Economic mobilisation

Population and labour force

Over the course of the war, the total population of the Habsburg Empire fell by nearly 2 per cent (table 3.4). This was an outcome, first, of high military casualties especially in the initial stages of the war and during 1915 (cf. Herwig, 1997: 135-49); second, a sharp decline in live births after 1914, and, third, an increase in civilian mortality. As early as 1915, the natural increase turned negative in both halves of the empire (table 3.5). Here, a rapidly shrinking supply of foodstuffs is likely to have been a major factor (see pp. 91-7).

Table 3.4. Habsburg Empire: population and armed forces

Habsburg Empirea

Austria

Hungary

Population

Armed forces

Population

Armed forces

Population

Armed forces

Millions:

1913

50.60

0.39

29.19

0.25

21.41

0.14

1914b

50.79

0.45

29.29

0.28

21.50

0.17

Percentage of 1913:

1914, second halfc

100.3

982.5

100.2

827.5

100.4

1,252.1

1915

99.6

1,048.8

99.6

916.7

99.6

1,278.9

1916

99.6

1,254.5

99.7

1,096.4

99.5

1,529.6

1917

99.1

1,311.1

99.1

1,146.2

99.1

1,597.9

1918

98.2

1,195.4

98.2

1,045.0

98.2

1,450.7

a Excluding Bosnia-Hercegovina.

b Mid-year population and pre-mobilisation-strength armed forces. c Armed forces after full mobilisation.

Note: Population refers to total population net of war dead and missing in action at the end of the year. Wartime population for Austria reconstructed using indices of live births and civilian dead in Alpine Lands and Czech Lands (1914-18); for Hungarian Kingdom: official figures for 1914-15, extrapolated using index for population movement in Hungary proper (1916-18); 1913 and 1914 include small official adjustments for migration effects. Armed forces: 1914 number of mobilised men; 1915-18 ration strength (annual average).

Sources: Austria - (Österreichisches Statistisches Handbuch 1916/17; Austria - Statistisches Handbuch Republik 1920; Gratz and Schüller (1930: 151, 161-4); Grebler and Winkler (1940: 145-6); Hungary-Magyar Statisztikai Evkönyv-1916/18; Winkler (1930: 18-9).

From the perspective of resource mobilisation for war, changes in the level of employment are of particular significance. Despite a marked increase in female participation in Austria, the more populous and more industrialised part of the empire, both total and civilian employment fell dramatically during the war. This was bound to act as a severe constraint on wartime output. Table 3.6 shows that, by 1918, the civilian labour force in the empire as a whole was about 24 per cent below the 1913 level. Even with the number of prisoners of war working in industry and agriculture accounted for in the labour force estimate, the 1918 level of employment (excluding the armed forces) was still one-fifth short of the prewar level. Total employment, including military personnel (cf. table 3.4), fell by 3 to 8 per cent between 1913 and 1918, depending on whether or not prisoners of war are included in the labour force.

Two factors, in particular, mitigated against higher levels of overall employment throughout the war. First, the scope for expanding the

Table 3.5. Habsburg Empire: births, civilian deaths, and war casualties (thousands)

1913 1914 1915 1916

1917

1918

1914-18, total

Habsburg Empire a Natural increase Casualties0 Austria Births Deaths

Natural increase b Casualties0 Hungary Births Deaths

Natural increase b Casualties0

512.6

864.8

589.9 274.9

735.6 500.9

234.7

511.6 220.9

850.7 579.9

270.8

124.9

529.5

632.1

299.3

512.3

186.8

466.1

186.8

465.2 761.0

155.3

a Excluding Bosnia-Hercegovina. b Births, less deaths.

c Number of men killed in action, died in captivity and missing.

1,742.7 including Bosnian casualties. Note: Casualties per year estimated using total of war dead and missing in action for 1914-18 and average monthly casualty rates for 1914/15 and 1917/18. Allocation of casualties between Austria and Hungary according to their shares in the total for 1914-18.

Source: See table 3.4.

female labour force was severely limited by the extent to which, prior to the war, women were engaged in low-productivity agriculture. According to the 1910 census, nearly 45 per cent of Austria's female population participated in the labour force and most of those (67 per cent) were in agriculture, largely as so-called 'family helpers'.4 The female participation rate in agriculture stood at 58 per cent and Winkler (1930: 31-2) argues that there was little room for going much, if at all, beyond that level. Any significant increase in the size of the female labour force was, therefore, largely confined to the urban, non-agricultural population.5 There, initial prewar female participation was about half of that within the agricultural population, permitting a pronounced increase during 1914-18.

