As noted in the introduction to last week's ""Inflation and Culture" Lessons From French History" the value of money acts somewhat like an anchor, helping to hold steady a society's conception of reality. And when that anchor slips, and drags, it can have profound effects on the collective psyche: first unease, then disorientation, followed by anger and then possibly political upheaval.
From the University of Chicago's Booth School of Business' Chicago Booth Review, March 29:
Hyperinflation in 1920s Germany set off ripples that persist a century later.
For many people, the increase in inflation in 2021 was the first time they’d experienced sharp price rises. As the world economy recovered from COVID lockdowns, the Consumer Price Index rose 7 percent in the United States, the largest percentage change since 1981. Inflation in the United Kingdom and Japan hit 40-year highs in 2022.
This surge may have a lasting effect on economic behavior, suggests research by Tilburg University’s Fabio Braggion, University of Zurich’s Felix von Meyerinck, WHU–Otto Beisheim School of Management’s Nic Schaub, and Chicago Booth’s Michael Weber. People’s expectations about price changes can shape decisions on what, when, and how much to consume in the present, and the research suggests it may echo for decades upon decades.
The researchers draw their conclusions from a study of postwar Germany. In 1922–23, German prices shot up almost 150 billionfold , one of the worst inflation shocks on record. Looking at local inflation data from 1920 to 1924 for 633 German towns, as well as consumer sentiment surveys in the 2000s until the current day, the researchers find that people living in areas that experienced hyperinflation still had inflation expectations that were 1.4 percentage points higher than those in places that didn’t.
The researchers also performed a comparative analysis on Polish households. Some areas in present-day Poland were within the borders of Germany during the period of hyperinflation. The study uncovers a similar pattern in that analysis, with particularly pronounced effects in areas that had less migration after World War II.
“Overall, our findings hint towards a general vertical transmission of inflationary shocks across generations,” the researchers write, “and raise the concern that the recent surge in inflation will result in elevated inflation expectations around the globe for a prolonged period of time even when inflation rates will ultimately recede.”
High costs are hard to forget...
....MUCH MORE
And no, the Weimar inflation didn't lead to the rise of the Nazis, that was more the doing of the combination of the Great Depression, the Nazi-Nietzsche "Will to Power," and the rise of mass communication/propaganda.
On the other hand there is no doubt that food inflation was a part of the "Proximal Origin" (as the covid gangsters like to say) of the French Revolution.
And the Nazis? From a 2012 post:
....For comparison, here's how the Nazis and Communists fared in Germany:
December 1924
Communist Party of Germany...............9%
National Socialist Freedom Movement ..3%
In the November 1933 election the National Socialists won 92.11% of the vote.
One final point. The Weimar hyperinflation ran from June 1921 to January
1924. with the sweet spot, if you can call it that, being March to
November 1923. The Nazis attempted to start the revolution in Munich on
November 8th. The Putsch failed.
The point of this data dump and discourse?
The hyperinflation didn't bring the Nazis to power, that happened during the deflationary depression.
If interested, see also October 2022's Nazis: "Our way of taking power and using it would have been inconceivable without the radio and the airplane” and January 2021's "Practical Politics: Never Let a Reichstag Fire Go To Waste"
