In Our Time - The Economic Consequences of the Peace

Episode Date: October 26, 2023

In an extended version of the programme that was broadcast, Melvyn Bragg and guests discuss the influential book John Maynard Keynes wrote in 1919 after he resigned in protest from his role at the Paris Peace Conference. There the victors of World War One were deciding the fate of the defeated, especially Germany and Austria-Hungary, and Keynes wanted the world to know his view that the economic consequences would be disastrous for all. Soon Germany used his book to support their claim that the Treaty was grossly unfair, a sentiment that fed into British appeasement in the 1930s and has since prompted debate over whether Keynes had only warned of disaster or somehow contributed to it.WithMargaret MacMillan Emeritus Professor of International History at the University of OxfordMichael Cox Emeritus Professor of International Relations at the London School of Economics and Founding Director of LSE IDEASAnd Patricia Clavin Professor of Modern History at the University of OxfordProducer: Simon TillotsonReading list:Manfred F. Boemeke, Gerald D. Feldman and Elisabeth Glaser (eds.), The Treaty of Versailles: A Reassessment after 75 Years (Cambridge University Press, 1998)Zachary D. Carter, The Price of Peace: Money, Democracy and the Life of John Maynard Keynes (Random House, 2020) Peter Clarke, Keynes: The Twentieth Century’s Most Influential Economist (Bloomsbury, 2009) Patricia Clavin et al (eds.), Keynes’s Economic Consequences of the Peace after 100 Years: Polemics and Policy (Cambridge University Press, 2023) Patricia Clavin, ‘Britain and the Making of Global Order after 1919: The Ben Pimlott Memorial Lecture’ (Twentieth Century British History, Vol. 31:3, 2020)Richard Davenport-Hines, Universal Man; The Seven Lives of John Maynard Keynes (William Collins, 2015)R. F. Harrod, John Maynard Keynes (first published 1951; Pelican, 1972)Jens Holscher and Matthias Klaes (eds), Keynes’s Economic Consequences of the Peace: A Reappraisal (Pickering & Chatto, 2014)John Maynard Keynes (with an introduction by Michael Cox), The Economic Consequences of the Peace (Palgrave Macmillan, 2019)Margaret MacMillan, Peacemakers: Six Months that Changed the World (John Murray Publishers, 2001)Etienne Mantoux, The Carthaginian Peace or the Economic Consequences of Mr. Keynes (Oxford University Press, 1946) D. E. Moggridge, Maynard Keynes: An Economist’s Biography (Routledge, 1992) Alan Sharp, Versailles 1919: A Centennial Perspective (Haus Publishing Ltd, 2018)Robert Skidelsky, John Maynard Keynes, 1883-1946 (Pan Macmillan, 2004) Jürgen Tampke, A Perfidious Distortion of History: The Versailles Peace Treaty and the Success of the Nazis (Scribe UK, 2017) Adam Tooze, The Deluge: The Great War, America and the Remaking of the Global Order, 1916-1931 (Penguin Books, 2015)

BBC Sounds, music, radio, podcasts. This is in our time from BBC Radio 4, and this is one of more than a thousand episodes you can find on BBC Sounds and on our website. If you scroll down the page for this edition, you can find a reading list to go with it. I hope you enjoyed the programme. Hello, in 1919, John Maynard Keynes

quit his job at the Paris Peace Conference where the victors of World War One were deciding the fate of the defeated. Immediately, Keynes wrote, the economic consequences of the peace, his warning of why in his view the Treaty of Versailles would be disastrous. And soon Germany used this book as proof

that the treaty was grossly unfair, a sentiment that fed into British appeasement in the 1930s and a since-sporned debate over whether Keynes had only warned of disaster or somehow contributed to it. With me to discuss Keynes the economic consequences of the peace, a Patricia Clavin, Professor of Modern History at the University of Oxford,

Michael Cox, Emeritus Professor of International Relations at the London School of Economics and founding director of the LSE Ideas, and Margaret Macmillan, Emeritus Professor of International History at the University of Oxford. Margaret MacMillan, how had World War I come to an end? It came to an end with an armistice. Germany was the central power, and its allies were falling away, and on the battlefield the German troops couldn't go on. and so the German government at the urging of the German high command asked President Woodrow Wilson to arrange an armistice.

