Hyperinflation is not 6% inflation, it's not even "inflation but bigger."
Hyperinflation is better thought of as the rejection of a currency by the people, and it has historically always been associated with extreme exogenous factors like foreign-currency denominated debt, with war, civil war or rampant corruption.
The Weimar Republic had foreign-currency denominated debt, which famously you cannot satisfy with printing more domestic currency.
[edit] Here's a good write-up that aligns with my take.
In 2023 my father was talking about how his grandfather talked about the inflation and the Weimar Republic. He talked about it how clearly in 2023 inflation was going to destroy the US as well.
My father is in his late 60s. He lived through the 70s. He saw double digit inflation. He saw price controls. All in his prime working years.
I don’t know where this leaves us. But it worries me when even those with memories to draw from don’t.
To be clear I'm not trying to say it will or won't happen, just that when people think hyperinflation, they think of a purely monetary phenomenon where inflation exceeds some threshold so it gets a "hyper-" prefix. I think it's worth thinking about the phenomenon more deeply when trying to pattern match because there's more to it. It's also something that's not super well understood since we don't have a ton of data points on it.
Would sure be nice to live in precedented times for a change.
Oh yes I agree. Not trying to downplay the recent inflation at all. More musing about how it’s interesting that we’re mostly looking back to events outside of the US when in reality we can look to the US for much of this. Which isn’t to say don’t look everywhere more that it feels like we have a blind spot that we shouldn’t have.
This is a bad article. The expert it quotes are all wrong in important ways. Mises who wrote at the time when lot of information wasn't actually available and is simply factually wrong.
Adam Fergusson is a controversial right wing economists. And the claim that its 'more a psychological event than a purely monetary event' can be made about many things. One could argue that an earthquake or anything else is 'more psychological'.
Factually speaking, its simply a monetary event. It doesn't matter what when and where, if you print money to the extend Wiemar did your gone get hyperinflation. Had France, Britain or the US done the same, it would have had the same effect.
Carl Melchior was a member of the German elite who had a completely wrong understanding of economics and his words should not be just accepted.
> made by huge German exports and these exports will ruin the trade in England and America
This is a fundamentally flawed statement. This is German elites still thinking in Zero-Sum terms. The idea that Britain and the US could never accept German as an exporting trading partner, is just false. And its also false that debt can only be paid back if you are a massive exporter.
Every modern economist who looks at this, concludes that Germany could have paid back the debt just fine. Its simply that the German elites didn't want to pay it. That the simple reality.
Hyperinflation happened because German elites preferred hyperinflation, economic chaos to paying back the debt.
Uses a mix of old economic stats paired with German citizens journals and public newspapers to tell the story of how hyperinflation in Germany started and then ended, but not before creating so much distrust in society that the seeds were sewn for the country to take a militaristic stance to fixing its problems. Highly recommend the book above.
I slowly start to believe that there are powers at play that want the world economy to tank. First seen during covid pandemic, halting all public life. Now with a US administration that does everything to tank world economy. Who these powers are, what their intentions are, I have no idea. But it is apparent that we can watch in slow motion how the desaster unfolds.
Sorry for the unsolicited advice, but that sounds like the seeds of conspiracy theory thinking, which is dangerous if you end up with confirmation bias and start finding clues that satisfy your theories, e.g.: https://archive.is/sS3W1 . "Satisfy" in the sense of "I knew it! I was right, I'm onto something!"
Of course it's possible your theory is right, at the moment my uneducated guess about what the Trump admin is doing is like some art critic seeing paint on canvas and asking "I wonder what this artist' motivation is..." when it's in fact just a monkey having smeared its droppings on the canvas.
Whereas the lockdowns around the world are probably governments being scared that they'll have too many deaths. If there was a conspiracy, with so many governments, what do you think the chances are of somebody leaking the plans are?
Hyperinflation can also be caused by massive fiscal mismanagement. Venezuela and Argentina are currently undergoing this. It doesn't have to be violent, though violence is certainly a risk.
This is false. Germany was not invaded during WW1, their capital stock was untouched, infect they had heavily invested in capital during the war.
And unlike after WW2 Germany didn't unconditional surrender, Germany was not invaded and its factories were not transported away as the Soviets did after WW2.
So both your points are wrong, German industrial capacity was neither destroyed nor seized. No idea what you are basing these claims on.
German eventually was required to pay reparations. But the also received massive foreign investment at the same time. In fact, the received more foreign investment then they paid in reparations.
And the reparations payment were far from something that Germany couldn't actually handle at the time. They simply didn't want to.
Well I mean destroy and seized in a generic sense. I am wording it poorly, but Germany lost a massive amount of industrial capacity post WW1. In the treaty of Versailles, Germany had to make massive concessions.
"The treaty stripped Germany of 65,000 km2 (25,000 sq mi) of territory and 7 million people."[1]
They also specifically lost coal and iron rich areas to pay back France for destroying theirs.
Hyperinflation isn't just "inflation on steroids" as mainstream economics often portrays it. Blyth's work is eye-opening here - he shows hyperinflation requires either extreme conditions (war, regime collapse) or spectacular policy incompetence, not just regular government spending.
The inflation fear-mongering serves specific interests. When central banks jack up rates to "fight inflation," workers lose jobs while asset-holders are protected. Meanwhile, recent inflation wasn't primarily caused by stimulus or "too much money" - it was supply chain disruptions, corporate price-setting, and energy shocks.
