Advertisement

Income Expectations and Political Instability in Germany, 1918–39

  • Theo Balderston
Part of the Studies in the Economies of East and Southeast Asia book series (SEESEA)

Abstract

This chapter discusses the relation between income change and political instability in the period of modern German history most affected by both. This was the era of postwar revolution (November 1918—c. April 1919), of inflation and hyperinflation (1918–23), of almost unparalled depression accompanied by an explosive increase in the Nazi vote (1929–32) and of dictatorship advancing ever more probably to war (1933–9). The discussion will be guided by the following propositions:
  1. 1

    The ‘income change’ which has the potential to cause political conflict is change in expected ‘lifetime’ or ‘permanent’ income, not change in actual past income. For rational political action relates to the future, not the past! Where income change has been continuous for a long period, past change may satisfactorily proxy expected long-term change. In cases of abrupt and discontinuous income change, it might not. Interwar Germany conformed to the latter case. Where, however, real income expectations do collapse, they may be expected to undermine democracy by narrowing the scope for compromise. This is because, with lower expected incomes, the margin for ‘absorbing’ adverse economic policy decisions out of future income growth is reduced. Democracy presupposes a willingness to accept the adverse decisions of the majority — as ascertained by some agreed political formula — on many economic policy choices potentially affecting future incomes.

     
  2. 2

    Adverse change in income expectations will have political consequences only when (i) those adversely affected believe it can be remedied by different economic policies (otherwise it will be accepted passively and without political protest), and when (ii) they believe they have the political muscle to swing policy round to their own advantage.

     
  3. 3

    Income inequality is not necessarily incompatible with political stability. In ‘traditional societies’ throughout the world it has been stably legitimated by principles of deference and of uncontested status differentiation. Changes in expected income distribution will best be able to build coalitions of protest where the ‘glue’ holding them together is not sheer self-interest, but a shared sense of distributional injustice.

     