Second, high rates of war casualties led to almost continuous calling-up of large numbers of prime working age males for military service well into 1918 - all in all, 8 million men were mobilised over the period 1914-18. Neither the rise in female participation nor the increased use of prisoners

Table 3.6. Habsburg Empire: civilian labourforce

Habsburg Empire Austria Hungary

Male

Female

Total A

Total B

Male

Female

Male

Female

Thousands:

1913

15,166

11,399

26,565

26,565

8,568

6,469

6,598

4,929

Percentage

of 1913:

1914

73.7

101.6

85.7

85.7

75.4

101.8

71.5

101.3

1915

60.7

106.4

80.3

81.0

62.9

108.0

57.9

104.2

1916

55.1

107.5

77.6

81.1

57.2

109.7

52.3

104.7

1917

50.9

110.4

76.4

80.3

52.9

113.4

48.3

106.4

1918

48.6

112.6

76.0

81.0

50.7

116.7

45.8

107.4

Total A: Male and female labour force.

Total B: Total A plus prisoners of war working in agriculture and industry, assuming two-thirds of prisoners of war working from 1915.

Note: With few permanent moves out of the armed forces and back into the civilian labour force (as distinct from exemptions from military service, i.e. 'Enthebungen'), the civilian male labour force has been approximated as the potential male labour force (based on actual population movement and prewar participation rates) minus all males drafted into the armed forces over 1914-18. Female labour force: agriculture - using Austrian 1910 agricultural participation rates (reflecting likely maximum female participation) also for Hungary (where census undercounts prewar female participation in agriculture); other sectors - estimates based on wartime increase in female industrial labour recorded in workers' accident and health insurance statistics for Lower Austria.

Sources: table 3.4; Austria - Census 1910; Hungary - Census 1910; Winkler (1930: 30-5).

of war as industrial and agricultural workers was anywhere near sufficient to compensate for the cumulative labour shortfall that emerged.

Aggregate output

Tables 3.7 and 3.8 present new estimates of wartime GDP in the Habsburg Empire, based on the output or value-added approach to national income.6 They suggest that the Habsburg economy was subject to an almost uninterrupted contraction throughout World War I. While there was some difference in the timing and extent of this contraction between the Austrian and Hungarian halves of the empire, which had to do with both structural characteristics of the 'two economies'7 and allo-cative decisions made during the war, the overall picture is fairly clear: by 1918, aggregate output had fallen to between 59 and 65 per cent of its 1913 level.

Table 3.7. Habsburg Empire: gross domestic product (1913 prices)

GDP per employee, crowns

GDP, million GDP per head, -

crowns crowns A B

Percentage of 1913:

A: Based on total civilian labour force plus armed forces.

B: Based on total civilian labour force, armed forces, plus prisoners of war working in agriculture and industry. Source: tables 3.4, 3.6, and 3.8.

Table 3.8. Austria and Hungary: gross domestic product (1913 prices)

Austria

GDP GDP, per million head,

GDP per employee,

Hungary

GDP, million

per head,

GDP per employee, crowns crowns crowns crowns crowns crowns

Percentage of 1913:

1914

88.5

88.3

89.9

92.2

91.8

93.6

1915

85.0

85.3

88.7

96.4

96.8

104.4

1916

77.7

77.9

81.0

84.6

85.0

91.5

1917

66.9

67.5

69.6

74.2

74.9

81.0

1918

59.4

60.5

62.8

65.1

66.3

73.2

Note: The estimates of GDP in constant 1913 prices are each based on seven sectoral series (agriculture; mining; manufacturing; handicrafts; construction; trade, finance and communications; government and private services (excl. housing)). These sectoral output series and their constituent sub-series are combined using constant 1913 value-added shares as weights. Bosnia-Hercegovina is not included. The estimates for 1918 are conjectural and based on only a small number of output indices.

