Zach Carter: evaluation

Transcript context

…Well, if we look at the numbers, it seems Germany never paid more than 2.5 percent of its GDP in a given year in terms of reparations, and that’s less than what Hitler asked Germans to pay for rearmament. So if Keynes had simply made a political argument, “Well, this is going to irritate the Germans politically,” but he made an economic argument that it’s impossible, and that seems entirely feasible. There were plenty of countries back then 2.5 percent poorer than Germany, or more. Didn’t Keynes in fact lend some credence to the notion that Germany had been stabbed in the back by the Allied powers, by Britain’s most prominent intellectual endorsing the notion? He had somewhat of a political critique, but on the economics he was wrong. Well, you’re right that Germany never paid the reparations duties that were due, but that’s sort of inherent in the critique. If they were unaffordable, they weren’t going to pay them. Of course, by 1923, Germany is in a hyperinflation crisis, so I think the idea that Germany could afford to pay is tied up in the political circumstances of the day. But again, countries poorer than Germany didn’t have to hyperinflate, right? The Germans brought that upon themselves. Plenty of Eastern Europe was more than 2.5 percent poorer than Germany. They made various mistakes, but in terms of what it interjected into German politics, didn’t Keynes misread the situation, thinking that his message ultimately would be supporting German liberalism? What turned out is that Europeans ended up more at each other’s throats. Again, on the economics, it just doesn’t seem that convincing. No one likes to pay 2.5 percent of GDP, but you go to the later 1920s — there’s the transfer-problem debate with Ohlin. Wasn’t Keynes wrong about that as well?…

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