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Gl0balCD t1_j37fby0 wrote

The Treaty of Versailles was meant to prevent the Germans from ever having the power to start another war of that scale again (mostly by the French). No one wanted the Weimar Republic to fail, as that would concentrate power with a few individuals.

The problem of reparations can be seen in two lights: willingness to pay, and ability to pay. Germany was one of the largest economies in the world, so the ability to pay shouldn't really be questioned. It was the willingness to pay that was the problem. Who are you going to tax to raise the reparation funds? No one was willing to pay a tax for the war that Germany had been winning right until the end. So they printed money and borrowed foreign currency in international markets.

It was in 1932 when the Americans called in those loans to Germany. This essentially crashed their economy again and made Hitler look like a prophet (he stated that the Americans were not their friends and would financially ruin Germany only months before). Hitler fully intended to do away with the republic if elected, and did it within weeks of becoming Chancellor. It wasn't a guaranteed failure, but it was an explicit goal of the Nazi party.

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DaslolligeLol OP t1_j37o0tp wrote

Germany indeed was one of the largest economies in the world but the reparations where so high that it was almost impossible to pay them while this trouble was going on especially in the early years. Germany paid the last installment in 1989, so it wasn't only the willingness that lacked.

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Gl0balCD t1_j3851yh wrote

It was equivalent to about $270 b USD today (history.com). They had the ability to pay this, but the logistics were another thing. It was not easy to pay out quickly without crashing the German economy, thus the Dawes and Young plans were established.

The fact that they did pay it off after 70 years does indicate the abilities to pay, just not all at once. No one ever expected to receive reparations in one lump sum

The reparations were the same as Germany imposed on France in 1871, matched by inflation. The 1871 reparations were the same as the Napoleonic reparations, adjusted for inflation. You really can't understate the tit-for-tat of Franco-German relations during this time.

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RavenRakeRook t1_j4cmu1o wrote

Using a CPI or GDP deflator index doesn't really work well over such a long time frame. There's been different monetary regimes both in the US and in Germany at that time. You have to look at it as an underwriting of whether the govt could pay and the economy could be taxed. CPI in the US is corrupted a long time ago for political minimization. So whenever I see John D Rockefeller was worth $x billion in today's dollars or a 1890 house was cost $y in 2022 dollars it doesn't really compute. You have to look at average wages and average product prices to get proper proportionality.

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Gl0balCD t1_j4cxwlu wrote

I agree. I just threw in an estimate from a source that has honestly no validity as a reliable source. I totally agree about the problems with using CPI, you should always use a variety of measures such as proportion to GDP or purchasing power. Any historical estimate is going to be questioned because all methods produce different results and each have both advantages and disadvantages. I've seen graphics that have put Mansa Musa or Julius Caesar as the richest person in history, but you can't ever make an apples to apples comparison

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RavenRakeRook t1_j4d6ypl wrote

Economist Keynes's book, The Economic Consequences of the Peace, 1919 (haven't read it) is my go-to as the hyperinflation didn't set in until 1920-23. Quoting Keynes per Wiki:

>I cannot leave this subject as though its just treatment wholly depended either on our pledges or on economic facts. The policy of reducing Germany to servitude for a generation, of degrading the lives of millions of human beings, and of depriving a whole nation of happiness should be abhorrent and detestable, – abhorrent and detestable, even if it was possible, even if it enriched ourselves, even if it did not sow the decay of the whole civilized life of Europe.

When Money Dies mentions that the Nazis rose during the hyperinflation, but once a new Rentenmark in Nov 1923 stabilized the currency, the Nazi's appeal faded away --- until the Great Depression destabilized Germany again.

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