Online Library of Liberty: The Economic Consequences of ...

1 The Online Library of LibertyA Project Of Liberty Fund, Maynard Keynes,The Economic Consequences ofthe peace [1920]The Online Library Of LibertyThis E-Book (PDF format) is published by Liberty Fund, Inc., a private,non-profit, educational foundation established in 1960 to encourage study of the idealof a society of free and responsible individuals. 2010 was the 50th anniversary year ofthe founding of Liberty is part of the Online Library of Liberty web , whichwas established in 2004 in order to further the educational goals of Liberty Fund, find out more about the author or title, to use the site's powerful search engine, tosee other titles in other formats (HTML, facsimile PDF), or to make use of thehundreds of essays, educational aids, and study guides, please visit the OLL web title is also part of the Portable Library of Liberty DVD which contains over1,000 books and quotes about liberty and power, and is available free of charge cuneiform inscription that appears in the logo and serves as a design element inall Liberty Fund books and web sites is the earliest-known written appearance of theword freedom (amagi), or liberty.

2 It is taken from a clay document written about2300 in the Sumerian city-state of Lagash, in present day find out more about Liberty Fund, Inc., or the Online Library of Liberty Project,please contact the Director FUND, Allison Pointe Trail, Suite 300 Indianapolis, Indiana 46250-1684 Edition Used:The Economic Consequences of the peace ,(New York: Harcourt, Brace, and Howe:1920).Author:John Maynard KeynesAbout This Title:As part of the British delegation to the Versailles peace Conference after WW1 Keynes had detailed knowledge of the debates about reparations which weredemanded of Germany. He believed the demands on defeated Germany were tooharsh and he resigned his government position and wrote this book explaining Library of Liberty: The Economic Consequences of the PeacePLL (generated September, 2011)2 Liberty Fund:Liberty Fund, Inc.

3 Is a private, educational foundation established to encourage thestudy of the ideal of a society of free and responsible Information:The text is in the public Use Statement:This material is put Online to further the educational goals of Liberty Fund, otherwise stated in the Copyright Information section above, this material maybe used freely for educational and academic purposes. It may not be used in any wayfor Library of Liberty: The Economic Consequences of the PeacePLL (generated September, 2011)3 Of ContentsPrefaceChapter I: IntroductoryChapter II: Europe Before the WarChapter III: The ConferenceChapter IV: The TreatyChapter V: ReparationChapter VI: Europe After the TreatyChapter VII: RemediesOnline Library of Liberty: The Economic Consequences of the PeacePLL (generated September, 2011)4 [Back to Table of Contents]PREFACET hewriter of this book was temporarily attached to the British Treasury during thewar and was their official representative at the Paris peace Conference up to June 7,1919; he also sat as deputy for the Chancellor of the Exchequer on the SupremeEconomic Council.

4 He resigned from these positions when it became evident thathope could no longer be entertained of substantial modification in the draft Terms ofPeace. The grounds of his objection to the Treaty, or rather to the whole policy of theConference towards the Economic problems of Europe, will appear in the followingchapters. They are entirely of a public character, and are based on facts known to thewhole 's College, Cambridge,November, Economic Consequences Of The PeaceCHAPTER IINTRODUCTORYT hepower to become habituated to his surroundings is a marked characteristic ofmankind. Very few of us realize with conviction the intensely unusual, unstable,complicated, unreliable, temporary nature of the Economic organization by whichWestern Europe has lived for the last half century. We assume some of the mostpeculiar and temporary of our late advantages as natural, permanent, and to bedepended on, and we lay our plans accordingly.

5 On this sandy and false foundationwe scheme for social improvement and dress our political platforms, pursue ouranimosities and particular ambitions, and feel ourselves with enough margin in handto foster, not assuage, civil conflict in the European family. Moved by insane delusionand reckless self-regard, the German people overturned the foundations on which weall lived and built. But the spokesmen of the French and British peoples have run therisk of completing the ruin, which Germany began, by a peace which, if it is carriedinto effect, must impair yet further, when it might have restored, the delicate,complicated organization, already shaken and broken by war, through which alone theEuropean peoples can employ themselves and England the outward aspect of life does not yet teach us to feel or realize in theleast that an age is over.

6 We are busy picking up the threads of our life where wedropped them, with this difference only, that many of us seem a good deal richer thanwe were before. Where we spent millions before the war, we have now learnt that wecan spend hundreds of millions and apparently not suffer for it. Evidently we did notexploit to the utmost the possibilities of our Economic life. We look, therefore, notonly to a return to the comforts of 1914, but to an immense broadening andOnline Library of Liberty: The Economic Consequences of the PeacePLL (generated September, 2011)5 of them. All classes alike thus build their plans, the rich to spend moreand save less, the poor to spend more and work perhaps it is only in England (and America) that it is possible to be sounconscious. In continental Europe the earth heaves and no one but is aware of therumblings.

7 There it is not just a matter of extravagance or "labor troubles"; but of lifeand death, of starvation and existence, and of the fearful convulsions of a one who spent in Paris the greater part of the six months which succeeded theArmistice an occasional visit to London was a strange experience. England still standsoutside Europe. Europe's voiceless tremors do not reach her. Europe is apart andEngland is not of her flesh and body. But Europe is solid with herself. France,Germany, Italy, Austria and Holland, Russia and Roumania and Poland, throbtogether, and their structure and civilization are essentially one. They flourishedtogether, they have rocked together in a war, which we, in spite of our enormouscontributions and sacrifices (like though in a less degree than America), economicallystood outside, and they may fall together.

8 In this lies the destructive significance ofthe peace of Paris. If the European Civil War is to end with France and Italy abusingtheir momentary victorious power to destroy Germany and Austria-Hungary nowprostrate, they invite their own destruction also, being so deeply and inextricablyintertwined with their victims by hidden psychic and Economic bonds. At any rate anEnglishman who took part in the Conference of Paris and was during those months amember of the Supreme Economic Council of the Allied Powers, was bound tobecome, for him a new experience, a European in his cares and outlook. There, at thenerve center of the European system, his British preoccupations must largely fallaway and he must be haunted by other and more dreadful specters. Paris was anightmare, and every one there was morbid. A sense of impending catastropheoverhung the frivolous scene; the futility and smallness of man before the great eventsconfronting him; the mingled significance and unreality of the decisions; levity,blindness, insolence, confused cries from without, all the elements of ancienttragedy were there.

9 Seated indeed amid the theatrical trappings of the French Saloonsof State, one could wonder if the extraordinary visages of Wilson and of Clemenceau,with their fixed hue and unchanging characterization, were really faces at all and notthe tragi-comic masks of some strange drama or proceedings of Paris all had this air of extraordinary importance andunimportance at the same time. The decisions seemed charged with Consequences tothe future of human society; yet the air whispered that the word was not flesh, that itwas futile, insignificant, of no effect, dissociated from events; and one felt moststrongly the impression, described by Tolstoy inWar and Peaceor by Hardy inTheDynasts,of events marching on to their fated conclusion uninfluenced and unaffectedby the cerebrations of Statesmen in Council:Spirit of the YearsObserve that all wide sight and self-command Deserts thesethrongs now driven to demonry By the Immanent Unrecking.

10 Nought remains Butvindictiveness here amid the strong, And there amid the weak an impotent Library of Liberty: The Economic Consequences of the PeacePLL (generated September, 2011)6 of the PitiesWhy prompts the Will so senseless-shaped a doing?Spirit of the YearsI have told thee that It works unwittingly, As one possessed Paris, where those connected with the Supreme Economic Council received almosthourly the reports of the misery, disorder, and decaying organization of all Centraland Eastern Europe, allied and enemy alike, and learnt from the lips of the financialrepresentatives of Germany and Austria unanswerable evidence of the terribleexhaustion of their countries, an occasional visit to the hot, dry room in the President'shouse, where the Four fulfilled their destinies in empty and arid intrigue, only addedto the sense of nightmare.