Sources: (1) output: Austria - (Österreichisches Statistisches Handbuch 1913-1916/17; Austria-Hungary - Statistik des auswärtigen Handels 1917 (I), Gratz and Schüller (1930: 133, 139-42), Grebler and Winkler (1940: tables 18, 23); Hungary-Magyar Statisztikai Evkäänyv 1913-1916/18, Riedl (1932: 275-6), Komlos (1983: tables E.3, E.5, E.6), Sandgruber (1978: tables 4, 139, 154), Schulze (1996: tables A.6-A.10, A.13-A.17; 2000: tables 2, A1, A2), Wegs (1979: table 7), Winkler (1930: 47-53, 60, 234, 240). (2) population and employment: tables 3.4 and 3.6.

Table 3.9. Habsburg Empire: military/war expenditure, 1913 prices

Million crowns Percentage of GDP

1914/15 7,382.1 30.2

1915/16 6,191.2 26.8

1916/17 4,535.7 22.2

aTo October 1918.

Note: Wartime GDP recalculated to correspond with financial year (July to June).

Sources: Austria - (Österreichisches Statistisches Handbuch 1915, Grebler and Winkler (1940: 135; tables 2, 6, 7, 8); Hungary-Magyar Statisztikai Evkonyv 1914, Muhlpeck et al. (1979: 678-9), table 3.7.

The fall in output per head of population and output per employee was slightly less dramatic, yet nevertheless substantial. The decline of the latter, as a proxy measure for labour productivity, may serve as a first pointer to material input supply (and possibly infrastructure) constraints as a key factor in the contraction of Austria-Hungary's war economy - in other words, it was not just a case of an insufficient labour supply that curtailed GDP growth. While there were some signs of a stabilisation or even increase (Hungary) in GDP and GDP per worker in 1915, all this amounted to little more than a temporary and partial reprieve. The key message here is that Austria-Hungary had to fight the war from a progressively shrinking material resource base. The question that now arises is how successful business and government were in making those overall diminishing resources available to the war effort.

In the last year before World War I, about 21 per cent of the combined central government expenditure of the two states making up the Habsburg Empire were spent on the armed forces, i.e. the joint army and navy, the Austrian Landwehr and the Hungarian Honved. All this added up to about 4 per cent of the empire's total GDP. As Table 3.9 shows, the war first brought about a dramatic increase in real military expenditure during 1914/15 and then a fast decline. Likewise, the proportion of GDP devoted to the war effort so measured first shot up to 30 percent in 1914/15 and then declined as real war expenditure contracted even more sharply than real GDP.8 However, in wartime government expenditure continued to include 'regular' expenditure items that cannot be classified as 'war expenditure'. The figures reported in table 3.9 are thus indicative of the minimum of actual claims by the Habsburg state(s) on domestic product. With real GDP falling, this led to a fast and serious compression of private consumption over the course of the war.9

Changes in the structure of output

The composition of aggregate and industrial output changed over the course of the war. This process was conditioned by three major factors, in particular, that partially reinforced and partially negated each other: first, the emergence of absolute sector-specific material and labour shortages; second, a shift in economic priorities that led to the redirection of resources into essential war industries at the expense of other, nonessential industries; and, finally, the outcome of continuous intra-empire conflicts between the Austrian and Hungarian governments over the placement of war orders and use of material stocks.

The agricultural sector provides a poignant illustration of the first problem. In both halves of the empire, its absolute and relative size in terms of output shrank dramatically during the war as labour, seeds, fertilisers and transportation were lacking, leading to widespread and progressively more serious food shortages (see pp. 91-7). Austria-Hungary's experience thus offers a stark reminder that a country's peacetime (near) self-sufficiency in foodstuffs may well be irrelevant to its war economy (Hardach, 1987: 111-12, 121-3). Before the war, male agricultural workers accounted for half the total male labour force in Austria; in Hungary the

Table 3.10. Austria: gross domestic product by sector of origin (million crowns and 1913 prices)

1913

1914

1915

1916

1917

Agriculture

4,255.6

3,686.7

3,220.8

2,910.0

2,210.7

Mining

360.5

321.6

321.6

350.8

326.3

Manufacturing

4,829.7

3,765.5

3,573.5

3,318.0

2,938.8

Construction

451.7

416.7

238.5

269.2

264.7

Handicrafts

1,522.4

1,207.3

1,097.7

1,032.2

922.6

Distribution, finance, and

transport

3,278.0

2,851.9

2,688.0

2,491.3

2,294.6

Government, professions, and

personal services

2,676.0

3,125.6

3,631.3

3,133.6

2,673.3

GDP, total a

17,373.9

15,375.3

14,771.4

13,505.1

11,631.0

Annual change

-

-11.5%

-3.9%

-8.6%

-13.9%

a Excluding housing. Source: See table 3.8.

a Excluding housing. Source: See table 3.8.

