Eugen von Philippovich, Ein Wirtschafts- und Zollverband zwischen Deutschland und Österreich-Ungarn (1915)

Philippovich’s wartime pamphlet argues that a German–Austro-Hungarian economic and customs association is not a patriotic fantasy but a practicable, historically prepared, and strategically necessary project. Written in the Mitteleuropa moment of 1915, it presents the war’s isolation of the Central Powers as the occasion to revive a nineteenth-century plan repeatedly blocked by politics rather than economics. The second preface states the thesis directly:

Ich habe an dieser Schrift in der neuen Auflage keine Änderung vorgenommen, aber ich möchte doch zum Ausdruck bringen, daß das fortgesetzte Studium der Zolltarife und Warenbewegung zwischen Deutschland und Österreich-Ungarn mich in der Überzeugung bestärkt hat, daß eine Zolleinigung möglich ist.

English translation: I have made no change to this work in the new edition, but I should nonetheless like to state that the continued study of the tariff schedules and the movement of goods between Germany and Austria-Hungary has strengthened me in the conviction that a customs union is possible.

The work’s first sections reconstruct Austrian trade policy as late-unified and long constrained by prohibitions, internal customs lines, and protectionist interests. Against this inertia Philippovich sets Metternich’s efforts toward freer German trade and especially Bruck’s plans of the early 1850s. Bruck’s staged path—abolition of prohibitions, stepwise reductions of internal duties, common commercial representation, and eventual customs unity—becomes Philippovich’s model. The failed negotiations with Prussia are read not as proof of impracticability but as a lost historical opening, captured in Schäffle’s retrospective judgment:

Die Einigung war ein deutsches Interesse allerersten Ranges.

English translation: The unification was a German interest of the very first rank.

This history gives the pamphlet its argumentative structure. Bismarck’s objections about different consumption habits, administration, and revenue distribution are treated as secondary rationalizations; the real obstacle was Prussia’s wish to command the Zollverein without Austria. After the 1870s, both empires turned toward autonomous protective tariffs, especially under agricultural pressure. Philippovich condenses this change into a formula:

Nationale wirtschaftliche Autarkie wurde das Schlagwort.

English translation: National economic autarky became the watchword.

Yet he is not a simple free-trader. His central conceptual move is to separate the ideal of a large common economic space from the immediate abolition of all internal protection. A Zollverband must enlarge markets and coordinate external policy, but Austrian industry, weaker in capital, freight conditions, taxation, and domestic purchasing power, needs transition. Hence union is possible only as gradual convergence.

The statistical middle of the pamphlet supports this developmental argument. Philippovich shows Austria-Hungary’s rising coal and iron production, factory numbers, bank capital, savings, transport, and communications, while admitting that Germany remains wealthier and more productive. He stresses latent strengths: Alpine water power, technical education, Kunstgewerbe, specialized manufactures, and artistic small industry. Austrian backwardness is therefore not natural but institutional; wider markets and legal reform could release capacities already present.

The trade analysis makes the asymmetry sharper. Since the 1906 commercial treaty, imports from Germany have grown strongly, while Austro-Hungarian exports—especially agrarian ones—have weakened as domestic consumption rises and yields lag behind Germany. In industrial goods Austria-Hungary carries large deficits in metals, machinery, instruments, chemicals, paper, leather, rubber, and textiles. This imbalance is precisely why Philippovich rejects any one-sided liberalization:

Es kann daher bei einer Zollvereinigung — wie auch bei einem etwaigen selbständigen Handelsvertrag — nicht die Rede davon sein, daß wir neue Erleichterungen bieten, ohne einen Ersatz zu finden.

English translation: There can therefore be no question, in a customs union—as also in any possible independent commercial treaty—of our offering new concessions without finding some compensation in return.

The proposed “Ersatz” is an institutional architecture: a common external tariff where the two schedules already approximate one another; moderate agricultural protection; temporary intermediate duties for vulnerable Austrian industries; tariff calculation preferably in Mark; and harmonization of company, exchange, administrative, and commercial law. War removes former treaty constraints, especially most-favored-nation limitations:

Durch den Krieg ist jedem Staat seine Freiheit wiedergegeben, und namentlich die dauernde Bindung Deutschlands, die durch die Aufnahme der Meißbegünstigungslausel in dem Frankfurter Friedensvertrag mit Frankreich entstanden war, besteht heute nicht mehr.

English translation: Through the war, every state has had its freedom restored to it, and in particular the permanent obligation of Germany, which had arisen through the inclusion of the most-favored-nation clause in the Treaty of Frankfurt with France, no longer exists today.

The final argument is geopolitical. Philippovich imagines a Central European economic area from the Adriatic to the North Sea, perhaps widened further, capable of resisting British-led isolation and redirecting capital, production, and trade toward the Balkans and the Orient. Scale is his governing economic category:

Je größer der Raum, je größer die Bevölkerung, desto leichter wird eine Vervielfältigung der Produktions- und Abgrenzungsmöglichkeiten.

English translation: The greater the territory and the greater the population, the more readily can the possibilities of production and of specialization be multiplied.

The pamphlet combines wartime strategy, historical memory, and institutional economics. Philippovich’s union is presented as a mechanism for reform, specialization, and resilience: German mass production and Austrian finer manufactures, German capital and Austro-Hungarian developmental space, common external strength and staged internal adjustment. Above all, Philippovich expects the economic treaty itself to become the catalyst of domestic reform:

Ich erwarte gerade von dem Abschluß eines Wirtschaftsvertrages zwischen unserer Monarchie und Deutschland, der einen freieren Verkehr als Ziel nimmt, die Anregung zu solchen Änderungen.

English translation: I expect precisely from the conclusion of an economic treaty between our monarchy and Germany, one that takes freer commerce as its aim, the impulse toward such changes.