Otto Bauer was one of the founders and leading thinkers of the left-socialist Austromarxists who sought a middle ground between social democracy and revolutionary socialism. He was a member of the Austrian Parliament from 1907 to 1934, deputy party leader of the Social Democratic Workers' Party (SDAP) from 1918 to 1934, and Foreign Minister of the Republic of German-Austria in 1918 and 1919. In the latter position he worked unsuccessfully to bring about the unification of Austria and the Weimar Republic. His opposition to the SDAP joining coalition governments after it lost its leading position in Parliament in 1920 and his practice of advising the party to wait for the proper historical circumstances before taking action were criticized by some for facilitating Austria's move from democracy to fascism in the 1930s. When the SDAP was outlawed by Austrofascist Chancellor Kurt Schuschnigg in 1934, Bauer went into exile where he continued to work for Austrian socialism until his death.

Austromarxism 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, and later supported by Austrian-born revolutionary and assassin of the Imperial Minister-President Count von Stürgkh, Friedrich Adler. It is known for its theory of nationality and nationalism, and its attempt to conciliate it with socialism in the imperial context. More generally, the Austromarxists strove to achieve a synthesis between social democracy and revolutionary socialism. Uniquely, Austromarxists posited that class consciousness in the working class could be achieved more organically through the maintenance of national autonomy, in contrast to the internationalist perspective and the notion of the party vanguard popular in orthodox Marxist circles elsewhere in Europe.