It was in fact a surrender. If you look at the terms of the armistice, the Germans lost. The big problem was going to be, of course, that they didn't think they had. But when it came to an end, the Allies, Britain, France, and the United States, which had joined them, thought they were in a very strong position to dictate the sort of terms they wanted to Germany. But just to pick up a side, almost side remarking, man, they did. a lot of people in German didn't think they had lost, thought they could have fought on? Well, the High Command played a really sinister role here, I think,

Ludendorf and Hindenberg in particular, because they were the ones who panicked and said to the German government, we can't fight on, which is true. I mean, their lines were crumbling, the Allied troops were rolling towards the German borders. You've got to make some sort of deal. We've got to stop fighting. About six months later, they changed their tune and said, you know, it was the civilian cowardly government that lost its nerve.

We could have fought on. And that played into a story, a narrative, if you like, that was going to be very powerful in Germany, that we should have fought on, we could have fought on, we didn't really lose, which, of course, undermine the treaty. Yes. And how much truth do you think there was in it? I don't think they could have fought on. I mean, they were out of all the essential things like gas, oil, fuel. They were running out of ammunition. If you look at where the German armies were moving, they were retreating. And they had no allies left. All their allies had dropped out and had made separate deals with the allied powers. And so, no, I don't think they could have fought on, but it doesn't matter. It's what people thought.

So this is quixotic and fantastical rather than any reality grip? I think so, but it's what people believe can be as important in politics as the truth. So we get to the Paris Conference, the Armistice Conference, let's call it that, which we're going to see basically through the eyes of Maynard Keynes or come to him in a minute. What was the aim there when they set it up, what were they going to do? Their aim at first was to drop peace terms for the defeated nations And so there were a number of defeated powers Was Germany of course the key one

But there was also Austria-Hungary, the Great Empire There was Bulgaria, there was the Ottoman Empire They were all going to get their own treaties But what happened is the Allies met in Paris In January 1919 to drop the terms And it took them so long to do That when the time came They decided they couldn't sit down

And have a full-blown peace conference With the German Germany and its defeated allies which is what they had intended. And so in the end, they simply gave the terms to Germany and the others and said, take it or leave it more or less. We'll accept any objections in writing. You have two weeks to do it. And so the peace conference, which started out as a preliminary peace conference,

ended up being the real thing. What they thought they were doing was settling the fate of Europe, drawing up peace terms. What they found they were doing was actually being a sort of world government because the world was in such a state. There were revolutions breaking out. There was hunger, starvation in large parts of Europe. They found themselves actually having to deal with a whole range

of problems which they hadn't expected to deal with. So I think this led to a weaker settlement? It led to a settlement which I don't think could have succeeded with all the hopes that were placed in it. I mean, the world was in a dreadful state. I mean, this was a catastrophe. The Great War had been an absolute catastrophe for Europe and for much of the world. And then remember the influenza epidemic was going on.

There were all sorts of diseases breaking out in addition because of malnutrition and so on. Revolutions, the Russian Revolution had taken place. Hungary had a communist government for six months. In Mayday in Paris, 1919, they had to close down the whole peace conference because of battles in the streets between right and left. And so I think what they felt they were doing was trying to reconstruct a world.

And the task was, I think, beyond almost anyone's power, quite frankly. And so there was bound to be disappointment of whatever came out of the peace conference. So there doesn't have rushed to a conclusion, any conclusion? They needed to get it done. And what they were worried about is the alliance itself was falling to pieces. And the Japanese were furious about some of the terms,

that affected them. The Chinese refused to sign the final Treaty of Versailles. The Italians walked out at a certain point. And so I think from the Allied point of view is we have to get something done because the situation in Europe and the wider world is so perilous. We've got to do something. But of course, later on people saw it as a great disappointment. I think nobody could have settled the world of 1919 happily. Mick Cox, our guide through this is going to be Maynard Keynes. What was he doing there? Keynes had joined the Treasury in 1915. He had previously worked at the India office in an earlier period.

