Back to Book Reviews

Back to Cercles



Keynes’s Economic Consequences of the Peace

A Reappraisal


Edited by Jens Hölscher and Matthias Klaes


London: Pickering & Chatto, 2014

Hardcover. xi + 208 pp. ISBN 978-1848934559. £75.00


Reviewed by Peter Clarke

Trinity Hall, Cambridge



This volume deserves a warm welcome for making accessible a number of diverse and interesting essays, based on the papers given at a conference organised through the Scottish Centre of Economic Methodology (SCEME) in 2012. John Maynard Keynes published The Economic Consequences of the Peace at the very end of 1919, having resigned his position as a Treasury representative at the Paris peace conference earlier that year. He was thus singularly well informed on the negotiations leading to the Versailles Treaty. By the time it was signed at the end of June, Keynes had already begun writing and his manuscript was delivered to the publishers four months later. It was not wholly surprising that it was a polemical document, nor unexpected that its arguments made good use of his own privileged access to the discussions that had taken place, especially over German reparations.  What was unpredictable in 1919, however, was that this slight book, running to fewer than two hundred pages, would achieve such a stunning international impact, catapulting the name of its hitherto little-known author to international fame.

What is extraordinary today, moreover, is that the Economic Consequences retains such compelling interest and that it does so not simply as a period piece, nor as a mere apprentice work, nor as an ephemeral contribution to the postwar political controversy over Versailles. It is still read as an analysis that is worth serious attention, amid our own crises over the European economy, which are apparently so different – or perhaps not so different after all. This is certainly my impression after reading the eight essays in this volume, which are divided between four in Part One dealing with 'The Consequences in their Time' and four in Part Two on 'The Consequences Today'. There is also a ninth contribution, by Greg Hill, in the form of the first act of a play. Here Keynes sits in Paris in the spring of 1919, musing to his secretary amid interruptions from American, French and German callers. In the best tradition of a Hollywood biopic, Keynes delivers one-liners that will already be familiar to those who have already read his Economic Consequences, and no doubt the participants at the conference relished these in-jokes, many of them worth sharing.

In Part One, the emphasis is naturally on the historical reception of the Economic Consequences. The editors are right to warn us that David Coe's essay 'provocatively' makes some of its points, which are directed against a reading of Keynes that sees him as justifying not only the rise of fascism but also its economic policies. If this seems rather too simple in its broad-brush reading of the relevant literature, other essays more than compensate in their attention to fine detail. Thus Larry Lepper provides a close reading of the use and origin of the metaphorical language that Keynes often deploys. Likewise there is attentive bibliographical research behind the essay by Eyüp Özveren and Seven Agir on the impact of Keynes's critique of the Versailles Treaty (which applied to Germany) when Versailles was used as a template for the Treaty of Sèvres, as imposed on Turkey. They show that in the later negotiations, which were to replace these terms with those of the Treaty of Lausanne, the Turkish strategy for revision successfully deployed Keynes's analysis. Arturo Hermann's essay concludes this historical part of the volume with a general survey of the relevance of Keynes's thinking in the light of later developments.

It is in Part Two that some of the most trenchant ideas in the book are developed. Anna M. Carabelli is well known as the author of a distinguished monograph, On Keynes's Method (1988), and she now extends this line of analysis in an essay, written jointly with Mario A. Cedrini, on the methodology of the Economic Consequences. This is illuminating in bringing out the centrality of the theme of organic interdependence in Keynes's thinking, in analysing models of competitive self-interest where the outcome may only serve to defeat the intentions and interests of all alike. Such methodological points, though they may at first sight seem rather abstruse, have highly practical implications in analysing some of the key issues facing Europe today. These concerns are more explicitly taken up in three other excellent essays. Horst Tomann makes some shrewd comments on the status of sovereign debt; Jesper Jesperson writes with well-earned authority on the consequences of the form in which the euro was introduced; and Ivan Vujacic likewise brings his own experience to bear on some fundamental problems facing the European Union today. Each of the essays in Part Two, whether inflected with an Italian, a German, a Danish or a Serbian accent, speak to themes that are truly common, in their demonstration that this is no zero-sum game in which one country can only win if others lose. One historical irony is obviously the contrast between Germany as the immediate victim of the terms imposed upon it in its weakness in 1919 and the position of Germany today. It would be nice to suppose that the insights of an English economist, cogently developed nearly a century ago, can still help us to understand our common predicament better in the European context that we now contemplate together, sadder but perhaps not much wiser.


Cercles © 2015

All rights are reserved and no reproduction from this site for whatever purpose is permitted without the permission of the copyright owner.

Please contact us before using any material on this website.