german saving

german saving

“In Germany, people want to be world champions in all areas, including saving. And above all, this term shows that it is important for the German self-image, for the German identity. It’s important to be way ahead when it comes to saving. That has relatively little to do with reality,” says Robert Muschalla, curator of the exhibition “Saving – History of a German Virtue”, which is currently on view at the German Historical Museum in Berlin. savings world champion? Much higher savings rates are registered in small Switzerland and in the huge empire of China. In Italy and Japan, on the other hand, they are fairly low. Which in turn shows that when it comes to saving, rational considerations play less of a role than habitual, cultural imprints.
Muschalla: “Originally, the situation was that there had been a large increase in population since the middle of the 18th century. In France they reacted with the revolution, in Germany savings banks were founded to educate people to a hardworking and frugal lifestyle.”

In combination with order, cleanliness and punctuality

Thrift, however, was not a new value. This postulate already existed in the early modern period, initially in relation to how things were handled, for example in the farming family, explains Sandra Mass, Professor of Transnational History at the Ruhr University in Bochum: “For the 18th century thrift then became a value, a bourgeois virtue in connection with order, cleanliness and punctuality and was also increasingly linked to dealing with money, i.e. a gradual replacement from the economical use of things. Then there was dealing with money and it was, so to speak, a way of being able to make important decisions in the future.”
Practicing thrift meant learning to distinguish between the present and the future. In the future, the important future decisions should be made, which one had denied in the present. The newly founded savings associations preached independence from the state, help for self-help and proceeded from the cliché that the men of the working classes would immediately spend their wages in the taverns, leaving only misery for the families. Who were the sponsors of the savings associations?
Sandra Mass: “Middle-class philanthropists who worried that the lower classes wouldn’t be able to put their pennies, their smaller cash contributions, away. Behind this was the concern that alcohol would be consumed immediately, in particular, so that one could not make provisions for future unfortunate situations.”

Heavily exploited in the 19th century

But it didn’t just stop at individual provision. Saving was quickly politicized. Mass: “On three levels, firstly as a means of reducing revolutionary activities, as a means against the socialists; Secondly, as a means of stabilizing the national economy in the context of the race between nations before the First World War and, thirdly, of course, as proof of one’s own ability to develop in comparison with the supposedly unsparing ‘savages’ or even with children.”
In the late 19th century, especially in the political debates about social issues, saving was heavily instrumentalized. The monetary behavior of underprivileged strata got on the bourgeois index: not class relations, but individual failure in dealing with money was considered one of the causes of social poverty.
The counter of the Berliner Sparkasse, based on a drawing by Albert Kiekebusch (1894)
The counter of the Berliner Sparkasse, based on a drawing by Albert Kiekebusch (1894) (Copyright: Historical Archive of the Berliner Sparkasse)
“On the other hand, of course, there is the not entirely unjustified notion that someone who has saved something is perhaps also less willing to risk everything in order to pursue revolutionary tendencies, for example. But in any case, it is an idea that those who have saved would rather keep it and are therefore more likely to preserve the existing conditions. And if the poor then join in, perhaps all the better,” adds Raphael Gross, Director of the German Historical Museum in Berlin. Worse still: The political instrumentalization of saving reached its ugly climax in National Socialism, when it served the anti-Semitic counterpart: here the hard-working and frugal German national comrade, there the anonymous, rapacious Jewish finance capital.
Curator Robert Muschalla: “And of course that is something, this complementary relationship, which the National Socialists then explicitly picked up on. Before that, austerity ideology and National Socialism existed side by side as two sides of the same coin. In National Socialism, they are very explicitly placed in context.”

Ideologically used by the Nazi regime

Saving in the service of politics was nowhere used as ideologically and practically enforced as by the Nazi regime. Johannes Bähr, economic historian at the University of Frankfurt am Main, gives the reasons: “On the one hand, it was an armaments financing instrument from 1935/36. So they stuck to the savings. On the other hand, an instrument for the political and ideological penetration of society in the sense of forming a national community. And thirdly, it is also linked to consumer expectations that are particularly reflected in the special savings forms.”
The synchronization of the savings bank organization went relatively smoothly, since there had always been points of contact between the National Socialist ideology and the idea of ​​the savings bank.
Bähr: “The savings banks had a lot of sympathy in the NSDAP. They were tied to their homeland, they were down-to-earth, they were geared towards the middle class. They were actually a counter-model to big business, which the party at least propaganda fought against, supposedly Jewish finance capital.”

