John Maynard Keynes's The Economic Consequences of the Peace (1919):

A Talk for the "Sidney Greats" Lecture Series, 15th November 2012

The Great War had inaugurated or accentuated a number of important trends in the domestic and international political economy of the European powers and of the Atlantic Economy: the extension of the franchise, the ascendancy of mass political parties and nationalistic movements, the unprecedented governmental control of industry, the distortions in domestic production and consequent large physical and fiscal resource transfers (“inter-allied debts”).  In the aftermath of the conflict, these trends generated tensions on a scale which overwhelmed the “automatic adjustments” of the pre-1914 Gold Standard, and equally transcended the scope of domestic political action.  In spite of President Wilson’s “Fourteen Points” and of the agreement to establish a League of Nations, the 1919 Paris peace conference ultimately heightened, rather than moderating, each country’s popular expectations of what their leaders could extract from those negotiations: for Europeans, the negative sum game of total war made it extraordinarily difficult to conceive of its aftermath as anything other than a zero sum game.

Published within months of the signing of the Peace Treaty, John Maynard Keynes’ The Economic Consequences of the Peace made a forceful plea for a different, co-operative solution to the problems of post-war Europe.  The book was written in angry frustration, and in the enforced leisure which followed its author’s resignation in protest from the British delegation at the Conference. Admittedly, the immediate practical impact of the Consequences (as opposed to its remarkable publishing success) was limited: not Keynes' persuasion, but the hard realities of the transfer problem did eventually bring about the scaling down of Germany’s reparations – too late to achieve anything beyond a vindication of Keynes’ stance.

The Economic Consequences of the Peace was, nevertheless, a great book for two reasons. Firstly, it took economic argument (notably a powerful vision of the interconnectedness and mutual dependence of Europe’s economies) from cabinet offices and diplomatic parlours to public opinion, thus expanding the scope of public debate to include a crucial dimension of international relations.   Secondly, the Consequences prompted a strand of economic research aod of public debate which led the Allies of WW II, within weeks of the Normandy landing, to plan the multilateral economic and financial architecture (the “Bretton Woods system” of fixed exchange rates, managed capital mobility, and gradually liberalized international trade) which was to underpin post-war reconstruction and the “Golden Age” of Western post-war economic growth (1950-1973).

A Musical  and Spoken Introduction

Key Passage from the "Great Book" (pdf):

Additional passages of particular interest (page numbering from the Skyhorse Publishing reprint, 2007):

The whole "Great Book" on-line:

Some Additional Readings: