17 thoughts on “The Economic Consequences of the Great War

  1. This is an excellent and in-depth analysis of political economics from 1914 onward. One has to remember that John Maynard Keynes was NOT an economist. He was eventually a Professor of Mathematics. As a political journalist and Treasury adviser he came at issues from a non economic perspective. This left open many questions economist would love to have asked of the so called “Treasury view” of the 1920s and 1930s so strongly endorsed by English politicians like Winston Churchill. That very endorsement would be a sign today that something was horribly wrong with this “Treasury view”. Politicians rarely understand economics in the applied sense of that word. They think they understand concepts like the gold standard. But in reality they are at a cave man understanding of this complicated exchange rate mechanism. In the 1920s one can imagine English politicians standing around in the halls of Westminster saying things like
    “Gold standard good! Debt bad!”
    Really not much has changed from this orthodox view of political economics. Not sure anyone who does serious economic research today would support such a view. The “Treasury view” as outlined on pages 11 and 12.; ended up in Australia during the early years of the Great Depression. Sir Otto Ernst Niemeyer was sent out to Australia to get an assurance on debt repayment potentialities. An Oxford graduate, Niemeyer was an advocate of the “treasury view”. On his mission he was joined by Professor Theodore Gregory and Raymond Kershaw who was an Australian economist. Niemeyer was appalled by what he found going on in Australia. His advice to the Scullin Government was that its people would have to “accept a lower standard of living”. He ignored advice from Keynes who had pointed out that it was “gravely embarrassed by the fall in the price of their staple exports” ( D.J. Markwell “Keynes and Australia” page 14 (Sydney: RBA). Research Discussion Paper 2000/04; and were not ready to be pushed too hard by the Bank of England.

  2. Don’t start a book by announcing what are not going to do.

    Nothing about France, still a Great Power in its own eyes. Unlike Britain and Germany, the war had surely led to the destruction of a great deal of the industrial base, concentrated round Lille,
    occupied and very close to the front.

    A few open parentheses for the copy editors to pick up. I’m not sure about the substantive footnotes. Purists object to all of these, and argue that if you can’t fit a point into the flow of the text, you should drop it. I waver, but the general rile is caution. Consider text boxes as an alternative, for illustrations not digressions..

  3. J.Q,

    I agree one thousand percent! Particularly in relation to textboxes. They break up text flow. They are antithetical to a connected argument. They promote the idea of the existence of stand-alone points which is anathema to any complex system analysis. I will accept textboxes in some manuals (the type for dummies usually).

    I do like the idea “text-boxes” in Tristram Shandy though, by Laurence Sterne. I haven’t read it yet, but I do like the idea. The page or page and a half of asterisks, the blank page, the black page and the marbled page all act as kinds of textboxes or perhaps anti-text boxes. A creative novelist’s technique of course and not appropriate (even when text is in the box) for a connected argument. Of course, one could use it for a little light relief. A page of asterisks would represent the publishable non-expeletive laden part of what I, at least, think of neoliberals. A black page would represent our future, as in “Here is our future if we do not act immediately and effectively on climate change”.

  4. Prof Q (I’m sorry, I started calling you that and now it’s hard not to), have you considered getting a phone or laptop from https://puri.sm/, to enhance your already purist purism?

    I prefer a single level of footnotes, unless you’re Terry Pratchett. Just number the things, and if you have footnotes in your footnotes they go in the sequence. Also, if a single footnote takes a whole page (or more) they should all be banished to the end of the chapter.

    But I imagine that your editors will gleefully overrule “someone on the internet said”.

  5. footnotes,index,bibliography
    tha lot!

    and illustrations black and white and colour…line( Rackham preferred)or photo, diagrams (for idiots).
    and if historical,the years under discussion in the margin.

    and in bookform. cyber is alright in small doses but i can’t lay it facedown and come back to it.
    also books can be dropped.even from a great height.try that with your entire library encoded in plakky and glass.

    you leave sir terrence alone , he can no longer bite back.

  6. I enjoyed reading the draft chapter 1. IMHO, the text so far is an example of ‘history does not repeat itself but it rhymes.’ – or some words to this effect. Less poetically put, pattern recognition with respect to a particular question makes for interesting reading.

    Your revised description of German policy after the GFC is now fair enough, IMO. [1]

    Yes, I did notice a very small number of obvious typos and one missing closing bracket. Surely, they will be picked up by a proof reader.

    I prefer footnotes to endnotes. No boxes, please.

    I look forward to the next preview.

    [1] As an aside, it is often useful to have some people arguing for expenditure restraint because the pressure on governing politicians to increase ‘money printing’ or debt for the benefit of some interest groups is quite high at times.

