Austrian economic policy in the 1930s was characterised by conflicting attitudes. On the one side, the increasingly authoritarian state paid lip service to the private sector and its ‘autonomy in the management of the economy’. On the other side, the state intervened increasingly in wide-ranging branches of the economy. In the aftermath of the world economic crisis, intervention in the economy – both from state and business – reached unprecedented proportions. ‘Peasants and capitalists’ as well as ‘the powers of high finance’ demanded state intervention in the economy with ‘surprising openness’. These interventions were regarded as a temporary measure to cope with current difficulties. However, a ‘free economy’ remained an ideal, unattainable at a time of economic crisis.

There was a wide gulf between theory and practice, an inherent characteristic of Austrian economic policy in the 1930s. The most prominent representative of the Austrian School of political economy, Ludwig Mises, rejected ‘categorically any state intervention in the economy that would go beyond traditional duties’. The advocates of liberal economic theory, such as Mises, Friedrich Hayek and Oskar Morgenstern, as well as advocates of diffuse concepts of corporatist policies, were faced with numerous ‘market regulatory’ interventions from the state. Apart from the special development of state banks, where strong financial support was not unusual, the state intervened most effectively in agriculture and trade, but intervention was also not insignificant in industry.