alternatehistory.com

It is common knowledge that economic problems have a tendency to radicalise a nation. A failed economic consensus can bring fringe ideas on the far-left and/or far-right to prominence practically overnight. Depending on the extent of the failure.

The trauma of German hyperinflation in the early twenties was a very different case. An economic catastrophe can be collectively pursued to such a degree that it can ultimately prove fatal to a state, but very rarely does the society re-shape itself so radically that when the the danger to the state manifested itself, it was received warmly and often blindly by virtually every part of the community.

This was the process of "proletarianisation" and it is ultimately responsible for Germany's stumble from an unloved democracy into a totaltarian state, The crisis of hyperinflation did not destroy Weimar, it did not even sow the seeds of its later destruction. It was far worse than that. The crisis actively re-shaped a society in such a way that communism not only became necessary but began to be seen as a component of the German character. Marx had envisaged this, although his prediction was that proletarianisation would come with increased accumulation of capital by the ruling bourgeoisie, instead it would be be brought about by a vitriolic mix of economic collapse, fervent nationalism and middle-class erosion

Weimar's hyperinflation had its roots in the First World War, where the German leadership gambled with large deficit spending almost immediately after the war had begun. As the military increasingly consolidated state power for themselves this was exacerbated, the first signs of out of control inflation were to be found in the promisory credits that the German Empire happily handed out to its subjects with no intention of honouring.

This was an economic gamble that was predicated on a German victory, where the risk was considered to be a necessary sacrifice for a victory that would allow Germany to redeem any losses from her defeated enemies. By 1919 this strategy had not only failed, but it had become apparent that the victorious Entente had a similar strategy in mind.

The reparations bill that had been dictated to Germany in the Summer of 1921 been artificially inflated to seem harsher on the defeated nation than it actually was, the declared sum of 123 Bilion Goldmarks was actually closer to 50 Billion. It was little relief for the Germans, who for the last four years had already been printing large amounts of unbacked currency.

The Germans protested that they had no means of paying such a sum, the victors were sceptical. Since the end of the war, German manufacturing had enjoyed a minor boom based on strong exports. Diplomats reported stories of cafes and restaurants that were full of foreign tourists, alongisde tales of Berlin's thriving nightlife. They chose to ignore Germany's crippling deficit and her high unemployment rate. The distrust of the British, the emnity of the French, and the disinterest of the United States created a consensus that the German protests were disingenious, and that their economic vitality was a testament to that.

The strength of German exports was attributed to the weakness of the Goldmark and a toxic consensus had formed around this belief. The "inflationary" consensus was not only preached by the center--right government but also by the Social Democrats. Germany's only solution to the problems caused by her defeat was to grow itself out of poverty, for that to be achieved, German manufacturing and trade had to be competitive, which in turn required a weak Goldmark. A large majoirty of Germans, whether business owners and workers agreed. The symptoms of the oncoming crisis had already begun to appear by the Summer of 1921, they were dealt with disastorously.

It had become clear that inflation was causing prices to overtake wages, this was generally acknowledged as a problem that needed to be resolved but the government was not willing to raise taxes to pay for wage increases, whilst businesses were unwilling to see their profits suffer. The government simply printed more money, whilst business increased prices even further to make up for their own wage increases, creating a wage-spiral that would eventually drag the country into depression.

The rising inflation was relatively gradual at first, tempered somewhat by the strength of German trade with the outside world, but the signs of a larger emergency were apparent. Germany's credit rating was abysmal and whilst the government appealed for help from the capital markets it was not forthcoming. This caused further uncertainty in the finanical world, and runaway speculation soon began with little attention being paid to risk. The government even began to speculate against itself by deliberately devaluing the Goldmark in an attempt to lessen the damage of the reparations payments. An archaic picture of attempting to print an economy out of debt and out of an economic slowdown emerged, and the banks began to panic. All the while, the printing continued and expanded as larger and larger sums were required.

The liquidity crisis began to take its toll, business had slumped, exports were in decline, and unemployment was on the rise. The Reichsbank's solution had become predictable, business needed credit and workers needed paper money to buy products, ignorant of the fact that they had already lost control. Hyperinflation ensued. In October 1921 an American Dollar could buy roughly 100 Goldmarks, in October 1922 it could buy 3000. By the end of 1922 it could buy 7000.