He'd resigned, but it got brought back into the Treasury because he was known to be an expert on money and an expert on credit. And he was brought in particularly to actually deal with the inter-allied debt question. To put it rather simply, the war could not have gone on unless we got more and more economic loans from the United States which Britain then dispersed to other allies so therefore he was there

in a fairly junior way he was very young very junior but nonetheless very central to this whole discussion Why was he central? Central because of his knowledge because basically I should also say by who he knew Keynes was a person who knew many many people one of the reasons he got the position in the first place

was because of a man called Edwin Montague who was a very very influential He knew came from Cambridge days and he brought him in, but he knew the economics. He would know that. And he became very central. He wasn't that senior, but even if he wasn't senior in terms of, you know, position, nonetheless, he simply became very central to this whole debate, almost like it was the axis around which this debt.

And so therefore, when, as Margaret said, when the war came to an end, they needed experts to come to Paris. And one of those experts was this young treasury official with very strong views about the piece and indeed about the economics of the piece and he was brought there in January. So it was a really quite remarkable assent for Keynes and he was still very, very young.

And by the way, throughout the negotiations, although he wrote the most influential book after it during the negotiations, he was really quite periphery, simply had to watch many of these things going on within the inner circles of the Council of Four. So it's not influential of the decisions being reached on the decisions being reached?

Well, as it turned out, clearly he wasn't, because when he saw the decision, which finally arrived at in the summer of 1919, he actually like quite a lot of other people, let's be perfectly clear, it wasn't just Keynes who came to this conclusion, he was fairly horrified about the terms under which Germany and the rest of Europe

was being reconstituted, or not reconstituted. So, yeah, it was the decision he made to go away, resigned, he sent a letter of resignation to Lloyd George to the British Prime Minister, at the time with whom he had a complicated relationship, to put it rather nicely. And then he went off to Sussex, to the home of some of his friends in the Bloomsbury Group, and sat down for two to three months to write the economic consequence.

That's what made him famous after the event. He was significant, but not central to the real discussions. And most of those discussions were held by other people with whom he fundamentally disagreed. You mentioned the Bloomsry Group, Vanessa Bell, Virginia Woolf, and so on. How effective he was part of that group. How effective were they in applying their pressure to him because most of them are conscientious objectors and here's this man dealing with war and so on.

What happened there? Well, it goes back through the war itself. I mean, it was quite clear that many of the Bloomsbury group, Lippon Stratian, all the Res, Virginia, Duncan Grant and the matter, they were conscientious objectors. Keynes was not. However, he did protect them, and he certainly provided them with a degree of employment.

You know, he kind of protected them in many, many ways. I think there's two aspects of the relationship with the Bloomsbury group. One, they disapproved of the war, and they did put what I call moral pressure on Keynes-Throughet. And he had to, to his friends, he had to justify a war in which he was involved in the economic role, which I've described. And I think he kind of sensed that he was under huge moral pressure from them. And I think that played a role. The more specific way... Which direction was the pressure leading him to?

What were they pressurizing him to do? Well, I think, and this is more complicated, I think that basically Keynes himself by 1916 and 17 really wanted the war to come to an end as quickly as possible. And I think he kind of felt under the pressure of the Bloomsbury group. And they were influential with them. After all, these were his closest friends. And I think he always feels that somehow or not he's appeased the Bloomsbury group, at least talk to them again.

And the other way, however, in which this plays out the Bloomsbury aspect of it, Of course, in 1918, Lismetresi wrote a very famous book, The Eminent Victorians, which is very, very iconoclastic, very, very dismissive of great Victorians who have been the great heroes and heroines of the 19th century.

And I think there's no doubt that Strachey himself, and the way he wrote the book did influence, the way that Keynes then went on to write the economic consequence of the piece. Because where you read the pen portraits, particularly of Clermontsoe, and also of Wilson, and also to a degree,

Lloyd George, you can see there's a great iconoclass. Many people would say he's been very, very unfair on the big three, not just the big four, but nonetheless, I think that is the influence of Bloomsbury. How good was he at the job that he'd been sent to do? On the economics side, look, he looked to me, and I'm not an economist, but I will speak some economics here, it looked to me he was very well qualified.

I mean, he'd studied the statistics, he'd gone through all of this, he was working 18 hours a day from 1915 onwards on all the trade statistics, the industrial statistics, all of the questions of how to get a European reconstruction after the war. And if you read his memos, which start in 1916, we've got to think about the peace, not just about the war. They are very detailed. They're very detailed indeed.

