Sunday, April 22, 2012

Tumbling Dice

We in the United States have a characteristic nearly unique in the world. Short cultural memories. In fact, we tend to view this as a virtue - we treat events in even the sixties and seventies as ancient history; mainly, it seems, to make it easier to sweep the downsides and mistakes of those time periods under the rug.

Other nations don't do this, and we tend to be critical of them for it. There's a Huffington Post article that excoriates Germany for being viscerally afraid of inflation, claiming that: "This fear has outlived its historical origin by a half-century: Catering to inflation worries today by hemming in the central bank is something like refusing to restore electricity to a darkened German city for fear that President Roosevelt will bomb it."

This snide remark does an injustice to history. Runaway inflation in the Wiemar Republic is, more or less, a direct cause for the Second World War, and ALL of the horrors that went with it - which were not confined to Germany. Now, history being what it is, it's impossible to say that all of the nasty goings on of the war could have been avoided if Germany had managed to keep its inflation rate under control. But it's likely, in any event, that a more stable German economy wouldn't have provided such fertile ground for the National Socialists to come to power. And though it may be true that the risks of the modern German economy going so far off the rails that history repeats itself are slim, every other time history has tragically repeated itself, it's been possible to find someone standing amid the wreckage in a daze, repeating "This time, it was supposed to be different," over and over.

It's easy to sit back in the United States and sneer at the worries of other nations, even while we've spent most of the last decade demanding that the rest of the world change the way they go about things to make room for our worries. Especially when we see consequences for ourselves in other nations' "unreasonable" refusals to drop their concerns. But I submit that we're the ones who are being unreasonable in expecting that other nations and other cultures adopt an American standard that seems to discount the significance of any event that the commentator isn't old enough to remember.

The consequences of runaway inflation in Germany were more wide-ranging than huddled German civilians dying in nighttime Allied bombing raids. That shouldn't need stating. And follow-on effects of the chain of events set in motion by the economic disaster of the early 20th century persist to this day. If Germany would rather have an economy that muddles along for a "lost decade" in order to avoid a repeat, that's their prerogative. Even if they drag the whole of Europe into the economic doldrums with them, that will be because the European Union ditched most of their national currencies - in part, for precisely the same reason. If we in the United States feel that unleashing inflation, and the risks that go with it, are a trivial thing, then let us lobby Congress to bear that burden ourselves, rather than complain about others' unwillingness to gamble on the outcome.

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