Hhe high inflation rates, an energy crisis, weaknesses in the global economy and falling share prices: this is not the first time we are experiencing all of this in Germany. Although the wording is not quite correct: because although there were years of very high inflation and dramatic energy crises in Germany, many people have not had these experiences themselves. Almost everyone alive today only knows 1923, the year of hyperinflation, from history books. The oil price shock of the 1970s is also only remembered by older people. Even the memory of the financial crisis of 2008/2009 is gradually fading. It is often heard from the financial sector that very few of the predominantly young traders in the trading room have ever been confronted with falling share prices for any length of time.
Which brings us to two central questions that not only concern economic historians, but are currently of great importance for every individual: Is it important to have certain experiences oneself in order to draw the right conclusions from them? And, if the answer is yes, might that not ultimately mean that we are unable to learn from economic history?
Now one might think of economic historians as deeply frustrated people. After all, their knowledge is only particularly in demand when the next crisis is already here, and in between is more of interest to specialists. Werner Plumpe, Professor of Economic and Social History at the Goethe University in Frankfurt, takes a pragmatic view of the matter: “Everyone has to make their own experiences. But everyone who has studied history also knows that not every experience catches you unprepared.”
Simple derivations are forbidden
His colleague Albrecht Ritschl from the London School of Economics (LSE) adds: “It often happens that we draw the wrong conclusions from history. Even perfect analogies are not possible. But that means above all that we have to look all the more closely when dealing with the past.” Simple deductions from history are therefore out of the question, even if the Germans have repeatedly tried to do so, as will be shown below. But something can still be learned by reflecting on history.
In 1923 banknotes were weighed. Due to inflation, the currency was hardly worth more than the paper itself.