“German style preserves those who work and save”

The charitable principle of the savings banks was subordinated to the NS guiding principle of “national community”. Saving ideas and popular ideas met under the nationalist slogan: “German way preserves who works and saves”. The savers were perfidiously exploited and deceived by the regime, for example during rearmament.
Johannes Bähr: “That was the system of so-called noiseless arms financing that Hjalmar Schacht introduced. In contrast to the First World War, this was due to the fact that the state debt was no longer placed as public loans with the population, but only with financial institutions, savings banks, banks, and also with social security agencies and insurance companies. The aim was to prevent the population from being able to see how their assets were dwindling from the price development, as was the case in the First World War. And with this silent financing, about half of the national debt was paid for by it.”
As impressive as the savings rates may have been during the Nazi era, a closer look reveals that the greatest increase took place during the war, when there were hardly any consumer offers. Saving turned into exhausted purchasing power because the money saved could not be spent at all. And the special savings – the travel savings for the KdF steamers, Olympic savings on tickets, the school or HJ savings remained economically meaningless.
Bähr: “It wasn’t as popular as the National Socialists portrayed it. No large sums came together. Even home saving, which was the most important special form of saving, accounted for only about 0.5 percent of savings deposits. These forms were important for propaganda reasons, so that you can reach the national community in practically all phases, parallel to education, for example in the Hitler Youth, in the League of German Girls, then also a savings education, from the cradle to the grave.”

Economic miracle as actual savings miracle

Even the popular saving on the KdF cars – the Volkswagens – remained a propaganda lie. It was mostly medium-sized companies that saved on it. It was not affordable for the worker anyway. But during the war years no car left the factory, the savers were cheated out of the money.
Up until the military defeat in Stalingrad, savers were expecting a “final victory” soon – but not after that. The savings in Greater Nazi Germany were later exceeded by far in the smaller Federal Republic, if only because of the higher incomes. Anyone who had believed that the proverbial German savings mentality had been shattered by two inflations was taught a lesson by the economic miracle of the post-war period.
Economic historian Bähr: “The economic miracle was the real savings miracle. And it is astonishing that after this experience of inflation and currency reform, savers then started back to this form of investment. You have to imagine that the Germans lost a large part of their savings twice in a generation within twenty-five years, in 1923 and then again during the currency reform of 1948, when the one hundred Reichsmarks saved became DM 6 and 50.”

Saving becomes a way of life

It may be that people have always saved for individual goals in the rational expectation of being able to afford more consumer goods and protecting themselves against the risks of old age. However, curator Robert Muschalla attributes the fact that the propensity to save in Germany, despite the sudden change, to a deeper cultural imprint.
“As early as the 1920s, after the hyperinflation, the term ‘savings miracle’ was coined for the almost reflex action of continuing to save. And that is what we see again in 1948, one can state that at that point in time in the middle of the twentieth century the long-lasting savings education, perhaps even the indoctrination to save, had had an effect and that existed independently of economic calculations and had become a way of life is.”
Irrespective of their economic accustomedness to success, deep-seated, dull fears of renewed inflation have persisted for generations. Which in 2008, after the Leman bankruptcy and the resulting debt crisis, was to lead to the historic appearance of Chancellor Merkel and her Finance Minister Steinbrück. Angela Merkel: “We tell savers that their deposits are safe. The federal government is also responsible for this.”
An elderly woman pulls a 20 euro bill out of her wallet.
The reputation of saving has suffered, today there is hardly any interest on it (imago / imagebroker)
“There was great fear among politicians, and this fear has a lot to do with the fact that they had the image in their minds of a run on bank accounts and that the financial system would actually have collapsed,” comments Raphael Gross. One could not be absolutely sure that savers would react calmly. Axel Börsch-Supan, Director at the Max Planck Institute for Social Law in Munich, has examined the direct consequences of Merkel’s guarantee declaration.
“This appearance of the two played a major role in being sure that the savings accounts would be guaranteed by the state in the worst case, simply because the historical fear of the savings accounts being devalued overnight in the hyperinflation has worked there. You can see in the data that there were some sales, almost all of which were wrong, and where people lost money on the sales. The amazing thing is (…): It stabilized again very quickly. And hardly anyone has left with major losses of wealth. Very different from the United States, where there have been huge fortune losses.”

Austerity policy in the EU is seen as “breaking savings”

An ideological dispute has been raging about the political dimension of saving since the European financial and debt crisis. The austerity policy in the EU is considered – to put it polemically – as “ruthless savings”, the principle of the “black budget zero” and the debt brake in constitutions as an investment blockade. With a German savings commissioner who has more or less been in command so far. Thus, the proverbial German austerity came up against the polemical index of over-indebted southern Europeans and right-wing populist demagogues, whose opposition to the EU is also based on so-called German “austerity dictates”. But that’s just public saving. At the same time, German savers are currently eking out an interest-free existence. And this for the good of the stabilization of southern Europe.
Kai Uwe Peter, director of the Berliner Sparkasse, explains the situation, which he finds frustrating: “At the moment, saving is in question because there is practically no interest on safe investments. The reason for this is the low interest rate policy of the European Central Bank and other central banks around the world. This means that we are now paying a social price that affects everyone. On the other hand, we get something, namely the stability in the Eurosystem or in the world economy, which could only be maintained through the measures taken by Mr Draghi, for example. So state stability in the national economies at the expense of low private interest income – that is the bitter consideration that politicians have to make right now.”
In addition to this system-friendly explanation of the involuntary waiver of interest, there are also more critical analyzes such as that of the sociologist and capitalism critic Wolfgang Streeck, who sees a shift from money market losses to private small investors in the long-term low interest rate policy. In this way, the German virtue of undeterred saving retains its eminent political importance.