So the post just showed up now....... I have been checking since 7:30
Who was responsible for the state of the German economy? Is that responsibility different for when it collapsed and when it resurfaced?
I would say the government is responible for the German economy. And I do not think it changed for the collapse or the resurface, it was all the government. The government decided to finance the war "exclusively through borrowing." (146) The Germans spent too much money on the war too fast and before they knew it they were in extreme debt. "Germany's national debt, which had been a modest 300 million marks on the eve of the war, rose to 51 billion 200 million marks by its end." (146) The government is was responsible for entering the war in the first place, and it was their ideas of how to finance the war, and invade France, etc. All of the reparations were the faults of the government in Germany.
Since the German people were in extreme poverty, the only people who could fix the economy at that point was the government. Also, French and Belgium forces were to blame for the hyper inflation as well. Workers stopped working in order to say a kind of "fuck you" to the troops, and that in turn stopped major factories from producing their goods.
If it wasn't for the creation of the new currency, the Rentenmark, I wonder how much longer it would have taken the German economy to resurface, and what the government would have done instead. It makes sense that the government is the one to fix the economy, because it was their mess to clean up.
Joined: 27 Mar 2012 Posts: 7 Location: United States
Posted: Tue Apr 10, 2012 8:01 pm Post subject:
The main factors that caused the economic downfall in Germany was the hyperinflation because they were blamed for ww1 and were forced to pay reparations to the Allied Regions.
The Allied forces wanted Germany to pay a total of 34.1 billion dollars, which was a considerable amount for a country that just got out of war. This handicapped the nation and people felt that they couldn't pay the reparations as the nation was at a political deadlock between the Wiemar Republic and Nazis.
Once Germany stopped paying French and Belgium troops took over the Ruhr capital which was the largest industrial sector in Germany. They consumed all resources that Germany had and this further weakened the economy.In response, the workers in that area began a general strike against the foreign occupiers and refused to work for them. That strategy was eventually successful at getting the French and the Belgians to leave, but it brought the Germany economy to a standstill.
On top of all that, the value of the mark dropped between January to November of 1923 from 18,000 to USD to 4.2 trillion PER USD! Obviously this hyper inflation devastated the economy. Money was useless at this point.
Germany's economy resurfaced thanks to the Dawes plan that was passed . They finally changed thier currency from the Mark to the Rentenmark based on the collateral agricultural and industrial debt. Gustav Stresemann managed to drag the economy out of the war but the reasons for the resurfacing of the economy was totally different from the downfall. _________________ Manveer Singh
I have to agree with Maddy, that the government was responsible for the state of the German economy, because you can't blame the German people. I think this for the same reason Maddy did, they decided to during WWI "change the nature of the German economy" (146). By not requiring the Mark to be backed by 1/3 gold, but having loan banks where money was backed by the promise of other money. And then the government financed the war by borrowing. But even though I say all this, I think that not one group can be blamed for the miserable state of the economy. As Manveer France and Belgium's occupation of Germany didn't help either, although it seemed very deserved. (because of what Germany did to them in the war). And finally I think that political parties were partially to blame although I am having a hard time saying why, if anyone else thinks of a good solid reason please say it, for now I just mention this because the many political parties in Germany had a lot of influence on the actions of government.
I would say the responsiblity should be German government's and Triple Entente's which is France, Great Britain, and US.
Firstly, Germany should pay for reparation after WW! due to Treaty of Versailles. Since Germany had to pay 33 billion dollars for reparation, German government started to print excessive amount of marks in order to pay them back. However, this decision turned out to be irresponsible action of German government. Hyperinflation occured as a reslut. As statics said, weekly cost of food in German Marks was 9354000000000 Marks. This is insane! Which means the value of German currency became useless.
Secondly, the Treaty of Versailles choked Germany to the death. Thirteen percent of the territory that Germany lost because of treaty had been comprised of bounticful agriculture, mineral resources. Germany also lost 74.5 % of iron ore, 68.1 zinc ore, and 26% of coal. Moreover, Germany had to build ships, locomotives, railroad cars for Triple Entente. Therefore, this harsh circumstances gave Germany harder time than ever.
