Gustav Stolper, Der deutsche Volkswirt, and the Controversy on Economic Policy at the End of the Weimar Republic

The conventional wisdom on the economic causes of the downfall of the Weimar republic has long put the blame on the deflationist policy of the Brüning government and its refusal to fight unemployment by programs of public works. This traditional view emphasizing the opportunities missed by Heinrich Brüning's economic policy has been challenged by the so-called Borchardt thesis (Borchardt 1991). According to this thesis, Germany adopted a deflationist policy because the restricted room of maneuver for German policy rendered the alternative of expansionism (in a proto-Keynesian spirit) infeasible. In the estimation of Knut Borchardt, among the many obstacles to an expansionist policy were (1) the need first to correct the structural imbalances of the German economy, (2) the economic and political constraints on the availability of the relevant instruments—for example, the impossibility of financing public works other than by credit creation, which, however, would have violated the restrictions of the Young plan¹—and, above all, (3) the lack of a public consensus for such an alternative policy. Most important in this regard was the role of public opinion that, mainly out of fear of inflation and of depreciation of the currency, reacted hostilely to expansionist proposals.

Therefore, it might be rewarding to look at the position of one of Germany's leading economic weeklies, namely, Der deutsche Volkswirt (hereafter, DV), edited by the well-known journalist, economist, and politician Gustav Stolper, and its contributions to the controversy surrounding Brüning's economic policy.² The relevance of this study derives from the unique role of Stolper and the DV in shaping public opinion on the economic and political affairs of the Weimar republic. Stolper founded the paper in 1926; it was immensely successful, quickly climbing to a circulation of 10,000. Moreover, it initiated theory-based debates on current economic issues and thereby—supported by Stolper's political activities as a member of the Reichstag³—exercised some influence on German economic policy. To name but two examples, Wilhelm Röpke (1933, 429), in his account of German business cycle policy, refers to the DV as one of those “two leading periodicals” that “warmly supported, and probably rather influenced” the laissez-faire view of the Brüning government. Similarly, in retrospect, George Garvy (1975, 398) states that “reflationary proposals were opposed by the most influential economic and business weekly, the Deutsche Volkswirt, published by Gustav Stolper.”

The influence of the DV is underlined by the host of (then and now) prominent authors who contributed to it. The most notable was Joseph Schumpeter, who was also a close personal friend of Stolper and who wrote no less than nineteen articles, most of them in the early years of the DV.⁴ Other contributors were Friedrich August von Hayek, who published a two-part essay on the fate of the gold standard (Hayek [1932] 1984, chap. 5); Gottfried Haberler, Oskar Morgenstern, Röpke, and Alexander and Hanns Joachim Rüstow; and, from the so-called Kiel school, Hans Neisser, Jacob Marschak, and Emil Lederer.⁵ Besides Stolper and his wife Toni, the permanent staff of the paper included Carl Landauer, who was heavily involved in the controversy on economic policy, and Georg (later, George) Katona. Notable by their absence were contributions from members of the historical or organicist schools, in particular from the most prominent member, Werner Sombart; obviously neither their approach to economic theory nor their political goals fitted into the scheme propagated by the DV.⁶ It should finally be noted that shortly after the Nazis came to power, Stolper, having been forced to give up the editorship and sell the DV, decided to emigrate (like so many of his collaborators).

In the following, Stolper's account of the German depression shall be critically analyzed by asking...