Page 118 - Sterling 2k21

THE ECONOMIC CONSEQUENCES OF PEACE: AN ANALYSIS
The world saw unprecedented slaughter and violence in the four years from 1914- 1918. Yet, some
describe the years
Keynes, one of the world’s leading economists of the 20th century, provides a rare peek into the
world after WWI, and the provisions of
Central powers. Keynes underlines not only the economic and political
repercussions of the Treaty, but also takes a humanistic perspective of the post-
‘Carthaginian Peace’
Germany economically, politically, socially and industrially, but also
have far reaching impacts on the rest of Europe and the world. One particularly offensive clause was
Article 231, which thrust upon Germany and her allies, the entire blame of the War, and thus, the entire
liability to finance the reconstruction.

The Treaty, Keynes analyses, not only burdens Germany with a Reparation of $33-40 billion, but also
handicaps it’s industries, working class, mercantile marine, imports and exports, military and navy,
coalfields, iron-ore mines, and agricultural produce. He argues against these harsh provisions, stating that
they will forever plunge the industry and fields of Germany into depression, and thus she will never be able
to pay off the sum demanded of her in Reparation. Thus, the book shows how the Allies and their “peace”
was extremely one-sided and cruel, almost to the point of being impracticable. We may safely thus
conclude, that the Treaty was a double-edged sword.

The book shows how the pre-war economy of Germany was the fragile centre of all trade and economic
activity in Europe, and how it’s breakdown and further crippling by the Treaty affects not only her own
finances, but those of the countries from which she used to import items in the pre-war times, which after
this financial disaster, she will never be able to. At the same time, it depicts how France, by taking back the
iron rich district of Alsace- Lorraine, which had been taken from her after the Franco-Prussian war of 1870,
has finally been able to exact her revenge, but how this vengeance will cost the world a very high price in
the future, in terms of industrial breakdown in Germany due to lack of resources, and industrial slowdown
in France, due to the lack of industrial machines relative to the resources it had acquired due to the Treaty.

The Treaty was, and always remains a cruel reminder of the triumph of political policies and personal
vengeance, over the vital concern for the upliftment of mankind. Keynes, through this book, has been able
to highlight this beautifully concealed flaw within the treaty, and even provides certain mitigative measures
to battle the oncoming breakdown in Europe and abroad. His suggestions including cancelling Inter-Ally
indebtedness to lessen the financial burden upon al l convalescing countries, granting an international
loan to Germany for the rebuilding of her economy and industry and then finally exacting a fair war debt
from her, and lastly, a thorough and open minded re-drafting of the Treaty of Versailles, taking into
account the opinions of German delegates, an action which had been neglected the first time around.

The book suggests that Keynes’ main motives for opposing the Treaty were not only a sense of concern for
the dwindling standards of life in Europe, but also the looming fear of another oncoming war due to the
dissatisfaction of the wide masses with its provisions. In fact, he even goes so far as to predict a popular
upheaval of the peoples of different states in Europe to overturn the existing government regimes if the
clauses in the Treaty were not rectified soon.

Despite his keen efforts, this dreaded prediction of Keynes came true about 20 years later, when World
War II broke out, and caused even more damage to life and civilian property than ever seen before. In this
light, the injustices done to the German economy and her civilians seem to almost vindicate the emotions of
anger and frustration that might have marred the minds of nationalists like Adolf Hitler, even though their
actions remain unpardonable. It makes you almost question, was WWII actually a symptom, a cure, or
maybe both, for the damages wreaked by WWI and its following “peace”?

Vishakha Singla
XI-E