Keywords

Political Instability Compulsory Purchasing Income Change Political Protest Weimar Republic 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Abelshauser, Werner (1981) ‘Verelendung der Handarbeiter? Zur sozialen Lage der deutschen Arbeiter in der grossen Inflation der frühen zwanziger Jahre’, in Hans Mommsen and Winfried Schulze (eds), Vom Elend der Handarbeit. Probleme historischer Unterschichtenforschung, Stuttgart, pp. 445–76.Google Scholar
  2. Balderston, Theo (1993) The Origins and Course of the Economic Crisis. May 1923 — November 1932 Berlin.Google Scholar
  3. Balderston, Theo (1995) ‘A Strong German Economy: A Precondition for the Revitalization of the European Market?’, in Marta Petricioli et al., A Missed Opportunity? 1922: The Reconstruction of Europe, Berne, pp. 147–65.Google Scholar
  4. Balderston, Theo (1996) ‘The Expectation of Profit in Nazi Germany’, University of Manche-ster, Working Paper, no. 33.Google Scholar
  5. Barclay, David (1978) ‘A Prussian Socialism? Wichard von Moellendorff and the Dilemmas of Economic Planning in Germany 1918–19’, Central European History, 11, pp. 50–82.CrossRefGoogle Scholar
  6. Barkai, Avraham (1990) Nazi Economics: Ideology, Theory and Policy Oxford.Google Scholar
  7. Bellon, Bernard P. (1990) Mercedes in Peace and War. German Automobile Workers, 1903–1945 New York.Google Scholar
  8. Bendix, Reinhard (1952) ‘Social Stratification and Political Power’, American Political Science Review, 46, pp. 357–75.CrossRefGoogle Scholar
  9. Bessel, Richard (1993) Germany after the First World War Oxford.Google Scholar
  10. Blackbourn, David (1997), The Fontana History of Germany 1780–1918: The Long Nineteenth Century, London.Google Scholar
  11. Burnham, Walter Dean (1972) ‘Political Immunization and Political Confessionalism: The United States and Weimar Germany’, Journal of Interdisciplinary History, 3, pp. 1–30.CrossRefGoogle Scholar
  12. Caplan, Jane (1988) Government without Administration. State and Civil Service in Weimar and Nazi Germany Oxford.Google Scholar
  13. Childers, Thomas C. (1982) ‘Inflation, Stabilization and Political Realignment in Germany’, in Gerald D. Feldman, C.-L. Holtfrerich, G.A. Ritter and P.-C. Witt (eds), The German Inflation Reconsidered: a Preliminary Balance, Berlin, pp. 255–88.Google Scholar
  14. Childers, Thomas C. (1984) The Nazi Voter. The Social Foundations of Fascism in Germany 1919–1933, Chapel Hill, NC.Google Scholar
  15. Dumke, Rolf (1990) ‘Income Inequality and Industrialization in Germany 1850–1913: The Kuznets Hypothesis Re-examined’, in Y.S. Brenner, H. Kaelble and M. Thomas (eds), Income Distribution in Historical Perspective, Cambridge, pp. 117–48.Google Scholar
  16. Falter, Jürgen W. (1991) Hitlers Wähler Munich.Google Scholar
  17. Falter, Jürgen W. and Dirk Hänisch (1986) ‘Die Anfälligkeit von Arbeitern gegenüber der NSDAP bei den Reichstagwahlen 1928–1933’ Archiv fir Sozialgeschichte, XXVI, pp. 179–216.Google Scholar
  18. Falter, Jürgen W. and Reinhard Zintl (1988) ‘The Economic Crisis of the 1930s and the Nazi Vote’, Journal of Interdisciplinary History, 19, pp. 55–85.CrossRefGoogle Scholar
  19. Feinstein, Charles H. (1972) National Income, Expenditure and Output of the United Kingdom 1855–1965 Cambridge.Google Scholar
  20. Feldman, Gerald D. (1970) ‘German Business between War and Revolution: The Origins of the Stinnes — Legien Agreement’, in G.A. Ritter (ed.), Entstehung und Wandel der modernen Gesellschaft: Festschrift fur H. Rosenberg, Berlin, pp. 312–341.Google Scholar
  21. Feldman, Gerald D. (1993) The Great Disorder: Politics, Economics and Society in the German Inflation New York.Google Scholar
  22. Feldman, Gerald D., Eberhard Kolb and Reinhard Rürup (1972) ‘Die Massenbewegungen der Arbeiterschaft in Deutschland am Ende des Ersten Weltkrieges (1917–1920)’, Politische Viertelsjahrschrift, 13, pp. 85–104.Google Scholar
  23. Geary, Dick (1993) Hitler and Nazism London.Google Scholar
  24. Geiger, Theodor (1932) Die Soziale Schichtung des Deutschen Volkes: Soziographischer Versuch auf statistischer Grundlage Stuttgart.Google Scholar
  25. Germany (annual) Statistisches Jahrbuch für das Deutsche Reich Berlin.Google Scholar
  26. Germany (1936) Statistik des Deutschen Reichs, Bd. 453: Berufszählung. Die berufliche und soziale Gliederung der Bevölkerung des Deutschen Reichs Berlin.Google Scholar
  27. Hamilton, Richard F. (1982) Who Voted For Hitler? Princeton.CrossRefGoogle Scholar
