Zach Carter: evaluation

Transcript context

…Let’s start with a simple question. Wasn’t Keynes simply wrong about the Treaty of Versailles? Man, tough question out of the gate. I don’t think so, but of course, there are people who made this case over the years. In his critique of the Treaty of Versailles, as an economic critique or a political critique, I think a few years after 1922, after the treaty had been signed, Keynes did a follow-up analysis called A Revision of the Treaty, which was basically 80,000 words of “I told you so. ” He goes through the debt and resource numbers in detail and says, “Look, I was right.” I find that persuasive. There’s a very prominent critique from the 1940s by the son of the translator for Clemenceau at Versailles which says Keynes is wrong about all the economic numbers, but I don’t find that persuasive. I don’t have it in front of me, so I can’t get into the exact details, but I don’t think so. If you think about the Treaty of Versailles as a political document that sets the terms for international cooperation over the coming decade, the imposition of scarcity across not only Germany, but also Britain and the victorious Allies, through the refusal to wipe out debt and to impose de facto austerity on Germany through high reparations levies results in a lot of international discord. People see their money going to other countries, and it fuels nationalism and discontent. I think he’s basically right about that, but do you not agree? 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.…

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