Austro-Marxism was a Marxist theoretical current, led by Victor Adler, Otto Bauer, Karl Renner, Max Adler and Rudolf Hilferding, members of the Social Democratic Workers' Party of Austria in Austria-Hungary and the First Austrian Republic (1918–1934). It is known for its theory of nationality and nationalism, and its attempt to conciliate it with socialism in the imperial context. Hence, Otto Bauer thought of the "personal principle" as a way of gathering the geographically divided members of the same nation. In Social Democracy and the Nationalities Question (1907), he wrote that "The personal principle wants to organize nations not in territorial bodies but in simple association of persons", thus radically disjoining the nation from the territory and making of the nation a non-territorial association.
Beginning in 1904, the Austro-Marxist group organized around magazines such as the Blätter zur Theorie und Politik des wissenschaftlichen Sozialismus and the Marx-Studien. Far from being a homogeneous movement, it was a home for such different thinkers and politicians as the Neokantian Max Adler and the orthodox Marxist Rudolf Hilferding.
In 1921 the Austro-Marxists formed the International Working Union of Socialist Parties (also known as 2½ International or the Vienna International), hoping to unite the 2nd and 3rd Internationals, something which eventually failed.
Austro-Marxism inspired later movements such as Eurocommunism and the New Left, all searching for a democratic socialist middle ground between communism and social democracy and a way to eventually unite the two movements.
Austro-Marxism also instituted economic and social reforms such as healthcare, municipal housing, and educational system in Vienna, which later inspired the Scandinavian social democratic parties and the British Labour Party.
Austro-Marxism was also the first movement in Europe to mount an armed resistance to a fascist government, although eventually defeated in 1934.
The Austro-Marxist principle of national personal autonomy was later adopted by various parties, among them the Bund (General Jewish Labour Union), left-wing Zionists (Hashomer Hatzair) in favour of a binational solution in Palestine, the Jewish Folkspartei between the two world wars and the Democratic Union of Hungarians in Romania after 1989.
- Otto Bauer-Between Reform and Revolution-Early New Left
- Otto Bauer und Die Mühen des Dritten Wegs Die Linke, Michael R. Krätke
- Otto Bauer: Social Democracy and the Nationalities Question (1908)
- Norbert Leser: Zwischen Reformismus und Bolschewismus. Der Austromarxismus in Theorie und Praxis (1968)
- T. Bottomore and P. Goode (eds.), Austro-Marxism (Oxford: Clarendon Press, 1978).