As the founder of his eponymous economic school of thought, John Maynard Keynes contributed many influential theses on the economics of his day. Nowhere is this more notable than in 1920’s The Economic Consequences of Peace, his controversial criticism of the Treaty of Versailles. Keynes asserted that the Treaty would do little other than prolong and perhaps exacerbate the period of postwar unrest in Europe, noting that “the Treaty includes no provisions for the economic rehabilitation of Europe” (Keynes). Instead, the major powers responsible for the Treaty (i.e. France, the United Kingdom, the United States) used it to advocate their own national interests. With the exception of the U.S., who primarily viewed the Treaty as means of implementing President Wilson’s somewhat unrealistically idealistic Fourteen Points, Keynes argued that the aforementioned nations utilized the Versailles Treaty to reprimand Germany for the damage it caused during WWI , particularly by crippling its economy. Keynes’ ultimate qualm about these tactics was that because Germany, a formerly thriving industrial nation, had become so firmly established as a staple of European industry and commerce, its virtual elimination from this economic community would cripple not only Germany, but all of Europe. Although this excerpt did not offer any explicit alternatives to the Versailles Treaty, Keynes was noted several years later (1933) as an advocate of “economic nationalism…the autonomy which individual states had gained over policy as a result of the collapse of a unified international economy” (Mazower, 137). It is then perhaps reasonable to infer that in the wake of this interwar economic crisis, Keynes felt that a Europe composed of economically independent states would be more stable than the tightly interdependent economic climate that dominated the decades prior.
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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.