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Martin H. Geyer: What Crisis?

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Martin H. Geyer: What Crisis? Martin H. Geyer: What Crisis? Speculation, Corruption, and the State of Emergency during the Great Depression Schriftenreihe Bulletin of the German Historical Institute Washington, D.C., Band 55 (Fall 2014) Herausgegeben vom Deutschen Historischen Institut Washington, D.C. Copyright Das Digitalisat wird Ihnen von perspectivia.net, der Online-Publikationsplattform der Max Weber Stiftung – Deutsche Geisteswissenschaftliche Institute im Ausland, zur Verfügung gestellt. Bitte beachten Sie, dass das Digitalisat urheberrechtlich geschützt ist. Erlaubt ist aber das Lesen, das Ausdrucken des Textes, das Herunterladen, das Speichern der Daten auf einem eigenen Datenträger soweit die vorgenannten Handlungen ausschließlich zu privaten und nicht-kommerziellen Zwecken erfolgen. Eine darüber hinausgehende unerlaubte Verwendung, Reproduktion oder Weitergabe einzelner Inhalte oder Bilder können sowohl zivil- als auch strafrechtlich verfolgt werden. Features Forum GHI Research Conference Reports GHI News WHAT CRISIS? SPECULATION, CORRUPTION, AND THE STATE OF EMERGENCY DURING THE GREAT DEPRESSION FIFTH GERALD D. FELDMAN MEMORIAL LECTURE, DELIVERED AT THE GHI WASHINGTON, MAY 29, 20141 Martin H. Geyer LUDWIG-MAXIMILIANS-UNIVERSITÄT, MUNICH I. The historiography on the Great Depression of the 1930s has lan- guished in the last two decades, at least in Germany. There are several reasons for this. First of all, the debate on Heinrich Brüning’s auster- ity policy and its possible alternatives, which fl ared up in the context of the debates on the crisis of Keynesianism in the late 1970s and 1 I am indebted to Dona 2 1980s, has for the most part been exhausted. Second, in Germany a Geyer and Richard Wetzell landscape of commissioned company studies has blossomed. Even for improving draft s of this published English version. though the Great Depression usually represents an important episode in the history of the fi rms being studied, this history usually pales 2 Albrecht Ritschel, Knut Borchardts, “Interpre- in comparison with the period of Nazi regime, given the evidence of tation der Weimarer a company’s entanglement with National Socialism.3 Third, unlike Wirtschaft . Zur Geschichte und Wirkung einer economic historians and economists who have used the depression wirtschaft shistorischen as an exercise in refl ecting on economic theories — much more so Kontroverse,” in Historische Debatten und Kontroversen in the United States than in Europe4 — cultural historians have not im 19. und 20. Jahrhundert, seen this period as a stimulating challenge, quite unlike the preceding ed. Jürgen Elvert und Su- sanne Krauss (Wiesbaden, turbulent periods of the revolution, infl ation, and the “golden years” 2003), 234-244. of the Weimar Republic. A fourth reason for this relative neglect is 3 There are exceptions, see, that the Great Depression no longer holds a place of its own in what for instance, Gerald D. Feldman, “The Deutsche has become the common historical periodization. On the one side, Bank from World War to two decades divide the Great Depression from what is by now referred World Economic Crisis 1914-1933,” in Die Deut- to — somewhat exaltingly — as the “golden age” of “social demo- sche Bank 1870-1995, cratic consensus” (Eric Hobsbawn/Tony Judt) or the postwar period ed. Lothar Gall (London, 1995), 130-276. of “consensus liberalism” (Anselm Doering-Manteuff el), which plays such an important role, at least in German debates. On the other side, 4 Randall E. Parker, ed., The Economics of the Great De- two decades separate the Great Depression from the end of the “long pression: A Twenty-First nineteenth century” and the heyday of what Detlev Peukert has called Century Look Back at the Economics of the Interwar “classical modernity.” Although Peukert and other historians placed Era (Cheltenham, UK, great emphasis on the transformative years of the early 1930s, this 2007). 5 rather short period has become somewhat of a side story. The reason 5 Detlev Peukert, Die Wei- for this is quite clear: Grave as the political and economic crisis of marer Republik: Krisenjahre der klassischen Moderne the 1930s was, its impact can only be understood in the context of a (Frankfurt, 1987). GEYER | SPECULATION, CORRUPTION, AND THE STATE OF EMERGENCY 9 longue durée not only of mentalities and ideologies but also of social and political practices that precede the Great Depression. We will see whether the more recent worldwide fi nancial crisis will bring new impulses to historiography.6 What has become quite evident so far is a fl ourishing interest in the history of “capitalism” — which has always been, to a considerable extent, the history of its crises. Yet the question of which analogies or comparisons