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[photo] The Economic Consequences of the Peace by Maynard Keynes on the Treaty of Versailles 1919
‘If we aim at the impoverishment of Central Europe, vengeance, I dare say, will not limp’
At the end of the First World War, in January 1919, the renowned economist and chief representative of the British Treasury, travelled with Prime Minister Lloyd George to the Paris Peace Conference at Versailles. Keynes argued for the outright cancellation of intergovernmental debts, suggesting that such a move would allow nations to return to economic normality. Despite the widespread support in the room for his proposal, the American government adamantly refused, unwittingly at this point, setting the stage for the rise of the Nazis.
Keynes argued his case later that year in his book (above). Historian Adam Tooze calls is a ‘ferocious polemic.’ It was an international bestseller. Even Lenin and Trotsky recommended people read it. Among much else Keynes commented that the Americans had arrived at the Paris Peace Conference in 1919 without any financial ideas about the future at all. But he also bitterly criticised the British and French for their short-sighted ignorance over the economic consequences of what they were negotiating. He called the resulting Treaty of Versailles with Germany as ‘one of the most serious acts of political unwisdom for which our statesmen have ever been responsible.’
‘If we aim at the impoverishment of Central Europe, vengeance, I dare say, will not limp. Nothing can then delay for very long the forces of Reaction and the despairing convulsions of Revolution, before which the horrors of the later German war will fade into nothing, and which will destroy, whoever is victor, the civilisation and the progress of our generation.’ He was, of course, right.
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[photo] Cartoon: At the Peace Table. Treaty of Versailles. Clemenceau says, "Take your seats, gentlemen!" The food and chairs look dangerous, and there are handcuffs on the table, worried and suspicious German delegates
The notorious War Guilt Clause – for Germany
At the Paris Peace Conference the solution the French favoured, for obvious reasons, was to place the entire the blame for the war onto Germany – in the notorious War Guilt Clause, clause 231 of the Treaty of Versailles.
‘The Allied and Associated Governments affirm and Germany accepts the responsibility of Germany and her allies for causing all the loss and damage to which the Allied and Associated Governments and their nationals have been subjected.’
All the loss and damage. That’s the key part. It was, of course, grossly unjust. As we see in our series World War One: how much was it Britain’s fault? [https://www.historycafe.org/episodes/world-war-one-how-much-was-it-britains-fault] the British, among others, shared a very large share of the blame.
In 1921, after two years of embittered negotiation, Germany was presented with a bill for what were termed ‘reparations.’ It was set at $33bn. It was astronomical figure that was supposed to be paid in a rather complicated arrangement of annual instalments, including both cash and goods, to France and Britain. They would then, supposedly, be able to pay off their debts to each other and finally, most important, to the Americans. It did not turn out that way!
[cartoon] 'The League of Nations bridge' built by the USA - made up of Belgium and France (left) England and Italy (right), and the missing keystone USA removed!
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‘one of the most serious acts of political unwisdom for which our statesmen have ever been responsible’ - Maynard Keynes
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