The Economic Consequences of the Peace

The Economic Consequences of
the Peace, by

John Maynard Keynes
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Title: The Economic Consequences of the Peace
Author: John Maynard Keynes
Release Date: May 6, 2005 [eBook #15776]
Language: English
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THE ECONOMIC CONSEQUENCES OF THE PEACE
by
JOHN MAYNARD KEYNES, C.B. Fellow of King's College,
Cambridge
New York Harcourt, Brace and Howe
1920

PREFACE
The writer of this book was temporarily attached to the British
Treasury during the war 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 Supreme Economic Council. He

resigned from these positions when it became evident that hope could
no longer be entertained of substantial modification in the draft Terms
of Peace. The grounds of his objection to the Treaty, or rather to the
whole policy of the Conference towards the economic problems of
Europe, will appear in the following chapters. They are entirely of a
public character, and are based on facts known to the whole world.
J.M. Keynes. King's College, Cambridge, November, 1919.

CONTENTS
I. INTRODUCTORY II. EUROPE BEFORE THE WAR III. THE
CONFERENCE IV. THE TREATY V. REPARATION VI. EUROPE
AFTER THE TREATY VII. REMEDIES

THE ECONOMIC CONSEQUENCES OF THE PEACE

CHAPTER I
INTRODUCTORY
The power to become habituated to his surroundings is a marked
characteristic of mankind. Very few of us realize with conviction the
intensely unusual, unstable, complicated, unreliable, temporary nature
of the economic organization by which Western Europe has lived for
the last half century. We assume some of the most peculiar and
temporary of our late advantages as natural, permanent, and to be
depended on, and we lay our plans accordingly. On this sandy and false
foundation we scheme for social improvement and dress our political
platforms, pursue our animosities and particular ambitions, and feel
ourselves with enough margin in hand to foster, not assuage, civil
conflict in the European family. Moved by insane delusion and reckless
self-regard, the German people overturned the foundations on which
we all lived and built. But the spokesmen of the French and British
peoples have run the risk of completing the ruin, which Germany began,
by a Peace which, if it is carried into effect, must impair yet further,
when it might have restored, the delicate, complicated organization,
already shaken and broken by war, through which alone the European

peoples can employ themselves and live.
In England the outward aspect of life does not yet teach us to feel or
realize in the least that an age is over. We are busy picking up the
threads of our life where we dropped them, with this difference only,
that many of us seem a good deal richer than we were before. Where
we spent millions before the war, we have now learnt that we can spend
hundreds of millions and apparently not suffer for it. Evidently we did
not exploit to the utmost the possibilities of our economic life. We look,
therefore, not only to a return to the comforts of 1914, but to an
immense broadening and intensification of them. All classes alike thus
build their plans, the rich to spend more and save less, the poor to
spend more and work less.
But perhaps it is only in England (and America) that it is possible to be
so unconscious. In continental Europe the earth heaves and no one but
is aware of the rumblings. There it is not just a matter of extravagance
or "labor troubles"; but of life and death, of starvation and existence,
and of the fearful convulsions of a dying civilization.
* * * * *
For one who spent in Paris the greater part of the six months which
succeeded the Armistice an occasional visit to London was a strange
experience. England still stands outside Europe. Europe's voiceless
tremors do not reach her. Europe is apart and England is not of her
flesh and body. But Europe is solid with herself. France, Germany,
Italy, Austria and Holland, Russia and Roumania and Poland, throb
together, and their structure and civilization are essentially one. They
flourished together, they have rocked together in a war, which we, in
spite of our enormous contributions and sacrifices (like though in a less
degree than America), economically stood outside, and they may fall
together. In