By Valery Vayserberg | Spring 2026 – Volume 16

“An economic fiasco!” One might say that when
attempting to verbalize the true trials and tribulations
of the international economy between World War I and
World War II. “The most trying of times!” A German
resident may exclaim, reaching into his pocket and
grabbing 1 United States dollar only to realize that what
was once worth 317 gold marks in 1922 was now worth
7,600 gold marks by the end of the year. What one may
not know when considering the economic state of the
world, particularly that of war-torn Germany, is the
true power that economists as individual actors had.
Certainly, they could not magically fix the
hyperinflation of the 1920s, but what they could do was
establish a new era of economics.
The Weimar era was known for its beautiful art, and
more importantly, for its way of blending art to
represent the strangeness and uncertainty of the period.
Yet what was it about the study of economics that
created a pathway void of collaboration and instead
ripe with opportunities for the greatest of successes and
the lowest of lows?

What Was Germany’s Economic State
and Response?

Before taking into account who was in the room
dealing with Germany’s economic crises, it is essential
to dive deep into what Germany’s economic state truly
was. As aforementioned, the hyperinflation of the
1920s in Germany was intense and often left the
general public scrambling to make ends meet. The
average citizen could go to bed one day and wake up
the next with their money practically worthless.
Furthermore, between June 1922 and 1923, prices rose
an average of 1.6% per day, causing a rapid decline in
the living situation for all Germans.

Despite this economic desperation, the German
government refused to take accountability for its
economic state, as seen in a report by the Reich Statistical
Office in March 1923. They claimed that the inability to
maintain the current conditions “was not the fault of the
Government, but was due to the conditions which made
themselves felt since the end of June, 1922.” With the
subdued verbiage, the Statistical Office blamed outside
actors rather than pressuring the government to take
accountability. Oftentimes, Germany perpetuated the
“stab in the back” idea, which claimed that the reason for
losing the war was due to betrayal on the home front by
Jews, socialists, and other social groups.

It is evident that the government needed to immediately
accept that the new economic and political situation,
particularly in relation to hyperinflation, was
incomparable to the pre-war state. As historian Richard
Bessel argued, the idea that it “was possible to return to
pre-war conditions” was a “dangerous illusion,” both
politically and regarding economic policy. There was no
way to return to pre-war inflation levels, and therefore,
the measurements of hyperinflation and unemployment
in 1922 should not have been compared to those in 1913.
In a sense, they were attempting to compare apples to
oranges.

Due to the fact that the government and Statistical Office
were both tied up in comparing the Weimar Republic’s
economic state to pre-war Germany, politicians should
have utilized the objectivity and expertise of economists
who understood the incomparability of the two
situations. Weimar Germany called for a line of experts
who did not believe the stab in the back myth and instead
looked directly at the numbers, yet in a way which
blended both the quantitative and qualitative aspects of
economics. Neglecting either aspect would mean
neglecting the humanity involved or the truth hard
statistics would provide.

Who were Weimar Economists?

Prior to the hyperinflation of the 1920s, the field of
economics had broader diversity, due to the fact that
young, able-bodied men were off at war. This situation
allowed women to rapidly gain positions in jobs
previously held for men. In addition to this, women were
able to pursue university education on a wider scale,
with the scope still limited towards social work and
social policy related fields.

Women in particular were able to merge the artistic and
qualitative elements of the field of economics, with
historical economists arguing that “women’s ‘feminine
qualities’ of empathy and intuition made them better
observers” which was necessary for the “empirical work
that was so valued in the discipline.” Women were often
hired as’ ‘applied economists’, a catchall term for the
wide-range of non-academic jobs open to men and
women with degrees in the field,” which historian Van
Zee argues “is an indicator of the youth of economics
expertise with a social lens.” Historical economics
utilizes economic data in order to explain the past, while
applied economics focuses on utilizing economic data in
order to explain the present and to guide decisionmaking.

At the peak of hyperinflation in 1923, the field began to
narrow as several women’s organizations endorsed a
policy which drastically altered the future of economics.
The government offered married women a one-time
payment to resign from their jobs, and later on allowed
“all married women civil servants whose future seemed
economically secure” to be let go without any severance
payment. Female professionals were not regarded as
equal, especially when their status was tied to their
familial unit. These policies stifled alternative solutions
to the hyperinflation in Germany, as the field narrowed
and excluded diverse perspectives.

