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.