Austro-Marxism was a Marxist theoretical current, led by Victor Adler, Otto Bauer, Karl Renner and Max Adler, members of the Social Democratic Workers' Party of Austria during the late decades of the Austro-Hungarian Monarchy 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.