- By: Abu Bakr Rieger
"The paper money rush" - Goethe still influences modern Frankfurt. By Abu Bakr Rieger
Things are all go in Germany's financial capital. For a few autumnal weeks Frankfurt was host to lectures, exhibitions, and even a specially presented theatre programme. After the Occupy movement and the strife which the banking quarter had to put up with recently, things were far more cultured this time in the hallowed halls of the cultural metropolis. Just a stone's throw away from the headquarters of Germany's banking institutions, theatre enthusiasts, philosophers, economists, bankers and the educated middle classes had gathered together to reflect upon the subject of Goethe and money, and the key question therein implied – a question to which so many recent events have been dedicated: can Germany's greatest poet still shed light upon our days of darkness?
Given the backing of the German banking industry, and amidst the current monetary crisis, it is a surprisingly short step into the depths of German intellectual history. Goethe's Faust is being staged at the city's magnificent theatre. You can either watch the poet's masterpiece in two comfortable parts, or, if you wish for more efficiency in today's hurried times, then prepare yourself for an eight-hour marathon in which the entire work is performed in a single day. Short version or long, Goethe expert and economist Hans Christoph Binswanger quite rightly considers the drama the very latest, aktuellste piece which could possibly be offered in Germany theatres today. Theatre itself was considered a revolutionary institution in Goethe and Schiller's time, but things have been quiet around Frankfurt's theatre-house in spite of a number of "bombs" which exploded rather quietly around the fringes of the spectacle in the form of newly discovered treasures from Goethe's legacy.
It was Jens Weidmann, the Bundesbank's director of all the people, who in his keynote address at the start of the charming scintillating programme pointed out the force which Goethe's can still exert today. Reflecting on Goethe's work and his timeless ruminations, Germany's most important economist was animated to consider a range of system-level questions which, remarkably, the Frankfurt-born genius of old thought about throughout his whole life.
In the world of his Faust it was famously Mephistopheles who enticed the political leadership to break taboo and issue money in paper form – creating it out of nothing, so to speak – and, thus equipped with a devilishly ingeniously competitive edge, attempt conquest of the whole planet. This ambitious strategy worked at first to the surprise of those involved, since people still believed in the promise of the new money-issuing banks that their colourful notes were backed up by natural resources. Amid the stunning prospect of a new and mighty economy with access to vast amounts of money, the modern tragedy and inevitable downfall of Faust emerges. If they were to avoid blatantly inflationary conditions ad absurdum then the new technique, and the conquest by new money, were unfortunately based on a principle which is "contra naturum" – in other words, the expectation of endless growth and the endless creation of wealth. At the end of the second part Faust has to concede that he does not possess the magical powers that this would require.
In his speech in Frankfurt, Weidmann picked up on this ambivalent theme of Faust's not as a historian or self-proclaimed Bildungsbürger of the educated classes, but, needless to say, as the President of the Bundesbank discussing the highly contemporary disaster of unfettered paper money production today. The creation of endless stocks of money from nothing, national debt, inflation – all of these still leave a nasty taste, explained the banker to Frankfurt's intellectual elites in true Goethian spirit. "Alchemy by other means" is how economist Binswanger sums up today's economic doctrines which since Goethe's day have cast their spell over the world of finance.
By paying homage to the poet, the Bundesbank hopes to show that it is committed to that very Germany tradition of wariness towards the dangers of inflation and state finance. The Bundesbank sees itself as the incorruptible guardian of Germany's financial constitution, especially now at the peak of the dramatic euro crisis and the Mephistophelian temptations to which politicians are now subject.
Weidmann, a keen reader of Goethe, is not the only one to have been captivated by the poet's relevance. In the Bundesbank's museum there is a special exhibition entitled Goethe.Auf.Geld – Goethe on money – containing traces of a tentatively self-critical analysis of the history of money. In fact, the Bank has long told the history of money in its museum rooms in Wilhelm-Epstein-Straße. This exhibition shows trade using old coins alongside the high-speed commerce of modern stock brokers. European Monetary Union is put forward – very politically correctly as is to be expected – as a kind of crowning glory of European monetary history, and that in spite of the fact that inside the Bank certain people already think that the euro itself will soon be nothing more than a historical episode consigned to European monetary history.