Blyth demonstrates how our inflation responses are political choices disguised as economic necessities. We could address price stability through buffer stocks, targeted subsidies, or energy transition investments instead of the blunt instrument of interest rates that disproportionately harm working people.
The kicker? Inflation actually helps debtors (most people) while hurting creditors (the wealthy). No wonder the financial class is so obsessed with stamping it out at any cost to workers.
The hyper inflation was in the aftermath of WWI when Germany's economy was broken by 4 years of war. An it was austerity at the beginning of the 29 financial crisis that brought on deflation and collapse. Followed by the election of Hitler. In the US the same thing resulted in the election of FDR and the end of Republican dominance for two generations.
The claim that 'austerity' resulted in the Great Depression is nonsense. I don't know of serious economist who actually believes that. Its the opposite actually, deflation causes some governments to adopt austerity, specifically governments who can't control their money. See Adam Tooze argument why Germany didn't want to leave the gold standard: https://www.youtube.com/watch?v=9Alx_JDpQio
The reality is, no matter if the German government had increased or decreased spending, the Great Depression was bigger then Germany and would have impacted Germany either way.
The deflation happened because of the massive accumulation of gold by the central banks of France and the US. France and the US manipulated the gold standard.
And the Financial crisis of 1929 wasn't really the bad part, that was a stock collapse. But this doesn't make a great depression, stock went down more in 1987 then in 1929.
The situation in 1929 caused many problems in the US horrifyingly organized banking system (that's its own topic) and further restricted the money supply. The Smoot–Hawley Tariff Act lead to banks collapsing in Europe and continued the restriction of the money supply.
The countries that left the gold standard early were more successful then those that left later. Economist like R. G. Hawtrey (one of the most famous economists at the time) spend literally 10 years warning people that this would happen because the Post-WW1 gold standard was so flawed. Had they listened to him, there might have still been some amount of stock collapse in 1929 but the real issue was not the 1929 stock collapse, but rather the 1930/1931 deflation.
So 'austerity' has nothing to do with it really, its only a background character.
The German love for authoritarianism did that. And WW1 Allies who bled the country dry with reparations as the article mentions. Which lead to desperation in the population and hatred for the establishment. You can see it play out in leading Nazi figures like Goebbels who was constantly broke, struggling to pay bills and ranted about financial enslavement of his people.
The excessive treatment made them see themselves as freedom fighters. Of course, that's not what people are taught in school in Britain or France, it's an inconvenient narrative.
And then that's more or less what I remember from my history classes in France (30-35 years ago) : they were broke because of how we put way excessive sanctions on them, and Hitler was seen as (and partly really was) the savior who put the country economically back on track.
That was in public school so the same program as for the vast majority of French students.
Interesting, that's not what they teach these days from what I've seen. The economic aspect is a side note and the focus is on the politics, racism, Holocaust, etc. Which imo doesn't really how teach the kids the root cause.
Communism is usually also not discussed enough. In the Weimar Republic in the 30s it was inevitable that either Communists or Nazis would come to power. The mainstream parties had completely failed the country so the people were desperate and sought refuge in radical ideologies. It was either or, there was no alternative.
You are just repeating the same old story, that was pushed by Waimar and Nazi propaganda, that has long been overturned by modern scholarship.
Germans didn't love authoritarianism. Well over half the population voted Communist, Social democrat or with the center party. And usually far more, only in the middle of massive economic depression did the Nazis gain ground. Arguable the communist are 'authoritarians' but they don't think of themselves that way. And many who did vote for the Nazis weren't authoritarians either. Germany had the largest social democratic movement in the world.
The whole 'bled the country dry with reparations' is just weimar/nazi propaganda. Germany reparations were not that extreme, and specially when you compare on what reparations Germany forced on its enemies. Germany could heave paid the reparations without much issue. All the claims that poor little Germany couldn't handle it is Waimar propaganda that the Nazis continued and intensified. Somehow they can spend 20+ of GDP on building a military, but the reparations are somehow impossible.
> Nazi figures like Goebbels who was constantly broke, struggling to pay bills and ranted about financial enslavement of his people.
What if I told you that there are poor people in all nations? And people struggle in lots of place. Germany in 1920 did better then most nations on the plant. And Goebbles was likely in the Top 1 of global population. And you are literally quoting the propaganda minister, of course that is the impression he wants to give.
> The excessive treatment made them see themselves as freedom fighters. Of course, that's not what people are taught in school in Britain or France, it's an inconvenient narrative.
Except that's exactly what people are thought in school. The whole 'extreme reparations' nonsense is the standard view. Its only in the last couple decades that this was seriously questioned by economists and historians.
Honestly I think this article is ok, but it tries way, way to hard to explain 1933 based on this. The events of the Post-W1 are interesting enough without only evaluating it in context of 1933. And sure, they had something to do with 1933, but so did WW1 and many other things.
The reality that still many people don't want to see is that the deal was actually not bad for German. Keynes as usually got it totally wrong. They could paid the reparations, other countries have done so in arguable worse situations. Germany was mostly untouched by WW1 (capital stock), they had significant industrial power and very good relations with the US. Massive amounts of investment went into the country, more then after WW2 and the Marshall Plan.
