Today could be the wrong time for this article, what with Paul Lewis on Twitter suggesting that, rather than fearing inflation, we should not be afraid of DEflation either. However, Martin Odoni has written to warn us against the ‘warning from history’, not about behaving like the Nazis, but about behaving in a way that opens the door to the Nazis. He writes:
One of the most frequent forms this takes is the ‘Beware-The-Mistakes-Of-The-1920’s’ argument… The warning focuses on how the phenomenon of ‘Hyperinflation’ supposedly killed [the Weimar Republic] off.
There was indeed a bewildering period of out-of-control inflation in the Weimar Republic in the early-1920’s, and it led to terrible hardship for its people… In this light, it becomes understandable that people in Germany ended up rejecting democracy and adopted authoritarianism in the years ahead… There is just one problem with this interpretation of the time. It is completely untrue.
It involves directly and immediately linking two events that in reality were over half-a-decade apart, and ignoring everything that happened in between times. And a lot of very significant events did happen in between times. There was no inevitability whatever during Hyperinflation that an extremist right-wing Government would take over, and for some years after 1923, the possibility became very much more, not less, remote.
The problem, Martin writes, is this: The myth causes many a mind at the Exchequer to think that any amount of inflation is undesirable, and to imagine that it is the one danger, above all others, that must be guarded against at any cost.
In fact, as Martin discusses, Osborne’s neoliberal ideology demands a vast number of unemployed people – and this is far more likely to bring about the rise of authoritarianism along Hitler’s lines than hyperinflation.
The article is on The Critique Archives and shows up yet another mistake by our political leaders, who should know better. Even Osborne studied history!
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