The period after World War I can be discussed as rather challenging for the development of the countries which were defeated during the war. As the main aggressor, Germany faced the most dramatic consequences of World War I and experienced the political, economic, and social collapse.
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The state developed as the superpower before the progress of the war, and the aftermath of World War I for Germany was in the necessity to pay reparations and to realize the required disarmament. From this point, it is necessary to examine the consequences of World War I for Germany and to contrast the aspects of the country’s political, economic, and social development before and after the war.
In spite of the fact that Germany was one of the most powerful European states before the war’s start in 1914, World War I led to the political, economic, and social decline in the country during the early 1920s; the contrast was caused by the inability of Germany to realize its intentions to become the extended superpower while using the means of war and by the inability to follow the conditions mentioned in the Versailles Treaty regarding reparations and disarmament.
How Germany Lost Its Position of the Superpower and Became the Weak European State
The end of World War I was associated with signing the Treaty of Versailles and with the necessary armistice based on a range of stated conditions. The Allied Forces concluded that Germany’s intentions and military actions were the main causes for the progress of World War I.
As a result, the Allied Forces concluded about Germany’s responsibility for compensating the losses caused by the dramatic war conflict and for paying reparations to the countries winning in the war. This decision was one of the main causes for the country’s economic decline during the period of the 1920s.
Furthermore, the costs of the war and human and economic losses should also be discussed as significant reasons to speak about Germany’s decline after World War I. Developing the potential as the European superpower, Germany focused on the war conflict as the way to expand the territories and to gain more resources while occupying the French territories. As a result, a lot of money was spent for mobilizing troops.
The focus on the war became the priority for the German government, and significant material resources were spent to satisfy the needs of the troops. Much attention was paid to the aspects of the mobilization and militarization in order to contribute to the further progress of the German state.
However, the expected results were not achieved. Germany was the economically and socially prosperous state before World War I, but the focus on the war led to the decline in industries and agriculture because of losses in territories and resources. The shift from the superpower to the weakened state was rapid and impetuous, and the defeat in World War I was the main cause for the process.
Differences in the German Economy before and after World War I
Germany was discussed by politicians and economists as the real threat to the stability and power of Britain and France before World War I because of the intensive economic development.
Despite the fact that the history of the united country was extremely short, the economic and political potential of Germany was significant. Thus, the German lands were united in the 1870s to build the powerful state, and the country’s potential was stated during the Franco-Prussian War in the 1870s when France was defeated, and new industrial territories were occupied.
During the period before 1914, Germany developed as one of the most powerful industrial states because of the focus on producing steel. Having occupied the defeated French territories of Alsace-Lorraine, the country received a lot of resources to produce steel and to develop different industries during the early part of the twentieth century.
The industrial progress and economic stability led to the development of Germany as one of the main naval European countries. Germany developed its potential as the naval state in several years, and this situation became the real challenge for Britain which took the position as the most powerful naval country in Europe.
The other field for the progress was associated with the development of the German colonies and with the country’s aggressive approach to provide stability in the African colonies and oppress the revolts. Thus, the economic development of Germany before World War I could be characterized by the stable growth and orientation to the progress.
The situation can be discussed as quite opposite while discussing the aftermath of World War I. The defeat of Germany was connected with significant human and material losses, and moreover, the state’s defeat meant that Germany was ordered to pay reparations in more than $30 billion.
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Thus, “the Allies made extortionate reparation demands which caused a balance of payments deficit and resulted in a disastrous fall in the exchange rate”. However, according to the Treaty of Versailles, Germany lost the French industrial territories and the other occupied territories that supported the industrial development of the state.
Germany lost such territories as “Upper Silesia, Alsace-Lorraine, the Saar district, most of Posen and part of west Prussia, Schleswig, Danzig, the Baltic part of Memel, the Western frontier districts of Eupen and Malmedy and a small area near Troppau”; and Germany became depended on “foodstuffs and raw material imports, because the regions lost were particularly rich in agricultural and industrial resources”.
Thus, Germany lost 15% of the arable land and 75% of the iron ore deposits. The impossibility to reorganize and restructure industries because of the lack of necessary resources caused the impossibility to pay reparations.
The shift to the new economic order was problematic, and the instability of the German economy along with the growth of the reparation debt resulted in hyperinflation. According to Hetzel, in 1913, “total currency in Germany amounted to just 6 billion marks”. Nevertheless, the situation changed dramatically after the war and in 1923, “a loaf of bread cost 428 billion marks and a kilogram of butter almost 6,000 billion marks”.
It is possible to determine several causes for such economic decline in Germany during the period of the 1919-1923. Thus, the economic cause of hyperinflation was “the monetization of public and private debt by Germany’s central bank, the Reichsbank. The political cause lay in the inability of a fragile democracy to impose the taxes necessary to pay war reparations”. Inflation of 1918-1919 became the hyperinflation of 1920-1923, and the extreme measures were necessary to stabilize the situation.
If the period after World War I was discussed as contrasting to the period before the Great War, the situation changed in 1924 when Germany asked the US financial assistance. According to the Dawes Plan, the United States provided the necessary loans for Germany in order to guarantee the payment of reparations.
In spite of the fact the conditions of the plan were rather unfavorable for Germany, this plan contributed to stabilizing the economy, to developing the industries, and to improving the social sphere. $25 billion provided by the United States contributed to the reconstruction of Germany’s status as the economically stable state, but the crisis of 1929 led to one more extreme economic decline.
