Bad Marks
‘The Downfall of Money,’ by Frederick Taylor
Albert Harlingue/Roger Viollet—Getty Images
German children playing with banknotes that have lost their value through inflation, circa 1919.
By CATHERINE RAMPELL
The New York Times Book Reviews, January 3, 2014
Frederick Taylor’s “The Downfall of Money” promises, on its jacket, to deliver “an economic horror story.” A horror it was: We’ve all seen the photos from Germany with the wheelbarrows full of cash or the children playfully stacking bricks of worthless bills (by late 1923 the mark had deteriorated from a value of 4.2 to the dollar in 1914 to over 4 trillion). The monetary crisis was so traumatic that to this day, it renders the German people thoroughly allergic to price increases.
THE DOWNFALL OF MONEY
Germany’s Hyperinflation and the Destruction of the Middle Class
By Frederick Taylor
Illustrated. 416 pp. Bloomsbury Press. $30.
But despite its title, this book is primarily concerned not with money but with everything else the Germans were also concerned with from 1914 to about 1929: military strategy, starvation, assassinations (of people good and bad), putsches (fruitless and fruitful), foreign occupation, riots, strikes and pretty much every other permutation of anarchy and violence.
For the first 100 pages or so, Taylor, the author of “Dresden” and “The Berlin Wall,” gives us a highly detailed, and somewhat detoured, narrative of the years around World War I. There is little mention of monetary issues, save an occasional reference to the exchange rate. Taylor pays more attention to the economic issues of the 1920s, but even then what he really seems to want to write about is the general craziness that was Weimar Germany.
There is much engrossing craziness to cover. Many readers are no doubt familiar with the Treaty of Versailles’ war-guilt clause, which shifted blame for a pointless, expensive autopilot of a war entirely onto Germany and its allies. Fewer probably remember how that finger-pointing then ricocheted within Germany itself after the Kaiser was ousted and splintered groups of Communists, Social Democrats and far-right nationalists blamed one another for the humiliations of the war and its aftermath. Abused by the vengeful victors, the Germans turned to abusing (and slaughtering) themselves.
To be sure, Germany was not simply a victim deserving of sympathy. Taylor documents its plans to visit crushing indemnities and annexations upon its enemies had it prevailed in the war. Everyone, he argues repeatedly, behaved badly. And almost everyone borrowed way too much to bankroll this bad behavior, counting on the other guy’s losing in order to get back in the black. The United States, the main creditor to the other victors, comes off looking worse than Americans may care to remember. It was Washington’s refusal to forgive the Allies’ war debts, after all, that encouraged Britain and France to tighten the screws on the broke and psychically broken Germany (which was effectively paying French and British debts to the United States indirectly). As a result, Uncle Sam collected the nickname “Uncle Shylock.”
Only toward the end of the book are we introduced to the long-awaited hyperinflation. There Taylor details the less obvious ways in which dizzyingly high prices frayed the social fabric. Women couldn’t marry, for example, because their dowry savings had been inflated away. Lifestyle choices became strangely distorted by price changes; unlike food costs, opera ticket prices remained cheap because they were set by the state, encouraging consumption of entertainment instead of calories. Strikes and riots abounded — including, most memorably, a strike by Reich printing house workers when the government finally got serious about stamping out inflation. (If they weren’t regularly printing money, they were in danger of losing their jobs.)
There are, Taylor suggests, parallels between the profligate German welfare state of the 1920s and Germany’s European Union peers today. But he is frustratingly noncommittal about why the German government pursued the inflationary policies it did — and to what extent they were deliberate or just ad hoc. Uncertainty ruled not only Weimar economic policy, it seems, but also the historians’ assessments that followed.
