Paper and Iron: Hamburg Business and German Politics in the Era of Inflation, 1897-1927 [Hardcover]

Niall Ferguson (Author)

Book Description

Publication Date: May 26, 1995 | ISBN-10: 0521470161 | ISBN-13: 978-0521470162 | Edition: First Edition

Few economic events have had the impact of German hyperinflation in 1923, still remembered as a root cause of Hitler's rise to power; yet in recent years historians have defended the inflationary policies adopted after 1918. Niall Ferguson takes a different view. He argues that inflation was an economic and political disaster, and that alternative economic policies could have stabilized the German currency in 1920. To explain why these were not adopted, he points to long-term defects in the political institutions of the Reich from the 1890s. The book therefore not only reveals the Wilhelmine origins of Weimar's failure: it also casts new light on the origins of the Third Reich.

Editorial Reviews

Review

"...Ferguson makes a valuable contribution to the historiography of German inflation....a valuable reassessment of long-term inflationary pressures in German history." The Historian

"This thoroughly researched and well-written study is a sophisticated substantiation of earlier analyses that pointed out the destructive effects of hyperinflation on Germany." Choice

"This superb work offers revisions of a good deal of previous scholarship on Germany in the late Wilhelminian and the Weimar eras. Future studies of German history in this crucial period will have to take Paper and Iron into account." Michael Richards, German Life

"Niall Ferguson makes a valuable contribution to the historiography of German inflation by recasting the history of the inflation of the early 1920s...This book serves as a useful model for analysis of the relationships between different levels of government. Moving between the world of Hamburg's upper bourgeoisie and the German central government, Paper and Iron provides a valuable reassessment of long-term inflationary pressures in German history." The Historian

"This stimulating and elegantly conceived book skillfully links three major themes-the history of German finance, an analysis of the role of Hamburg in German ,political and economic life, and an examination of Max Warburg, the great Hamburg banker, and of his central role in German financial decision making in the early 1920's." Harold James, Journal of Interdisciplianry History

"There is little doubt that for years to come Paper and Iron will remain one of the most important contributions to the existing body of literature on the economic and political history of the German inflation." Larry Eugene Jones,German Studies Review

"Ferguson's counterfactual produces powerful insights that deserve careful consideration and further investigation..." Gerald D. Feldman, Central European History

"This well-written, imaginative, and lively account, the author's first book, desrves scrutiny by every serious student of Weimar's business, political, and financial history." Elisabeth Glaser, Business History Review

"...a new perpective on one of Germany's major economic centers during the pre-war and Weimar eras." Rebecca S. Fahrlander, The European Studies Journal

Book Description

Few economic events have had the impact of German hyperinflation in 1923, still remembered as a root cause of Hitler's rise to power; yet in recent years historians have defended the inflationary policies adopted after 1918. Niall Ferguson takes a different view. He argues that inflation was an economic and political disaster, and that alternative economic policies could have stabilised the German currency in 1920. To explain why these were not adopted he points to long-term defects in the political institutions of the Reich from the 1890s. The book therefore not only reveals the Wilhelmine origins of Weimar's failure: it also casts new light on the origins of the Third Reich.

Product Details

• Hardcover: 556 pages
• Publisher: Cambridge University Press; First Edition edition (May 26, 1995)
• Language: English
• ISBN-10: 0521470161
• ISBN-13: 978-0521470162
• Product Dimensions: 9.2 x 6.3 x 1.5 inches
• Shipping Weight: 2.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #3,387,511 in Books (See Top 100 in Books)

More About the Author

Niall Ferguson is one of our most renowned historians. He is the bestselling author of numerous books, including The War of the World, Colossus, and Empire.

Customer Reviews

Most Helpful Customer Reviews

15 of 17 people found the following review helpful:

4.0 out of 5 stars Flamboyant first book, July 16, 1999

By A Customer

This review is from: Paper and Iron: Hamburg Business and German Politics in the Era of Inflation, 1897-1927 (Hardcover)

Neil Ferguson's first book is a provocative, erudite treatise that challenges much of the more recent writing on Germany's great inflation. Following Carl-Ludwig Holtferich's pathbreaking work, a consensus had begun to emerge that sees the mark's fall as part of a successful strategy that maintained employment and helped in the recovery of the German economy from WWI, thus giving a crucial boost to the stabilization of the young republic. The rewards of moderate inflation during the immediate post-war period were, according to this view, not confined to the Reich alone - German demand for American manufactures, for example, provided a significant countercyclical stimulus to the U.S. economy during the downturn of the early 1920s. Ferguson's strongest point is that this sideeffect of Germany's inflation undermined one of the main policy aims after 1919 - the revision of the Versailles treaty. According to the architects of 'fulfillment', the inflation would lead to an export boom as the mark's value on the foreign exchanges collapsed faster than in Germany itself. Hence, the Allies would realize that they would ultimately have to pay for German reparations through unemployment at home. Instead, because loose monetary policy caused a boom in the Reich at the very time when other industrialized countries went into recession, the trade balance degenerated as imports surged and exports languished in depressed foreign markets. Ferguson thus exposes an important inconsistency in the inflationary strategy - but it is one that only the benefit of hindsight reveals. The historical accident of the postwar boom in the UK and America turning to bust at exactly the time when the Germans attempted to 'export the cost of reparations' undermined a strategy that was based on accurate economic analysis. And even if the export surge never materialized, the monetary chaos within the Reich arguably did help in reducing inflated demands for reparations - from the 28 billion gold marks demanded by Cunliffe in 1919 to the approximately 4 billion of the London Ultimatum. Ferguson also presents a fresh argument that the 1920/21 easing of inflationary pressures could have been used for a more permanent stabilization - at perhaps 50-60 marks/ $. Three factors contributed to this change in fortunes: the fall in import prices due to postwar depression, foreign speculators expecting a recovery of the mark, and the recovery of output. Yet here, as in other parts of the book, Ferguson pays little attention to the considerable time-lag that operated between individual economic variables. The rise in output during 1920/21 was partly caused by the policies of easy money in the years before. The strength of the mark on the foreign exchanges, underpinned by 'hot money', could only last if Germany embarked on a deflation on the Anglo-Saxon model - something that not even Ferguson thinks was politically or economically possible. The argument is also not helped by simple arithmetic errors that lead Ferguson to overstate the size of the Reich's deficit in 1920 and 1922 (p. 278, p. 477) - revenue of 3.2 billion gold marks in 1920 minus expenditure of 7.1 billion simply does not yield a deficit of 6.1 billion. This book's main contribution therefore lies in the wider questions it raises, and not in the ones it answers. That is no mean achievement in a work that combines a monograph on the inflation in Hamburg with more wide-ranging chapters on the Reich's economic fortunes. For this is a study so rich in its observations about the inflation's effects on Hamburg's shipbuilding, banking, and overseas trade, and about the role of Hanseatic politicians in the policymaking in Berlin, that it could easily be mistaken for a regional study. Nothing could be further from the truth: Paper and Iron will at least partly define the research agenda for future scholars of Germany's great inflation.