So I think he was very, very well qualified to kind of talk about the economics. The question is the conclusions he arrived at were not the same conclusions that were arrived at by the Big Three or the Big Four when they finally dropped the Versailles Peace Treaty. Thank you. Patricia, Patricia Clement. The war may have ended. But for people in Europe, what were conditions like while the negotiations dragged on?

Well, they were extremely difficult because, in some senses, the war hadn't ended. The war persisted under the terms of the armistice, and the key thing that the Central Europeans experienced was the blockade. The blockade remained in place. Can you just explain more of the blockade? So the blockade was the allied attempt

to stop raw materials food, essential wartime commodities, getting to Germany, getting to Austria, Hungary, and their allies. And it was folded, it kind of expanded to incorporate also parts of Russia, which was now engulfed in a civil war. So it meant that some of the conditions

that Margaret's described, serious malnutrition, diseases related to hunger, so tuberculosis, typhus, those were increasing between 1918 and 1919. And the tragedy was that on top of that blockade, the empires that had disintegrated were now also blockading

one another. The best example of that is Austria-Hungary, which was already falling apart as the war was ending. Now Austria was being blockaded by people who'd formerly been part of that empire. So the new state of Czechoslovakia was blockading Austria. Poland was blockading Austria. So you had this new territory, which was the city of Vienna, and then part of the Alps, which produced almost none of its own food because it had been part of an integrated empire, was now starving. And Keynes, I mean, Nick's alluded to the fact that Keynes was very aware of the statistics. The blockade is this huge statistical exercise of looking at global markets what's being traded where. And the British, I mean, it's really the British who are at the centre of it with the French and the Americans monitoring these supplies.

So Keynes knows what's happening with regard to the debts that the Allies have accumulated. to the United States, but he also knows about what's being traded and where. So he's very sensitive to this kind of implosion in Europe and the fact that actually conditions are deteriorating as the war ends instead of improving. And as you said, the central empires of the old Europe which is integrating. That's right. And they're fighting one another. I mean, it's not, I've talked about the hunger and disease. There's also an explosion of political violence, even in place that were on the victorious side.

So Italy, which of course, in a few years' time, succumbs to a fascist government. There are sort of intense civil wars taking place along parts of those borders. And there are people on the move everywhere because you might, if you're a German speaker and you now find yourself in what was Galicia that's now being incorporated into another country, you'll feel safer to go into Austria or move to Germany. So there's these very significant population movements. And as people move, they also take their diseases with them. and they go to places that have no food for them.

So the central and eastern Europe, in particular, and also looking down south towards the former parts of the Ottoman Empire, you know, are in a complete mess, a complete mess. There is a suggestion in some of the notes I've read that more people died through in the first two or three years of the armistice of the beach and died in the war. Yes, that's what historians now calculate. If you include the disease, which was being measured

because Germany and Austria, they actually had quite sophisticated medical healthcare systems. They were actually monitoring and measuring the health of their children. And aid workers were in there too. And you add in disease, you add in ethnic cleansing of political violence. You know, some people calculated at about 4 million deaths up until about 1923. That's really when finally, you know, a kind of a piece where there's less political violence and civil war comes to an end. what Keynes was very close to his family

mother in the Blooms Roop had an effect on him were being told by Mick what about his family has he rooted in that to an extent that swayed his judgment yes I think so he was very close to his mother Florence Keynes who was quite a forceful woman a campaigner for women's rights and was she was involved with Keynes's sister Margaret

in the Women's International League for Peace and Freedom and their campaigning for the end of the blockade. That's a big, I mean, as women get the vote, they don't just stop fighting for things. They start fighting for women's rights and children's rights. So they're very animated by this question over the blockade. And Margaret Keynes is best friends with Eglantine Jeb. And Eglentine Jeb is the person who sets up to Save the Children Fund, which is connected to the persistence of the blockade. And throughout the time that Keynes is sent to Paris to calculate the reparations, that's what he's doing in a detailed way. He's trying to work out what

compensation will Germany and Austria and Hungary pay for the damage caused by the war. His mother is sending some letters saying, Maynard, what are you going to do about these starving children in Vienna in Austria? So, you know, there's a kind of, he's connected through his family to a very lively campaign that sees Eglentine Jeb in prison because she's taking these images of the starving children that the Austrians are circulating and disseminating them to the British public. So this becomes really quite a drive. There are so many threads here because his family were very sympathetic to Germans, and he had been to Germany, he spoke good German and so on.

