Co-ruler
Joseph was made a member of the State Council and began to draw up minutes for his mother to read. These papers contain the germs of his later policy and of all the disasters that finally overtook him. He was a friend to religious toleration, anxious to reduce the power of the church, to relieve the peasantry of feudal burdens, and to remove restrictions on trade and knowledge. In these, he did not differ from Frederick, or his own brother and successor Leopold II, all enlightened rulers of the 18th century. He tried to liberate serfs, but that did not last after his death.
Where Joseph differed from great contemporary rulers, and was akin to the Jacobins, was in the intensity of his belief in the power of the state when directed by reason. As an absolutist ruler, however, he was also convinced of his right to speak for the state uncontrolled by laws, and of the wisdom of his own rule. He had also inherited from his mother the belief of the House of Austria in its "August" quality and its claim to acquire whatever it found desirable for its power or profit. He was unable to understand that his philosophical plans for the moulding of humanity could meet with pardonable opposition.
Joseph was documented by contemporaries as being impressive, but not necessarily likable. In 1760, his arranged consort, the well educated Isabella of Parma, was handed over to him. Joseph appears to have been completely in love with her, but Isabella preferred the companionship of Joseph's sister, Marie Christine of Austria. The overweening character of the Emperor was obvious to Frederick II of Prussia, who, after their first interview in 1769, described him as ambitious and as capable of setting the world on fire. The French minister Charles Gravier, comte de Vergennes, who met Joseph when he was traveling incognito in 1777, judged him to be "ambitious and despotic". In August 1765 his father died after a seizure. In a letter to his former tutor Batthyany, Joseph — now automatically becoming emperor — expressed sorrow and self-pity at the death of his father.
He was my teacher, my friend [...] I am now twenty-four years of age. Providence has given me the cup of sorrow in my early days. I lost my wife after having possessed her scarcely three years. Dear Isabel! Thou wilt never be forgotten by me! You, my prince, were the guide of my youth; under your direction, I became a man. Do now support me also as a monarch in the important duties which destiny imposes upon me, and preserve your heart for your friend.
As emperor, the nominal head of the venerable but inert institution known as the Holy Roman Empire of the German Nation, he had little true power. Joseph was only allowed to have as much power during his mother's lifetime as Maria Theresa, the Archduchess of Austria and Queen of Bohemia and Hungary, felt comfortable giving him. The actual power was held by Maria Theresa, who ruled the Austrian hereditary dominions. Maria Theresa took the extraordinary decision to make her son co-regent because she felt she could no longer continue running the government alone. Joseph had no power save in the army, treasury, and court administration. This was limited, though, as his mother had the last say on all significant issues. Although Joseph had a little more influence in military matters, he prudently avoided using it since he feared his mother's rage and always showed deference to her authority.
As co-regent alongside his mother, Empress Maria Theresa, from 1765 onward, Joseph II quickly became involved in the financial administration of the Habsburg Monarchy, recognizing the urgent need to reform and rationalize the state and court budget. The Austrian fiscal system at the time was notoriously inefficient and weighed down by the costs of maintaining a sprawling imperial court, a vast bureaucracy, and a large standing army. Joseph, influenced by Enlightenment ideals of efficiency and utility, advocated for a more centralised and accountable approach to public finance.
One of his priorities was to gain a clearer understanding of the monarchy's financial state, which had long been obscured by a patchwork of regional accounts and a lack of standardized procedures. Joseph pressed for the creation of more systematic and transparent bookkeeping practices, insisting on detailed and regular financial reports from court and government departments. He also sought to reduce unnecessary expenditure at court, curbing lavish spending on ceremonies, festivities, and personal privileges that had characterized the reign of his father, Francis I, and earlier Habsburg rulers.
Joseph initiated reductions in the size and costs of the imperial household, cut down on the number of court officials and servants, and attempted to limit the extravagance of court life. He championed the idea that the monarchy should serve the state, not vice versa, and that royal resources were to be used for the common good rather than for personal luxury. Furthermore, Joseph advocated for the reform of tax collection, pushing for a more equitable distribution of the tax burden and greater efficiency in revenue gathering.