  28. Hardach, Gard (1976) Weltmarktorientierung und relative Stagnation: Währungspolitik in Deutschland 1924–31 Berlin.Google Scholar
  29. Herbst, Ludolf (1983) ‘Die Krise des nationalisozialistischen Regimes am Vorabend des Zweiten Weltkrieges und die forcierte Rüstung’, Vierteljahrshefte für Zeitgeschichte, 26, pp.Google Scholar
  30. Hoffmann, Walther G., F. Grumbach and H. Hesse (1965) Das Wachstum der deutschen Wirtschaft seit der Mitte des 19 Jahrhunderts, Berlin.Google Scholar
  31. Holtfrerich, Carl-Ludwig (1986) The German Inflation 1914–1923: Causes and Effects in International Perspective Berlin.CrossRefGoogle Scholar
  32. Hughes, Michael L. (1988) Paying for the German Inflation, Chapel Hill, NC.Google Scholar
  33. Jones, Larry E. (1989) ‘Democracy and Liberalism in the German Inflation: The Crisis of a Political Movement 1918–1924’, in Gerald D. Feldman, C.-L. Holtfrerich, G. Ritter and P.-C. Witt (eds), Consequences of Inflation, Berlin, pp. 3–44.Google Scholar
  34. Kolb, Eberhard (1988) The Weimar Republic London.CrossRefGoogle Scholar
  35. Lipset, Seymour Martin (1960) ‘Fascism — Left, Right, and Centre’, in Seymour Martin Lipset, Political Man: The Social Bases of Politics (Garden City), pp. 127–79.Google Scholar
  36. Lyth, Peter J. (1990) Inflation and the Merchant Economy: The Hamburg Mittelstand 1914–1924 New York.Google Scholar
  37. Maier, Charles S. (1975) Recasting Bourgeois Europe: Stabilization in France, Germany and Italy in the Decade after World War I Princeton.Google Scholar
  38. Mason, Timothy W. (1993) Social Policy in the Third Reich: The Working Class and the ‘National Community’, Providence, RI.Google Scholar
  39. Merkl, Peter H. (1975) Political Violence under the Swastika. 581 Early Nazis Princeton.Google Scholar
  40. Miller, Susanne (1978) Die Bürde der Macht: Die Deutsche Sozialdemokratie 1918–1920 Düsseldorf.Google Scholar
  41. Milward, Alan S. (1967) The German Economy at War London.Google Scholar
  42. Moeller, Robert G. (1982) ‘Winners as Losers in the German Inflation. Peasant Protest Over the Controlled Economy’, in Gerald D. Feldman, C.-L. Holtfrerich, G.A. Ritter and P.-C. Witt (eds.), The German Inflation Reconsidered: A Preliminary Balance, Berlin, pp. 255–88.Google Scholar
  43. O’Loughlin, John, Colin Flint and Luc Anselin (1994) ‘The Geography of the Nazi Vote: Context, Confession, and Class in the Reichstag Election of 1930’, Journal of the Association of American Geographers, 84, pp. 351–80.CrossRefGoogle Scholar
  44. Overy, Richard J. (1982) ‘Hitler’s War and the German Economy: A Reinterpretation’, Economic History Review, 35, pp. 272–91.CrossRefGoogle Scholar
  45. Peukert, Detlev J. K. (1989) Inside Nazi Germany: Conformity, Opposition and Racism in Everyday Life Harmondsworth.Google Scholar
  46. Peukert, Detlev J. K. The Weimar Republic: The Crisis of Classical Modernity, New York.Google Scholar
  47. Ryder, A. J. (1967) The German Revolution of 1918: A Study of German Socialism in War and Revolt Cambridge.Google Scholar
  48. Schoenbaum, David (1968) Hitler’s Social Revolution New York.Google Scholar
  49. Scholz, Robert (1986) ‘Lohn und Beschäftigung als Indikatoren für die soziale Lage der Arbeiterschaft’, in Gerald D. Feldman, C.-L. Holtfrerich, G.A. Ritter and P.-C. Witt (eds), The Adaptation to Inflation, Berlin, pp. 255–88.Google Scholar
  50. Spoerer, Mark (1996) Vom Scheingewinn zum Rtistungsboom: Die Eigenkapitalrentabilität der deutschen Industrieaktien Gesellschaften 1925–1941 Stuttgart.Google Scholar
  51. Tschirbs, Rudolf (1989) ‘Der Ruhrbergmann zwischen Priviligierung und Statusverlust: Lohnpolitik von der Inflation bis zur Rationalisierung’, in Gerald D. Feldman, C.-L. Holtfrerich, G. Ritter and P.-C. Witt (eds), Consequences of Inflation, Berlin, pp. 308–46.Google Scholar
  52. Turner, Henry A. (1985) German Big Business and the Rise of Hitler New York.Google Scholar
  53. Wehler, Hans-Ulrich (1985) The German Empire 1871–1918, Leamington Spa.Google Scholar
  54. Winkler, Heinrich August (1972) Mittelstand, Demokratie und Nationalsozialismus: Die politische Entwickling von Handwerk und Kleinhandel in der Weimarer Republik, Cologne.Google Scholar

Copyright information

© Palgrave Macmillan, a division of Macmillan Publishers Limited 1999

Authors and Affiliations

  • Theo Balderston

There are no affiliations available

Personalised recommendations