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Hearing Tobias Straumann talk is like listening to a colleague give a succinct explanation of the world's nebulous machinations over a quick pint after work. He casually chats about complex issues and explains tricky details with ease. As an economic historian, he's a highly sought-after expert in any discussion on economies in crisis – it's one of the reasons he's been placed sixth in the NZZ ranking of Switzerland's most influential economists, up from rank 27 two years ago. His profound insight into Switzerland's financial and economic history and his ability to skillfully mediate between academia and society have earned him the Doron award, which comes with CHF 100,000 prize money.
Lying on the small round table in Straumann's office at the Department of Economics is a copy of his new book Debt, Crisis, and the Rise of Hitler, which is now also available in German under the title 1931 – Die Finanzkrise und Hitlers Aufstieg. The work has enjoyed wide recognition and was included in the Financial Times list of best books of 2019. In it, Straumann examines the fateful correlation of economics and politics that facilitated the rise of National Socialism after the 1931 German financial crisis. The book reads like a crime novel. Straumann smiles and tells me that he was guided by ancient tragedies for the structure of his text.
Substantiated with precise source analyses, the book follows the key protagonists of the period – in particular Reich Chancellor Brüning, who was in a hopeless catch-22 situation. The government of the Weimar Republic faced a desperate dilemma: After World War I, debt-ridden Germany was forced to make unrealistic reparation payments to the Allies. This meant enforcing severe austerity measures during a deep recession, which resulted in the collapse of their entire fiscal and monetary system. The crisis played into the hands of the National Socialists and assisted their ascent to power.
Outside, the fall sunshine warms the tarmac. Straumann slides the book aside, sighs and says: "With regard to economic policies, there are certainly lessons to be learned from historic financial crises. It's important that international agreements are realistic and flexible enough. Rigid reciprocal commitments can paralyze a country during a time of crisis." Straumann points to the Greek crisis as an example. "The problem there is the European monetary union," he continues. "In contrast to European security policy, which is designed to be adaptable, the monetary union impinges greatly on the individual countries' sovereignty." Straumann explains that the creation of the Euro de facto canceled out the member states' own monetary and fiscal policies. "These, however, are an important instrument for crisis management. If required, a country can use them to devalue its own currency and tailor its monetary policy to suit the needs of its economy." Entering the monetary union removes this option entirely. In the case of Greece, the European Central Bank eventually stepped in to prevent bankruptcy, but only after prolonged wrangling.
Straumann repositions his chair. He grew up in the village of Oberrohrdorf near Baden, which he describes as an unremarkable, comfortable sort of environment – lots of children to play with in the garden and on the street. He comes from a teaching family. There were numerous primary and secondary teachers among his relatives and his mother was also a teacher. His father, Norbert Straumann, was a physics professor at UZH. That's probably where his flair for numbers stems from. But as a young man, he decided against studying mathematics – too similar to his father, he felt. Now, through his specialization in financial and economic history, numbers have found their way back in to his working life.
With his calm manner, Straumann comes across as modest and nonchalant. Those who encounter him as an economics and crisis expert in the media struggle to place him politically. He can neither be assigned to the left nor the right. Straumann nods. That's important to him. "As an academic, you can't be guided by ideological convictions, " he says. "Every issue has to be considered independently. And you have to be free to change your mind – that's a basic requirement for research and academic learning. Reality is complex and doesn't hold any simple answers. That's something one has to cope with," Straumann adds with a smile.
His ability to explain the world's nebulous machinations in a comprehensible manner is probably also due to his background as a journalist. After his PhD thesis – Straumann studied history and sociology and did his doctoral degree on the development of laboratory research in Basel's chemical industry – he'd had enough of academia and embarked on a career in journalism. Working for the regional weekly paper Zuger Presse he reported on business issues and was soon writing for the Zurich-based Tages-Anzeiger. Straumann leans back in his chair and recounts how as business editor he often searched for experts who could explain economic issues in a historical context – without success. "In the 1990s, historians tended to focus on cultural topics," explains Straumann, "while economists had little interest in history. Economic history was a rather exotic subject."
But when it comes to analyzing economic crises, the relationship between politics and the economy is hugely important. Examining this relationship requires an understanding of economic processes as well the ability to study relevant sources. Straumann laughs. He didn't ponder the matter for very long – "if there isn't anyone who can do this, then I'll simply fill the gap." He swapped sides and went back to university to specialize in economic history.
In 2000, Straumann and his wife, a piano teacher and jazz pianist, went to Berkeley for a year. The experience stoked his enthusiasm. At the University of California, he met the great and the good of economic history: Barry Eichengreen, Brad DeLong, Christina Romer – their names loom large on the spines on Straumann's bookshelf. Those encounters gave him a big push. "Coming from a different discipline, I had to work pretty hard to keep up with the clever economists," Straumann recounts. "It was intensive and stimulating – I benefited hugely," he emphasizes. His passion for the subject still shines through.
It was during his time in Berkeley that he started his habilitation thesis on the exchange rate regimes of small European states in the 20th century, which he finished in Zurich in 2007. Now a father of two sons aged 13 and 18, he has been an adjunct professor of modern history at UZH since 2014 and earns his living from various teaching assignments at the Faculty of Arts and Social Sciences as well as the Faculty of Business, Economics and Informatics. Since spring 2019, he is also in charge of the Master of Advanced Studies in Applied History at UZH.
And what does he plan to do with the Doron prize money? "Plow through mountains of records," he says with a smile. In his next book, Straumann wants to examine the circumstances of the German debt mountain after World War II. There's plenty of sources yet to be tapped on the subject. It's the kind of work that suits Straumann down to the ground.