  7. Agreed on endnotes. But on KIndle or Torah scrolls, they are the only notes you can have.

  8. Ernestine you are entirely welcome. But I cannot take the credit, Despite studying the life and works of John Maynard Keynes over the last forty-seven years, I was still unaware of that Reserves Bank of Australia Research Discussion paper from their 2000 collection. Back then I was still teaching economics! So I have no excuse.. The credit has to go to Zachary D. Carter whose new book THE PRICE OF PEACE (RANDOM HOUSE New York 2020) is a goldmine (no pun intended on Keynes’s life) of information on the impact Keynes had from about 1914. It is a stunning read even for a jaded Keynesian like myself.

  9. I am a little baffled by this first chapter. As an approach to the topic “The Economic Consequences of the Pandemic” it seems more than a little circuitous and initially even tangential. I wonder how many readers will be a little bemused as I am? At the same time, I think I can see what Prof. J.Q. is trying to do. The links are there but should they be introduced and traced out in a slightly different fashion?

    I wonder if the introductory sections need a change in approach and emphasis? I would suggest commencing right up front with the 1919 flu pandemic rather than with the Great War. [1] First, compare (and contrast) the 1919 flu pandemic with the current COVID-19 pandemic. Then compare and contrast the conditions leading to each pandemic. Note the Great War and then its incidental but significant “war on nature” element as per the current draft. Then note the preconditions to the COVID-19 pandemic. There was no great war of peoples on peoples but there was already an undeclared and unacknowledged “war on nature” generated by unfettered demographic and economic growth, increasing waste streams including CO2, continuing expansions into wild habitats (leading to novel zoonoses) and increasing circulations of people around the world via business, tourism and migrations (which rapidly carried a new and and dangerous emergent disease around the world). Note the concomitant unwillingness to shut down international people movements (mainly tourism, business and education travel) when that was indicated by the potentially severe dangers posed by COVID-19.

    Virtually all of these points are in the existing draft but the order of introduction and exposition slightly muddies the waters, IMHO. Start with the diseases (the 1919 flu and COVID-19), draw the parallels of their genesis (the Great War as incidental war on nature and modern unregulated capitalism as in many ways a direct, though unintended, war on sustaining nature.) Note the parallel disruptions of natural systems to the detriment of humans and their socioeconomy plus also the disruption and damage to the natural world’s “value-in-itself-for-itself”.

    Then of course, the responses of austerity and the “Treasury View” versus Keynesianism and even socialist and democratic measures can be compared and contrasted in terms of measures and outcomes.

    As I say, all of this is already there or implicit in the draft. I just think the logical or argumentation order is slightly wrong. Start with the 1919 Flu Pandemic and COVID-19 pandemic. Draw the parallels of their causes: the unintentional and incidental war on nature intrinsic to modern total war and now the unintended, unacknowledged war on nature intrinsic to endless growth capitalism or endless capitalist competition (as you wish to term it). Then the stage is set to talk about policy responses to the damage to nature and society by previous wrong economic responses (Great Depression). Then obviously link that back to the current situation.


    1. A possible reader reaction to starting with the Great War is bafflement. Why am I reading about the Great War? Aren’t I reading about “The Economic Consequences of the COVID-19 Pandemic”? Eventually, it becomes clear why the book starts in this way but it is an odd entry to the topic.

  10. Hi John,

    The Easter break has allowed me to catch up on some reading. I found your chapter fascinating and well written.

    My only suggested change is that I think the chancellor of the exchequer is more analogous to the treasurer (a politician) rather than the secretary to the treasury (a public servant).


    Dr John Hawkins

    Senior Lecturer

    Convener for Behavioural Science (11240) and Economics for Managers G (6234)

    Co-lecturer for Asia-Pacific Business PG (9696)

    Tutor for Climate Change and Sustainable Business (11318)

    Canberra School of Politics, Economics & Society

    Room 11C40

    Faculty of Business, Government & Law

    University of Canberra | Canberra ACT, 2617



  11. @John Hawkins Thanks for these kind words. I’m writing for a US audience, which I keep forgetting to mention. The Secretary of the Treasury there is a member of the Cabinet, analogous to the Treasurer here

  12. Hi Gregory McKenzie

    You mention Zachary D. Carter’s new book THE PRICE OF PEACE (RANDOM HOUSE New York 2020). It’s that good huh? I enjoyed it immensely but I’m trying to work out whether it’s good economics. It seems like it.

    At one point Carter claims that FDR, Morgenthau and White (Treasury officials) made it a deliberate policy to go and destroy the British Empire, because they mistakenly believed the UK was responsible for the Great Depression, instead of realising that their own excessively high interest rates were more instrumental. Heckuva claim!

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