The Economic Consequences of the Peace
by John Maynard Keynes

Chapter 1: Introductory

 The power to become habituated to his surroundings is a
 marked characteristic of mankind. Very few of us realise with
 conviction the intensely unusual, unstable, complicated,
 unreliable, temporary nature of the economic organisation by
 which Western Europe has lived for the last half century. We
 assume some of the most peculiar and temporary of our late
 advantages as natural, permanent, and to be depended on, and we
 lay our plans accordingly. On this sandy and false foundation we
 scheme for social improvement and dress our political platforms,
 pursue our animosities and particular ambitions, and feel
 ourselves with enough margin in hand to foster, not assuage,
 civil conflict in the European family. Moved by insane delusion
 and reckless self-regard, the German people overturned the
 foundations on which we all lived and built. But the spokesmen of
 the French and British peoples have run the risk of completing
 the ruin which Germany began, by a peace which, if it is carried
 into effect, must impair yet further, when it might have
 restored, the delicate, complicated organisation, already shaken
 and broken by war, through which alone the European peoples can
 employ themselves and live.
     In England the outward aspect of life does not yet teach us
 to feel or realise in the least that an age is over. We are busy
 picking up the threads of our life where we dropped them, with
 this difference only, that many of us seem a good deal richer
 than we were before. Where we spent millions before the war, we
 have now learnt that we can spend hundreds of millions and
 apparently not suffer for it. Evidently we did not exploit to the
 utmost the possibilities of our economic life. We look,
 therefore, not only to a return to the comforts of 1914, but to
 an immense broadening and intensification of them. All classes
 alike thus build their plans, the rich to spend more and save
 less, the poor to spend more and work less.
     But perhaps it is only in England (and America) that it is
 possible to be so unconscious. In continental Europe the earth
 heaves and no one but is aware of the rumblings. There it is not
 just a matter of extravagance or 'labour troubles'; but of life
 and death, of starvation and existence, and of the fearful
 convulsions of a dying civilisation.

     For one who spent in Paris the greater part of the six months
 which succeeded the armistice an occasional visit to London was a
 strange experience. England still stands outside Europe. Europe's
 voiceless tremors do not reach her. Europe is apart and England
 is not of her flesh and body. But Europe is solid with herself.
 France, Germany, Italy, Austria, and Holland, Russia and Roumania
 and Poland, throb together, and their structure and civilisation
 are essentially one. They flourished together, they have rocked
 together in a war which we, in spite of our enormous
 contributions and sacrifices (like though in a less degree than
 America), economically stood outside, and they may fall together.
 In this lies the destructive significance of the Peace of Paris.
 If the European civil war is to end with France and Italy abusing
 their momentary victorious power to destroy Germany and
 Austria-Hungary now prostrate, they invite their own destruction
 also, being so deeply and inextricably intertwined with their
 victims by hidden psychic and economic bonds. At any rate an
 Englishman who took part in the Conference of Paris and was
 during those months a member of the Supreme Economic Council of
 the Allied Powers, was bound to become -- for him a new
 experience -- a European in his cares and outlook. There, at the
 nerve centre of the European system, his British preoccupations
 must largely fall away and he must be haunted by other and more
 dreadful spectres. Paris was a nightmare, and everyone there was
 morbid. A sense of impending catastrophe overhung the frivolous
 scene; the futility and smallness of man before the great events
 confronting him; the mingled significance and unreality of the
 decisions; levity, blindness, insolence, confused cries from
 without-all the elements of ancient tragedy were there. Seated
 indeed amid the theatrical trappings of the French saloons of
 state, one could wonder if the extraordinary visages of Wilson
 and of Clemenceau, with their fixed hue and unchanging
 characterisation, were really faces at all and not the
 tragic-comic masks of some strange drama or puppet-show.
     The proceedings of Paris all had this air of extraordinary
 importance and unimportance at the same time. The decisions
 seemed charged with consequences to the future of human society;
 yet the air whispered that the word was not flesh, that it was
 futile, insignificant, of no effect, dissociated from events; and
 one felt most strongly the impression, described by Tolstoy in
 War and Peace or by Hardy in The Dynasts, of events marching on
 to their fated conclusion uninfluenced and unaffected by the
 cerebrations of statesmen in council:

                  Spirit of the Years

         Observe that all wide sight and self-command
         Deserts these throngs now driven to demonry
         By the Immanent Unrecking. Nought remains
         But vindictiveness here amid the strong,
         And there amid the weak an impotent rage.

                  Spirit of the Pities

         Why prompts the Will so senseless-shaped a doing?

                  Spirit of the Years

         I have told thee that It works unwittingly,
         As one possessed not judging.

     In Paris, where those connected with the Supreme Economic
 Council received almost hourly the reports of the misery,
 disorder, and decaying organisation of all Central and Eastern
 Europe, Allied and enemy alike, and learnt from the lips of the
 financial representatives of Germany and Austria unanswerable
 evidence of the terrible exhaustion of their countries, an
 occasional visit to the hot, dry room in the President's house,
 where the Four fulfilled their destinies in empty and arid
 intrigue, only added to the sense of nightmare. Yet there in
 Paris the problems of Europe were terrible and clamant, and an
 occasional return to the vast unconcern of London a little
 disconcerting. For in London these questions were very far away,
 and our own lesser problems alone troubling. London believed that
 Paris was making a great confusion of its business, but remained
 uninterested. In this spirit the British people received the
 treaty without reading it. But it is under the influence of
 Paris, not London, that this book has been written by one who,
 though an Englishman, feels himself a European also, and, because
 of too vivid recent experience, cannot disinterest himself from
 the further unfolding of the great historic drama of these days
 which will destroy great institutions, but may also create a new

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