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“After the First World War in Germany, peace came with hyperinflation, which obliterated all wealth. Haffner described what Austrian economists would call a high time preference among German youth: “Amid all the misery, despair, and poverty, there was an air of light-headed youthfulness, licentiousness, and carnival.” Money, he reported, “was spent as never before or since; and not on the things old people spend their money on.”
The bonds of civilization fray during hyperinflation. As Ludwig von Mises explained in On Money and Inflation: “The truth is that the government—that is the recourse to violence—cannot produce anything. Everything that is produced is produced by the activities of individuals and is used on the market in order to receive something in exchange for it.”
Without a stable store of value, voluntary exchange becomes difficult. As von Mises writes, “Social cooperation among men—and this means the market—is what brings about civilization.” When money becomes worthless, “all that civilization has created” is at risk.
By the summer of 1924, monetary stability had returned, and Haffner saw that despite peace and monetary stability, the mindset of many Germans set the stage for a perilous future”