Badenheim 1939 is known as a seminal work of Holocaust literature. Rather than providing a realistic account of the atrocity, it envelops its historical references in a satirical allegory. In doing so, Appelfeld points to the the loss of sanity that ensues in the fictional Jewish-Austrian village as a proxy for the absurd logic of genocide. The cascade of insanity ironically begins at Badenheim's annual arts festival. Appelfeld's choice of occasion suggests that while crimes against humanity squelch and interrupt the arts, they also originate from a similar process of artistic formation.

When the "Sanitation Department" (a euphemism for the Nazi regime) arrives and begins to extricate the Jews to eastern Europe, they try to rationalize the regime's actions. Since there is no moral logic behind Hitler's state-sponsored genocide, the Jewish people internalize the unintelligibility of their situation and turn on each other as the only available scapegoats. Appelfeld thus depicts the collapse of European society as predicated on this moral and intellectual confusion and the need to assign culpability to an "other" when the orchestrator of suffering is alienated from everyday life.