In his living room filled with books, Carl-Ludwig Holtfrerich recounts the German hyperinflation of 1922-1923 as if he were there. The professor emeritus of the Free University of Berlin is the author of a reference work on the subject, Inflation in Germany (1914-1923), translated into French by the Institute of Public Management and Economic Development (2008). “It was a period when prices were increasing several times a day, he explains. When someone ordered a beer, they bought two at the same time. As soon as they received their salary, people immediately tried to change it into tangible goods. “
German collective memory retains the image of the ticket wheelbarrows necessary to buy the simplest goods from this period, suggesting a deep trauma in the population. In fact, says the professor, inflation did not affect all people the same. “It has certainly been a difficult experience for many. But it is above all the upper classes that have paid the heaviest price, as well as civil servants and small businesses. However, at the time, Germany was dominated by agriculture. The period even allowed a reduction in the wealth gap between rich and poor. “
Hard hit by the 1929 crisis
So where does the tenacious idea come from that the hyperinflation of 1923 would have prepared the Nazis to take power in 1933? “It’s a myth”, says Holtfrerich. Between 1923 and 1933 a major event occurred: the world economic crisis of 1929, which hit Germany hard. “When Hitler came to power, it was not inflation but deflation that reigned. Prices were falling, they were not going up. The unemployment rate had climbed to 17.3%, compared to only 1.5% in 1923! “ The fear of inflation was then politically instrumentalized by Heinrich Brüning, Chancellor between 1930 and 1932, to impose a policy of reducing public spending on the population. The political stake was then the payment of reparations after the First World War. “The Chancellor wanted to show the whole world that Germany was down and that she was no longer able to pay these reparations. “
However, this reason is not sufficient to justify that the anxiety of inflation is still anchored in the German mentality. The explanation is that it was again used politically after the Second World War … in order to allow the country to gain market share internationally. “In my research, it is very clear that this fiscal policy was intended to give Germany an international competitive advantage in the context of the fixed exchange rates of the time. ”
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