Friday, November 11, 2011

From "The Economic Consequences of the Peace" (1919)

"This was the atmosphere in which the Prime Minister left for Paris, and these the entanglements he had made for himself. He had pledged himself and his Government to make demands of a helpless enemy inconsistent with solemn engagements on our part, on the faith of which this enemy has laid down his arms. There are few episodes in history which posterity will have less reason to condone - a war ostensibly waged in defence of the sanctity of international engagements ending in a definite breach of one of the most sacred possible of such engagements on the part of the victorious champions of these ideals."

Keynes provides a footnote to this paragraph:

"Only after the most painful consideration have I written these words. The almost complete absence of protest from the leading Statesmen of England makes one feel that one must have made some mistake. But I believe that I know all the facts, and I can discover no such mistake."

The reference is to the wide gulf between the broad outline of terms in the armistice (commemorated today), and the treaty negotiations which were supposed to specify the details of that armistice, but instead instituted a new (and as Keynes put it) "Carthaginian peace". The culprits for Keynes were a vengeful Georges Clemenceau, a politically opportunistic Lloyd George, and a naive, lackluster Woodrow Wilson who probably wanted what Keynes wanted but was completely in over his head in Paris. We often hear about how Keynes clobbered Wilson in the book, but actually the treatment of Lloyd George is much, much worse (and perhaps he deserves every bit of it).


  1. The would-be philosopher-mathematician became a world-class economist. His mathematics fellowship dissertation was done during the Edwardian era in probability, where he studied under Bertrand Russell and Alfred North Whitehead. "The Economic Consequences of the Peace" and the material that would become "A Treatise on Probability" in 1921 were criss-crossed in these years. Could it be that it was because of his mathematics training that he rose to greatness?

  2. Another credible voice that supports the idea that the environment that fostered WWII was deliberately, albeit unknowingly, created at the end of WWI.

  3. Off topic, but here's my latest: Russ Roberts vs Krugman


  4. Excellent passage. It occurs to me in thinking about this that the evil of the betrayal of Germany, which Keynes denounces, extends to poison the well-being of Europe even in our own day. It was the treaty's extortionate repairations that caused the German hyperinflation; it is (inaccurate) memory of that incident that makes the ECB so obdurate in its refusal to act to save the Euro.

  5. Something that tends to be overlooked: the Second Reich imposed much more vicious provisions on the defeated Russians in the Treaty of Brest Litovsk than the Western Allies imposed on the Weimar Republic at Versailles. That was part of the context of the time.

    As historian John Terraine points out, Haig saved Lenin (by defeating the Germans) while Ludendorff defeated himself by leaving his cavalry on the Eastern Front to secure the imperial gains, so he had no arm of exploitation when he broke through in the second Battle of the Marne.

    That does not mean anything Keynes said was wrong: just that vengeful peace treaties seemed to be what was on offer.


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