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Monday, February 26, 2007

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

Read Keynes' pivotal work about his economic predictions about the world after WWI. Now that we've talked about Europe and the Great Depression, comment on Keynes' main points.

Remember, Keynes was a member of the Bloomsbury Group and therefore a Modernist. Keep that in the back of your mind as you read.

Summarize Keynes' main points. Choose one of his main points to analyze and defend as his most convincing argument.

Due: MIDNIGHT, Monday, Feb. 26

posted by RJS at 8:20 AM

7 Comments:

  • Keyes uses very logical reasoning in creating a prediction for the collapse of Europe's economies. His first point is that the Council of Four was negligent to any issues besides reparations, and that nothing in the Treaty of Versailles could be cited as an example of responsible economics. The powers, as he explains, did not place economic welfare on their list of priorities, and even the allied European powers were going to suffer because of it.
    His most powerful point is that of the careful balance of German economics that is going to be devastatingly disruptive and deadly if the treaty is signed into law. He explains the reliance of the country on imported food to feed its people now that it is no longer an agrarian state. He uses numerical facts to draw the conclusion that the people of Germany will begin to starve if their trade is cut off, as had been the case in Russia and Austria to some extent. This arguement is meant to be rational and yet draw from the moral and ethical values of the powers who defend the treaty. This could be an example of Keyes' modernist background, considering his economic theories weren't created from romanticism, nationalism, capitalism or any other ism but humanism.

    By Blogger Victoria, at Monday, February 26, 2007 6:46:00 PM  

  • I believe Keynes' most convincing argument was the council of the peace not having any long term economic concerns or stability for the newly carved nations but for immediate money flow for reparations all the while persuing narrow goals single minded that would not bring long term stability but merely short term benefits to their specific countries alone.
    Keynes' main points were the absurdity of the level and expense of the reparations and punishments levied on Germany, the severity of the punishments making both the reparations and the recovery of the European economy as a single entity impossible. He also mentions that the leaders seem completely oblvious and/or apathetic to the plight of the everyday person, which he goes on to say are the very people which cause the great damaging upheavels and insurrections. All in all, Keynes seems to be frustrated with the world powers for being so very inraptured with the grain of sand before them, that they manage to ignore the entire desert.

    By Blogger laura, at Monday, February 26, 2007 8:13:00 PM  

  • Keynes is scary good. I hope I can achieve that level of sophistication of thought someday. Why does Adam Smith's system recieve more recognition than Keynesian economics, anyway?
    Keynes writes out in brutal honesty ( a trait I very much admire and strive towards) the economic situation which other European powers simply refused to acknowledge. He blasts the Big Four as being incompetent and moves on to a criticism of the reparations system. His analysis of Europe is wonderful. He simply states that vast amounts of people survive happily only throught vastly complex economic systems. When those systems break down and no attempt is made to fix them, people will cease to exist in a civilization. The most chilling statement is that since Germany will not be able to import enough food, millions of Germans will die as a result of the treaty.
    Even though he quotes instead of writes this, I see no other point which can hope to match this in its pure unadulturated wrathful sense. The Treaty of Versaille should not have been about deciding political blame on various countries and exacting punitive measures. It was supposed to be a way to reorganize the lives of millions of people. Botching the treaty ruined the lives of millions of Germans.
    Germany is a collection of people, not a faceless enemy. The treaty didn't just decrease German currency or stop German imports- it destroyed lives. I have had a modicrum of personal hardship- enough to sympathize, though not enough to truly understand, a little of what that means. I am sure some of you weep a little inside when you see a picture of starving European kids in our book, or a mother and child being executed by a Nazi, or the horrifying image of a broken British miner slumped against a wall. This history is about the hardship and misery of people, not nations. I try to respect their long dead suffering. Millions of deaths. How can I take a calm or cavalier attitude toward those three words?

    By Blogger ThomasBatson, at Monday, February 26, 2007 8:16:00 PM  

  • First of all, I'd like to laugh at the fact someone actually blog-spammed where I do my homework tonight wanting me to change my network browser, which I assume Mrs. Stone deleted. It must have been automated, or why would you target this one?

