John Maynard Keynes: The Economic Consequences of the Peace, 1920.

In this article, Keynes talks about the Treaty of Versailles, and it’s failure to address the economic issues of a post-Great War Europe. He states that victorious Allied powers fail to realize that the stability of Europe, and thereby the stability of both France and Britain as well, is reliant on a complicated system of continental and global trade, which the Treaty attempts to disintegrate.

He focusses on Germany and uses them as a representative of post-war Europe. He believes that the booming population levels, in relation to the rapidly increasing pre-war industrial levels, would not be able to survive with the territorial and financial sanctions the Treaty proposes. His prediction is proven by Mazower in his text “Dark Continent”. Mazower states that because the smaller Central and European nations did not have sufficient resources, they suffered in the post-Great War period. It was only with American loans were they able to initially recover, and thus through American liquidation during the Great Depression they were thrown back into economic turmoil. Alternatively, Russia was self-sufficient during the interwar period, and thus was an economic success, admittedly with a large human cost (Mazower, p.124-5). Finally, Mazower states that while autarky was a good short term plan, in the long run it was detrimental to the Russian economy (Mazower, p.119), especially in comparison to the trading-centric post-World War Two continental economies.

While Keynes’ criticisms are economically valid, he fails to address the volatile political situation of 1919. A perfect example of this revenge-based politics is the War guilt clause written into the Treaty of Versailles. This was unnecessary addition economically, but was an important political addition, especially to the democratic governments in Britain and France. In my opinion, Keynes, while economically correct, fails to acknowledge the context of the Treaty signing, and thus fails to provide viable alternative solutions.

6 thoughts on “John Maynard Keynes: The Economic Consequences of the Peace, 1920.

  1. This is a very good post. You address many of the major themes of the Keynes’ excerpt. Keynes did not address the political climate at the time of the treaty, but would acknowledging these factors have made the consequences any different? This excerpt is so powerful because he addresses the negative ramifications of the treaty, though he is British; the objectivity of this piece is really very helpful to understand how drastic these conditions were. One thing that would make this post stronger is citing the page numbers of Mazower when you paraphrase, just so that it is clear where the information is coming from.

  2. This post was very interesting. Your connections with the Mazower text were very helpful in backing up the points you were making, especially when talking about America and it’s backing of many of the European countries. However I think that you misjudge Keynes. His text’s focus on only economic issues can be seen not as a result of his political ignorance, but on the vast importance he puts on economic issues. The point can be made that Keynes simply held the view that the overall economic health of Europe was more important then the desire for revenge held by some countries after the war, and that economic unity was the only way to have a health and successful Europe.

  3. This post is excellent in proving a well rounded understanding of Keynes. First it quickly but successfully summarizes the document. Second it accurately places a context of Mazower’s work and the bigger picture. Third you address issues you perceive with Keynes’ thoughts, specifically the political implications. The logical structure works well to build from thesis to explanation to criticisms. While I would say there is obviously much more to say about Keynes, confined to a blog’s length this post works very well as a reaction piece.

  4. This was a great analysis of Keynes’ writing. You were clear about what Keynes was trying to emphasize when describing the problems with the Treaty. I also thought you made great connections to the Mazower text; I thought it was smart to connect post-World War I Germany to Russia. However, I agree with previous comments: Keynes did not address the political situation at that time because his main focus and area of expertise was with the economic side of Europe.

  5. Good job on this post. I like how you stated Keynes’ main argument right at the beginning of your post, which was that the Treaty of Versailles compromises the economic integrity of all of Europe. The selection from Mazower that you included does an excellent job of showing how certain countries were unable to recover because their economies were shattered beyond repair and they had lost the ability to be self sufficient as they were in the past. If he did take some of the other factors that you mentioned into consideration, do you really think he would change his mind all that much? It seems as though it was correct of him to take this unbiased approach because he was very accurate in his predictions.

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