The Goldmark had already become a bad joke in the autumn of 1922 but the Allies were unsympathetic. When the Germans asked for a moratorium on reparations payments they were accused of deliberately orchestrating the crisis. Germany was expected to pay in tangible assets rather than in her increasingly worthless currency. When Germany defaulted on a payment to France, a large shipment of timber, Raymond Poincare's government was unsympathetic to what they saw as German excuses. Poincare had been President when Germany had occupied large areas of France, he now chose to return the favour.

On January 11, 1923, Belgian and French troops entered the Ruhr, a move that provoked universal anger amongst the German people. The government's declaration that it would resist the occupation immediately strengthened their legitimacy amidst the economic crsis but ultimately it would only make things worse. As the Belgians and French marched by factories, workers packed up and left, whenever they came near a government building they would see the civil servants filing out of the doors. This was passive resistance on a mass scale, an organised attempt at making the Ruhr ungovernable and unproductive. The government promised to reimburse any worker who joined the general strike, and this naturally required printing more money.

If the government's response to the occupation worsened the crisis, the success of the passive resistance exacerbated things even further. The Ruhr made up 80% of German coal and steel production, it was not long before the regional shutdown created an economic depression across the country. Still, the printing of money continued. By July 1923, a Dollar could buy 160,000 Goldmarks, the following month it was up to a million and by November, four billion.

This was fertile territory for proleterianisation. By 1923 the distinction between white and blue collar workers was becoming increasingly meaningless, civil servants often found themselves earning little more than unskilled labourers whilst the hyperinflation rendered their savings meaningless. As money became good for nothing but kindling, the very existence of a bourgeois identity increasingly became one of pride rather than actual status. Many continued to own their own homes, but their interiors were increasingly cold and barren as more and more property was sold off to buy essentials. It was a fragile state of affairs, and as many lost their jobs and went hungry, resentments began to overtake the need to preserve a class identity.

The blame against the state, the Reichsbank, and their economists, was near universal. The promises of democracy and prosperity that the republic had seemed to promise were now often seen to have been nothing but lies that were leading Germany to destruction. Many lost their faith in the republic, and some were convinced that they now had to work towards its destruction. Anyone who was seen to be profitting from the crsis was often blamed for making things worse, with particular ire for those who had engaged in speculation. These attitudes were often of an anti-semitic or xenophobic nature, but increasingly they all agreed that the free markets that the inflationary consensus had been designed to service were the true cause of Germany's ills.

By the end of the Summer of 1923, the German people were increasingly used to the erosion of class identity and the shared misery, with a growing scepticism of capitalism and the republic itself, and a universal hatred of the foreign occupation. These were the products of proletarianisation, a mix of economic, poltiical, and patriotic fury that no-one seemed able to provide an aswer for.

Until, to the detriment of the world, one man did.

~ David Irons, Bridging the Horseshoe

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There was a solid look of terror in the Frenchman's eyes, even as the bottom half of his face collapsed. It wasn't an expression that was likely to change The gun had jerked violently in Johann's hand but he was close enough for it not to matter. The other soliders were dead before they could realise. Johann was relieved for that, it had been a while since he had fired a gun in anger, and never from the ground. He realised it was rather different when you had to look into someone's eyes.

The French troops hadn't seemed particularly interested in the flea market they had been told to supervise. Johann supposed that they had drawn the short straw on a weekend where many fellow troops would be on leave or relaxing in their barracks in the old castle on the other side of the river. In a way, Johann could sympathise, he wasn't interested in the market either, only in them. Their friends' turn would come in due course.

Johann felt a strong urge to run, but, like his comrade, Freder, who had dispatched the other two troops, he had a job to do. He hoped he appeared calm to the outside world as he kneeled down and took the soldiers rifle and slung it over his shoulder, secreting his pistol into the pocket of his long jacket. He winced as he stood back up, his back was aching from all the digging he had done last night to find the weapon's secreted in an old farmer's field, but he had no time to moan.

