The Economic Consequences of The Peace - Impact On British Public Support For The Treaty of Versailles

Impact On British Public Support For The Treaty of Versailles

Keynes' portrayal of the Treaty of Versailles as a Carthaginian peace quickly became the orthodoxy in academic circles and was a common opinion amongst the British public. It was widely believed in Britain that the terms of the Versailles Treaty were unfair. This in turn was influential in determining a response to the attempts by Adolf Hitler to overturn the Versailles Treaty especially in the period leading up to the Munich Agreement. In Germany, Keynes' work confirmed what the overwhelming majority of the people already believed: that is, that the Versailles Treaty was unfair. France was reluctant to use armed force to enforce the Versailles Treaty without the support of the British Government. Prior to late 1938, the strength of public opposition to prospective involvement in another war meant that British support for the French position was unreliable.

Étienne Mantoux criticised the impact of Keynes' book in his book The Carthaginian Peace: or the Economic Consequences of Mr. Keynes, saying that it did more than any other writing to discredit the Treaty of Versailles. Mantoux compared The Economic Consequences of the Peace to Edmund Burke's Reflections on the Revolution in France because of the immediate influence on public opinion. In his book Mantoux sought to discredit Keynes' predictions of what the consequences of the Treaty would be. For example, Keynes believed European output in iron would decrease, but by 1929 iron output in Europe was up 10% from the 1913 figure. Keynes predicted that German iron and steel output would decrease but by 1927 steel output increased by 30% and iron output increased by 38% from 1913 (within the pre-war borders). Keynes also argued that German coal mining efficiency would decrease, but labour efficiency by 1929 had increased on the 1913 figure by 30%. Keynes contended that Germany would be unable to export coal immediately after the Treaty, but German net coal exports were 15 million tons within a year and by 1926 the tonnage exported reached 35 million. He also put forward the claim that German national savings in the years after the Treaty would be less than 2 billion marks: however in 1925 the German national savings figure was estimated at 6.4 billion marks and in 1927 7.6 billion marks. Keynes also believed that Germany would be unable to pay the 2 billion marks-plus in reparations for the next 30 years, but Mantoux contends that German rearmament spending was seven times as much as that figure in each year between 1933 and 1939. Mantoux, however, ignores several other factors, such as the irregularity and eventual relaxation of reparations payments, and also the significant economic problems which did plague Europe in the inter-war period.

During the 1930s, Keynes was an early advocate of rearmament to deter what he referred to as the brigand powers of Germany, Japan and Italy. In July 1936, Keynes sent a letter to the editor to the New Statesman saying a state of inadequate armament on our part can only encourage the brigand powers who know no argument but force, and will play, in the long run, into the hands of those who would like us to acquiesce by inaction in these powers doing pretty much what they like in the world.