Looking at the little exhibition in honour of Goethe you can easily understand how an economy based on paper money can quickly veer into absurdity. A curious example is provided by the emergency monetary notes from Germany's inflationary period of the 1920s, some of which even have written on them things which Goethe wrote about the creation of paper money. On the back of one of these notes, nominally worth a breathtaking billion marks, the Faustian character of Gretchen is quoted as she sighs in the first part of the play: "Towards gold throng all, to gold cling all, yes, all! Alas, we poor!"
In East Germany there were also bank notes bearing the image of the Master, similarly mindless usurpations of the great man. After your visit the museum, in its shop at the main entrance, you can purchase a series of consumer products which come across most strangely: there are deutschmark notes made into memo blocks, and shredded euro notes which are guaranteed to be genuine but which have been pressed into briquettes, as well as the latest 50 euro note offered as a colourful serviette.
Frankfurt's Goethe House is more serious. Its small but finely presented exhibition shows many aspects of how Goethe dealt with money issues large and small, private and public, at different times in his life. A universal thinker, Goethe confidently broached all of the fundamental economic questions of his time, including the central theme of the legitimacy of a technique which created supposed wealth out of nothing in the form of paper money.
It was part of his genius that he foresaw the extraordinary strength of possibilities that the radical creation of new money would bring about, and that this would fuel the impending industrial revolution massively. The nature of money in Germany's small principalities at the time tended to have the reverse effect. It is worth noting that in the time of Goethe's youth there were 26 different kinds of gold coin and 14 different silver coins in Frankfurt alone, which meant of course considerable pressure to change the monetary customs then prevalent.
The Industrial Revolution, which Goethe anticipated with a mixture of hope and anxiety, created not only an enormous need for capital. The authorities, who were known to him personally, wished to equip themselves technically and expand into new realms, planning among other things to wage their wars using the new techniques of finance. The magic of paper money acquisition, which Goethe so expertly expresses in Faust, certainly affected Goethe as a political being, but he had serious doubts. He feared nothing short of the repression of art and culture by a mediocre world of technology and trade. He had the foreboding that the absolute commercialisation of life would be the consequence of a marriage of capital and technology. But of course, Goethe knew that resistance to the onwards march of technology was useless. In 1825 he wrote to Georg Nicolovius with melancholy: "...just as steam engines cannot be silenced, so too will moral insulation be an impossibility: the vigour of trade, the torrents of paper money, the swelling of debt to pay for other debt – these are all the mighty elements to which a young man is today exposed..."
When his friend Prince Carl August also turned to the idea of a paper currency for his starving town in the year 1810, Goethe, who was acting as the Prince's finance minister, was thrown into a dilemma. He had received a stately home from the Prince in 1794 and spent a small fortune simply to renovate and furnish the place, so he well knew the need for money brought about by an ambitious lifestyle. Goethe knew how difficult it could be to get by on limited means when you had to demonstrate public largesse and dignity. But in the end Goethe rejected the introduction of paper money on the basis of his convictions. He held to what he had already said in his coinage report of 1793 – "that money is only money if it carries intrinsic value, not just on account of its stamp." The functioning system of precious metal currencies, according to Goethe, could not simply be replaced by paper money without there being consequences.
The short tour through the different phases of Goethe's life which illustrates his relation to money ends at a video installation in the centre of the room. The images there remind us of our own crisis, reflecting the political squabbling, showing the flood of fast, changing pictures which rain down on us in our media, flanked by burning bank notes and flickering stock market figures. Standing here in Frankfurt, venerating Goethe along with the rest, one cannot but think of another of his propositions: "No one is more enslaved than he who considers himself free without being so."