A Further Analysis of the Economics of Radical Change


April 16, 2020

My Dear Reader,

In continuing our investigation of economics and radical change, I thought it would be pertinent to move the conversation ahead to the rise of the Nazi party in Germany following their defeat in World War One.

It was a clear day on May the 10th, 1871.  As the spring rains had given way to the summer sun, the full beauty of the French countryside could be taken in by everyone.  Though on this day, the French would have traded all of their sunny days for a second chance at the months preceding it. They had just been handed a humiliating defeat at the hands of the Germanic princes and the revitalized Prussians, and worse still, the treaty they were forced to sign gave away most of the western lands that the great Louis XIV had claimed just one hundred and fifty years prior.  It took this massive and humiliating defeat to rally the French people around their ideals established in the French Revolution. For forty years they waited, in an era known as revanchism , before they drafted the treaty of Versailles at the end of World War One. Not only did France demand her territory back, but she also carved away the colonial and non-ethnic German provinces out of her rival.  

In the immediate aftermath of Germany’s defeat, radical groups who in large part opposed the conflict, such as the communist group “Spartacus League” an English history education center, known as “school history” wrote about the early days of the German communist party after World War One.

“In the elections to the National Assembly on January 19, 1919, the SPD (Social Democratic Party of Germany) became the strongest party. In fact, by refusing to participate in the parliamentary elections, the KPD was further sidelined and reduced by the persecution and arrest of its members. It had been banned in the spring of 1919 and was only able to carry out its subsequent party congresses illegally. Members of the communist party started to be persecuted and murdered. For instance, one of the victims was Leo Jogiches, who was killed in the Berlin-Moabit detention centre in March. Military and security police used firearms against the Communists. On January 13, 1920, the result was a bloodbath at the Reichstag building. As a consequence, the social-democratic Reich government imposed once again the state of emergency, which was only lifted in December 1919, and banned the newspapers Freiheit und der Rote Fahne. On January 19, twelve party officials of the USPD and the KPD, including the chairmen Ernst Däumig and Paul Levi, were detained for some time.”

What is evident here is not just the use of force by the Wiemar Republic, which was more of a democracy, but the fact that they had to use force.  When an economic recession hits in a stable republic or nation, the people typically have enough trust in the government to attempt to keep a status quo. However, the Wiemar Republic was a new creation, and was even seen as forgin by some German Nationalists.  One such man was a dispatch runner on the Western Front by the name of Adolf Hitler. Shaped by the hellfire of the Great War, Adolf Hitler hated the Wiemar republic and joined the newly created National Socialist German Workers party, or Nazi Party.

In 1924, Hitler, inspired by Mussolini’s overthrow of the Italian Government, attempted to march on Berlin. In what became known as the Beer Hall Putsch, Hitler was arrested, some of his cohorts were killed and he began to work on his manifesto, Mein Kampf.

I tell you this long tale of political fallout because it’s important to know that radical movements can always be quelled when a country’s economy is recovering or running smoothly. For further proof of this fact, alongside our Russia analysis from this week, I’d like to point to sales of Mein Kampf before the Great Depression of 1928. 

A business insider article from 2016 details this further:

“Initially sales of Hitler’s anti-Semitic diatribe didn’t capture Germany’s attention.“They sold, so-so,” Dr. Pascal Trees, a research associate at the Institute for Contemporary History, said in the Smithsonian documentary “Hitler’s Riches.” “To be perfectly frank, it’s not a good read,” Trees said. The führer’s notorious memoir was first published in 1924 and cost 12 deutsche marks, according to Trees.”

We can gather from Dr. Trees that during the German recovery of 1921-1927, the people were not interested in the radical and anti-semitic politics of either the communists or the Nazis.  This is reflected in the election data from those years. In 1924 the Nazi party received 36,291 votes, or .01% of the total possible. By 1928 they had expanded to 810,127, or 2.6% of the total number of votes.  However by the time the economy had crashed in 1932, the Nazi party received 13,745,680 votes, or 37% of the total number.  By that time, Germany’s fate was sealed.  

In my estimation, this proves that economic devastation can be far more dangerous than a war or plague, as it can be the fertile ground on which evil can grow.  But what happens in a country as polarized as our nation is at the moment? To conclude this series, I’d like to turn your attention to Spain, in the spring of 1936.