    Anyway, Keynes focuses on the treaty's disruption of vital long-term trade systems made to keep Europe fed and thriving, and exposes millions to potential death from starvation due to the perpetual debt forced on Europe's governments, and the Big Four's failure to realize this danger. I especially like his deviation from complete Smithian laissez-faire economics by requiring governments to centrally manage their economies without fully planning every function. As Nixon said, "Everyone's a Keynesian now", but we (America) have actually deviated from that as corporations gain more influence, so that our current government's economic policy is generally to cut taxes and let the economy go. Even without an economic depression going on, the government should be a bit more interventionist rather than let corporations handle it. I'm not willing to devote to any one economist as fully correct, as obviously Keynes' argument is very situationally based, but this is more appealingly put than the mercantilism and Adam Smith systems we've been taught about so far.

    By Blogger Unknown, at Monday, February 26, 2007 9:51:00 PM  

  • Keynes' main points seem to consist of the illogical and unethical treatment of Germany through the treaty. He mentions that for such an incredibly industrial center to be cut off from trade, especially when their agriculture is not what it used to be and the people are fairly dependant upon imports, and for the country as a whole to be pushed back fifty years in their development. Keynes also says how Europe is pretty much forcing all of the German people into a corner. They are cut off from everything and made to pay astronomical ammounts, so the obvious choice would be to emmigrate, however most countries wouldn't accept German immigrants. So the German people aren't able to leave the horrible conditions that have been set upon them, an interesting form of torture.
    I find the most convincing argument to be his mention that the four powers are concerned with everything except economic issues. Morality, reparations, but they aren't concerned witht the economic immplications that their actions will have on Germany. So the four powers are pushing Germany into this corner and turning a blind eye to the economic problems, no wonder Germany gets pissed. Jeez, it's like they're poking a bear in the eye or something then they wonder why it tries to eat them.

    By Blogger manxomefoe, at Monday, February 26, 2007 10:26:00 PM  

  • Keynes, in this section, begins talking about how the peace will affect relations between central powers and others. France (he comments) shows a lot of fear and hostility towards Germany, which, along with the contributing ideas of other Allied countries, causes a rift between Germany and those erecting the Peace. This hostility (shown by demands for reparations from Germany and for pleading guilt for the causes of the war) instills in Germany and other central powers a less than friendly attitude towards the Allied Powers.
    His main argument is that the Peace does nothing to help stabilize the economies for the betterment of Europe as a continent. Demanding payment from Germany only debilitates its already crashing economy. Germany suffered as much as France or any other equivalent with casualties. If the Peace was signed, Keynes says that those responsible would also be responsible for the deaths of millions more Germans.
    His most convincing argument is that country-wide starvation could cause hysteria and madness. The following public unrest would be up to the government to control. If a government is too preoccupied with rebuilding its economy and repaying debts, it can't focus on its people and their happiness, and the topmost priority of a government should be its people. As history has already proved, unhappy people blame their government, and in turn cause revolutions.

    By Blogger TeganLove, at Monday, February 26, 2007 10:54:00 PM  

  • Keynes really slammed the Treaty of Versailles. He says the Treaty did nothing to help rebuild Europe, only obstructed its rehabilitation. Keynes argues that the reparations which Germany was forced to pay were too large and would lead to the ruin of the German economy. He also touches on subjects such as starvation(as a result of the failure of the economy), trade, and immigration. Because Germany had transformed into an agricultural state, she relied on other countries for foodstuffs. Keynes states that since Russia's and Austria's economies were failing, Germany's would fail as well, therefore causing starvation among the millions of Germans. He predicts the effects of this failure by claiming that the Allied powers do not realize what they are doing will cause unavoidable consequences to the German economy. Keynes is right to say this because the failure of Russia's and Austria's economies leads to the failure of Germany's economy. And the failure of Germany's economy leads to starvation which leads to death, because no other European countries with stable economies would allow German immigrants. Keynes's attack on the Versailles Treaty and views of the path Europe was taking ultimately predicts the Great Depression.

    By Blogger taylor, at Monday, February 26, 2007 10:57:00 PM  

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