The Political Situation in Germany of the 1920s in Contrast to the Pre-War Situation
Before 1914, Germany was the imperialistic and autocratic superpower which also influenced the distribution of powers in Europe. The focus on imperialism and militarism was associated with the country’s significant plans to gain the European strategically and economically important territories and to state the political and economic domination not only in the region but also on those continents where Germany had the colonies.
It seemed that there were not boundaries for the progress of the German Empire, and the German monarchy was oriented to dominating Europe as the most powerful naval and industrial state. That is why, the German monarchy chose to focus on occupying more territories and developing the plans for the military invasions.
Nevertheless, World War I caused by the aggressive actions of the German monarchy did not lead to the progress of the state, but instead, the war resulted in the German Empire’s collapse. In 1918-1919, the German state experienced the challenging revolution which symbolized the shift to the new political order.
The Social Democrats became the leading party in the country, and the period of the Weimar Republic began. From this point, one of the main consequences of World War I for the progress of the German state is the shift from the German monarchy to the democratic rule.
Nevertheless, comparing and contrasting the periods before and after World War I, it is important to note that the imperialistic Germany achieved more significant results, and the German monarchy was associated with the idea of the political stability when the first years of the Weimar Republic were associated with the periods of the political and economic instability.
The period of 1924-1929 is often discussed as the ‘Golden Years’ of the Weimar Republic because of the authorities’ reliance on the economic assistance of the United States. However, it is impossible to speak about the political stability in the country during the interwar period because many different parties, including the extremist ones, received the opportunity to enter Parliament and to influence the political development of the country.
This aspect was discussed as positive during the post-war period, but it became the threat for the state’s political stability in the late 1920s. From this point, the German monarchy can be discussed as more stable in comparison with the German democracy of the 1920s.
The Aspects of the Social Life in the Country before and after World War I
In spite of the developed imperialism, the German Empire before 1914 was the prosperous state where the aspects of the social life were closely associated with the continuous economic progress because of the increased industrialization and development of agriculture. On the contrary, the first years after World War I were characterized with references to the destroyed industries, economy, and agriculture. The problems in heavy industries led to the significant unemployment rates, and inflation made the situation worse.
Many people suffered from the lack of money, impossibility to find work, and from drastic living conditions. Although the democratic rule was stated in Germany after World War I, middle and low classes suffered from poor living conditions and poverty more dramatically than during the worst years of the empire’s development.
The authorities reacted to the public’s struggles and focused on the social spendings, but this approach led to the increase of the financial debt because of inflation of the German currency. The concentration on the transportation projects and on ways to modernize the low percentage of industries was not effective, the unemployment rate increased, and the municipals’ capitals were not enough to change the situation for better.
The economic problems and the results of the war affected different categories of the German population. Many people lost not only the members of their families and their jobs but also houses. The housing problem was critical during a long period of time, till the housing project was developed during the mid-1920s.
The dramatic consequences of the war influenced the representatives of the upper middle and high classes who became bankrupts because of the hyperinflation; the war affected workers and representatives of the lower classes who became suffering from unemployment, inability to work in industries, and from the housing problem; and the aftermath of the war was also dramatic for farmers because the whole system of agriculture was destroyed because many economically significant lands were given up.
The situation began to improve in 1924 when the first financial resources were received as the US assistance for Germany. The introduced social reforms contributed to improving the population’s living conditions.
Furthermore, the programs for overcoming the unemployment problem were implemented along with the multiple housing programs which were worked out because of the necessity to create the stable situation for the society’s development. However, the progress was not long, and the crisis of 1929 threw all the social achievements back to the post-war period when the social life of the German population was described as full of sufferings and challenges.
During the period of 1870-1914, Germany was the prosperous empire which used the imperialist approaches in order to state its domination in Europe.
In spite of rejecting the principles of democracy and the active use military means, Germany was described as the superpower because of the stable political approach to resolving the challenging situations and because of the focus on the economic progress. Germany concentrated on the industrial development and became the powerful naval state. The opposite situation is observed during the period of 1918-1923.
World War I influenced the development of the German country significantly, and the effects were negative because the war led to the challenging revolution, to the significant losses in human and material resources, and to the obvious economic ad social decline. From this point, the focus on expanding the state’s impact in Europe led to the great military conflict and to the dramatic negative consequences for Germany because the empire was defeated and ordered to pay significant reparations to the winning countries.
Braun, H. (2012). German economy in the twentieth century. USA: Routledge.
Hetzel, R. (2002). German monetary history in the first half of the twentieth century. Economic Quarterly, 88(1), 1-35.
Owen-Smith, E. (2002). The German economy. USA: Routledge.
Retallack, J. (2006). The German Right, 1860-1920: Political limits of the authoritarian imagination. USA: University of Toronto Press.
Temin, P., & Toniolo, G. (2008). The world economy between the wars. USA: Oxford University Press.
- Owen-Smith 2002: 2.
- Retallack 2006: 18-20.
- Hetzel 2002: 2.
- Braun 2012: 9.
- Braun 2012: 7-8.
- Owen-Smith 2002: 4.
- Braun 2012: 10.
- Owen-Smith 2002: 5.
- Hetzel 2002: 2.
- Ibid., 2.
- Hetzel 2002: 2-3.
- Retallack 2006: 25.
- Temin & Toniolo 2008.
- Temin & Toniolo 2008.
- Owen-Smith 2002.
- Hetzel 2002: 28.
- Braun 2012.
- Owen-Smith 2002.