They always received far more money in foreign investment then they ever had to pay back, and then over multiple rounds, that debt was reduced and reduced and then eliminated. Mostly because US and British elites had no interest in actually enforcing anything. Essentially stabbing France in the back.
The route cause of all of this is really Wilson. Wilson refused to ally himself to Britain and France. He always was pro-German, or at very least saw them as one and the same. Then he fell right into the traps of the German, when the Germans came to him specifically, over heads of France and Britain, and ask for an armistice on lenient terms. And then the Germans could let Wilson do the work of forcing this deal onto Britain and France. Instead of insisting that armistice negotiations would only be held with all major nations together.
Henry Cabot Lodge and other in congress (and of course many others) believed pushing at least into the Ruhr was the minimum. Then you can negotiate from a real position of strength and you can continue to occupy the Ruhr with a multinational (US/Belgium/English/French) force until Germany was clearly in line. And at the minimum they should destroyed German army leadership and split up all the large land holdings in the East of German. This would have actually benefited the SPD. But the SPD couldn't really do it themselves. And this is not hing sight, many at the time understood this.
Then during the negotiations he continued to refused the US/Britain/French alliance that could have stabilized the world. He refused unilateral debt renegotiation with his allies. Both of these were done successfully after WW2.
He only cared about the flawed 'League of Nations'. And the reason he actually wanted the 'League of Nations' is because it would have overruled the constitution and would have given him power to go to war without congress. So if Serbia attacks Greece, the US could go to war with Serbia without congress approval. Wilson really hated congress (or anything else that prevented him from doing whatever he wanted).
But France simply refused to go along with the deal Wilson had in mind. Because France was not dumb enough to believe that 'Collective Security' from the League would actually help them. This could only be overcome by Wilson basically caving in, and offering France the alliance it wanted. So the whole Treaty was concluded under what turned out to be false promises in the first place.
He then refused any attempt by congress to even minimally adjust the treaty, making it clear that the US would only go to war with an act of congress. Its often claimed that congress was full of hardcore isolationist but this simply isn't the case. Many republicans were pro allies, and wanted the US to take a leadership position in global affairs. Very basic congressional politics could resulted into the US joining the League and having an alliance with France and Britain. Many republicans would have gone along with that.
The problem is, he was so hell bent on his (flawed) vision of Collective Security and Presidential power. He wasted time and nearly killed himself giving speeches and trying to convince the general population of his vision. And then he eventually opposed the treaty in congress anyway because it wasn't exactly his, telling the democrats to vote against. This collapsed the complete security architecture of Europe and diplomatic fallout followed. Leading to a more isolationist mood in the US.
Germany saw the opportunity to do the same thing again, claiming they can't pay, creating inflation, divided US/French/British and again using to US to force the others into line. The US pushed for debt restructuring for German debt on French and Britain. But its important to understand, there was no restructuring of the debt that Britain and France owned the US. So the US was very willing and aggressively pushed for Germany to pay less debt to other, but was unwilling to reduce the debt on its own allies. Wilson had completely refused any consideration that all of the this debt was connected. He wanted to use debt as a mechanism to keep France and Britain in line instead.
The Treaty of Versailles was full to the brim with inspirational stuff, like womans rights, labor rights, pretty much anybody that showed up with some concerns could get bunch of stuff into the Treaty. But it fundamentally lacked solutions for the things that actually mattered to the leadership of all the countries, European security and government debt.
The fundamental division between US/France/Britain essentially gave Germany the opportunity to completely reverse the Treaty of Versailles and facing no consequences.
So I think saying the hyperinflation is the cause of 1933 is fundamentally flawed, its more accurate to say that both the hyperinflation, the great depression and the return of German militarism were all because of a flawed peace making after WW1. And Wilson wanting the US to stand alone, "city upon a hill" and all the others are just equally unimportant sinners that could be dominated by him is a the root of the issue. He negotiated an armistice on bad terms, forced a bad treaty onto the other nations and then failed to actually stand behind his treaty. So at the end of his presidency, the complete Post-WW1 security architecture had already fundamentally collapsed and the Treaty of Versailles was mostly a dead letter.
This comment is long enough, but the Great Depression very much happened because of this same dynamic.
I recommend Adam Tooze on some of this (even if I don't fully agree with him on some things). These talks he gave at Standford about the Post-WW1 treaties.
German fascism didn't actually rise during the hyperinflation of 1922-1923. Hitler's first attempt at power (the Beer Hall Putsch) failed miserably in November 1923 just as hyperinflation was ending[9].
The Nazis only became a major political force years later during the DEFLATIONARY period of 1930-1933. Heinrich Brüning's government implemented brutal austerity in response to the Depression - slashing wages by 25%, quadrupling pension contributions, and cutting social spending by two-thirds[12]. This deflationary policy was economic malpractice that caused massive suffering.
Recent research confirms that "localities that experienced larger declines in spending and higher rises in taxes had higher vote shares for the Nazi Party in each and every German federal election between 1930 and 1933"[11]. Each standard deviation increase in austerity severity correlated with a 2-5 percentage point increase in Nazi votes[11].
The political establishment's obsession with balancing budgets through austerity crushed the working and middle classes, creating mass unemployment (reaching 6 million by 1932)[9] and pushing desperate voters toward radical solutions. As Hjalmar Schacht warned in 1930: "if the German people are going to starve, there are going to be many more Hitlers"[11].
