The German Inflation Trauma: Weimar’s Policy Lessons Between Persistence and Reconstruction

The notion of a nation-specific inflation trauma among the German population is ubiquitous in the public debate in Germany and beyond. According to a widespread reading of history because of its experience with hyperinflation in 1923, the Germans not only fear rising prices but favor a stability-oriented monetary and fiscal policy. The historical origins of this contemporary understanding of the German inflation trauma are controversial. The majority of the literature presumes that a specific traumatic disposition persists since 1923, and as communicative memory has been transposed intergenerationally (persistence thesis). Others, however, point to a post-hoc reconstruction of past experiences, explaining it as a distinctly cultural memory that is largely detached from the first-hand experiences of 1923 (reconstruction thesis). By drawing on both methods of history and political sciences, we provide new insights on the question of origin. Specifically, we examine the remembrance of hyperinflation in personal memoirs and German Bundestag debates. Doing so, we find plausible support for the logic of reconstruction. We show that individual memories of hyperinflation were ambiguous and hardly ever provided explanations or specific policy lessons. Thus, personal memoirs do not provide any manifest testament for a communicative memory of the German inflation as understood by the persistence thesis. Furthermore, Bundestag speeches in the first decades of the Federal Republic indicate a contested communicative memory of 1923 with conflicting political lessons drawn from the historical experience. As only the Weimar memory transcended into the cultural realm from the 1980s onwards, a process of discursive alignment occurred resulting in the contemporary understanding of the inflation trauma. These findings rebut the persistence thesis and underscore the logic of reconstruction.