Rise_and_Fall_of_Weimar_Democracy_----_(7._The_Extraparliamentary_Offensive)

Chapter Seven: The Extraparliamentary Offensive

Overview

• The chapter discusses the political and economic situation during the mid-phase of the Weimar Republic, particularly against the backdrop of the Ruhr crisis and hyperinflation.

• Significant international agreements (Treaty of Locarno, entry into the League of Nations) afforded Germany equality with other European powers.

• Although reparations remained an issue, they were perceived as contributions to rectify war damages rather than as punitive obligations.

Economic Stabilization Post-1924

• Post-1924, the German economy experienced rapid growth due to international loans and capital influx.

• The government prioritized currency stabilization and balanced budgets, benefiting capital owners at the expense of lower-income workers.

• While nominal wages increased, costs of living also rose, resulting in minimal improvement in living standards for most wage earners.

Social Policy and Fiscal Reforms

• The fiscal reforms introduced, particularly by the Luther cabinet, favored high-income earners while marginalizing the middle class and low-income sectors.

• Tax reforms reduced the burden for high earners significantly while maintaining lower rates for the poorest.

• Widespread dissatisfaction arose from wealthy property owners benefiting disproportionately from tax reforms.

Economic Crisis of 1925-26

• The emergence of a stabilization crisis marked a return of unemployment above two million, self-regulating market forces ineffective.

• Social policy began to function as a compensatory mechanism for sectors facing economic turmoil, emphasizing state intervention.

James Popitz and Economic Theories

• The reform principle of "economic defensibility" rejected social equity-focused taxation, fueling tensions between industry and labor.

• Tax aversion and subsidy approaches favored heavy industries, leading to growing discontent and eventual conflict between workers and employers.

Emergence of Authoritarianism

• Authoritarian tendencies increased, with industrial elites resisting leftist policies while promoting anti-Social Democratic sentiment, leading to calls for replacing parliamentary governance.

• The heavy industry's influence on political parties intensified opposition against extensions to social policies like the eight-hour day.

Political Coalition Conflicts

• Splits emerged within political parties, particularly in the Center Party, leading to a shift toward more rightist policies and alignment with heavy industry interests.

• Hindenburg's presidency illustrated the growing influence of conservatives, while left factions struggled to unify amidst party splintering.

Rise of Paramilitary Groups

• As political polarization intensified, right-wing paramilitary groups sought to alter the political landscape, and combat leagues proliferated, pushing authoritarian agendas against the parliamentary systems.

Conclusion

• The stranglehold of heavy industry on economic policymaking, paired with rising unemployment and social tensions, paved the way for a shift toward authoritarian governance, sidelining the democratic and socialist agendas that characterized the early Weimar years.