BOOK REVIEW: ‘The Downfall of Money’

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THE DOWNFALL OF MONEY: GERMANY’S HYPERINFLATION AND THE DESTRUCTION OF THE MIDDLE CLASS
By Frederick Taylor
Bloomsbury, $30, 416 pages, illustrated

The British historian Frederick Taylor has written so brilliantly and incisively about Adolf Hitler that it is no surprise that he has turned his attention to the German economic meltdown generally credited with allowing that madman to take control of one of Europe’s great nations. However, Mr. Taylor rightly begins his story much earlier, not merely with World War I, which ruined Germany and its political and economic stability, but with the fatal decision in July 1914 — before hostilities had even broken out — to abandon convertibility of its currency into gold.

The total inability of Germany’s citizenry to have any faith in its national currency or credit inevitably had political effects long after a new system was established. Mr. Taylor illuminates these seeds — sown years before Hitler came to power, after the Great Depression delivered yet another blow to the still-bruised and barely recovering German economy — in a chapter titled “Everyone Wants A Dictator.” They led to “a unique consensus of universal national catastrophe” and “many lost what trust they had in the Republic. Democracy withered. And then Hitler, the troublemaker from Munich, did finally conquer Berlin.” And he shows no doubt of its continuing effects:

“This consensus still haunts the nation’s collective memory and constitutes a decisive influence on German government policy, even in the twenty-first century.”

“The Downfall of Money” does not just generalize and analyze. It is full of concrete examples of just what happens to people when their money has lost its value. Government could not raise the price of tickets for trains and buses fast enough, so they cost a pittance — so did movie, theater or opera tickets — whereas commodities necessary for survival could often only be had through barter — if you had anything to trade, that is. Fourteen dollar bills, changed one at a time each time for astronomically more marks, were enough to keep a young man going for a fortnight. However, as that man writes, “Admittedly I was in a privileged position. How many others could live off dollar bills?” And Mr. Taylor follows immediately with a case in point:

“An elderly Berlin literary man withdrew all his savings — 100,000 marks, formerly sufficient to support a modestly comfortable retirement — and purchased all it would buy by that time: a subway ticket. The old gentleman took a last ride around his city, then went back to his apartment and locked himself in. There he died of hunger.”

Mr. Taylor’s book, “Exorcising Hitler,” proved the author’s prowess at social and political historiography and a magnificent grasp of Germany as a whole. “The Downfall of Money” demonstrates that superb attunement to Germany anew and also his mastery as an economic historian. He examines the reasons why this catastrophe was a particularly “German trauma” and understandably frames his book in the context of the country’s unease today with its submersion in the eurozone:

“Clearly, for all Germany’s renewed prosperity, the ninety-year-old national sense of trauma has not yet been fully overcome. The problem for the world may be that Germany’s instinct is correct.”

That Mr. Taylor chooses to end his book with these ominous words shows how lingering are the effects of what he has so vividly and assiduously chronicled here.

Firmly and rightly grounded in its own time and place, “The Downfall of Money” nonetheless resonates in our own. I suspect that it reads — and perhaps might even have been written — very differently from just a decade ago. However, through current lenses, it screams the words “cautionary tale” loud and clear. Yes, yes, I know that losing a world war had so much to do with Germany’s plight as to merit the old “aside from that Mrs. Lincoln, how did you enjoy the play?” comparison. I know that our current financial policymakers count on American pre-eminence in the world safeguarding us from the consequences of their actions, and that in a world where crises result in a “flight to quality” — i.e., toward U.S. financial instruments — this has protected us thus far. Nevertheless, things can change awfully quickly, and then those chickens could come home to roost with their disastrous consequences — just when we can least bear them.

I was going to say that I wish all those who currently direct our finances would read this book, but then I suppose they would view it through their own self-justifying lenses. Still, it beggars belief that anyone could read this chilling account without realizing what can happen when you flout normative financial practices and political responsibility.

Martin Rubin is a writer and critic in Pasadena, Calif.

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