The reason for germany's failling economy and inflation of currency was result of several factors. One, that Germany had lost the war and was forced to may major reparations to France, that they decided to borrow money in the war rather than raise taxes internally, and that they stopped using gold as a backing for their currency. The decision to "finance the war exclusively through borrowing" was made by Karl Helfferich, the secretary of treasury in 1914, and resulted in a huge debt increase: "during the war, Germany's national debt, which had been a modest 300 Million marks on the eve of the war, rose to 51 billion 200 million marks by its end". Also the decision to stop using gold as a backing resulted in the freedom of banks to print money whenever it was needed. And as the prices of goods grew, loans and debt of the German people grew, which put pressure on the govt. to inflate the currency. It was a vicious cycle, and result of poor decisions/losing the war.
Posted: Tue Apr 10, 2012 10:44 pm Post subject: responsible
I guess the government was sort of responsible for the economic collapse and resurfacing. It's hard to say.
You could argue that the lack of government and order was what made the economy so uneasy. There were so many political parties and so much hatred and violence between them that it was difficult for the government to take order and improve the economy. Erzberger tried to create a policy where mostly the rich would be taxed, but this didn't last, partially because of the political conflict and also Germany's huge debt after the Treaty of Versailles. America sending troops into France caused Germany to lose the war which caused Germany to have so many problems. I'm not saying that Germany didn't somewhat bring these problems on itself, but I'm trying to figure out how it lost the war.
As for the resurfacing, I believe the government helped by changing the currency. It was no longer so worthless although not everyone got out of their debts.
The German government was responsible for Germany’s failing economy. After World War I, Germany had to pay large reparations to other countries, and also had to financially compensate veterans, widows, orphans, and fatherless children for their losses. Germany did not have the money necessary to make these payments, so the German government made a series of irresponsible decisions in order to do so, including over printing marks (which contributed to the massive inflation) and irresponsible borrowing. The huge gap in the workforce also hurt the economy, many men had died in the war and many veterans were no longer capable of doing industrial work due to injuries sustained during the war.
I agree with what Ellery said about the collapsing German economy being a vicious cycle. It seemed like there was no way to advance financially in post World War I Germany.
I agree that responsibility for Germany's failing economy fell on the government's shoulders. Even with the reparations to the Allies and the compensation for those who lost family members in the war, Germany was managing itself decently for a time. The real trouble started when officials tried to take the easy way out of paying off their debts by printing massive amounts of money and causing the value of the German mark to drop to a point of literal worthlessness. Even with all of Germany's money struggles, I think that solutions, be they long-term or temporary, could have been compromised on between Germany and those they owed money to, had the mark remained a currency with at least SOME value.
The big thing that saved the economy was the introduction of a new currency, so Germany's government was also responsible for pulling the economy up and out of the grave, but I think it would have been a greater achievement if, like Maddy said, they hadn't dug the grave themselves to begin with.
I would say that the blame for Germany's failing economy, as Ellery said so well, was the government, but also various political leaders, industrialists, land owners and union leaders. Of course Germany wasn't always in a state of turmoil but Germany had to borrow money from the war, which furthered their debt. As things became more expensive people wanted to spend less and that would've helped. Erzenburger tried to tax the the wealthy and corporations and those with inheritance, which kind of helped and was a good idea but it wasn't enough. The hyperinflation further plunged them into debt and because of that, Germany paid less reparations from the war, but it didn't really work. The best way to push themselves out of their economic crisis would have been to increase taxation, but although they considered, it, they were worried about not creating a greater debt, so understandably they didn't want to take any risks.
Im gonna stick with what i was talking about in class, that the terrible state of the weimar republic, and its existence, are a direct result of the wars outcome. what do you guys think about the hypothetical of germany winning? I think that, had germany won, the tsar would not have fled the country, thusly there weimar government would have nerver come to be. That coupled with the lack of reparations, the german economy would have been thriving, and probably better than ever. What do you guys think?
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