Europe’s Economies after the First World War

When the Allies met in Paris to negotiate the terms for peace after the First World War, their main goal was ostentatiously to create stability in Europe, but each representative came to the table with his own specific interests in mind. This led to major issues in the Treaty of Versailles, such as its questionable economic feasibility. In his book, The Economic Consequences of the Peace, John Maynard Keynes discusses how the preoccupation of the Allies caused them to deal with economic issues using politics and without considering the future of Europe’s economies. While the Treaty of Versailles set many future events in motion, the economic turmoil it created was the most dramatic and disastrous effect it had on the European Continent.

As Mark Mazower writes in Dark Continent, “After the Great War, Europe’s economic life was in chaos.” He goes on to describe the hunger and rapidly falling prices that ensued in Europe following the war. (Mazower 104) Keynes elaborates on the same point, stating that, “In relation to other continents Europe is not self-sufficient; in particular it cannot feed itself.” The people of the industrialized cities of Europe need to obtain supplies like food from outside their cities if they are going to survive. When war breaks out, these supply lines are broken, and because of “… the interruption of the stream of supplies, a part of this population is deprived of its means of livelihood.”(Keynes) After the war, no agreement to eliminate economic tariffs is made, as was suggested by President Wilson in his Fourteen Points, causing even more economic stress in Europe.

A large part of the economic wrongdoing in the Treaty of Versailles was directed at Germany. Not only did Germany have to accept blame for the war, it also had to pay reparations to the Allies for the damage it caused. Germany was also stripped of its colonies, leaving it little economic prospect for paying the Allies.  In response to these terms in the treaty, Count Brockdorff-Rantzau identified that the terms of the peace treaty would literally and economically starve Germany, and that, “Those who sign this Treaty will sign the death sentence of many millions of German men, women and children” (Keynes).

The Treaty of Versailles possessed many economic faults, and, writing in 1920, Keynes foreshadows many of the consequences that these faults will have on Europe. The treaty doesn’t help to restore Europe’s economic vitality or create stability in Central Europe, leaving Europe liable for depression and bloodshed.

4 thoughts on “Europe’s Economies after the First World War

  1. I thought that this post was very strong. You did an excellent job interweaving Keynes’ perspective with Mazower. (One small thing, your citations should follow immediately after a quotation.) You said at one point that the treaty “set many future events in motion, the economic turmoil it created was the most dramatic and disastrous effect it had on the European Continent,” but wouldn’t you also say that many of these “future events” were largely impacted by the economic crisis and situation in Europe following the war?

  2. I agree with you that the economic crisis affected many future events in Europe, but issues such as minority rights, nationalism, and genocide that came from the movement of boarders and creation of new countries by the Treaty of Versailles, were some what separate from the economic problems of the time.

  3. This post was very thorough. Your ability to use both the Mazower text and Keynes, in a sort of unison was very interesting and it really drove your points home. However it seems that you a bit strong with your assertion that the Versailles treaty set up the financial crisis of Europe. There is no question that it had a large part, but other issue’s like the influx of American capital and other political and social problems had a effect on the financial crises of the inter war period as well.

  4. I think this is a very strong post, and you provided lots of evidence to back up your argument. It was important to note social life following the first World War, as this was something that Keynes emphasized in his writing. The concept of Europe losing millions of people to starvation and poverty was a very important concept to Keynes. I would rephrase the last sentence, because I feel that the argument could have come across stronger there.

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