Research Paper on "Economic Problems in Germany After WWI"

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The Weimar republic was formed as a result of the World War I when Germany lost. The German troops could not intrude into the western front in their war against the British and French armies. The British navy obstructed their ports which caused the Germans to be subjected to a lot of adversities. It caused the loss of Germany to be almost certain. All the disorder led to the new government being organized. They had two options as far as the government was concerned. One of them was to form a democratic organization supported by the social democrats, which were among the most powerful political parties at that time. The other one was to follow a communistic approach which was among the top priorities of the Spartacus league guided by Karl Liebknecht and Rosa Luxemburg. They made a lot of efforts to take control with an attack over Berlin. This uprising was soon stopped by the freikorps units who had a larger army. The freikorps made several merciless attacks in early 1919 killing off a lot of people including Karl and Rosa, who were taken into custody on the 14th of January and then shot. Their death was the start of a lot of proceedings in Germany's political sector. It caused a significant dent in the relations between the Communist party of Germany or the KPD and the Social Democratic part of the SPD, who were responsible for how the freikorps operated. It eventually led to a situation where a reunion of the two parties during the period of the Weimar was not probable.

The treaty of Versailles was made official on the 28th of June, 1919. Clemenceau from France and Lloyd George from Britain had set up a plan as a way to satisfy their vengeance against Germany even though some of their points-of-view were different. Clemenceau wanted to direct all his efforts towards destroying Germany. This was due to the repercussions of France having its north eastern side demolished by Germany. He did not want that to happen again and wanted to make sure that Germany was in no position to consider future attacks.

The peace resolution which was finalized was considered as a shame by the extreme right front, most of which was blamed on the Weimar republic. The politicians who accepted the settlement in 1918 were discouraged in the following years and treated as criminals. As the terms of the peace treaty were declared to the public, they were highly criticized by both the extreme right front and the general opinion which voiced the nation's politics. Not only did they protest against the conditions of the treaty but also on the way it was presented against Germany. When it came out, it was believed that Germany would make further discussions with the allies to negotiate the terms and that these would be decided based on Woodrow Wilson's fourteen points, neither of which happened. It led to the treaty of Versailles to be stamped as a dictated peace treaty or diktat.

Germany had to deal with a lot of retributions as a result of the clause. They had to present themselves as being the cause of starting a war. This directly implied that they were financially responsible for the damages which were brought on by the war. Considering the magnitude of devastation caused, this amounted to a lot of money. Most of the compensation was supposed to be received by Belgium and France. Their financial architecture and general life were affected the most by the war. The final amount charged from Germany was not declared by the treaty right away. As per the calculations of a team set up in this regard (Inter-Allied Reparations Commission), the final amount equaled to over several billion pounds. This was way beyond what Germany could manage to accumulate. The financial losses were coupled with losing different territories which were distributed to other countries. Belgium took over Malmedy and Eupen, France received the control over Lorraine and Alsace while West Prussia and Posen were given to Poland. The territories located overseas, under the control of Germany came under the rule of France and Britain. Germany was also forced to restrict its military strength. It was forbidden to have strength of over 10 thousand in its army, with only six battleships in the navy and was not allowed to have any kind of air force. Operations of any military forces were disallowed in the Rhineland area on the border of Germany and France. This was to protect the French from having to deal with attacks and feel safe. Readily accepting the conditions presented by the treaty was very hard for the Germans. They were left with no other option but to taking steps of reprisal against the allies and the group who had signed the treaty in the first place.

The early steps in the retaliation included a demonstration across Berlin where Wolfgang Kapp got together with over 5000 others on the march of 1920 to create the right wing government. They declared a strike where all the workers stopped performing their duties. This did not work out the way he had planned causing him to flee to another country. He tried to cover up his acts of trying to bring down the republic by declaring the treaty of Versailles and the downfall of Germany's strength as the reasons. He tried his best to lay the blame on the German politicians saying that they had double crossed the German army, breaking their trust. This implied that the political leaders in the German government had accepted defeat even though the army was still in a position and had the motivation to keep fighting. This was however a lie and failed in breaking down the republic. A couple of reasons prevented the Weimar republic from splitting up. Wolfgang Kapp did not have a large following of supporters in the extreme right front. The number accounted to a small minority who were not strong enough to carry out his beliefs. Another reason was that the German working class supported the actions of the republic in the 1920's and prevented its downfall. Germany was not under the pressure of yielding to the communistic activities going on in the early 19th century. This is mainly because the Communist party of Germany or the KPD was not backed up by a lot of supporters. This was evident from the low share of votes that they received in the 1920's (just over 12%). The leaders of the KPD were not good enough to successfully execute what they wanted. Neither were Leibknecht and Luxemberg any better in guiding the spartacist movement in 1919.

The payments imposed on Germany ignited numerous economic problems which along with its retaliation, can be considered as the primary factors which caused the Weimar republic to end eventually, making way for Adolf Hitler's regime as a dictator. The costs of damages had the potential of destroying the Germany economic and political sector. Some historians hold the belief that even though Germany was capable of paying the amount, they did not want to. The views of John Maynard Keynes and the French economist Etienne Mantoux are significant in this regard. Mantoux was against Keynes and believed that Germany needed to… READ MORE