You certainly raise a lot of interesting and valid points. I don't disagree.

I think that most people (including me!) would argue that just because somebody (or some government body) calls itself socialist, doesn't make it so. Everything I know about the Nazi government points to that -- they called themselves socialist, but they weren't, not really. Very similar to their line on religion, too. With one hand they claimed to be Christian, but on the other hand, Hitler and his govt implemented policies that were meant to greatly reduce the popularity of religion (e.g. church taxes -- still in existence today!).

Socialism doesn't necessarily mean a centrally controlled or planned economy, or govt owning businesses, or govt employing everyone and the division of resources. That, to me, sounds more like communism. Socialism the way it's practiced in most of the EU today involves a type of capitalism, with an underpinning of higher tax rate, worker/consumer protection laws, and social services.

So those things don't necessarily go hand-in-hand.

Austria really is a perfect test case, because the emperors had a rather populist bent compared to other emperors/empires. You nailed that for sure.

But... its military is absolutely pathetic. They have no budget, no war machinery, no devotion, and no popular support. All this despite, or perhaps because of, youth conscription. (Every male has to do 9 - 12 mos I think, in military or social services. Which pretty much means guarding the border and helping out in avalanches.)

I don't know where you're from, if you're aware of the perception of the military/govt in Austria. If you are, forgive me if I am repeating things you already know :)

But, for example, the Austrian military recently purchased a small batch (I think 6?) of old fighter jets. Not all, apparently, in working order (and it's questionable if they even have sufficiently trained people to make use of them). They will never get used. And this has become a quintessential national joke -- about how they bought a bunch of broken planes, how they think they're relevant but they're not, etc. Not just on the street, but in the newspapers.

The cities are surprisingly rich with anti-nationalists, people who think nationalism is a disease, who hold protests and summits against government, capitalism, racism, the EU, socialism (quite a lot of communists here) and so on.

The economy isn't centrally controlled; it's not as easy to start a business as in the US, but it's still very easy; it is, in my mind, a great mix of socialized services and free market. There are consumer and worker protection laws, but the tax rate is not nearly as high as, say, Denmark.

You can even get unemployment benefits if you quit your job (or are self-employed), to encourage worker mobility (which puts pressure on employers to shape up) -- and yet the unemployment rate is extremely low.

But despite all these goodies, Austria is hardly a country where government is Mother and Father, and the people are ready to fall in line and fight for her.

Compared to the US, Austria is as unpatriotic as they come. Nobody sings songs about Austria. Nobody talks about how they are so grateful to be "free" (or the Austrian equivalent). Nobody goes around saying "Well, sure there are problems, but our x system is the best in the world!" There is simply not the same kind of beloved national mythos we have in the US (although people do seem quite fond of the last real emperor and empress).

Nobody even displays the flag.

In fact, I'd go so far as to say that Austrians are a spoiled lot, because they have no idea how good they have it. :)

As for innovation - one of the things that has helped me the most have been "alternative therapies," including an immune system booster medication called Bronchovaxom.

Turns out it costs nothing, because it's a bunch of dead bacteria, works extremely well... and isn't available in the US. Guess it doesn't make enough of a profit to make the FDA approval process worth the money?

Profit motive is only a motive for certain kinds of innovations. Many of the biggest life-saving inventions in healthcare came from love of humanity or curiosity, not profit motive (think antibiotics and vaccinations).

EDIT: As an aside, regarding people being willing to fight for the country... every European I've told about the Pledge of Allegience has been absolutely gobsmacked. They don't believe that in the land of the free, every day, millions of schoolchildren are forced on pain of punishment to kiss up to the government. Now that's kinda brainwashy, if you think about it.