The Economic Consequences of the Peace

Keynes paints a devastating portrait of post-war Europe teetering on the edge of complete collapse. The Treaty of Versailles has created a continent where 100 million people cannot survive without imports, yet the economic machinery to earn those imports has been systematically destroyed. Germany faces potential mass starvation as an industrial nation stripped of its colonies, fleet, and foreign investments, unable to feed 67 million people who once depended on international trade. Meanwhile, runaway inflation ravages every European currency - the German mark has lost 90% of its value, while governments print money to cover massive deficits they refuse to address through taxation. This isn't just economic hardship; it's the breakdown of civilization itself. Keynes warns that desperate, starving populations don't die quietly - they overthrow whatever remains of organized society. The currency collapse destroys all normal business relationships, making trade impossible and reducing commerce to gambling on exchange rates. France and Italy maintain artificial prosperity only through Allied loans that are ending, while their budgets show expenditures three times their revenues. Across Eastern Europe, governments have essentially ceased to function. Keynes sees this as more than temporary post-war adjustment - it's a fundamental assault on the capitalist system that may be irreversible. The economic chaos feeds political extremism, as people lose faith in traditional institutions and become susceptible to revolutionary ideologies. What emerges is a Europe where the bonds of custom and law are dissolving, setting the stage for whatever desperate remedies desperate people might embrace.