This history matters today. When elites respond to economic crisis with deflation and austerity that protects creditors while immiserating workers, they create the perfect conditions for fascism. The CEPR's conclusion is chilling: "too much harsh austerity can trigger social unrest and unintended political consequences"[11].
I now honestly think Trump is a Russian asset. It's the only way his actions makes any sense. It's that or he's insane. So guess the most charitable interpretation is: Russian asset.
I was his quiet champion up until about a month ago. So much crap to get rid off in the west. Still true.
There is a lot of confusion around finance and economics in the the general population. The average person does not even understand what money is and how it's created. This includes many journalists.
I think people who're into economics can usually tell what he tries to say. But in terms of communicating it to the wider public its a total failure because he simply says what he thinks and tries to dumb it down for common people. Which is of course bound to fail, it sounds silly to them because they have never been told anything like it. The usual PR is to spin the strategy and essentially lie to the public. Trump talks about all the things he's actually doing without any filter which sounds insane and scary to people.
If you're worried about inflation now, probably better they didn't tell you what they did in 2020:
The strongest argument against him being a Russian asset is that the Russians would have instructed him to maintain a plausible cover. :)
This isn't merely a joke. If you read about famous intelligence stories, you'll see how much emphasis the Russians place on maintaining a believable cover to protect their agents.
Hyperinflation is not 6% inflation, it's not even "inflation but bigger."
Hyperinflation is better thought of as the rejection of a currency by the people, and it has historically always been associated with extreme exogenous factors like foreign-currency denominated debt, with war, civil war or rampant corruption.
The Weimar Republic had foreign-currency denominated debt, which famously you cannot satisfy with printing more domestic currency.
[edit] Here's a good write-up that aligns with my take.
[1] https://www.pragcap.com/hyperinflation-its-more-than-just-a-...
In 2023 my father was talking about how his grandfather talked about the inflation and the Weimar Republic. He talked about it how clearly in 2023 inflation was going to destroy the US as well.
My father is in his late 60s. He lived through the 70s. He saw double digit inflation. He saw price controls. All in his prime working years.
I don’t know where this leaves us. But it worries me when even those with memories to draw from don’t.
To be clear I'm not trying to say it will or won't happen, just that when people think hyperinflation, they think of a purely monetary phenomenon where inflation exceeds some threshold so it gets a "hyper-" prefix. I think it's worth thinking about the phenomenon more deeply when trying to pattern match because there's more to it. It's also something that's not super well understood since we don't have a ton of data points on it.
Would sure be nice to live in precedented times for a change.
Oh yes I agree. Not trying to downplay the recent inflation at all. More musing about how it’s interesting that we’re mostly looking back to events outside of the US when in reality we can look to the US for much of this. Which isn’t to say don’t look everywhere more that it feels like we have a blind spot that we shouldn’t have.
This is a bad article. The expert it quotes are all wrong in important ways. Mises who wrote at the time when lot of information wasn't actually available and is simply factually wrong.
Adam Fergusson is a controversial right wing economists. And the claim that its 'more a psychological event than a purely monetary event' can be made about many things. One could argue that an earthquake or anything else is 'more psychological'.
Factually speaking, its simply a monetary event. It doesn't matter what when and where, if you print money to the extend Wiemar did your gone get hyperinflation. Had France, Britain or the US done the same, it would have had the same effect.
Carl Melchior was a member of the German elite who had a completely wrong understanding of economics and his words should not be just accepted.
> made by huge German exports and these exports will ruin the trade in England and America
This is a fundamentally flawed statement. This is German elites still thinking in Zero-Sum terms. The idea that Britain and the US could never accept German as an exporting trading partner, is just false. And its also false that debt can only be paid back if you are a massive exporter.
Every modern economist who looks at this, concludes that Germany could have paid back the debt just fine. Its simply that the German elites didn't want to pay it. That the simple reality.
Hyperinflation happened because German elites preferred hyperinflation, economic chaos to paying back the debt.
A great book on this subject but I didn't see cited in the article is "When Money Dies": https://www.amazon.com/When-Money-Dies-Devaluation-Hyperinfl...
Uses a mix of old economic stats paired with German citizens journals and public newspapers to tell the story of how hyperinflation in Germany started and then ended, but not before creating so much distrust in society that the seeds were sewn for the country to take a militaristic stance to fixing its problems. Highly recommend the book above.
I slowly start to believe that there are powers at play that want the world economy to tank. First seen during covid pandemic, halting all public life. Now with a US administration that does everything to tank world economy. Who these powers are, what their intentions are, I have no idea. But it is apparent that we can watch in slow motion how the desaster unfolds.
Sorry for the unsolicited advice, but that sounds like the seeds of conspiracy theory thinking, which is dangerous if you end up with confirmation bias and start finding clues that satisfy your theories, e.g.: https://archive.is/sS3W1 . "Satisfy" in the sense of "I knew it! I was right, I'm onto something!"
Of course it's possible your theory is right, at the moment my uneducated guess about what the Trump admin is doing is like some art critic seeing paint on canvas and asking "I wonder what this artist' motivation is..." when it's in fact just a monkey having smeared its droppings on the canvas.
Whereas the lockdowns around the world are probably governments being scared that they'll have too many deaths. If there was a conspiracy, with so many governments, what do you think the chances are of somebody leaking the plans are?
