Discussion about this post

User's avatar
Pancho's avatar

Let me add to your great recap of post ww1 germany. I would say all the hyper, de-inflation was a symptom of policy blunder upon policy blunder that slowly (almost two decades) decredited ALL the "main-stream" institutions in Germany from 1914 to 1933. Deflation, depression were just the "straw that broke the camel's back". WW1 useless war lead to inflation. A weak, divided politcal system after the revolution assured hyperinflation. Hyperinflation lead retenmark(sp?), austerity which lead to politics of scarcity. Eventually, economic contraction, which led to a false messiah. It all because the politcal/economic elite failed.....and eventually the masses said f you and flocked (ish) to that messiah. To me, that is the enternal lesson.....failure(s) ussually don't led to institional collapse like Germany, Russia but repeated failure can led to cathrophic results. In a small way, the repeated policy failures since the GFC (eg QE 1-3, QT 1-2, rate supression etc) are sympthomatic to the failure of our own elites to actually do the "right" thing. Add in foreign policy, Afghan w/d, enless "War on X". We may not be the Wiemar but we have started down that path of discrediting our institutions. Instead of reforming/adjusting, the state/institutions has just doubled down, and declared war on the people.

Expand full comment
jeremy1113's avatar

David, while Weimar was experiencing its fourth year of deflation when the Browns were elected/negotiated into office in early 1933, the hyperinflation of a decade earlier had helped their cause - or had given them a hook on which they could hang their campaign.

The hyperinflation had inflated away to nothing the value of many Germans' savings, causing destitution. However those who had access to foreign money - the purchasing power of which grew ever higher the longer the hyperinflation continued - were in a much stronger position. Assets need to be owned by someone, and many Germans found, at the end of the hyperinflation, that most of the country's assets had been sold to one social group for not much more than a song, because that social group had access, through family and business networks, to US and British money.

Adolf made hay from this outcome, appealing to the resentment of ordinary Germans regarding the wealth and influence this group had been able to acquire while the rest of the country slid into destitution.

Expand full comment
5 more comments...

No posts