Weimar on the AegeanRoundup
tags: economics, Greece
Try to talk about the policies we need in a depressed world economy, and someone is sure to counter with the specter of Weimar Germany, supposedly an object lesson in the dangers of budget deficits and monetary expansion. But the history of Germany after World War I is almost always cited in a curiously selective way. We hear endlessly about the hyperinflation of 1923, when people carted around wheelbarrows full of cash, but we never hear about the much more relevant deflation of the early 1930s, as the government of Chancellor Brüning — having learned the wrong lessons — tried to defend Germany’s peg to gold with tight money and harsh austerity.
And what about what happened before the hyperinflation, when the victorious Allies tried to force Germany to pay huge reparations? That’s also a tale with a lot of modern relevance, because it has a direct bearing on the crisis now brewing over Greece.
The point is that now, more than ever, it is crucial that Europe’s leaders remember the right history. If they don’t, the European project of peace and democracy through prosperity will not survive.
About those reparations: The basic story here is that Britain and France, instead of viewing the newly established German democracy as a potential partner, treated it as a conquered enemy, demanding that it make up their own wartime losses. This was deeply unwise — and the demands placed on Germany were impossible to meet, for two reasons. First, Germany’s economy had already been devastated by the war. Second, the true burden on that shrunken economy would — as John Maynard Keynes explained in his angry, powerful book “The Economic Consequences of the Peace” — be far greater than the direct payments to the vengeful Allies.
In the end, and inevitably, the actual sums collected from Germany fell far short of Allied demands. But the attempt to levy tribute on a ruined nation — incredibly, France actually invaded and occupied the Ruhr, Germany’s industrial heartland, in an effort to extract payment — crippled German democracy and poisoned relations with its neighbors.
Which brings us to the confrontation between Greece and its creditors. ...
comments powered by Disqus
- Trump, Mueller And The Ancient History Of Grants Of Immunity
- Documents show Gorbachev was assured US wouldn't expand NATO into Central and Eastern Europe
- Memorial to honor 4,000 victims of lynching to be built in Montgomery, Alabama
- Study: Inequality is a phenomenon of the past 10,000 years
- From 200 Years Ago, a Lesson About Mass Killings
- College Board revises AP European history test in response to criticism by conservatives
- AHA says it’s feasible to stop the proposed tax on grad student tuition waivers
- Rashid Khalidi opposes Trump decision on Jerusalem
- Daniel Pipes backs Trump decision on Jerusalem
- The Penn TA who said she calls on black women first won’t be teaching next semester