Burdensome reparations imposed after World War I, coupled with a general inflationary period in Europe in the 1920s—another direct result of a materially catastrophic war—caused spiraling hyperinflation of the German Reichsmark by 1923. This hyperinflationary period combined with the effects of the Great Depression (beginning in 1929) to seriously undermine the stability of the German economy, wiping out the personal savings of the middle class and spurring massive unemployment.
Such economic chaos did much to increase social unrest, destabilizing the fragile Weimar Republic. Efforts of the Western European powers to marginalize Germany undermined and isolated its democratic leaders and underscored the need to restore German prestige through remilitarization and expansion.
The social and economic upheaval that followed World War I powerfully destabilized Germany's fledgling democracy and gave rise to many radical right wing parties in Weimar Germany. Particularly detrimental in connection with the harsh provisions of Versailles was the rampant conviction among many in the general population that Germany had been "stabbed in the back" by the "November criminals"—those who had helped to form the new Weimar government and broker the peace which Germans had so desperately wanted, but which had ended so disastrously in the Versailles Treaty.
Many Germans forgot that they had applauded the fall of the Kaiser, had initially welcomed parliamentary democratic reform, and had rejoiced at the armistice. They recalled only that the German Left—Socialists, Communists, and Jews, in common imagination—had surrendered German honor to a disgraceful peace when no foreign armies had even set foot on German soil. This Dolchstosslegende (stab-in-the-back legend) was initiated and fanned by retired German wartime military leaders, who, well aware in 1918 that Germany could no longer wage war, had advised the Kaiser to sue for peace. It helped to further discredit German socialist and liberal circles who felt most committed to maintain Germany's fragile democratic experiment.
Vernunftsrepublikaner ("republicans by reason"), individuals like the historian Friedrich Meinecke and Nobel prize-winning author Thomas Mann, had at first resisted democratic reform. They now felt compelled to support the Weimar Republic as the least worst alternative. They tried to steer their compatriots away from polarization to the radical Left and Right. The promises of the German nationalist Right to revise the Versailles Treaty through force if necessary increasingly gained inroads in respectable circles. Meanwhile the specter of an imminent Communist threat, in the wake of the Bolshevik Revolution in Russia and of short-lived Communist revolutions or coups in Hungary (Bela Kun) and in Germany itself (e.g., the Sparticist Uprising), shifted German political sentiment decidedly toward right-wing causes.
Agitators from the political left served heavy prison sentences for inspiring political unrest. On the other hand, radical rightwing activists like Adolf Hitler, whose Nazi Party had attempted to depose the government of Bavaria and commence a "national revolution" in the November 1923 Beer Hall Putsch, served only nine months of a five year prison sentence for treason—which was a capital offense. During the prison sentence he wrote his political manifesto, Mein Kampf (My Struggle).
The difficulties imposed by social and economic unrest in the wake of World War I and its onerous peace terms and the raw fear of the potential for a Communist takeover in the German middle classes worked to undermine pluralistic democratic solutions in Weimar Germany. They also increased public longing for more authoritarian direction, a kind of leadership which German voters ultimately and unfortunately found in Adolf Hitler and his National Socialist Party. Similar conditions benefited rightwing authoritarian and totalitarian systems in Eastern Europe as well, beginning with the losers of World War I, and eventually raised levels of tolerance for and acquiescence in violent antisemitism and discrimination against national minorities throughout the region.
Finally, the destruction and catastrophic loss of life during World War I led to what can best be described as a cultural despair in many former combatant nations. Disillusionment with international and national politics and a sense of distrust in political leaders and government officials permeated the consciousness of a public which had witnessed the ravages of a devastating four-year conflict. Most European countries had lost virtually a generation of their young men. While some writers like German author Ernst Jünger glorified the violence of war and the conflict's national context in his 1920 work Storm of Steel (Stahlgewittern), it was the vivid and realistic account of trench warfare portrayed in Erich Maria Remarque's 1929 masterpiece All Quiet on the Western Front (Im Westen nichts Neues) which captured the experience of frontline troops and expressed the alienation of the "lost generation" who returned from war and found themselves unable to adapt to peacetime and tragically misunderstood by a home front population who had not seen the horrors of war firsthand.
In some circles this detachment and disillusionment with politics and conflict fostered an increase in pacifist sentiment. In the United States public opinion favored a return to isolationism; such popular sentiment was at the root of the US Senate's refusal to ratify the Versailles Treaty and approve US membership in President Wilson's own proposed League of Nations. For a generation of Germans, this social alienation and political disillusionment was captured in German author Hans Fallada's Little Man, What Now? (Kleiner Mann, was nun?), the story of a German "everyman," caught up in the turmoil of economic crisis and unemployment, and equally vulnerable to the siren songs of the radical political Left and Right. Fallada's 1932 novel accurately portrayed the Germany of his time: a country immersed in economic and social unrest and polarized at the opposite ends of its political spectrum. Many of the causes of this disorder had their roots World War I and its aftermath; and the path which Germany took would lead to a still more destructive war in the years to come.