Table 3.11. Hungary: gross domestic product by sector of origins (million crowns and 1913 prices)

1913

1914

1915

1916

1917

Agriculture

5,174.4

4,564.9

4,789.0

3,942.6

3,428.0

Mining

122.9

114.5

106.9

112.5

113.2

Manufacturing

1,543.2

1,345.3

1,423.8

1,420.1

1,272.3

Construction

220.0

202.0

116.2

131.1

128.9

Handicrafts

512.6

449.6

447.5

450.6

407.0

Distribution, finance,

and transport

930.0

809.1

762.6

706.8

651.0

Government, professions,

and personal services

1,449.2

1,688.3

1,944.8

1,655.0

1,386.9

GDP, total a

9,952.3

9,173.7

9,590.8

8,418.6

7,387.3

Annual change

-7.8%

4.5%

-12.2%

-12.2%

a Excluding housing. Source: See table 3.8.

a Excluding housing. Source: See table 3.8.

proportion was even higher at 67 per cent (Austria - census 1910; Hungary -census 1910). Drafting these men (or a significant proportion of them) from low-productivity agriculture into the armed forces was bound to have a large adverse effect on the total output of foodstuffs. Yet the blockade against the Central Powers succeeded in making compensating imports of foodstuffs unavailable. The blockade also curtailed the supply of industrial inputs, and here the cotton textile industry is a case in point. The rapid fall in cotton imports and the exhaustion of stocks meant that essential raw material inputs were quickly running out. By 1917, Austria's textile industry produced less than a fifth of its 1913 level of output (table 3.12) and was not any longer in a position to satisfy the clothing requirements of the armed forces.

In contrast, the development of the engineering and metallurgy sectors reflect the prioritisation of essential war industries. Before the war, Austria-Hungary's engineering industry was amongst the world's leading producers (Schulze, 1996). In addition, the empire had a sizeable iron and steel industry to draw on. Overall, these sectors responded reasonably elastically up to mid-1917 to the war-induced increase in demand for military hardware and the associated rise in steel requirements. As a result, their share in total manufacturing output rose from about 25 per cent in 1913 to nearly 50 per cent in 1917. Riedl (1932: 278) estimates that, in 1917, 85 per cent of total steel output was claimed by the army administration to cover direct military demands such as armaments, ammunition, railway equipment, and fortifications. In peacetime, military requirements had probably added up to less than 5 per cent of a

Table 3.12. Austria: value added in manufacturing (million crowns and 1913 prices)

Percentage of 1913

Percentage of 1913

Table 3.12. Austria: value added in manufacturing (million crowns and 1913 prices)

1913

1914

1915

1916

1917

Brewing, distilling

263.3

75.2

51.9

13.9

9.2

Sugar refining

74.2

98.7

98.7

64.2

61.2

Flour milling

112.9

61.0

58.0

44.0

57.0

Food processing

707.8

76.0

61.3

29.7

29.9

Textiles, clothing

1,045.3

76.3

57.0

38.0

19.0

Iron, steel

258.9

85.0

105.3

142.7

124.7

Engineering

528.5

78.0

96.0

126.0

123.0

Metal-working

406.6

Electricity generation

60.3

118.1

138.0

143.9

142.9

Total a

4,829.7

78.0

74.0

68.7

60.8

a Includes residual estimate for other manufacturing branches. Source: See table 3.8.

a Includes residual estimate for other manufacturing branches. Source: See table 3.8.

smaller volume of steel output. There was an initial decline in engineering and steel production in 1914 and this was largely (though not solely) an outcome of labour shortages as workers joined the armed forces. In the mining sector, this continued to be a problem well into 1915. Policy was subsequently reversed in order to exempt a larger proportion of workers from front-line service and raise manpower levels again in the steel mills and iron ore mines (Gratz and Schüller, 1930: 99).

