Reacting To Economic Challenges 1918-1932 Flashcards
What can you judge the strength/weakness of an economy on?
Trade
Inflation
Growth: GDP
Employment
Redistribution of wealth: class, welfare system, living standards
What was Germany;s economy like following WW1?
-high inflation
-poor living standards due to reparations
-lack of money and resources
-perceived as worthless
What were Germany’s 4 economic problems?
Debt : Germany debt = 144,000 million marks, currency lost over 1/3 pre war value
Industrial potential : Germany’s industry potential was severely crippled by loss of Saarland and Upper Silesia
Investment : Germany had little hope of attracting foreign investment when capital was in short supply
Reparations : total liability of £6,600 million, annual payments equivalent to 1/4 of all German exports
What were the positive elements of Germany’s economy after ww1?
-export trade increased
-unemployment fell sharply
-working class benefitted
Weimar’s post ww1 war debt
-1914-1918 government borrowed almost 150 billion marks, government raised around M7/M8 billion in taxes which was enough to pay interest of debt but not enough to reduce it
Weimar’s pose ww1 reparations
ToV forced Germany to pay reparations. Inter-Allied Reparations commission of 1921 set figure of £6,600 million. Germany could pay this back by sending goods such as coal
Weimar’s post ww1 loss of income
ToV meant Germany lost territory. German coal productions declined by more than 15%. Lost almost half of deposits of iron-ore. Economy = less profitable
Weimar post-ww1 unemployment
6 million soldiers left the army during 1919 = knock on effect for women who were sacke to allow returning soldiers jobs. February 1919 = 1.1 million without jobs.
Economic effects of hyper-inflation
-industrialists enjoyed cheap credit
-landowners and middle class house holders paid off their mortgages in inflated currency
-homeowners + pensioners = incomes evaporated by scale of inflation
Social effects of hyperinflation
-workers benefitted it middle class didn’t as inflation wiped out their savings
-health conditions plummeted, infant mortality rates increased, average lifespan declined, disease spread easily
Political effects of hyperinflation
-industrialists blamed workers for high wages
-everyone blamed civil servants
Who suffered from hyperinflation?
Middle class as their savings were wiped out. Working class benfitted
What was hyperinflation caused by?
Government printing more money in order to pay striking workers
What did hyperinflation cause?
Uprisings as groups wanted to take power from government, people could pay off loans, loss in savings
Problems from hyperinflation
-passive resistance was costing the government too much
-government spending too much money
-currency had become worthless