The Austrian state suffered from its strength: it had never had its range of activity cut down during a successful period of laissez-faire, and therefore the openings for a national conflict were far greater. There were no private schools or hospitals, no independent universities; and the state, in its infinite paternalism, performed a variety of services from veterinary surgery to the inspecting of buildings. The appointment of every school teacher, of every railway porter, of every hospital doctor, of every tax-collector, was a signal for national struggle. Besides, private industry looked to the state for aid from tariffs and subsidies; these, in every country, produce ‘log-rolling,’ and nationalism offered an added lever with which to shift the logs. German industries demanded state aid to preserve their privileged position; Czech industries demanded state aid to redress the inequalities of the past. The first generation of national rivals had been the products of universities and fought for appointment at the highest professional level: their disputes concerned only a few hundred state jobs. The generation which followed them was the result of universal elementary education and fought for the trivial state employment which existed in every village; hence the more popular national conflicts at the turn of the century.
(I think it’s fair to say that the term “national,” as used here by Taylor, basically means what we would call “ethnic,” since all of these various nationalities were subjects of the same empire.)