The steel industry, drawing primarily on domestic sources of iron ore, relied on both domestically produced anthracite and imported coking coal from Germany and was broadly capable of keeping pace with the rising demands of the armaments and munitions industries during 1915-16. In 1917, though, substantial steel imports were needed to augment domestic output and meet army requirements (Wegs, 1979: 51-62). From 1915, the lack of essential raw materials became a key constraint on Austria-Hungary's war industries. Non-ferrous metals essential for steel and armaments production were particularly hard to get, and previously abandoned zinc, tin, lead, and copper mines were reopened, reducing but not solving the problem of shortages. With vital inputs such as copper, nickel, manganese, and lead in short supply, the response was widespread confiscation of goods containing scarce metals and re-smelting as well as the use of 'ersatz' wherever possible in both civilian and military applications (Herwig, 1997: 240-1; Wegs, 1979: 56-80).

Table 3.13. Austria-Hungary: heavy industry and armaments output, physical units

1913

1914

1915

1916

1917

1918

Mining

Million tons:

Coal a

54.1

48.4

47.3

49.9

47.3

(43.3)

Coal consumption a

60.1

52.4

50.5

56.2

53.6

-

Thousand tons:

Coke b

2,598.8

2,202.0

1,907.6

2,584.7

2,618.5

-

Iron ore

5,098.1

4,009.6

3,785.5

4,600.1

4,075.5

-

Manufacturing

Thousand tons:

Cast iron

287.4

215.7

302.9

206.2

515.9

172.8

Steel

2,649.0

2,162.0

2,667.0

3,563.0

3,116.0

1,887.0

Cast iron and steel

consumption

3,058.3

2,381.9

2,933.1

3,851.2

3,757.9

-

Units:

Machine guns

-

1,187

3,730

6,335

15,436

12,201

Field guns

-

1,730

6,948

7,700

2,064

Rifles, thousands

-

149.2

905.8

1,197.1

1,091.1

237.1

Shells, thousands

-

300

1,300

2,000

1,400

750

per month

Cartridges, thousands

-

2,500

3,750

4,000

3,000

1,750

per day

Locomotives

-

273

273

395

398

463

Tenders

-

146

157

211

226

113

Railway cars

-

3,500

12,000

18,000

14,000

-

a Anthracite and lignite.

Austria only.

Sources: Austria - (Österreichisches Statistisches Handbuch 1913-1916/17; Austria-Hungary -Statistik des auswärtigen Handels 1917 (I), Grebler and Winkler (1940: tables 22, 23); Hungary-MagyarStatisztikaiEvkonyv 1913-1916/18, Riedl (1932: 275-6), Schulze (1996: tables A.6, A.13), Wegs (1977: 124-5, 127; 1979: tables 7, 10, 15, 16), Winkler (1930: 50-1).

However, it is telling that of the fifteen output and consumption series listed in table 3.13, nine peaked as early as 1916 (ignoring 1913). To the extent that these series represent essential war industries that, under the auspices of the joint War Ministry, were given priority in terms of resource allocation, the numbers point to a limited capacity to translate these priorities into sustained output increases.

The evidence would suggest that this had much to do with the disintegration of the railway system. Wegs (1977: 121-34) described transportation as the 'Achilles heel of the Habsburg war effort' and argues that after mid- to late 1916 the carrying capacity of the transportation system declined sharply. By the end of 1917, the railways could only meet half the demands made upon them for want of rolling stock. The significant rise in wartime output of rolling stock between 1914 and 1916 (table 3.13) was insufficient to accommodate the army's needs without adversely affecting service provision to industry. In addition, it failed to compensate for the heavy losses of rolling stock in the Galician theatre (1914-15) and the rapid fall in reliability owing to poor maintenance. The ability to repair railway cars and engines was reduced as both spare parts and trained personnel were lacking. At the start of the war, around 12,000 locomotives were available for military and civilian purposes, yet about 5,000 of these were continuously in repair. Although the production of locomotives was stable in 1916-17 and even increased in 1918 (table 3.13), output remained far too low to avoid the stock of engines at the railways' disposal falling over the course of the war and insufficient to meet essential military and civilian transport requirements.10 By 1918, the total number of railway engines had fallen to less than 7,000, many of which were either of reduced load capacity or completely unserviceable because of the use of inferior repair materials (Wegs, 1977: 124-7).

During the winter of 1917 most Austrian cities suffered from severe coal shortages as a result of the railway system's inability to deliver. Likewise, industrial plants were shut down or had to operate at much reduced capacity because of a lack of coal in early 1918 - not because coal was not mined, but because it was not taken from the pit heads to the manufacturing establishments. This was having a detrimental effect on the railway system itself: the lack of fuel meant that the shortage of rolling stock would be aggravated further, since railway car producers were among the many no longer able to obtain essential inputs. The adverse effects on some core transport and coal users in 1917/18, such as the steel, armaments, and munitions industries, are reflected in table 3.13 (cf. Gratz and Schüller, 1930: 96-7).