That's right, that's right. And I think that's also, he's got a connection to the Germanophone world. They know that part of the, you know, the holiday there. He had a German governess. And that's also, I mean, it connects too to the way that he's able to disseminate his ideas and his position through that part of the world subsequently. Do you want to come in, Nick? Yeah, thanks for that.

terrific points. I think on the family side, the other thing, of course, to remember, they were big L-liberals in the Cambridge environment, and this was actually central to Keynes' vision of the future world order. And throughout his whole life, am I a liberal? Yes, I am a liberal. I am a liberal. I'm not a conservative. I'm not a state socialist. And by the way, many of the things we know about Keynes during the war and after actually are letters written to both his mother and to his father. So it's a very close and loving, loving, But the whole question that is raised there about Keynes is how can I, as a good liberal, who have witnessed this, he calls it a civil war, by the way. I don't even think he really holds Germany fully responsible for starting the war. It's very, very interesting in a way he conceives of it. Whereas the Allies in 1990, say, War Guild, Keynes is saying this is a civil war within a European family. So I think the way he views the war and views Germany are very, very different. And one of the one of the very quick point. I think one can really underestimate a kind of

pro-German sentiment that was in Britain amongst the ruling elites before World War I. I mean, many of the institutions we created, the welfare state, the London School of Economics was partly founded on ideas about German higher education. We were great admirers, and

the British royal family, of course, had a German base. I think Keynes in many ways reflected a certain Germanophilia, which was still there, I think, in 1919. Margaret? Well, I think when the war broke out, I think I'm right, there were four members of the cabinet who'd gone to university in Germany,

which says something. And it went down through the classes. I mean, Robert Graves, who was middle class, his mother was German. So, you know, the most English of poets. But I think also with Keynes, he had this view. And I think there's the passage. I think it's in the economic consequence of the peace of what the world was like before the war.

You could sit having breakfast in London. You could get news from all over the world. Commodities were coming in. You were linked in this world that was peaceable because trade was linking it. I mean, it was a utopian vision, perhaps, but I think he was hoping to get back to that sort of world where trade and investment went around. People moved around the world freely.

And I think that was a very powerful motivating force. So let's get to the book. He sat down and almost dashed the book off, didn't it? It had a tremendous zip and drive. It was terrifically successful. Can you just talk about the book and the impact that the book had? And what his main, it's a big one this, what his main drive was in the book?

Well, it makes anyone who writes books rather envious because he wrote it in about six weeks and it's still in print. I don't know how many copies it's sold. He also did a deal where he got all the royalties in the UK. He was a very good businessman, Keynes, and he did a very good deal with his publisher. And the book has a very dull title, in my view, but it is a polemic.

It's very well done. He writes beautifully. This is the economic consequences of the piece, which is not something you would pick up in a bookshop. It doesn't sound that exciting. But when you read it, he's got these sketches and of the people. Some of the rudest stuff he took out,

his mother said, you really cannot call Lloyd George a half goat, half man, I forget the exact phrase. But they're still very powerful. I mean, Clemenceau, this deeply cynical old man who only cares about France and revenge. Woodrow Wilson, who's an idiot,

who's turned around by the wily Europeans until he doesn't know which way he's going. Lloyd George, who has no moral core, who comes out of this strange world. These are quite powerful. And, of course, he makes his arguments very powerful. He writes very well. And he says what we're doing is a disaster.

We should be getting Europe going again. We should be getting Germany, the powerhouse of Europe, the economic engine of Europe going again. What are we doing? We're doing these foolish, foolish things, and we're creating a disaster. And when you read it today, it's still very powerful. And one of the things that made it powerful,

the pen portraits. Can you talk about one? Let's talk about the most important in a way. It was Wilson's place in all this of the United States and how he described him and why that was, you tell her. Well, he's got a very acute eye, Keynes does, and so he describes him both physically and intellectually.

