The Rise of a Sustainable Public Debt in the 18th-Century Habsburg Monarchy

The ability to borrow on a sustainable basis was an essential element of a successful fiscal-military state. Historians have shown greater interest in direct taxation as a source of revenue, though they have drawn attention to the role played by the Vienna City Bank and external borrowing in the rise of a medium- and long-term public debt in the 18th-century Habsburg Monarchy. This chapter factors two further, crucial elements into the story. First, the central government increasingly tapped into the credit facilities of the provincial Estates in the Austrian and Bohemian lands, in effect deriving a critical advantage from the Monarchy’s composite political structure and the public bodies associated with it. The high points of this activity would be the Seven Years War and the wars of the 1790s. After 1763 Vienna’s debt management strategies proved so successful that the first sustainable form of cameral debt could be sold, which came to represent the fourth main pillar of affordable public credit.