On “The Economic Consequences of the Peace” by John Maynard Keynes ***

I was looking for a book by Keynes for my economics reading list and chose this one. It wasn't quite what I was looking for insofar as it didn't really seem focused on what folks call “Keynesian economics.” Then again, I didn't really want some really scholarly text, and that was one main reason I settled on this one: because it was, I read, intended for a popular audience. By that, however, the “popular” audience was very much that of its day. There wasn't much in here that I felt invested in in our day.

That said, the book is an interesting snapshot of one of the concerns of its day, and in it, one can see that Keynes had some foresight. The text largely criticizes the conditions of the peace treaty coming out of World War I, one that was very draconian in the manner in which it treated Germany and that was not in keeping with the assurances Germany had been given when it surrended. He shows how the punishment, the payment forced on Germany by the winners of the war, was unsustainable. It took away chunks of land that Germany had had, some indeed of the most productive land. It asked Germany to repay based on a degree of production that it was incapable of, especially without that land. And it rewarded nations that were not as damaged by the war as certain others and that could have likely sustained the losses—namely Britain and in turn the United States (which Britain was indebted to and thus was repaying), as opposed to nations like France, which suffered much more substantial losses and whose payment was likely more justified.

The result, Keynes hints, is one that is actually not going to resolve issues that it hopes to resolve and instead is likely to lead to the renewal of hostilities, because the German population is not going to be willing to be taxed into poverty for war debt with no end in sight. Such are the arguments, and such, of course, is what came to be.