Goethe, money and the Faustian pact

Goethe's fear of paper money, as a continuation of alchemy by other means, still influences German thinking

For anyone struggling to grasp German attitudes to money and debt in the euro zone crisis, all roads lead to Frankfurt.

Germany’s financial capital is not just home to two central banks, the Bundesbank and the European Central Bank, but also a yellow, baroque building in the shadow of the ECB tower.

It was here that Germany’s literary genius, Johann Wolfgang Goethe, was born in 1749.

Now a museum, the Goethe Haus is home to a fascinating exhibition, Goethe and Money (Goethe und das Geld), exploring how societal attitudes to money informed Goethe’s writing which, in turn, shaped German attitudes to money.

Goethe was born with a silver spoon in his mouth thanks to a thriving family business and some advantageous marriages. Though friendly with several banking families – Goethe almost married into one – losses sustained by institutions after the Napoleonic wars gave the writer a life-long suspicion of banks. The writer’s household accounts show he was far from the frugal German stereotype, often spending 15 per cent of his annual earnings on wine. Bailouts from his mother and employers were a regular affair. As the exhibition curators note, Goethe defended his spendthrift ways as “crucial for the development of his personality”.

He was more stringent when he became finance minister of the duchy of Saxe-Weimar, around what is now the eastern state of Thuringia, from 1784.

This was an economically depressed provincial patchwork with a ruler, Duke Karl August, who viewed the state purse as his own and was attracted to the idea of erasing his substantial debts by embracing the new trend of paper money.

Unfortunately for him his finance minister, Goethe, had followed closely the escapades of John Law, the Scottish economist and financial adviser to King Louis XV of France. Law’s attempts to stimulate the war-ravaged French economy, by printing paper money and replacing national debt with shares in economic ventures, ended in economic disaster.

Eventually Goethe managed to talk the duke away from the French model and down a path of reform, an experience that helped inspire his literary masterpiece, Faust.

The first part of Faust, obligatory reading in all German schools, centres on the notorious “Faustian pact” between the eponymous scholar and the devil Mephistopheles.

The devil promises to do Faust’s bidding on earth. But if Faust ever wishes for a moment in his life to last forever, Mephisto gets his soul. Money plays a key role in the climax of the pact in the second part of Goethe’s tragedy, published posthumously.

Faust II opens in the bankrupt court of a hedonistic emperor. The royal treasurer reports that the “coffers are still empty”, as are the royal cellars thanks to regular parties. The luckless court alchemists still have all lead and no gold.