"Weimar and Russia" forum Institute of International Studies, UC Berkeley: Currents
Gerald Feldman "There is no small irony in the fact that today many people are arguing that contemporary Russia can avoid the fate of Weimar Germany only if its former international political foes do everything possible to stabilize the country economically and politically ... Creditor nations and agencies can no more control the internal management of Russia in the present period than of Germany in the 1920s. In Russia as in Germany, the terms of economic reconstruction will ultimately be determined by domestic politics and not simply from abroad." |
Gerald Feldman, Professor of History, is one of the world's leading scholars on Germany between the wars. His most recent book, published by Oxford University Press, is The Great Disorder: Politics, Economics, and Society in the German Inflation, 1914-1924. |
he question that has been raised for this panel--is there an analogy between
the Weimar Republic and Russia--is not a new one but rather an old one, and I
think that the history of the question has great relevance for our current
discussion. In 1919, the nascent Weimar Republic, born of a revolution created
by Soldiers and Workers Councils that appeared to be modeled on the soviets,
seemed threatened by "Bolshevik conditions." Moderate Social Democrats and
their middle-class allies argued that unless Germany's former enemies supplied
food, basic necessities, money, and generous peace terms, Germany would succumb
to Russian conditions. At the same time, they justified their employment of
right-wing Free Corps units and their alliance with the forces of the old order
in the army, industry, and bureaucracy with the argument that these measures
were necessary to prevent Bolshevism. In short, the Weimar Republic was created
by people who feared that Germany would become like Russia unless Germany's
former enemies provided the economic and political support needed to stabilize
the country, and unless the forces of radical domestic reform were put down.
here is thus no small irony in the fact that today many people are arguing
that contemporary Russia can avoid the fate of Weimar Germany only if its
former international political foes and international organizations like the
IMF do everything possible to stabilize the country economically and
politically, while understanding that its leadership must compromise with the
military leaders, industrial managers, and nationalists who wish to limit
reforms. In the 1919 German case, the advocates of more thoroughgoing reform
were suppressed with the argument that this was the only way to keep out Lenin,
Luxemburg, and Liebknecht. In the present Russian case, there are those who
argue that the reformers have to be thrown out and the so-called "shock
therapy" terminated to prevent Mr. Zhirinovsky from becoming Russia's Hitler.
o serious student of Weimar history today believes that Germany was threatened
with Bolshevism in 1919. The Sparticists, as the Communists were first called,
were poorly led, badly organized, and easily suppressed. More importantly,
Germany was not like Russia. It had an extremely well-organized (indeed, overly
organized) civil society, with a tradition of universal suffrage in the Reich;
it had political parties of long standing, mighty trade union organizations,
powerful and confident employer groups, farmers well practiced in agitation for
their interests, and a veritable mania for association on all levels for all
sorts of purposes. Germany was an advanced industrial society, a capitalist
society with a reasonably developed bourgeoisie well schooled in commercial and
financial practices, and stood second only to the United States in its
development. Germany, in short, had everything that Russia lacked to resist the
chaos and disorder that marked the early years of the communist regime and the
bizarre economic experimentation that characterized that regime throughout most
of its history. It took National Socialism to paralyze the forces of civil
society in Germany, brush aside normal interest-group politics, and, through a
remarkable combination of charismatic leadership and genuine organizational
achievement, assert the primacy of racial and social Darwinist politics. Yet
even the bombed-out Germany of 1945 had the latent industrial capacity of the
Germany of 1936, and was set to go once the Allies permitted German
reconstruction.
ust as in 1919, so three-quarters of a century later in 1994, comparisons
between the Germany of 1919-1933 and Russia suffer because Germany is so
advanced and Russia, despite all the industrial progress since 1919, remains so
abysmally backward in its social and political development. The Weimar
Republic's collapse and the National Socialist seizure of power took place in a
highly advanced industrial society with a very advanced political and social
system where democracy had been tried and had failed. Similar analogies cannot
be made with the collapse of the Soviet Union a few years ago and with the
current state of affairs in Russia. Between 1930 and 1933, the majority of
Germans rejected what they called "the system." In the Soviet Union, the
system, such as it was, committed suicide, and at least as far as I can tell,
it has not been replaced by any new system that is clearly definable. Russian
civil society appears too insufficiently developed yet to define something that
is genuinely new and that is capable of being focused on as an object of
attack. While one can and should take the things Mr. Zhirinovsky says quite
seriously insofar as they strike a responsive chord in segments of the Russian
people and influence current policy, it would be a mistake to compare him or
his party at this point with the much more formidable National Socialists.
History, of course, has provided many unpleasant surprises; but they are then
genuine surprises, not repetitions of yesteryear. One of the most dangerous
things we can do is to attempt one-to-one analogies between Russia and Weimar
on the basis of a checklist of allegedly similar happenings and developments.
aving made this point, I do not want to suggest that we disperse, and I think
that much can be learned from Weimar, which at the very minimum is useful for
heuristic purposes. Take for example the question of inflation and
hyperinflation. Monetary inflation is a mechanism by which weak governments
seek to deal with the problems they are unable to manage through the normal
methods of belt-tightening, cost-cutting, taxation, and the productive use of
their credit. In the Weimar Republic, inflation served three functions. First,
it promoted social peace and effectively saved the republic in its early years
by allowing the continuation of price controls and the subsidization of high
employment by underwriting the inefficient operation of public (and also some
private) enterprises. Insofar as goods disappeared into the black market, they
could be afforded because of a wage-price spiral that was allowed and even
encouraged and because certain persons and groups had access to foreign
exchange. Inflation is a mechanism of buying time for governments in trouble,
and here there certainly are analogies between the uses of inflation in Weimar
and in contemporary Russia. Needless to say, the employment of inflation for
social pacification is an unjust method that leads to the expropriation of
savers and the impoverishment of those dependent on fixed liquid assets, while
favoring those who hold wanted goods and foreign exchange. When it all comes to
an end, if it comes to an end, the problem that remains is not simply one of
reconstructing the monetary system but also of reconstructing the notions of
fairness and justice, of equity and good faith, which have been damaged in the
process. This was very difficult in Weimar Germany, and it certainly will be
very difficult in Russia.
