HITLER swept into power partly on a tidal wave of worthless currency. Few things did more to discredit the Weimar Republic, Germany's experiment with parliamentary democracy after World War I, than the hyperinflation that gripped the country in 1922-23. Economic panic contributed to social chaos, which opened the door to the politics of the brownshirts. Weimar leaps to mind as one views the hyperinflation that has seized Argentina (as well as Brazil) recently. That's not to suggest that a Third Reich is waiting to be born in Argentina. But Weimar is an object lesson for the extreme peril that runaway inflation poses to representative government.
Prices in Argentina are vaulting. Looting of food stores in Rosario and Buenos Aires prompted lame-duck President Ra'ul Alfons'in to declare a state of siege Monday. Though justifiable to restore order, it's but a stopgap.
Argentina's economic woes are compounded by political uncertainty. The new President, Carlos Sa'ul Menem, isn't scheduled to take office until December. With Mr. Alfons'in's authority virtually evaporated, he'll have trouble making stick any new economic-reform measures, such as the austerity package he introduced last weekend. It would be in the best interests of the country for Alfons'in and Mr. Menem to negotiate a swift transfer of power. One attempt to do so broke down, but the leaders should persist.
Menem has been vague about his economic plans. The historical platform of his Peronist party - concessions to labor and heavy public spending - is not encouraging. Yet some observers predict that Menem will rise to the moment, using his popularity with workers and the center-left to bring about effective economic reform (``Nixon in China'').
The causes of Argentina's profound economic pathology, reflected in hyperinflation, are intractable. The nation needs truly courageous leadership. Recent successes in Mexico and Bolivia show that it's not political suicide to take an implacable stance against inflationary forces. Weimar shows that the price of flinching can be very high, indeed.