Many people had fled the market after hearing the gun shots, abandoned baskets full of useless banknotes littered the ground, along with an overturned wheelbarrow, still here some who had stayed and peered fearfully at the spectacle, from behind tables or from partially closed doors. Johann circled around the market square and acknowledged them, he rustled around in his pocket to find his red armband before stretching it up his coat sleeve. It was a garish looking thing but he supposed that was the point, he raised his fist and shouted as loudly as he could.

"This is the vengeance of the German worker! This is the fate of all foreigners and capitalists who enslave our people! The Red Front will be victorious!"

As Johann and Freder walked off purposefully, he thought he heard a muted cheer, or it might have just been a gust of wind rattling through the square that they had reduced to silence.

At least we made our point, Johann thought to himself, trying his hardest not to break into a run. "How long do you reckon we have?", he muttered to his comrade.

"Doesn't matter, just keep walking until we're out of view, we need to look like we're not scared."

"Despite the fact that we are?"

Freder smirked, "Are you sure you never finished university, detective?"

The moment they reached a sufficiently dark close, the armbands disappeared and the rifles were secreted underneath their coats as they ran as quickly as they could down a long line of winding, impoverished, tenement slums around the silent factories, before finally reaching the Inn that now formed the centre of Wetter's KPD activity, or, if everything went to plan tomorrow, the new town hall.

The innkeeper bolted his doors as soon as Freder and Johann had entered, it was a fairly common sight to run out of beer in the middle of day thanks to the beer shortages, and his patrons didn't seem to mind being locked in for a few hours. Two men, only know to him as The Besotten Wretch and The Semi-Drunk, raised their glasses to Johann, he grinned back before beckoning Freder into the backroom, where the man who didn't imbibe was holding court.

All men stood, the original handful that had walked with him from Munich, and those who had joined since, either out of belief, anger, or desperation, they all now looked to him as he stretched his arms over the map of Wetter and looked to the two comrades who had just entered.

"A good haul?"

Johann nodded, "Three rifles, two hand-guns, and two hand-grenades for some reason?"

There was a chuckle around the room before Hitler spoke,

"I suppose they thought they might get some fishing done this evening, oh well, a stroke of good luck for us I'd say, we'll need all the explosives we can get tomorrow."

"I still think that we're being too fast with this, we've started killing French soldiers now, they're going to start going after us."The man was Joseph Linge, like Johann he had been a party member since the Ruhr had risen up, it wasn't enough experience for Hitler to not single him out.

"We've been hiding for three years, that isn't enough time for you?"

"It's not about that, the French know we're here now, I don't think it's too hard to see why attacking them at their most alert isn't a good idea!"

"You weren't listening last time were you? I've decided that it's best to attack tomorrow because they're at their most alert!"

"And are you to formulate strategy on your own?"

Hitler looked around the room before going back to his map, he spoke deeply.

"Who in this room has actually fought the French? Raise your hands."

There was an awkward silence as Hitler raised his right-arm into the air, along with a handful more, Johann and Freder awkwardly raised theres. They had just shot some French soldiers after all. Hitler looked around the room and smirked at Joseph,

"I've stormed French fortifications before, the men in this room who also have will know the same as I do, the best time to attack them is when they think they're in pursuit. You fire the shot, you crouch in the foxhole, and wait for them to run out into your field of fire. They aren't expecting us tomorrow, and that's why we're going to do it. They're going to be scurrying all around the town thinking that we're hiding under a bed somewhere. When he hit them with our full force, when we storm the gates of Castle Wetter, they will be as confused as they are terrified!"

There was a murmur of approval around the room, as if his confidence was infectious.

"Tomorrow, we emerge from the shadows as we have waited to do for so long! The Red Front will be no longer be whispered by those who are frightened of French reprisal, by tomorrow night, all of the Ruhr will be running to our banner!"

The murmur was now a cheer, and Johann found himself joining it.

"...And when we take the Ruhr, I pledge, We. Will. Take. Germany!"

This time, a vote was taken, but it was clear that Hitler already had the room. The plan was on, tomorrow they would march.

"Arise ye workers from your slumber!" Followed soon after,

"Arise ye prisoners of want!" boomed the response.

A few hours later, Johann couldn't recall when the singing had ended and the drinking began, only that there was a multitude of both.

Johann liked to think it was their last night as chattel. For many, it would be their last night regardless.

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The painting is We Are Making A New World by Paul Nash.