Fighting the economic crisis
An Economical Theory of Financial Policies
Hermann Papst expresses his variety of skills and especially his ethos to fight for the general welfare in a script, he finishes in June 1933: “Development and Effects of the National Economy”. The subtitle reads: “The state’s opportunities for promotion.” It is meant to palliate the economic misery of the years 1931 and 1932, which are marked by inflation, high unemployment and trade inhibitions, by introducing a new theory concerning the currency politics. In his opinion the mistake lies within the unrecognized rule that the grand total of incomes, consists of the grand total of paid prices.
Money as the main influencing factor in economy
Hermann Papst believes that the only solution is to find a new definition of the economic cycle and that each influencing factor has to be recognized, even internationally.
His script begins with the description of the ailing economy conditions, which are marked by trade inhibitions, unemployment, decreasing incomes and inflation. He does not accuse any side of being guilty, he calls upon the citizens to change their attitude and behaviour. After analysing the crisis he points out the conditions that should make the solution work: the acceleration of cash-flow, increase motivation to work, be prepared to take entrepreneurial risks and sincere efforts for full employment.
The ground line of his ideas are the trade statistics concerning the duration of transfers of the grand total and the type of payment transactions, in which he has a positive attitude towards payment transactions without cash. He pleads for the expansion of the credit system because saving money only makes sense, when people are given loans as well. The only complaint he directs at the “capitalist” is that it is not fair to not be using the money in his bank account and receiving hardly justified credit interest instead of taking an entrepreneurial risk and investing it.
Avidities Hydra, Ignorance and Economic War have to subside
“The Hydra greed, Resentment, Distrust, Greediness, Economic Ignorance, Economy War and lacking confidence in the development of economy has to be beheaded, using the sword of sharp realization of the true, approaching national economy.” With his script he wants to contribute to the necessary clarification, since it is at least as important to bring the will of getting something done of a real economy, as the government’s economic acts.
He gives the forceful warning to increase the total currency, because that only leads to a higher inflation in the long run, if the values of goods are not adjusted. Overall one-sided moves should be avoided. Employment, prices and income should be influenced simultaneously and regularly. Within the closed cycle of economy, especially the acceleration of the circulation of the available currency is of importance.
Rationally-oriented free world economy
Hermann Papst expands his idea upon the world economy and recommends an opening of a national community to national communities, regarding the global trade effects. He draws the line though at the so called “World-Money”. Rather he demands the equality of all currencies to compensate for the loss by exchanging currencies. He concludes his understanding of the balanced and fair interaction of different factors with the conventional ending of his essay: “Everyone for all of them and all of them for everyone!”