This serves as an introduction to a debate between Hans Kelsen and Otto Bauer concerning the nature and relative autonomy of the state, and the theories that informed the political practices of the Austro-Marxists and of the SDAP immediately after the fall of the monarchy and during the early years of the First Republic. Both pieces were published in Der Kampf, the SDAP’s theoretical journal, in which many key texts of Austro-Marxist thought appeared. The debate is of theoretical interest, particularly (...) with respect to Marxist state theory, but is potentially also of renewed relevance to an age of post-GFC austerity. Bauer’s distinction between functional oligarchy and functional democracy is identified as one such potential contribution to current debate and analysis. (shrink)