The 100 year anniversary of the end of World War 1 has made me think of the extreme economic situation that preceded World War 2 and the link between economics and nationalism. Currently across Europe nationalist and far right parties are making significant electoral gains. We have also see the protest ‘Brexit vote’ in the UK and Donald Trump elected in the US. In Germany the AFD (Alternative for Germany) formed 5 years ago now has a seat in the Budestag. The Freedom Party of Austria has 26% of the vote and the Swiss Peoples Party 29%. The political trend across Europe and in the US is towards nationalism.
Nationalism was high in Germany prior to WW2 and driven by the desperate economic situation. There was extreme economic hardship in Germany prior to World War 2. The economic tragedy started in 1921 when Germany was given a bill of £6.6bn (after the Versailles Treaty) to pay for compensation for WW1. Germany agreed to pay in instalments but struggled to keep up on payments and by 1922 could not make the repayments. France and Belgium sent troops into the Ruhr in Germany. They seized control of the mines and factories in order to take payment directly.
The German workers wouldn’t co-operate with the French and Germans and went on strike (supported by the German population). The unemployment levels went from 2% to 23% as factories closed. The government continued to pay the wages of the striking workers, but with no income from taxes coming in and high debt levels they resorted to printing money. This led to hyper inflation in Germany. The price of a loaf of bread in November 1918 was 1 mark, by September 1923 a loaf of bread was 1.5m marks and November 1923 a loaf was 200bn marks. Money meant nothing in Germany and they lost control of the economy.
America stepped in to support the German economy in 1924 to 1929 with loans. This led to a brief period of stability in Germany, until the Wall Street Crash of 1929 (the start of the Great Depression). American banks wanted their money back and Germany was given 3 months to start repayments. Germany couldn’t pay the loans, businesses failed and there was mass unemployment with over 30% of the population unemployed. More than 6m were unemployed.
The high levels of unemployment, particularly amongst the young, made them vulnerable to extreme political views. The youth movement in Germany was harnessed by Hitler. Against this economic background, World War 2 was ignited. (WW2 started in 1939 and signalled the end of the Great Depression).
The echos of conditions in 1939 are prevalent in today’s society. We have a widening wealth distribution gap. In America the top 1% of Americans took home 22% of all income, the highest share since the peak of 23.9% before the Great Depression in 1928. The great depression was preceded by a credit boom. The credit boom that resulted in the 2008 financial crisis, has left central banks with interest rates that are still at emergency / very low levels. Raising interest rates would negatively affect the majority of households that are highly indebted.
Whilst unemployment rates are not at peak levels, wages do not provide the same living standards that they did 20 years ago. Maybe these economic factors are resulting in the current rise in nationalism.
Rebel Economics 
Another interesting piece, thank you Jenny. I never knew Germany had hyperinflation after WW1.
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As a nationalist, let me briefly try to defend my reasons for being so. But anyone truly interested in understanding the rise of nationalism need only read the writings of Steve Bannon, for example. My nationalism is not rooted in issues related to the economy nor of xenophobia, but rather a profound belief in the importance of democracy and the local accountability of people we elect to legislate over us. Underlying all nationalistic movements is the concern that economic and political power is being concentrated in institutions and companies that are wholly unaccountable to the people (and, as you say, with an associated increase in wealth and income inequality.) Although nationalistic parties are usually described as far right, in fact that is a wholly misleading term. Nationalistic parties across Europe stem the whole political spectrum in terms of their economic and social policies. But usually they have a strong dislike of authoritarian institutions, such as the EU. So it seems odd that people should label them “far right”! (Indeed, in many cases that insult arises because the adversary distrusts the views of the people, and believes only globalist, undemocratic institutions can solve problems such as global warming.) Incidentally, the politicians in countries such as Germany and France never stopped being highly nationalistic, as is obvious if one looks carefully at the protectionist measures they have adopted with regard to their manufacturing and agricultural industries respectively. By contrast, the UK and the US (associated with Brexit and President Trump) are unquestionably the least nationalistic nations within the developed world.
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