Germany's sudden surrender at the end of the World War I, and anger at the loss of life and deprivations which the conflict had inflicted upon Germany, led many to search for scapegoats to blame for the defeat. One theory, which has come to be known as the Legend of the Stab in the Back, (German Dolchstoßlegende -- literally "dagger-blow legend") posited that Germany's war effort had been weakened from within by Communists and Jews on the home front.

In November 1919, General Field Marshal Paul von Hindenburg attempted to exonerate himself and the German army as a whole by placing blame specifically on a Dolchstoß by troops stationed within Germany who joined soldiers' and sailors' unions during the Spartacist uprisings. In the latter part of the War Germany was practically governed like a military dictatorship, with the Supreme High Command (German: OHL, "Oberste Heeresleitung") and Hindenburg as commander-in-chief advising the Emperor. After the last German offensive on the western front failed in 1918, the German war effort was doomed. In response, OHL arranged for a rapid change back to a civilian government. As the Emperor had been forced to abdicate and the military had returned power, it was the temporary, civilian government who "had to" sue for peace.

The effectiveness of the Dolchstoß meme stemmed from the manner in which it addressed the anger and confusion felt not only by the average German, but also by soldiers returning from the front. Many of these men, feeling detached from civilian society as a whole because of their experiences at the front, were only too willing to join the paramilitary Freikorps forming around Germany in an effort to exact some sort of revenge. Further, in blaming Jews and Communists, it blamed groups not thought of as purely German in origin. As such, the Dolchstoß quickly became a central image in propaganda produced by the many right-wing and traditionally conservative political parties that sprung up in the early days of the Weimar Republic. The Dolchstoß figured prominently in propaganda produced by the National Socialist German Workers Party or NSDAP; indeed, one could argue that it became a key aspect of the National Socialist worldview.