In contrast, the wartime development of the brewing and distilling industries provides a case of intentional down-scaling of productive effort. Here the key issues considered by contemporary planners were that these industries' inputs were essential for either safeguarding wartime human food consumption and livestock feeding, or for war-related industrial applications.

The third major factor that influenced the structure of aggregate and industrial output was the internal political conflict between the Austrian and Hungarian authorities. This issue is addressed below and within the context of state intervention in the Habsburg economy.

State intervention and economic policy co-ordination

Constitutionally, the Habsburg Empire was made up of two major sub-units, Austria (Cisleithania) and Hungary (Transleithania), each with its own government, parliament, and bureaucracy. This did not pose a constraint in peacetime when resource allocation was left to markets. In wartime, however, the dualist structure of the Habsburg governmental and administrative machinery did indeed cause serious co-ordination problems. In effect, 'dualism' meant duplication of effort in the sense that a multitude of agencies were set up separately in each half of the empire. They were charged with organising the domestic and foreign procurement of raw materials, facilitating their distribution among producers, and setting prices and, in some industries, production quotas. Organised along product or industry lines, these agencies (or Zentralen) were mostly privately financed and run. With the first agencies for metals and cotton set up in Austria in autumn 1914, their numbers rose with increasing product coverage, and their interventionist remits widened as the war dragged on (Wegs, 1979: 29; Winkler, 1930: 107-22). Hungary followed with its own agencies in 1915. Heavy industry (steel, mining, armaments) and the activities of the relevant metal agencies came progressively under the direct control of the joint War Ministry with authority across the empire and the occupied territories (Wegs, 1979: 27-40; for a fuller discussion see Mejzlik, 1977). This was an exception to general practice in other sectors of the economy where the Austrian and Hungarian bodies operated more or less independently. In the absence of functioning goods and factor markets, and the presence of pervasive price controls, there were no systematic empire-wide allocative decision-making mechanisms.

'Dualism' also meant that decisions at government level on resource allocation were frequently the outcome of politically negotiated formulae that reflected the political and constitutional balance between the two halves of the empire, but ignored capacity constraints in, and productivity differentials between, the industrial and agricultural sectors of Austria and Hungary. In other words, the political structure of the Habsburg Empire increased wartime allocative inefficiency (and, in light of rising intra-empire trade barriers, inequity in consumption, too). At the extreme end of the spectrum, the 'dualist' state allowed its dominant constituent parts to work towards different aims. Perhaps more so than in any other area, this is demonstrated by the manner in which the severe and persistent food shortages were approached within the 'dualist' framework of the Austro-Hungarian monarchy (see pp. 91-7).

However, Gratz and Schüller (1930: 139-42) use the case of the woollen and cotton textiles industries to illustrate the point raised earlier, i.e. the allocation of scarce raw materials between the two states but within the same industry was frequently determined by political rather than economic considerations. The general rule tended to be to use the ratio of quota contributions to the common affairs budget (63.6 to 36.4 per cent) as the guideline for sharing input materials between the two parts of the empire. This holds, in particular, for those industries that did not fall under the control of the joint War Ministry, but were instead regulated by the agencies run under the auspices of the individual Austrian and Hungarian Ministries of Trade and Agriculture. According to Gratz and Schüller's evidence, the prewar capacity in textiles was about 10 to 15 times larger in Austria than in Hungary, depending on branch-specific activity. Yet Austrian manufacturers, who were generally producing at higher productivity levels, were allocated only about three times as much raw material as their Hungarian counterparts. As a result, much of Austria's capacity lay idle, implying, ceteris paribus, a loss in combined output because of the prevailing productivity differentials. Depending on the extent to which similar arrangements applied also to other manufacturing branches, this practice was bound to have an effect on both the relative performance of the industrial sectors in Austria and Hungary (see tables 3.10 and 3.11) and on the overall wartime performance and structure of manufacturing output in the empire. In terms of economics, then, there is perhaps more to be said in favour of the 'Zweistaaten-Theorie' than Wegs (1979: 129) is prepared to concede.

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