By 1922 the Austrian economy, which had been in free fall since 1919, teetered on the brink of collapse. The country was still devastated by its wartime expenditures, and the rate of inflation was out of control. Immediately after the war there had been twelve billion Austrian crowns in circulation; by the end of 1922 this figure had reached four trillion.1 While the country’s industry lay idle, lacking the coal and oil needed to power factories, the government’s printing presses ran at full speed, working day and night to produce new banknotes. Knapsacks replaced wallets as people carried around bundles of virtually worthless paper. In 1922 a 500,000-crown note was issued, a denomination no one would have believed possible a year earlier. Despite its incessant printing, the central bank couldn’t keep up with the hyperinflation, and provincial towns had to produce their own emergency money.
Visitors flocked to Austria to exploit the favorable rate of exchange. Stefan Zweig wrote of Austria’s “calamitous ‘tourist season,’ ” during which the nation was plundered by greedy foreigners: “Whatever was not nailed down, disappeared.”2 Even England’s unemployed turned up to take advantage, finding that they could live in luxury hotels in Austria on the government benefits with which they could hardly survive in slums back home. None of the indigenous population wanted Austrian crowns, which most merchants no longer accepted, and there was a scramble to swap them for secure foreign currency, or any goods available. Freud hired a language tutor to brush up on his shaky English so that he could take Americans into analysis, who paid him in U.S. dollars.
In October 1922 the Christian Social chancellor, Ignaz Seipel, secured a large loan of 26 million pounds sterling from the League of Nations to stabilize the depleted economy. The budget was balanced the following year under draconian foreign supervision by the league’s permanent members, who insisted that Austria unburden itself of a bloated bureaucracy. That year Vienna, which unlike the rest of the country had a clear Social Democratic majority, was declared a separate province from the otherwise predominantly rural province of Lower Austria. This gave the Social Democrats the power to raise their own taxes and implement an ambitious reform program without the need for their radical policies to be ratified by an unsympathetic assembly in Lower Austria. Excluded from national power, and exploiting the new period of prosperity, the Social Democrats concentrated on turning Vienna into a Socialist mecca, a model Western alternative to the Bolshevik experiment.
In 1923 the new city-state instituted a housing construction tax (the burden of which was on businesses and the diminishing middle class); 2,256 new residential units were built by the end of the year to redress the desperate housing shortage and to help clear the slums. Over the next decade, four hundred large communal housing blocks were built, planned around spacious courtyards, some of which spanned several city blocks. These increased the housing stock by 11 percent and housed 200,000 people, who were charged only token rents. The new “people’s apartment palaces,” as they were referred to, contained libraries, community centers, clinics, laundries, gyms, swimming pools, cinemas, and cooperative stores. The pride of these super-blocks, called the Karl-Marx-Hof, was built by a student of the architect Otto Wagner. Another was named after Freud.
These bastions were described by their Christian Social critics as “red fortresses,” suspected of being strategically sited and designed to be easily defendable in case of civil war. Vienna was hemmed in by the surrounding provinces from which it was now separated politically, and planners were therefore unable to enlarge the capital with garden city satellites. The historian Helmut Gruber describes the new housing blocks as reflecting the status of Vienna itself, a Social Democratic island in a national sea of Christian Socials: “Enclosed, isolated and defensive,” he writes, “they were enclaves within an enclave.”3
However, the Social Democratic politicians hoped that their form of “anticipatory socialism” would be infectious and serve as a springboard back to government. In 1923 their share of the national vote stood at 39 percent, but in Vienna they could count on a two-thirds majority in municipal elections. In Vienna, after the disillusionment of the immediate postwar years, the Social Democrats had managed to restore confidence in the revolutionary idea that modernism— reflected in the functional, streamlined forms of the architecture they sponsored— could reshape people’s lives for the better. The Social Democratic politician Otto Bauer claimed proudly that his party was “creating a revolution of souls.”4
As the Christian Socials grumbled about “tax sadism,” Vienna, like Weimar Berlin, became a model of social welfare, with not only excellent public housing but also enviable public health services. As city welfare councillor for Vienna, Julius Tandler, Reich’s former anatomy teacher, was responsible for the health and well-being of every citizen. The Social Democrats extended to everyone “cradle-to-grave” care. Tandler was also in charge of early childhood education and initiated kindergartens and child welfare centers, and arranged for the building of numerous swimming pools and gyms. Under his tenure mortality rates dropped to 25 percent of prewar levels and, thanks to a government-sponsored proliferation of maternity clinics, the rate of child mortality halved.
Though it was not state-funded, the free psychoanalytic clinic, the Ambulatorium, that opened at Pelikangasse 18 in May 1922, offering free therapy for all, regardless of their capacity to pay, should be seen in the context of Tandler’s and the Social Democrats’ politics of benevolent paternalism. In September 1918, Sigmund Freud had given a speech at the Fifth International Congress of Psychoanalysis in Budapest. It was two months before the Armistice (Reich had just reached Vienna on leave), and almost all the forty-two analysts who attended appeared in military uniform, having been conscripted as army doctors to treat war neuroses, their success at which had won psychoanalysis begrudging respect from conventional psychiatry. But Freud looked to the future rather than dwelling on civilization’s obvious discontents, promising his audience, “The conscience of society will awake and remind it that the poorest man should have just as much right to assistance for his mind as he now has to life-saving help offered by surgery.”5 To this end, and sounding more like a health reformer than a psychoanalyst, Freud urged his followers to create “institutions or out-patient clinics . . . where treatment shall be free.” Keen to contribute to a better postwar world, Freud hoped that one day these charitable clinics would be state-funded. “The neuroses,” he insisted, “threaten public health no less than tuberculosis.”6
The psychoanalyst Max Eitingon, who came from a wealthy family of Galician fur traders and had funded the first of these clinics, established in Berlin in 1920, later wrote that Freud had spoken “half as prophecy and half as challenge.”7 Eitingon had directed the psychiatric divisions of several Hungarian military hospitals during the war. He set up the Berlin Poliklinik with Ernst Simmel, who had been director of a Prussian hospital for shell-shocked soldiers. The Poliklinik, which reflected a postwar spirit of practicality, might be seen as the psychoanalysts’ attempt to adapt the intensive treatment of war neuroses to shattered civilian life.
The Berlin Poliklinik was a chic but modest outpost for this military-style campaign against nervous disease; it occupied the fourth floor of an unassuming block and it had only five rooms. Freud’s son Ernst, an architect who had trained with Adolf Loos, designed the Spartan, minimalist interior. There was a large lecture hall–cum–waiting room with dark wooden floors, a blackboard, and forty chairs; four consulting rooms led off it through soundproofed double doors, and were tastefully furnished with heavy drapes, portraits of Freud, and simple cane couches. One patient was struck by the apparent lack of medical paraphernalia and walked out disappointed, muttering, “No ultraviolet lamps?”
We don’t tend to think of Freud as a militant social worker, and imagine he was more likely to be found excavating the minds of the idle and twitchy rich. The psychoanalyst Karl Abraham, who was to become director of the Berlin Poliklinik, complained of just such a clientele