In the mid-18th century, the Jesuit order had become a target of suspicion and criticism throughout Europe, seen by many rulers as too independent, too influential in education, and insufficiently loyal to secular authority. Joseph shared these Enlightenment-inspired concerns regarding the Jesuits as a barrier to modernising reforms, particularly in education and church-state relations. When Pope Clement XIV formally dissolved the Society of Jesus in 1773, the Habsburg Monarchy, under Maria Theresa's rule with Joseph's strong encouragement, moved quickly to implement the papal brief. Joseph had already been pressing for greater state control over education and religious institutions, and the papal suppression provided the perfect opportunity.
As Joseph's power became more and more cemented, he focused on foreign affairs. Joseph played a key role in the negotiations and the subsequent integration of Galicia into the Habsburg Monarchy following the First Partition of Poland in 1772. His co-regency period also saw important legal and educational reforms initiated under Maria Theresa's leadership, with Joseph's support. The 1774 General School Ordinance (Allgemeine Schulordnung) established a standardised, state-controlled school system, reflecting Enlightenment ideals about education and citizenship.
During these years, Joseph traveled much. He met Frederick the Great privately at Neisse in 1769 (later painted in the Meeting of Frederick II and Joseph II in Neisse in 1769), and again at Mährisch-Neustadt in 1770; the two rulers initially got along well. On the second occasion, he was accompanied by Prince Kaunitz, whose conversation with Frederick may be said to mark the starting point of the First Partition of Poland. To this and to every other measure which promised to extend the dominions of his house, Joseph gave hearty approval. Thus, when Frederick fell severely ill in 1775, Joseph assembled an army in Bohemia which, in the event of Frederick's death, was to advance into Prussia and demand Silesia (a territory Frederick had conquered from Maria Theresa in the War of the Austrian Succession). However, Frederick recovered and thereafter became wary and mistrustful of Joseph.
A crisis that threatened a resumption of the great conflicts between Prussia and Austria was brought on by the sudden death of Maximilian Joseph, Elector of Bavaria, in December 1777. It had long been clear that the Bavarian house's male line was destined to disappear, and the Austrian court had been quietly formulating plans to acquire significant territory when the succession issue arose. In order to bridge the gap between Bohemia and the southern provinces of the Austrian empire, it was most desirable to have Bavaria, or at least a piece of it, and it appeared that colorable claims might be made to a sizable chunk of the empty inheritance. The unfortunate second marriage of the young emperor had been arranged primarily to secure this benefit. The Empress Josepha's untimely death in 1766 had put things back in their previous order, and while Maximilian focused his efforts on preserving the integrity of his dominions after his passing, Joseph — who was always a willing student when it came to territorial expansion — kept developing their aggressive plans.
Joseph's ambitions alarmed Frederick the Great of Prussia, who feared a shift in the balance of power. When Austria moved to occupy parts of Bavaria, Prussia responded by mobilizing its army, and the two powers prepared for war. Maria Theresa was much more cautious and deeply opposed to the prospect of a major conflict, but Joseph pressed aggressively for territorial gains, personally leading the diplomatic negotiations and military planning. When war broke out in 1778, Joseph took command of the Austrian army in the field, joining the troops in Bohemia. However, the campaign quickly bogged down into a war of maneuver and attrition, with little actual fighting — hence its nickname, the "Potato War", as both armies spent more time trying to secure supplies than engaging in battle. Joseph's logistical and organisational limitations became evident, and his hopes for a swift, glorious conquest faded amid stalemate and mounting costs.
Throughout the crisis, Joseph's mother worked tirelessly behind the scenes to limit the damage. Maria Theresa maintained secret correspondence with Frederick the Great and sought a diplomatic solution, fearing that a protracted war would weaken the monarchy and risk losing more than it gained. Ultimately, her efforts — supported by the mediation of France and Russia — prevailed. The conflict was resolved by the Treaty of Teschen in 1779, which granted Austria only a small strip of territory, the Innviertel, but forced Joseph to abandon his greater ambitions in Bavaria.
