New Edition of John Maynard Keynes, The Economic Consequences of the Peace , Palgrave Macmillan, 2019
The Treaty of Versailles has had a bad press. From the time that it was signed and John Maynard Keynes penned his all-too-well-known polemic, The Economic Consequences of The Peace (1919), until a recent book by that aging realpolitiker Henry Kissinger, commentators have had little good to say about the Treaty.1
In a plaintive letter sent on 16 March 1919 to Vanessa Bellâartist and sister of the novelist Virginia WoolfâJohn Maynard Keynes wrote that he was âabsolutely absorbed in this extraordinary but miserable gameâ of trying to convince his political superiors that it would be in everybodyâs interest to make a decent peace with a defeated enemy in Paris.2 But as he confessed, he was making very little headway. He then made what must have sounded like an odd request. Would Bell, he wondered, take him in at Charleston, her house nestled in the Sussex Downs, where he could in his own words âfinally relapse into insanityâ.3 The request was not as odd it seemed. Charleston was after all a rural home-from-home for members of the London-based Bloomsbury group, and since 1916 had even become Keynesâs âchief rural outpostâ.4 Here he felt at home amongst his close friends where he could talk literature, read his official briefs, do the occasional weeding of the garden, and gossip at length about all and sundry including no doubt those leaders in Paris whom he was soon to attack with such relish in The Economic Consequences of the Peace. Two months later he wrote yet another revealing note to another member of his inner circleâDuncan Grant5âone of his former lovers and for some years now Vanessaâs partner. He made no effort to conceal his misery. He confessed wearily: âIâve been utterly worn out, partly by incessant work and partly by depression at the evil around me. Iâve been as miserable for the last two or three weeks as a fellow could be. The Peace is outrageous and impossible and can bring nothing but misfortuneâŚno one in England yet has any conception of the iniquities contained in itâ.6 Two weeks on, and now close to collapse, Keynes even admitted that he was ânear breaking pointâ7 and was in need of somewhere where he might recover his equilibrium.
However, before finally disappearing into the Sussex countryside where he was to write most of The Economic Consequences of the Peace, Keynes hovered for a while through the spring of 1919 hoping perhaps that his grand scheme for European reconstructionâwhich he had first put forward in the last months of the warâwould be accepted.8 But it was not to be. âAmerica supportâ for the idea was âessentialâ and when that was not forthcoming, it was clear that there was nothing more Keynes felt he could do.9 The die was cast as he made clear (again) to Duncan Grant. âThank God I shall be soon be out of itâ he declared. Iâll soon be âwriting to the Treasury to be relived of my dutiesâ he went on. He added for good measure, that if he were a German, heâd ârather die than sign such a Peaceâ.10 He was somewhat more diplomatic when it came to speaking to Jan Christian Smuts, perhaps his closest colleague and mentor in Paris. The terms of the peace he suggested to the South African were not just immoral, they were âunworkableâ. Smuts agreed. It was a âthoroughly bad peaceâ he conceded; so bad perhaps that Keynes, he suggested, ought to write âa clear, connected account of what the financial and economic clauses of the Treaty actually are and mean and what their probable results will beâ.11 Keynes needed no second urging. Indeed, by the time Smuts had proffered his advice, Keynes was already heading out of the door called exit. On the 19th May he âinformed his superiorsâ that he would soon be resigningâ his position.12 Then, finally, in early June, he departed Paris âonce more a freeâ but very bitter âmanâ though not after sending a note to Prime Minister Lloyd George saying that he was âslipping away from this scene of nightmareâŚ. I can do no more good hereâŚ.The battle is lostâ.13
But if Keynes had lost what he saw as the battle, he was not about to give up the fight and was determined to tell his side of the story about what he saw as the hideous goings on in Paris and the threat which this posed to Europe as a whole. Indeed, it was not just the final peace treaty alone which depressed him. Civilization itself was at risk he felt. As Virginia Woolf was moved to record in early July, âMaynardâ was most âdisillusionedâ and feared for âthe stability ofâ the âthingsâ he most liked including âEtonâ (his old school), the âgoverning classes (almost certainly doomed) and perhaps most dreadfully of all, his beloved âCambridgeâ.14 There was no time to lose therefore. In fact, even by the time the formal Peace Treaty had been signed (on the 28 June 1919) Keynes was already three days into a book that would, for good or ill, shape the discussion about the Treaty for years to come. Indeed, in much the same way as Churchillâs history of the Second World War helped Churchill set the terms of the debate about that particular conflict, Keynesâs more vitriolic effort penned in just under three months for ever set the terms of the discussion about what went on in Paris between January and June of 1919.15 As one historian has observed, âwhatever may have been the economic consequences of the peace, the political consequences of Maynard Keynes were wholly momentous.â16 The great Austrian economist Schumpeter could not have agreed more. This âmasterpieceâ, as he called it, was a âwork of artâ to which âthe word success sounds commonplace and insipidâ.17