Correct me if I am wrong, but historically hyperinflation only happens when domestic production is destroyed due to a war or large scale civil unrest.
In Germany’s case much of their industrial capacity was destroyed or seized as reparations for WW1.
Trying to make parallels to the current situation in the US borders on the absurd.
You're absolutely correct.
Hyperinflation can also be caused by massive fiscal mismanagement. Venezuela and Argentina are currently undergoing this. It doesn't have to be violent, though violence is certainly a risk.
This is false. Germany was not invaded during WW1, their capital stock was untouched, infect they had heavily invested in capital during the war.
And unlike after WW2 Germany didn't unconditional surrender, Germany was not invaded and its factories were not transported away as the Soviets did after WW2.
So both your points are wrong, German industrial capacity was neither destroyed nor seized. No idea what you are basing these claims on.
German eventually was required to pay reparations. But the also received massive foreign investment at the same time. In fact, the received more foreign investment then they paid in reparations.
And the reparations payment were far from something that Germany couldn't actually handle at the time. They simply didn't want to.
Well I mean destroy and seized in a generic sense. I am wording it poorly, but Germany lost a massive amount of industrial capacity post WW1. In the treaty of Versailles, Germany had to make massive concessions.
"The treaty stripped Germany of 65,000 km2 (25,000 sq mi) of territory and 7 million people."[1]
They also specifically lost coal and iron rich areas to pay back France for destroying theirs.
[1]https://en.wikipedia.org/wiki/Treaty_of_Versailles
Careful that hyperinflation is significantly different from the mainstream story - Mark Blyth writes extensively about this.
Hyperinflation isn't just "inflation on steroids" as mainstream economics often portrays it. Blyth's work is eye-opening here - he shows hyperinflation requires either extreme conditions (war, regime collapse) or spectacular policy incompetence, not just regular government spending.
The inflation fear-mongering serves specific interests. When central banks jack up rates to "fight inflation," workers lose jobs while asset-holders are protected. Meanwhile, recent inflation wasn't primarily caused by stimulus or "too much money" - it was supply chain disruptions, corporate price-setting, and energy shocks.
Blyth demonstrates how our inflation responses are political choices disguised as economic necessities. We could address price stability through buffer stocks, targeted subsidies, or energy transition investments instead of the blunt instrument of interest rates that disproportionately harm working people.
The kicker? Inflation actually helps debtors (most people) while hurting creditors (the wealthy). No wonder the financial class is so obsessed with stamping it out at any cost to workers.
> Hyperinflation Heralded the Fall of German Democracy (2023)
No, it didn't. It was a crushing _deflation_. Germany actually did generally fine during the inflation period, with some economic growth.
Deflation completely killed that.
Seriously WTF?
The hyper inflation was in the aftermath of WWI when Germany's economy was broken by 4 years of war. An it was austerity at the beginning of the 29 financial crisis that brought on deflation and collapse. Followed by the election of Hitler. In the US the same thing resulted in the election of FDR and the end of Republican dominance for two generations.
The claim that 'austerity' resulted in the Great Depression is nonsense. I don't know of serious economist who actually believes that. Its the opposite actually, deflation causes some governments to adopt austerity, specifically governments who can't control their money. See Adam Tooze argument why Germany didn't want to leave the gold standard: https://www.youtube.com/watch?v=9Alx_JDpQio
The reality is, no matter if the German government had increased or decreased spending, the Great Depression was bigger then Germany and would have impacted Germany either way.
The deflation happened because of the massive accumulation of gold by the central banks of France and the US. France and the US manipulated the gold standard.
And the Financial crisis of 1929 wasn't really the bad part, that was a stock collapse. But this doesn't make a great depression, stock went down more in 1987 then in 1929.
The situation in 1929 caused many problems in the US horrifyingly organized banking system (that's its own topic) and further restricted the money supply. The Smoot–Hawley Tariff Act lead to banks collapsing in Europe and continued the restriction of the money supply.
The countries that left the gold standard early were more successful then those that left later. Economist like R. G. Hawtrey (one of the most famous economists at the time) spend literally 10 years warning people that this would happen because the Post-WW1 gold standard was so flawed. Had they listened to him, there might have still been some amount of stock collapse in 1929 but the real issue was not the 1929 stock collapse, but rather the 1930/1931 deflation.
So 'austerity' has nothing to do with it really, its only a background character.
The German love for authoritarianism did that. And WW1 Allies who bled the country dry with reparations as the article mentions. Which lead to desperation in the population and hatred for the establishment. You can see it play out in leading Nazi figures like Goebbels who was constantly broke, struggling to pay bills and ranted about financial enslavement of his people.
The excessive treatment made them see themselves as freedom fighters. Of course, that's not what people are taught in school in Britain or France, it's an inconvenient narrative.
And then that's more or less what I remember from my history classes in France (30-35 years ago) : they were broke because of how we put way excessive sanctions on them, and Hitler was seen as (and partly really was) the savior who put the country economically back on track.
That was in public school so the same program as for the vast majority of French students.
French indemnity? I remember reading this in regards to the Grexit crisis: https://creditwritedowns.com/2015/02/syriza-and-the-french-i...
Interesting, that's not what they teach these days from what I've seen. The economic aspect is a side note and the focus is on the politics, racism, Holocaust, etc. Which imo doesn't really how teach the kids the root cause.
