. Crucially, the Hungarian leadership had also subtly altered its position by this point, in that it accepted the fatal ambiguity of the April Laws in relation to foreign affairs and control of the Monarchy's armed forces and the need to resolve this.
Deak in particular recognised that these two issues were sticking points for Francis Joseph. Deak succeeded in convincing the monarch that the Hungarians were willing to modify the April Laws in so far as these were incompatible with the Monarchy's ability to function as a great power. The essence of the deal eventually struck was that the emperor was to be left with more or less undisputed control over foreign policy and the armed forces. In return, Hungary would receive constitutional autonomy within its historic borders, including Croatia. An essential part of the settlement, for the Hungarians, was that there must also be a constitutional government in the 'Austrian' half of the Monarchy; this would be a safeguard against a return to neo-absolutist rule.
By July 1865 Francis Joseph was convinced that the Hungarians could be trusted. He sacked Schmerling and authorised new elections for the provincial diets. In December the Hungarian Diet convened to debate the terms of the settlement. The Austro-Prussian War of 1866 and the decisive defeat of Austria, coming in the middle of these deliberations, only served to demonstrate afresh the interdependence of both the Monarchy and the Hungarian political elite. Forced to cede Venetia to Italy and to renounce leadership of and membership in the German Confederation, Francis Joseph was finally brought to see the necessity of Hungarian support if he were ever to recoup these losses.
Deak and his principal partner in the negotiations, Count Gyula Andrassy, for their part, appreciated all the more that Hungary was too weak to stand on her own and needed to be part of a great power in order to have any influence over her fate at all. In October 1866 the emperor appointed as foreign minister Count Friedrich Ferdinand von Beust. It was Beust and Andrassy who hammered out the basic points of the agreement.
The Austro-Hungarian Ausgleich or Compromise was essentially one reached between the monarch, not Austria', and the appointed representatives of the Hungarian Diet, which in turn largely represented the Hungarian nobility. As such, the Ausgleich was a deal that excluded all the other nationalities of the Monarchy, including the Germans. It was accepted by the Diet and promulgated in March 1867; only after that, in June, could Francis Joseph be finally crowned King of Hungary. A parallel constitutional law was enacted for Austria' in December 1867.
The result was something quite unique: a constitutional monarchy in two halves, united by the person of the monarch as Emperor of Austria and King of Hungary. Responsible to the monarch were three 'common' or joint ministers, for foreign affairs, war and common financial matters such as tariffs and trade treaties. All other matters were reserved to the governments and parliaments of the two halves, 'Austria' and Hungary. Each half had autonomy, with its own parliament, ministry and minister-president. 'Delegations', consisting of deputies from the two parliaments, sitting apart, were designed to monitor the workings of the three common ministries, but in practice the delegations were powerless, and the emperor and his common ministers were free to run foreign and military policy as they saw fit. The contribution of each half of the Monarchy to common expenses was fixed, at 70 per cent for 'Austria' and 30 per cent for Hungary, but this and the other common financial matters were subject to renewal every 10 years.
The most serious defect of this 'dualist' constitution was that, in satisfying the minimum requirements of the dynasty and the Hungarians, it recognised only imperfectly, if at all, the rights or aspirations of the other peoples of the Monarchy. Even the Germans, who thought of themselves as the natural leaders of 'Austria' and who to begin with did indeed control its government, were estranged when they found, some years later, that the emperor was quite capable of ruling without them. The other nationalities, in both halves of the Monarchy, felt even more aggrieved, and this has been the main criticism of the Ausgleich ever since: it did not solve, and indeed exacerbated, the 'nationality problem'. As a consequence, it has been argued, the Habsburg Monarchy was doomed to self-destruct because it was incapable of further change, and the 'uncompromising compromise', in George Barany's words, was the reason.24
There is an alternative view, put most cogently by C. A. Macartney, which seeks to place the Ausgleich in context. According to this, the deal done in 1867 was probably the best or even the only one possible; 'unjust but realistic', as Istvan Deak puts it.25 But this second view, though a sounder historical argument, can also be criticised. As Alan Sked points out, not every solution had been tried as of 1867; on the contrary, the general principles of the abortive Kremsier constitution of 1849, if probably too radical for the time in some of their detail, nevertheless constituted a genuine attempt to wrestle with issues of nationality.26 What is indisputable is that the settlement of 1867 left more inhabitants of the Monarchy dissatisfied than satisfied. The Monarchy was to pay the ultimate price for this half a century later.
World History