There was little doubting that, and within a few months of its publication the book had become one of the publishing sensations of the age, possibly âone of the âmost successful publishedâ polemicsâ of all time.18 It certainly had a massive impact on Keynes himself. Not only did it make him a fair deal of moneyâsome of which he later lost in currency speculationâbut almost overnight turned him into a major public figure with a world-wide reputation.19 The change was both dramatic and long term. Before the appearance of the bookâpublished by his Eton and Cambridge friend, Daniel Macmillanâ20 Keynes might be described as the quintessential âinsiderâ inhabiting a highly circumscribed world defined by his beloved College (Kingâs), the India Office (for a while), the Treasury (for four years), and regular attendance at the dining tables of the great and the good where he was always a welcome âguestâ in a world âthat produced future prime ministers, permanent secretaries and rulers of the Empireâ.21 This he was not about to give up. If anything the invitations to dine now came thicker and faster than ever. But with the publication of what one German admirer in 1919 called this âlandmarkâ work,22 but what one later British critic termed this âslighting and perverted sketch,â23 he was to become, and was to remain until his death in 1946, a public intellectual of the first order.
But why did The Economic Consequences of the Peace provoke such admiration in some quarters for its realism24 and downright hostility in others because of its avowedly âdestructiveâ character?25 And why does it still do so today with some writers praising its integrity and its âI was there immediacyâ,26 and others insisting that it is a mere polemic penned by someone who should have spent less time pouring scorn on the peace-makers and more trying to understand the almost impossible situation in which they found themselves in 1919. Five years after Keynes died, his friend and pupil Roy Harrod, observed that the book was âseldom readâ any more.27 But this was certainly not the case in the years immediately following its publication. Nor is it true today. As one of the great historians of the Treaty has observed, this âlittle book with a very dry titleâ28 penned by someone with a Bloomsbury âpropensity for moral superiorityâ29 has cast a very long shadow over all subsequent discussion about Versailles. Indeed, for a fairly short book it has managed to provoke one âgreat debateâ after another between economic historians who are still discussing the accuracy or otherwise of Keynesâs figures on reparations,30 scholars of International Relations who cannot quite make up their minds whether Keynes was an idealist or not,31 and a whole group of writers who have for many years held Keynesâthis âIsaiah of appeasementâ32âresponsible for the failure of British foreign policy in the 1930s. Nor has the discussion surrounding his 1919 book become any the less fraught since, especially amongst that very large group of international historians who have made the Versailles treaty their own, very special subject. In fact, most modern historians have been deeply critical of Keynesâs account with the resultâas shall seeâthat his âvivid polemicâ which once held sway amongst so many of his contemporaries has come to be regarded by many historians as being at best of limited value, and at worst no better than fiction. David Cannadine has suggested that The Economic Consequences of the Peace âwould now appear to have âbeen supersededâ by more recent accounts.33 Keynesâs more muscular critics would argue that the account should never have been accepted in the first place.
I certainly would not expect this new edition to lay all these discussions and controversies to rest. What it will try to do however will be altogether more useful I hope: namely explain how Keynes came to write the kind of book he did in 1919, why it provoked the different reactions it did, both for and against, why it has been so much discussed ever since, and whether or not there is much if anything we can learn from it today. Others of course have written about The Economic Consequences of the Peace before, including his many biographers. There have also been numerous editions of the book itself, including at least two containing introductions written by serious Keynesâ scholars34 and one by a senior US economic policy-maker who could hardly be described as an admirer of Keynesianism.35 However, all these were written some time ago and would never pretend to be histories of the book itself. Here I try to fill this particular gap, not I should add by hiding behind some smoke screen of faux âobjectivityââKeynes I believe wrote a brilliant, opinionated and often misunderstood book in 1919âbut by trying to explore how the book has been received at different times in different countries by different political actor and writers. But before doing so it might be useful first to look at Keynesâs earlier life and seek to understand why this well established figure decided at the end of the war to âbrave the boos and catcalls of a hostile audienceâ (not all members of the âaudienceâ were as hostile as Peter Clarke has suggested) ...