In addition to pushing women out of the workplace, the
introduction of a diploma program was highly contested
between the new wave of male-dominated applied
economists and the more gender-balanced historical
economists. The push for applied economics represents a
shift in mindset in Weimar Germany toward focusing on
the present and ignoring the lessons of the past.

The Organization of German Women economists
argued that having a diploma option “would reduce
education in economics to mere means to an end.” The
development of this program caused sociological
studies to “absorb much of the content that had been
the hallmark of historical economics,” and therefore
served as the end of an era. By having an increasingly
selective path to success in the economics field, personal
characteristics began to interfere with policy proposals
and foreign relations.

While the Weimar era was known for social movement
and growth, it was one that stifled the increasingly
diverse and high-profile profession of economics.

The Man of the Hour

Despite the need for objectivity in economic policy,
Germany brought in Hjalmar Schacht. The Republic’s
major fault was placing trust into this one man and
hoping that he would provide enough objectivity in
comparison to a growing number of female and other
diverse economists. Instead of being politically neutral,
Schacht became a founding member of the German
Democratic Party (DDP). Later on, he took on the role of
Minister of Economics from 1934 to 1937, an inherently
political role that ended up assisting in shaping Nazi
economic policy. The government’s failure to notice his
early political affiliations prior to concentrating executive
power into Schacht’s role would prove detrimental to his
policy creation, regardless of if it was his affiliation with
the DDP at the start or his eventual affiliation with the
Nazi party.

Schacht easily curated a reputation as intelligent, albeit
hotheaded. His rise to notoriety came from his
determination to introduce the Rentemark on November
20, 1923, despite not taking his position as president of
the Reichsbank until a month later. The Rentenmark was
a temporary, transitional currency which served as a
stepping stone to economic recovery.

His determination allowed him to become a key
representative at international negotiations despite his
lack of objectivity. Historian Alan Bollard noted that
Schacht’s “interpersonal relations were never good, and
his bloody-minded approach to crises was becoming a
problem.” This was clearly demonstrated at the 1924
Dawes Committee meeting to reconsider German
reparation payment obligations. Here, Schacht
demonstrated his excessive free will by first “refusing to be
summoned to a meeting by French President Raymond
Poincaré, then reluctantly agreeing, only to storm out of
the presidential waiting room after the president had kept
him waiting for 15 minutes.” It should not have been
possible for an appointed, high-ranking economic
specialist to get away with this internationally disrespectful
move. Yet instead of apologizing, Schacht doubled down.
At some point, he finally sat down with the French
president, but then elected to walk out halfway through
the conversation in frustration.

Since the economics field was making a push towards
objectivity, Schacht’s position should have been reevaluated
by the Reichstag or elected chancellor. At the
very least, they should have assembled a team of
economists to hold him accountable and minimize his
personal biases. Yet this was not the case. Schacht’s
attitude persisted through his writing, as demonstrated
through his 1926 novel, The Stabilisation of the Mark. As
this novel covers his professional career, the reader gets to
examine his thought processes. Some of the remarks
Schacht made on the international stage were helpful, as
he often stated things in a more honest fashion than a
politician. His bold, sharp-witted approach allowed
Germany to gain an advantage in reparations bargains in
the long run and prove Germany’s incapacity to pay the
high demands. In addition, Schacht provided valuable
unspoken criticism against the government: “He blamed
this poor domestic economic management and also the
British economic blockade for Germany’s ultimate
defeat.” That being said, other comments, such as
“Hellferich’s citation to these purely superficial figures…
can hardly be described as anything more than fencing
before a mirror,” were significantly less helpful and
therefore inflammatory to the already unstable
relationship between economists and the government.

Could Economists Truly Make an Impact?

Across the Weimar Republic was a lack of
accountability and an unfortunate display of a
prominent expert in the field failing to set aside his
partiality for the greater good of the people. This is not
to say that some economists did not try to organize and
collaborate, but to say that the government stifled their
ability to do so on a mass scale. Schacht’s inability to
negotiate in a way which subdued his personal
temperaments demonstrates why one individual should
not be tasked with solving unprecedented economic
disasters. Had the Weimar government embraced the
interdisciplinary approach to economics that women
and other forms of diversity could have provided, they
may have been able to implement long-lasting economic
reforms which could have withstood the political
instability of the period. Since they did not, it left the
average citizen reaching for a rapidly degrading United
States dollar in the hopes of a better life, and instead, a
turn for the worse.

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