The Downfall of Money: Germanys Hyperinflation and the Destruction of the Middle Class by Frederick Taylor Page B
Authors: Frederick Taylor
Tags: History, Germany, Europe, Economics, Finance, Professional & Technical, Business & Money, Money & Monetary Policy, Inflation, Accounting & Finance
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years social and political priorities took more or less absolute precedence over economics. This would remain the case until the government had no choice in the matter but to change it. However that lay a long way down the line.
On 10 November, Friedrich Ebert made his famous (or notorious) phone call to General Groener, and began the process of making an accommodation with the status quo, so that his version of the ‘revolution’, which was a very modest one, might win out.
A major reason why the government found itself in this situation was, of course, that it had decided to keep the capitalist economy and therefore, perforce, allow the country’s capitalists to survive. A Bolshevik-style reorganisation of the economy might have allowed the kind of central control that would permit the government to dictate terms (though admittedly the Bolsheviks themselves had to cope with a vicious, if temporary, inflation during their own civil war). This, however, was not what Ebert and his colleagues wanted, and probably rightly so.
Of course, in public Ebert and his Majority Social Democrats preached the end of capitalism. This would theoretically enable the peaceful transition to a new, more efficient and equal socialised economy that would function alongside a democratised, egalitarian society. But we know that in fact Ebert ‘hated the social revolution like sin’. That is why he did the deal with Groener.
The alternative to the social revolution was a social agreement. Accordingly, on 15 November 1918, another meeting took place in Berlin that would, in its way, be just as significant in ensuring that, whatever the revolution of 9 November might come to mean, it would not be the end of German capitalism. Again, men who considered themselves leaders of the working class offered a hand to the beleaguered establishment, and again the aim was not the furtherance but the prevention of radical change.
Carl Legien was the most powerful man in the Social Democrat-controlled trade union movement. Its membership had dipped from 2.5 million before the war to less than 1 million, before entering a steep upward curve during the last months of the war, rising on a steeper trajectory during the first weeks and months of peace as working-class men returned from the front to take up employment once more. In November 1918, Legien was a few weeks short of his fifty-seventh birthday, not only one of the Social Democrats’ leading lights but also one of the handful of men who really mattered in post-war Germany.
Born to a working-class family in Thorn, a Prussian city that in 1918 passed to Poland, after the early death of his parents Legien grew up in an orphanage and was then apprenticed as a turner. His rise through the ranks of the trade union movement, from such a heavily disadvantaged background, was astonishingly swift. In 1890, though not yet thirty, Legien became Chair of the (socialist) General Commission of German Trade Unions. He served as a member of the Reichstag between 1893 and 1918 as a Social Democrat. During the war, Legien’s status as a practical dealmaker of some genius enabled him to mediate between the employers, government and trade unions. He was a pivotal figure in the fight to keep production going, even in the war’s darkest moments.
On the other side of table from Legien on 15 November 1918 was the most prominent – and in his way most mysterious – industrialist in post-war Germany, forty-eight-year-old Hugo Stinnes. Offspring of a middling prosperous Rhenish-Westphalian merchant family, the young Hugo did not go to university, instead dabbling briefly in retail and at one time working for some months as a coal miner before spending a year at the School of Mines in Berlin. After a brief spell in the family firm, while still only twenty-two he branched out on his own, founding a trading company, Hugo Stinnes Ltd.
Dealing initially in coal, but then in just about anything else as well, was an activity for
On 10 November, Friedrich Ebert made his famous (or notorious) phone call to General Groener, and began the process of making an accommodation with the status quo, so that his version of the ‘revolution’, which was a very modest one, might win out.
A major reason why the government found itself in this situation was, of course, that it had decided to keep the capitalist economy and therefore, perforce, allow the country’s capitalists to survive. A Bolshevik-style reorganisation of the economy might have allowed the kind of central control that would permit the government to dictate terms (though admittedly the Bolsheviks themselves had to cope with a vicious, if temporary, inflation during their own civil war). This, however, was not what Ebert and his colleagues wanted, and probably rightly so.
Of course, in public Ebert and his Majority Social Democrats preached the end of capitalism. This would theoretically enable the peaceful transition to a new, more efficient and equal socialised economy that would function alongside a democratised, egalitarian society. But we know that in fact Ebert ‘hated the social revolution like sin’. That is why he did the deal with Groener.
The alternative to the social revolution was a social agreement. Accordingly, on 15 November 1918, another meeting took place in Berlin that would, in its way, be just as significant in ensuring that, whatever the revolution of 9 November might come to mean, it would not be the end of German capitalism. Again, men who considered themselves leaders of the working class offered a hand to the beleaguered establishment, and again the aim was not the furtherance but the prevention of radical change.
Carl Legien was the most powerful man in the Social Democrat-controlled trade union movement. Its membership had dipped from 2.5 million before the war to less than 1 million, before entering a steep upward curve during the last months of the war, rising on a steeper trajectory during the first weeks and months of peace as working-class men returned from the front to take up employment once more. In November 1918, Legien was a few weeks short of his fifty-seventh birthday, not only one of the Social Democrats’ leading lights but also one of the handful of men who really mattered in post-war Germany.
Born to a working-class family in Thorn, a Prussian city that in 1918 passed to Poland, after the early death of his parents Legien grew up in an orphanage and was then apprenticed as a turner. His rise through the ranks of the trade union movement, from such a heavily disadvantaged background, was astonishingly swift. In 1890, though not yet thirty, Legien became Chair of the (socialist) General Commission of German Trade Unions. He served as a member of the Reichstag between 1893 and 1918 as a Social Democrat. During the war, Legien’s status as a practical dealmaker of some genius enabled him to mediate between the employers, government and trade unions. He was a pivotal figure in the fight to keep production going, even in the war’s darkest moments.
On the other side of table from Legien on 15 November 1918 was the most prominent – and in his way most mysterious – industrialist in post-war Germany, forty-eight-year-old Hugo Stinnes. Offspring of a middling prosperous Rhenish-Westphalian merchant family, the young Hugo did not go to university, instead dabbling briefly in retail and at one time working for some months as a coal miner before spending a year at the School of Mines in Berlin. After a brief spell in the family firm, while still only twenty-two he branched out on his own, founding a trading company, Hugo Stinnes Ltd.
Dealing initially in coal, but then in just about anything else as well, was an activity for
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