Posted Jul 9, 2013 by Martin Armstrong
Marty – You are correct I believe in regards to Germany during the 1919-1923 period and even beyond…It was taken over by the Bolsheviks. You’ve alluded to the revolutionary Marxist takeover and government in Germany at this time…a fact many people probably aren’t aware of. Also, what many don’t realize is that CHAOS reigned in Germany after WW1. It was NOT business as usual for the German people after the Armistice and Treaty. It was actually worse! It was a continuation of the war for them. Consider: No navy, no air force, limited arms, limited troops, occupation of the Allied forces, an embargo which killed thousands upon thousands immediately after the war… I mean, one could go and on and make a strong case that hyper-inflation of the currency was an inevitable result of war-like conditions and suffering within Germany for several years after the Great war. It was just about survival, and we have no idea how they suffered.
REPLY: Everything is connected – just follow the money. There was a tremendous punishment imposed upon the German people for the actions of their government. People do not often appreciate that there is never a 100% agreement within any group. Hitler was not elected with a majority. Nevertheless, the punishment inflicted upon the German people by the Allies was inhuman following World War I and not merely led to starvation of citizens, but that laid the seeds for the rise of Hitler. The backlash against the Jews began with the bankers and it was all seen as a conspiracy to many not that strikingly different from today.
Germany is plagued by the nightmare of the hyperinflation and imposes austerity upon Europe that only creates a deepening depression. The misconception of the hyperinflation and the unreasonable reparation payments killed many German citizens, often the weak elderly and children. But again, history does not wish to remember the hardship imposed by the Allies any more than the Annihilation of the American Indians. John Maynard Keynes first was noted for his writing warning about the abuse of the Reparation Payments.
Keynes actually became famous, not for his 1936 General Theory, but for his Economic Consequences of the Peace (1920) and A Revision of the Treaty (1922). These were the real works he argued against at the 1919 peace conference, exposing the absurdity of imposing reparation debt on Germany.
The Germans saw the reparations as unjust extortion imposed upon the people. You can imagine if the USA lost a war and the victor then imposed a tax on everyone for the damaged cause by Washington. The efforts to accommodate the Allies’ demands undermined the government’s legitimacy setting the stage for the communist revolution in Germany. This later led to the rise of Nazism and the coming of a second world war. Keynes seemed to foresee the entire disaster that would unfold. In his 1922 book, he posed the crucial question: “Who believes that the Allies will, over a period of one or two generations, exert adequate force over the German government to extract continuing fruits on a vast scale from forced labor?”
We must always remember that people disagree with their government and as such punishing an entire nation is unjust and will only create future enemies. This is why often when a political leader killed a rival, he also killed his offspring for fear that they will seek vengeance when they become of age. The reparations set the stage for the hyperinflation as any wealth was plundered, and that opened the door for Hitler as resentment of other nations built up among the German people. Never punish a people for the sins of their political leaders.