should and can be made remains controversial. Two years ago, in his Feldman Lecture, Jürgen Kocka emphasized the diff erences between the current fi nancial crisis and that of the 1930s. He referred to the fundamentally dissimilar political constellations, but he also meant the roles of fi nance capitalism then and now. “This fi nance-market- related part of capitalism [today -MHG] is much larger, more apart from the rest, more global, more dynamic, and more powerful than in the 1920s and 1930s, and it is less regulated than it was twenty years ago.”7 This may be true, but contemporaries eighty years ago had good reason to see their crisis as the worst so far; and “fi nance capitalism” was as much a sore issue then as it had been during the economic crisis of the 1870s or is today. 6 Johannes Bähr and Bernd However, recent events have greatly increased the interest in Manias, Rudolph, Finanzkrisen: 1931, 2008 (Munich, 2011). Panics and Crashes (Kindleberger) and also in the shadier sides of capitalism, including corruption.8 Unlike some textbook versions, 7 Jürgen Kocka, “Writing the History of Capitalism,” capitalism is not characterized by a state of equilibrium. Cycles of Bulletin of the GHI 47 (2010): expansive and “speculative” waves involve people who at times act 7-24, 21. with what Keynes called “animal spirits.” More oft en than not, bank- 8 Charles Kindleberger, Manias, Panics, and Crashes. A History ers, entrepreneurs, and fi nanciers operate close to the edge of what of Financial Crisis (New York, is legal and moral, themes that have traditionally inspired many nov- 1978); Ingo Köhler and 9 Roman Rossfeld, eds., Pleitiers elists. Economic risk-taking is a form of speculation on the future und Bankrotteure: Geschichte under precarious conditions. Yesterday’s heroes are today’s failures, des ökonomischen Scheiterns vom 18. bis 20. Jahrhundert and the line that separates the serious businessmen from what I call (New York, 2012); see also the Grenzgänger of capitalism is sometimes thin indeed. Grenzgänger are special issue of the Jahrbuch für Wirtschaft sgeschichte 54 those involved in extremely risky businesses, and there are many types (2013) no. 2. of these blatant “rule benders,” including crooks and swindlers. In 9 Emile Zola, Money (orig. 1891; times of crisis, they tend to be the fi rst to run into trouble and therefore Oxford, 2014); Theodore Dreiser, inadvertently attract attention to themselves, usually to everybody’s The Financier [1912]. Critical Edition (Urbana, 2010); Karl- surprise. Despite the moral outrage which they provoke, they are part Josef Kuschel and Heinz-Dieter of any economic system. This might be disturbing and distressing; Assmann, Börsen, Banken, Spekulanten: Spiegelungen in of critical importance is the moment when the impression becomes der Literatur — Konsequenzen prevalent in the public at large that the economic system is dominated für Ethos, Wirtschaft und Recht (Gütersloh, 2011). by such Grenzgänger. “If the big banks can’t be relied on any more, it’s 10 BULLETIN OF THE GHI | 55 | FALL 2014 Features Forum GHI Research Conference Reports GHI News best to trust one’s money to the casino”, spoofed one caricature in the Ger- man satirical weekly Sim- plicissimus in the wake of the 1931 banking crisis while depicting bour- geois banker-like types at the roulette tables (see fi gure 1). The polemical talk about “casino capital- ism” predates the crash of 1929. It signifies a crisis of legitimacy af- fecting not only sup- posedly risk-averse institutions such as banks, but even more so the people who run them.10 From here it is ideologically not a big leap to attack bankers as a group of white- collar gangsters; in fact, it appears that the leader of the Bel- gian radical right, Leon Degrelle, can claim to have invented the neologism “bankster” in the 1930s.11 Figure 1. “If the big banks can’t be relied on any Political scandals and criminal investigations fueled the fi res that more, it’s best to trust discredited business and businessmen during the Great Depression. one’s money to the casino.” Simplicissimus Germany hotly debated the briberies of the Berlin magistrate by 36 (1931), no. 18 (3 August the Jewish Sklarek brothers and various forms of fraud and failings 1931), p. 208. Reprinted with permission. aff ecting many big companies. One was the case of the Schultheiss- Patzenkofer brewery, in which top-level directors at the Deutsche 10 Urs Stäheli, Spectacular Speculation: Thrill, the Eco- Bank were involved. In 1933, the U.S. Senate held public hearings into nomy, and the Popular Dis- fraudulent business practices of bankers and investigated, among course (Stanford, CA, 2013). other issues, whether bankers made loans to public offi cials. In 1934, 11 Léon Degrelle, Les voleurs France experienced the notorious right-wing Stavisky
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