o some extent, the untoward effects of inflation in Weimar Germany were
compensated for by the second function of inflation, namely, as an instrument
of economic reconstruction. Here I am not sure there is much analogy with
Russia. In Weimar, a very advanced group of entrepreneurs was able to use
inflation to dump their goods abroad at cheap prices, procure foreign exchange,
and then use the foreign exchange to reconstruct their plants at home. In the
process, they were also able to restore a measure of Germany's international
commercial role in the world. Furthermore, all this was made possible by the
willingness of hard currency countries to hold marks and speculate on the
Germans returning to their prewar work habits. Here I see little analogy with
Russia, since no sane person would invest in Russians returning to their old
work habits, the market for Russian goods appears very limited, and more
generally, the entrepreneurial types and bankers who engaged in this process
are hard to find in Russia--they're not to be confused with the crooks who are
running around in Russia today.
ventually, the German inflationary reconstruction degenerated into stagflation
as the world lost faith in the Germans and their currency, German competitors
took more protectionist antidumping measures, and German prices reached world
market levels. As far as I can tell, the Russians are starting off in
stagflation without experiencing the benefits of inflationary reconstruction.
ermany thus obviously had some advantages as a pioneer in the uses of
inflation which are not so easily available to others, and this also holds true
of the third use which the Germans made of inflation, namely, as a weapon
against the reparations clauses of the Treaty of Versailles. The Germans argued
that they could only pay reparations if the bill was cut down; they received a
breathing space to put their house in order, and they received a large-scale
international stabilization loan. The Allied response was that the Germans had
first to undergo what is today called "shock therapy," that is, economic regime
change, and thus demonstrate the credit worthiness necessary to qualify for
international financial assistance as well possibly have a convincing basis for
the mitigation of their obligations. The debate was ended when the French
occupied the Ruhr and the Germans were forced to engage in shock therapy in
order to qualify for the famous Dawes loans which financed reparations and
German reconstruction during the brief years of Weimar prosperity. While the
Russians do not face a reparations bill, they do face the problem of needing
loans and having to pay interest on them, and the demands of their potential
and actual creditors that they put their house in order as a precondition for
receiving assistance.
s the late William C. McNeil has shown in his study American Money and the
Weimar Republic (New York: Columbia University Press, 1986), Weimar was one of
the earliest illustrations of the difficulties encountered by creditors in
getting their debtors to live up to their promises of financial probity under
conditions of political tension and distributional conflict. One of his more
important points, however, is that the demands of creditors become the
instruments of those with special agendas in domestic politics. In the case of
Weimar, wages and social benefits recovered too rapidly and too well; domestic
savings were inadequate; conservative critics constantly warned that Germany's
dependence on foreign money was too great and costs too high to compete on
world markets. At the same time, nationalists claimed that foreign capitalists
were exploiting Germany for their own purposes, a claim not dissimilar to that
made by Russian nationalists today. When the Depression came, the critics of
German domestic and foreign policies appeared to be correct, and the question
then arose as to how to make the shock therapy of 1924 permanent domestically,
a goal that could only be achieved by authoritarian means. The concomitant
question was how to free the country from its international shackles. Insofar
as those in power were prepared to accept a measure of reflation, it had to be
reflation that served their purposes, which meant that it had to be under
authoritarian auspices.
hat this experience suggests, when one contemplates the even weaker Russian
government and the chaotic conditions under which it is forced to operate, is
that even the most successful shock therapy is unlikely to have lasting effects
satisfying to creditors unless those creditors are prepared to take a long-term
interest in the political stability as well as the economic prudence of the
Russians. This may mean that one will have to accept flushing some good money
down the toilet on the theory that the Zhirinovskys will be flushed along with
it. As in the 1930s, so now, the richer nations are weakened by their own
financial and economic difficulties, and are not in much of a giving mood. Even
if they were, however, one must raise the issue of whether such stability can
be maintained democratically. It is important to note that creditor nations and
agencies can no more control the internal management of Russia in the present
period than of Germany in the 1920s. Both the Weimar Republic and contemporary
Russia are great powers despite their weakened condition, and great powers do
not accept receivers to manage their affairs. In Russia as in Germany, the
terms of economic reconstruction will ultimately be determined by domestic
politics and not simply from abroad.
t is here, alas, that one has most cause to worry. Russia has much less of a
democratic tradition than Germany, much less experience with parliamentary
government, much less experience with capitalism, and many more entrenched
interests that are unproductive and backward. The acceptance of Western and
democratic traditions, as well as of capitalism, has taken a long time in
Germany, and has only really been successful after 1945. The German experience
gives some measure of how far Russia has to go. As an outside observer of
Russian affairs, it is very hard for me to see a happy solution unless Russia
is given a great deal more outside support than outsiders are prepared to give,
and unless one is in fact prepared to swallow a great deal of waste while
waiting upon a political and economic transformation and a turn-away from
strong anti-Western tendencies and old collectivist tendencies. In the last
analysis, Russia's problems and deficits vastly outstrip those of Weimar;
hopefully, however, the outcome will be less barbarous.