Communism is usually also not discussed enough. In the Weimar Republic in the 30s it was inevitable that either Communists or Nazis would come to power. The mainstream parties had completely failed the country so the people were desperate and sought refuge in radical ideologies. It was either or, there was no alternative.
You are just repeating the same old story, that was pushed by Waimar and Nazi propaganda, that has long been overturned by modern scholarship.
Germans didn't love authoritarianism. Well over half the population voted Communist, Social democrat or with the center party. And usually far more, only in the middle of massive economic depression did the Nazis gain ground. Arguable the communist are 'authoritarians' but they don't think of themselves that way. And many who did vote for the Nazis weren't authoritarians either. Germany had the largest social democratic movement in the world.
The whole 'bled the country dry with reparations' is just weimar/nazi propaganda. Germany reparations were not that extreme, and specially when you compare on what reparations Germany forced on its enemies. Germany could heave paid the reparations without much issue. All the claims that poor little Germany couldn't handle it is Waimar propaganda that the Nazis continued and intensified. Somehow they can spend 20+ of GDP on building a military, but the reparations are somehow impossible.
> Nazi figures like Goebbels who was constantly broke, struggling to pay bills and ranted about financial enslavement of his people.
What if I told you that there are poor people in all nations? And people struggle in lots of place. Germany in 1920 did better then most nations on the plant. And Goebbles was likely in the Top 1 of global population. And you are literally quoting the propaganda minister, of course that is the impression he wants to give.
> The excessive treatment made them see themselves as freedom fighters. Of course, that's not what people are taught in school in Britain or France, it's an inconvenient narrative.
Except that's exactly what people are thought in school. The whole 'extreme reparations' nonsense is the standard view. Its only in the last couple decades that this was seriously questioned by economists and historians.
Honestly I think this article is ok, but it tries way, way to hard to explain 1933 based on this. The events of the Post-W1 are interesting enough without only evaluating it in context of 1933. And sure, they had something to do with 1933, but so did WW1 and many other things.
The reality that still many people don't want to see is that the deal was actually not bad for German. Keynes as usually got it totally wrong. They could paid the reparations, other countries have done so in arguable worse situations. Germany was mostly untouched by WW1 (capital stock), they had significant industrial power and very good relations with the US. Massive amounts of investment went into the country, more then after WW2 and the Marshall Plan.
They always received far more money in foreign investment then they ever had to pay back, and then over multiple rounds, that debt was reduced and reduced and then eliminated. Mostly because US and British elites had no interest in actually enforcing anything. Essentially stabbing France in the back.
The route cause of all of this is really Wilson. Wilson refused to ally himself to Britain and France. He always was pro-German, or at very least saw them as one and the same. Then he fell right into the traps of the German, when the Germans came to him specifically, over heads of France and Britain, and ask for an armistice on lenient terms. And then the Germans could let Wilson do the work of forcing this deal onto Britain and France. Instead of insisting that armistice negotiations would only be held with all major nations together.
Henry Cabot Lodge and other in congress (and of course many others) believed pushing at least into the Ruhr was the minimum. Then you can negotiate from a real position of strength and you can continue to occupy the Ruhr with a multinational (US/Belgium/English/French) force until Germany was clearly in line. And at the minimum they should destroyed German army leadership and split up all the large land holdings in the East of German. This would have actually benefited the SPD. But the SPD couldn't really do it themselves. And this is not hing sight, many at the time understood this.
Then during the negotiations he continued to refused the US/Britain/French alliance that could have stabilized the world. He refused unilateral debt renegotiation with his allies. Both of these were done successfully after WW2.
He only cared about the flawed 'League of Nations'. And the reason he actually wanted the 'League of Nations' is because it would have overruled the constitution and would have given him power to go to war without congress. So if Serbia attacks Greece, the US could go to war with Serbia without congress approval. Wilson really hated congress (or anything else that prevented him from doing whatever he wanted).
But France simply refused to go along with the deal Wilson had in mind. Because France was not dumb enough to believe that 'Collective Security' from the League would actually help them. This could only be overcome by Wilson basically caving in, and offering France the alliance it wanted. So the whole Treaty was concluded under what turned out to be false promises in the first place.
He then refused any attempt by congress to even minimally adjust the treaty, making it clear that the US would only go to war with an act of congress. Its often claimed that congress was full of hardcore isolationist but this simply isn't the case. Many republicans were pro allies, and wanted the US to take a leadership position in global affairs. Very basic congressional politics could resulted into the US joining the League and having an alliance with France and Britain. Many republicans would have gone along with that.
The problem is, he was so hell bent on his (flawed) vision of Collective Security and Presidential power. He wasted time and nearly killed himself giving speeches and trying to convince the general population of his vision. And then he eventually opposed the treaty in congress anyway because it wasn't exactly his, telling the democrats to vote against. This collapsed the complete security architecture of Europe and diplomatic fallout followed. Leading to a more isolationist mood in the US.
Germany saw the opportunity to do the same thing again, claiming they can't pay, creating inflation, divided US/French/British and again using to US to force the others into line. The US pushed for debt restructuring for German debt on French and Britain. But its important to understand, there was no restructuring of the debt that Britain and France owned the US. So the US was very willing and aggressively pushed for Germany to pay less debt to other, but was unwilling to reduce the debt on its own allies. Wilson had completely refused any consideration that all of the this debt was connected. He wanted to use debt as a mechanism to keep France and Britain in line instead.
