Keynes and Versailles, 100 years on

The 100th anniversary of the Treaty of Versailles is coming back. I have a piece in The National Interest which ran under the headline (selected by the subeditor, as is usual), America Needs to Reexamine Its Wartime Relationships. Keynes first came to public attention with his critique of the Versailles Settlement, The Economic Consequences of the Peace, whith foreshadowed, in important respects, The General Theory of Employment, Interest and Money.

I argue that the rise, fall and rise again of the standing of Keynesian macroeconomics runs in parallel with views on the justifiability of the terms imposed at Versailles and more generally of the use of war as a policy instrument.

4 thoughts on “Keynes and Versailles, 100 years on

  1. A minor correction, only worth making in that the error inintentionally accepts part if the Dolchstoß lie. The majority of the German Army in France were no longer in the trenches on November 11 1918 but in open country a hundred miles east of it. Map here *****
    The opposing armies were still in their trenches only between Nancy and the Swiss border.

  2. Asymmetric intergroup bullying: The enactment and maintenance of societal inequality at work

     To break out of this pattern, a regime can attempt to decouple political power from economic ascendancy, freeing up the public and private sectors to operate on principles of efficiency, merit and fairness rather than sociopolitical concerns. On the other hand, one could argue that any society that has experienced a long history of political and economic asymmetry between social groups risks further entrenching this asymmetry if social group identities are downplayed before the imbalance in income and wealth between them is addressed. Though it sets a difficult task, the lesson for Turkey and other countries is that…

    *** until inequality and polarization between social groups are addressed, management practice and workplace interactions may continue to display patterns of asymmetric intergroup incivility and mistreatment.”***

  3. So much history seemingly explained by this article and I cant find where the argument is significantly wrong.

    It’s interesting that the idea that governments should pay their debts no matter what had a resurgence at precisely the time when there had been a huge build up of odious debts in the context of political constraints that had just been lifted. The third world debt crisis being caused by the west funding of its cold war allies who we could not do without. Not saying they are causally related but interesting coincidence.

    My understanding is that some or a large part of the debts were waived ostensibly for moral reasons but probably at a point when they could never be repaid.

  4. John Maynard Keynes was doing his economic studies under his father’s friend Alfred Marshall. He was a long way away from his 1936 theories. Still it was the Great Depression that exposed the fault lines in Classical economics. As Keynes himself once famously retorted to a journalist, who had accused him of always changing his position on the economic solutions,
    “I change my opinion when the facts change…” or words to that effect.
    This anniversary is significant for all students of economics!

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