Habsburg government? Hyper-taxation, serious economic crisis, favoritism towards industries beyond the Alps.
Written by an unknown author
It may be useful to remember that the so-called "good Austrian administration" was by no means good at all, but rather was marred by inefficiency and injustice, leading to an exasperated taxation and a severe economic crisis, with the intent purpose to exploit the Italian lands and turn them into a market for Austrian industries, while the proceeds of the taxes from Lombardy-Venetia were allocated to the development of Austria.
Veneto was massacred and impoverished to the max due to the tragic experience of Austrian and Habsburg colonialism. In 1866 it was the poorest region in the whole of northern Italy, with one person in five unemployed, high percentages of pellagra (malnutrition) and widespread illiteracy.
The Austrian administration conducted a policy of estrangement and abandonment against Venetian manufactories, to the advantage of its northern (non-Italian) possessions, favoring the disappearance of the Venetian industries or transferring them to Austria or to Bohemia. Since 1815 Veneto was subjected to imperial policies that facilitated the influx of manufactured goods from the northern regions of the Habsburg Empire. Lombardy-Venetia was in fact considered a market for Moravian and Bohemian manufactories which, with their competitive prices favored by lower taxes than those to which the Italian provinces were subject to, caused a crisis among the manufactories of Lombardy-Venetia.
Moreover, the imperial government also assumed a punitive attitude by operating a further increase in the already very high tax burden prior to 1848: the customs tariffs were raised in 1850, the gross was raised in 1850-1852, not to mention new taxes were introduced, such as a tax on capital income, on censuses, on industries and a tax on property transitions.
After the riots of 1848 and the war against Austria, the Veneto region witnessed a worsening of the already precarious economic situation. Venice, after a heroic resistance, suffered massive bombardments and cholera (the longest siege of the entire Risorgimento) which devastated the city and went on the decline. Agriculture, after small, modest progress in previous years, entered a crisis thanks to the sale of uncultivated communal land and the spread of silkworm diseases (pebrine and phylloxera) which affected the lives of the people and struck a blow to the most dynamic sectors. At the same time, the production of cereals also suffered a decline compared to the past. Naturally, the agricultural crisis had repercussions on industry and trade, slowing down investment and causing the disappearance of entire sectors related to the most affected agricultural products. Additionally, since 1849 Radetzky aggravated the economic situation by adding to the taxation a series of exorbitant confiscations, without any compensation, which was specifically designed to punish the people of Lombardy-Venetia. This caused the economic ruin of thousands of families, mostly belonging to the local bourgeoisie and Italian aristocracy.
The “Proclamation to the Venetians”, a work by a committee of patriots (Venice, June 20, 1863) stated: “The Austrian government with its indulgent taxes has destroyed agriculture, industry and commerce, which are always bound together, and have caused the impoverishment of every class of citizens, who are so poor that they barely have the shirts on their backs.”
In some years the taxation reached nearly 30 million florins, an absolutely enormous sum at the time, to which should be added the confiscations ordered by Radetzky. In this way Lombardy-Venetia, which represented 1/8 of the empire's population, bore ¼ of the entire tax burden and with its tax revenue covered the deficit of other imperial regions, playing the role of "milk cow" within the imperial system. The imperial government used the tax revenues of Lombardy-Venetia to finance the industrialization of the German-speaking territories north of the Alps.
The economist Andrea Meneghini wrote an essay in 1863 entitled Le imposte nella Venezia e nella Lombardia (Taxes in Venice and Lombardy), published at Turin in 1863. The author compared the taxation in force in Lombardy, which formed part of the newborn Kingdom of Italy, and the Veneto, which was still within the Habsburg Empire. The result demonstrated the enormous difference in the tax burden, and the much greater taxation greediness — direct and indirect — of Austria. Meneghini concluded that, according to the order of taxation in Lombardy (a region much richer than Veneto at the time), Lombardy saw a decrease in their annual fees by 20 million lire, whereas if Lombardy had returned under Habsburg dominion its tax burden would have increased by 25 million a year.
[M. MERIGGI, Il Regno Lombardo-Veneto, Torino, Utet, 1987, pp. 271 sgg. G. ZALIN, Aspetti e problemi dell’economia veneta dalla caduta della Repubblica all’annessione, Vicenza, Comune di Vicenza, 1969]
Note however that the policy of the Austrian administration to intentionally wreck the economy of their own colony and to exploit it to the max for the benefit of the German-speaking territories, was not applied only to Veneto and not only in the period of 1815-1866. Trentino also had to undergo a very similar treatment, with a tax burden that benefited only the German-speaking Tyroleans and Vienna, and limitations placed on economic activity in order to make this region a market for Austrian products and prevent the emergence of commercial and financial relations with the neighboring Italian regions: economic exploitation and the erection of an “iron curtain” ahead of its time were two of the aims pursued by the “good Austrian administration” in Trentino. The result was that this region was led towards increasing poverty: in 1914 the per capita income of an inhabitant of Trentino was equal to 1/5 that of a resident in another Habsburg region, Bohemia, which at the time was heavily Germanized.
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