Creation of the Weimar Republic (1918-19)

• When analysing markets, a range of assumptions are made about the rationality of economic agents involved in the transactions
• The Wealth of Nations was written

  1776
• Rational


  (in classical economic theory) economic agents are able to consider the outcome of their choices and recognise the net benefits of each one
• Consumers act rationally by


  Maximising their utility
• Producers act rationally by


  Selling goods/services in a way that maximises their profits
• Workers act rationally by


  Balancing welfare at work with consideration of both pay and benefits
• Governments act rationally by


  Placing the interests of the people they serve first in order to maximise their welfare
• Groups assumed to act rationally


  • Consumers
  • Producers
  • Workers
  • Governments
• Rationality in classical economic theory is a flawed assumption as people usually don't act rationally
• A firm increases advertising

  Demand curve shifts right
• Demand curve shifting right

  Increases the equilibrium price and quantity
• If you add up marginal utility for each unit you get total utility
• The Weimar Republic and its new Constitution still faced problems
• The Treaty of Versailles robbed the new democracy of its legitimacy and the association of the Republic with the Treaty made most Germans view it as betrayal of the country
• There was concern about democracy because it gave power to the uneducated, including women, and to the poor who wanted to take away the power and wealth of the rich, and it was deemed to be weak and indecisive as it made decisions based on discussions
• Popular Militarism undermined democracy as it was a popular respect expressed through Navy League, Defence League etc which argued for expansion of armed services which opposed with democracy
• The Weimar Republic has often been called a 'makeshift democracy' because it was the result of haste, compromise and a lack of legitimacy (no public support), military leaders only supported democracy to win favourable peace deal and have blame taken off them, and the Conservatives and nationalists supported democracy in order to prevent a communist revolution
• Groups and their support/opposition to the Weimar Republic

  • Working Class (supported)
  • Middle Class (mixed support and opposition)
  • Women (supported)
• The working class were in favour of the Republic because it gave workers new legal rights and a more secure position in negotiations with business leaders
• The middle class didn't support the Republic as much as the working class but there was still considerable support because they initially favoured the end to war and were therefore in favour of the constitution
• The Weimar Republic had huge support from women because female workers had been involved in the strikes against the monarchy and felt involved and listened to, and the franchise had finally been expanded to allow women to vote
• Despite being in favour of ending the war, many of the middle class were against the Republic because they were in favour of a monarchy
• In mid-1919, the middle class felt threatened by democracy and lacked political unity behind a single party (unlike the working class who largely supported the SPD)
• In 1923, hyperinflation caused people to lose of their savings, and the working class were badly hit so felt huge resentment, with many believing only a far-right party (such as the Nazis) could save them from socialism and communism
• Many women didn't support because trade unions tended to represent men so there was limited support for working women, and women were less willing to vote for extreme parties, with very few ever voting for Nazis and KPD in the 1920s