The Treaty of Versailles was full to the brim with inspirational stuff, like womans rights, labor rights, pretty much anybody that showed up with some concerns could get bunch of stuff into the Treaty. But it fundamentally lacked solutions for the things that actually mattered to the leadership of all the countries, European security and government debt.
The fundamental division between US/France/Britain essentially gave Germany the opportunity to completely reverse the Treaty of Versailles and facing no consequences.
So I think saying the hyperinflation is the cause of 1933 is fundamentally flawed, its more accurate to say that both the hyperinflation, the great depression and the return of German militarism were all because of a flawed peace making after WW1. And Wilson wanting the US to stand alone, "city upon a hill" and all the others are just equally unimportant sinners that could be dominated by him is a the root of the issue. He negotiated an armistice on bad terms, forced a bad treaty onto the other nations and then failed to actually stand behind his treaty. So at the end of his presidency, the complete Post-WW1 security architecture had already fundamentally collapsed and the Treaty of Versailles was mostly a dead letter.
This comment is long enough, but the Great Depression very much happened because of this same dynamic.
I recommend Adam Tooze on some of this (even if I don't fully agree with him on some things). These talks he gave at Standford about the Post-WW1 treaties.
Making Peace in Europe 1917-1919: Brest-Litovsk and Versailles (https://www.youtube.com/watch?v=EDlRKl3XGoM)
Hegemony: Europe, America and the problem of financial reconstruction, 1916-1933 (https://www.youtube.com/watch?v=9Alx_JDpQio)
And the book its based on: "The Deluge: The Great War, America and the Remaking of the Global Order, 1916-1931"
German fascism didn't actually rise during the hyperinflation of 1922-1923. Hitler's first attempt at power (the Beer Hall Putsch) failed miserably in November 1923 just as hyperinflation was ending[9].
The Nazis only became a major political force years later during the DEFLATIONARY period of 1930-1933. Heinrich Brüning's government implemented brutal austerity in response to the Depression - slashing wages by 25%, quadrupling pension contributions, and cutting social spending by two-thirds[12]. This deflationary policy was economic malpractice that caused massive suffering.
Recent research confirms that "localities that experienced larger declines in spending and higher rises in taxes had higher vote shares for the Nazi Party in each and every German federal election between 1930 and 1933"[11]. Each standard deviation increase in austerity severity correlated with a 2-5 percentage point increase in Nazi votes[11].
The political establishment's obsession with balancing budgets through austerity crushed the working and middle classes, creating mass unemployment (reaching 6 million by 1932)[9] and pushing desperate voters toward radical solutions. As Hjalmar Schacht warned in 1930: "if the German people are going to starve, there are going to be many more Hitlers"[11].
This history matters today. When elites respond to economic crisis with deflation and austerity that protects creditors while immiserating workers, they create the perfect conditions for fascism. The CEPR's conclusion is chilling: "too much harsh austerity can trigger social unrest and unintended political consequences"[11].
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[8] Interwar period - Wikipedia https://en.wikipedia.org/wiki/Interwar_period [9] The Weimar Republic: How Did it Allow Hitler's Rise to Power? https://www.thecollector.com/weimar-republic-hitler-rise-to-... [10] 10000 years of economy - Hyperinflation in Germany https://www.citeco.fr/10000-years-history-economics/industri... [11] Fiscal austerity and the rise of the Nazis - CEPR https://cepr.org/voxeu/columns/fiscal-austerity-and-rise-naz... [12] Divided they fell: the German left and the rise of Hitler https://isj.org.uk/divided-they-fell-the-german-left-and-the... [13] Economy of Nazi Germany - Wikipedia https://en.wikipedia.org/wiki/Economy_of_Nazi_Germany [14] [PDF] an assessment of german fascism as a mass movement in https://open.metu.edu.tr/bitstream/handle/11511/99803/Umut%2... [15] Hyperinflation and the invasion of the Ruhr - The Holocaust Explained https://www.theholocaustexplained.org/the-nazi-rise-to-power... [16] Commanding Heights : The German Hyperinflation, 1923 | on PBS https://www.pbs.org/wgbh/commandingheights/shared/minitext/e... [17] [PDF] Hyperinflation in the Weimar Republic - ResearchOnline@JCU https://researchonline.jcu.edu.au/21599/3/21599.pdf [18] Hyperinflation in Germany, 1914–1923 - Mises Institute https://mises.org/mises-daily/hyperinflation-germany-1914-19... [19] The Weimar Republic - Holocaust Encyclopedia https://encyclopedia.ushmm.org/content/en/article/the-weimar... [20] Hyperinflation - Econlib https://www.econlib.org/library/Enc/Hyperinflation.html [21] World War I: Aftermath | Holocaust Encyclopedia https://encyclopedia.ushmm.org/content/en/article/world-war-... [22] 1920s Hyperinflation in Germany and Bank Notes - Spurlock Museum https://www.spurlock.illinois.edu/blog/p/1920s-hyperinflatio... [23] How Hyperinflation Heralded the Fall of German Democracy