2011 Helmut Schmidt Prize Lecture

On December 8, 2011, the 2011 Helmut Schmidt Prize in German-American Economic History was awarded to Professor Charles S. Maier, Leverett Saltonstall Professor of History at Harvard University and a renowned expert on the history of 20th-century Europe and the United States. Maier was honored for his wide-ranging oeuvre, which includes Recasting Bourgeois Europe (1975), The Marshall Plan and Germany (1991), and Dissolution: The Crisis of Communism and the End of East Germany (1997), and Among Empires: American Ascendancy and its Predecessors (2006). The Helmut Schmidt Prize pays tribute to the former German chancellor for his part in transforming the framework of transatlantic economic cooperation. The Prize is awarded every other year. Since 2007 it is generously sponsored by the ZEIT-Stiftung Ebelin und Gerd Bucerius.

After introductory remarks by Hartmut Berghoff (GHI), Volker Berghahn (Columbia University) delivered the laudatio, from which we quote some passages here:

"There is a thread running through many of [Charles Maier's] books that explains why he receives the Helmut Schmidt Prize this year: He has never been an economic historian of the orthodox kind who would undertake a meticulous analysis of economic statistics, of the quantifiable economic performance of a particular country, of certain branches of industry, or of international trade flows. Rather he has been, throughout his academic life, a political economist. ... Professor Maier's very first book, which I still consider a truly great study was his Recasting Bourgeois Europe, a 600-page tome on the socio-economic and political stabilization in France, Germany, and Italy after World War I. This study looked at how the bourgeois elites of Europe succeeded in re-stabilizing a situation that had undergone an enormous upheaval between 1914 and 1923 by recasting its class structures in what he called a corporatist mode. To quote him: ‘This study examines a critical period in the disciplining of change, in the survival and adaptation of political and economic elites and in the twentieth-century capitalist order they dominated.'... You can find a further expansion of his thoughts on the transformations of capitalist societies in his 2006 book entitled Among Empires: American Ascendancy and Its Predecessors, which contains two illuminating chapters, one concerned with the "empire of production" and another one with the "empire of consumption." Perhaps it is not too far-fetched to say that here Professor Maier provides a subtle criticism of more orthodox approaches to economic history that have been concerned with the productionist side of modern industrial systems. What they overlooked for all too long was the advent of mass consumption and consumerism, the other side of the Fordist vision of modern societies. ... I hope I have given you the reasons why [the Prize] is given to a great historian of modern Germany and Europe and is certainly more than fully deserved by his many scholarly accomplishments and also by his mentorship of many budding historians whom he has trained in the past three decades at Duke University and then at Harvard."

After accepting the prize, Professor Maier delivered a lecture on the topic "Lessons from History? German Economic Experiences and the Crisis of the Euro." In this lecture, Maier sought to shed light on the current crisis by examining four episodes from twentieth-century German history: the Great Inflation of the early 1920s, the Great Depression, the issue of German reparations, and the Marshall Plan. The German inflation that culminated in 1923, he argued, turned on the question of who would bear the costs of the silent confiscation that had taken place since the First World War; in the end, the currency reform rewarded those who had avoided paper assets. The consequences of Chancellor Brüning's deflationary response to the onset of the Great Depression in 1929 were disastrous and should give pause to those recommending strict austerity measures in the present crisis. Turning to the issue of German reparations after the First World War, Maier noted that the issue presented difficulties on multiple levels: all Germans felt that the reparation demands were illegitimate; reparations presented a transfer problem: the value of the mark would continuously fall against the currencies of the Allies; and the need for increased German taxation would depress the economy. The main lesson, reflected in the series of renegotiations of reparations during the 1920s, was that reparations conceived as a series of debt payments were impossible to enforce. Maier then turned to the post-World War II Marshall plan, stressing that without the plan European governments would have had to embark on austerity programs, which would have presented grave political dangers. Working through incentives rather than Diktat, the Marshall Plan had the effect of nurturing centrist politics in Western Europe. In conclusion, Maier addressed the current "crisis of the Euro." The Euro zone, he argued, has been a transfer union all along; the transfers have been the counterpart of Germany's export boom. At the present moment, single-minded insistence on debt repayments will have disastrous results. A reduction of debt can only occur after economic growth resumes. In resolving the Euro crisis, the European Union will therefore will have to uncouple the short term from the long term by combining a short-term moratorium on debt payments with a long-term resolution of the debt problem. In the upcoming negotiations, the tone will be crucial: Germany's role will require generosity and imagination.

RFW