https://www.smithsonianmag.com/history/how-hyperinflation-he... [24] When Money Had No Value - Facing History & Ourselves https://www.facinghistory.org/resource-library/when-money-ha... [25] Hyperinflation in the Weimar Republic - Wikipedia https://upload.wikimedia.org/wikipedia/commons/thumb/8/89/Bu... [26] Economic difficulties - Why the Nazis achieved power - BBC https://www.bbc.co.uk/bitesize/guides/zsrwjxs/revision/6 [27] Economic Collapse and the Rise of Fascism, 1920–33 - jstor https://www.jstor.org/stable/j.ctt1c2crfj.14?mag=the-partisa... [28] Did Hyperinflation Doom the Weimar Republic? https://www.hnn.us/article/did-hyperinflation-doom-the-weima... [29] The hyperinflation crisis, 1923 - The Weimar Republic 1918-1929 https://www.bbc.co.uk/bitesize/guides/z9y64j6/revision/5 [30] Fascism shattered Europe a century ago — and historians hear ... https://news.berkeley.edu/2024/09/09/fascism-shattered-europ... [31] Hitler's Assumption of Power and the Political Culture of the Weimar ... https://www.jstor.org/stable/23736410 [32] Contemporary History World at War: Fascism and Communism https://education.cfr.org/learn/learning-journey/contemporar... [33] Art of the Weimar Republic and the Premonitions of Fascism https://scholarship.claremont.edu/cmc_theses/1932/ [34] Weimar Republic - Nazi Rise, Hyperinflation, Collapse | Britannica https://www.britannica.com/place/Weimar-Republic/The-end-of-... [35] Economics of fascism - Wikipedia https://en.wikipedia.org/wiki/Economics_of_fascism [36] Political Extremism in the 1920s and 1930s: Do German Lessons ... https://www.jstor.org/stable/24551040 [37] rise of fascism in Germany - Students - Britannica Kids https://kids.britannica.com/students/article/rise-of-fascism... [38] [PDF] The gold standard, deflation and fascism in Polanyi's Great ... http://siba-ese.unisalento.it/index.php/itinerari/article/do... [39] Tim Wu's Bad History: Big Business and the Rise of Fascism https://www.niskanencenter.org/big-business-rise-fascism-bad... [40] Economic Depression and Dictators: Crash Course ... - YouTube https://www.youtube.com/watch?v=Ojo8-GhhQcA [41] What Fascism Is Not: Thoughts on the Deflation of a Concept - jstor https://www.jstor.org/stable/1855138 [42] Fascism on the rise: where does it come from, and how to stop it ... https://www.eesc.europa.eu/en/news-media/news/fascism-rise-w... [43] [PDF] THE ROUTLEDGE COMPANION TO FASCISM AND THE FAR RIGHT https://marxismo21.org/wp-content/uploads/2015/04/Fascism-an... [44] Radical Perspectives on the Rise of Fascism in Germany, 1919-1945 https://surface.syr.edu/books/25/ [45] Debt, Deflation, and the Rural Rise of the Nazi Party - IDEAS/RePEc https://ideas.repec.org/p/rco/dpaper/511.html [46] The economic impact of World War One - Weimar Germany, 1918 ... https://www.bbc.co.uk/bitesize/guides/z8vt9qt/revision/2 [47] [PDF] The Causes of German Hyperinflation 1919-1923 https://www.habselstree.org.uk/boys/wp-content/uploads/sites... [48] Hyperinflation in 1920s Germany - Discover Economics https://www.discovereconomics.co.uk/post/hyperinflation-in-1... [49] The hyperinflation crisis, 1923 - Weimar Germany, 1918-1924 - BBC https://www.bbc.co.uk/bitesize/guides/zx8bmnb/revision/4 [50] 12.3 The Great Depression - World History Volume 2, from 1400 https://openstax.org/books/world-history-volume-2/pages/12-3... [51] Bowling for Fascism: Social Capital and the Rise of the Nazi Party https://www.journals.uchicago.edu/doi/10.1086/690949
Well, your post is certainly well sourced haha.
Perplexity gave me a little hand in those references ;)
I now honestly think Trump is a Russian asset. It's the only way his actions makes any sense. It's that or he's insane. So guess the most charitable interpretation is: Russian asset.
I was his quiet champion up until about a month ago. So much crap to get rid off in the west. Still true.
What finally changed your mind/convinced you?
Claiming VAT is a tariff.
Then, the other day, tariffing Ukraine with 10% but not Russia.
There is a lot of confusion around finance and economics in the the general population. The average person does not even understand what money is and how it's created. This includes many journalists.
I think people who're into economics can usually tell what he tries to say. But in terms of communicating it to the wider public its a total failure because he simply says what he thinks and tries to dumb it down for common people. Which is of course bound to fail, it sounds silly to them because they have never been told anything like it. The usual PR is to spin the strategy and essentially lie to the public. Trump talks about all the things he's actually doing without any filter which sounds insane and scary to people.
If you're worried about inflation now, probably better they didn't tell you what they did in 2020:
https://fred.stlouisfed.org/series/BOGMBASE
Wow, that's a beautiful non-explanation for the idiocy. My compliments to the chef.
The strongest argument against him being a Russian asset is that the Russians would have instructed him to maintain a plausible cover. :)
This isn't merely a joke. If you read about famous intelligence stories, you'll see how much emphasis the Russians place on maintaining a believable cover to protect their agents.
Somehow I don't see him understanding or abiding to such nuances. The obvious severe ADHD is likely an issue here.
Can you imagine being his handler?