But what I remember about the Wilson portrait is a very handsome man, and one of the things, but he looked much better when he was sitting down, because when he stood up, his legs were too short. And you get the sense right from the beginning that Wilson is not put together very well. And he talks about Wilson's moralism, and he talks about Wilson's naivete, and how Wilson doesn't really understand what he's dealing with in Europe. Isn't an element of snobber here?

He was merely an American, and he was very snobbish, Keynes, wasn't he? Oh, I think he was. And look, he came out of Cambridge, the idolized son of his parents, and which gave him the combination of parents, Cambridge, Bloomthry Group, gave him this enormous self-confidence and sense that he represented, I think, a higher civilization. And yes, I think he thought Wilson was, he didn't call him a booby, but that certainly is the impression you get. I'll come to you in a moment, Nick, but can we just conclude this? So what was the consequence of his portrait of Wilson, who was became, as time went on, the great player? I mean, there's so many players you don't know where to start,

but he was because they began to fund the war. You tell us. Well, the United States had been enormously important. I mean, from about 1916 onwards, and Patricia and Mick will know it much better than me, the United States had been funding the British war effort. The British, in turn, had been funding the French and the Italians and the French had been funding the Russians.

And so the United States was really the linchpin of the whole system of funding. And I think what Keynes saw in Wilson was someone who didn't really get, Europe. But what it did do is feed into, again, a sort of feeling that was growing in the United States, particularly after the war ended, that the U.S. should never have got involved in the war. We were dragged in by Wilson. It was not a legitimate thing to do that we should never have gone in. And look what's happened. The Europeans are at their old tricks again. And it helped to undermine the validity of, particularly the Treaty of Versailles, which was the crucial one with Germany.

It undermined it in the English-speaking countries. You know, Keynes' attack on the statesman, and an attack on what he called their indifference and their folly and their stupidity. And of course it was popular in Germany because it fed into German preconceptions anyway about the war, where it was never that popular was France for obvious reasons. Can we just say one or two more words

about the impact that Keynes' view of Wilson had on the whole discreet, tangled web? Well, within the United States, it was no doubt that the book, Keynes' book, The Economic Consequences of the piece was used by Wilson's enemies. And many of Wilson's friends at the time said it quite clearly to Keynes, why are you as a good liberal attacking the man

who stands up for international liberalism called Woodrow Wilson? The book, however, sold extraordinary numbers in the United States. I think within a year, it had sold 70,000 copies. And in some ways, Keynes became even more famous as famous in the United States as he was to become in the United States. in the United Kingdom itself. I just go back to two things, however. The attack on Wilson is vicious and I think in many ways very unfair. So I'll say that now, but there were two things behind that attack. One is he wanted the Americans to cancel the debt, basically, because until you

settle the debt question, be specific about the debt, please. The debt to whom by whom? Well, the debt basically from all the European allies, including the UK, to the United States, the United States themselves from 1916 onwards, as Margaret said, had effectively paid for the war for the French and the British and the Italians and the Russians to continue. So the debt was just huge and in the economic consequences of the peace, Keynes is quite clear. One of the things we have to do is settle the debt question because we don't do that. The financial system is going to be deeply unstable.

The other thing is really what Patricia was talking about central Europe. The whole fragmentation of what had once been a united empire, that fragmentation, nationalism, self-determination, which has been one of Wilson's great slogans into the war, he thought was politically probably necessary, but economically disastrous. So there were two aspects of his critique of Wilson other than just the personal attacks on his intellect

and his Presbyterianism. Patricia, do you think that at this stage, Keynes is ploughing a solitary faroe, or does he have allies? I mean, the book has given him ever since a particular place and power, one might say, in retrospect anyway. Where was it at the time?

We did people say, we've got to keep an hour on it, he's got it right, he's going in the right direction. Was that happening? Well, it was happening amongst the German delegation because one of the things that's surprising about is his ideas circulate very quickly. They move into the German-speaking world quite fast because, as Mick's explained,

And Keynes was a good liberal, and new liberal circles in Europe, there were liberals in the German delegation. But it's also that actually in the Treasury, in the Bank of England, there is a hope that the United States would drop the war debts. I mean, this kind of nexus of inter-allied debt. But it was enormous. It was enormous. And the complicating factor was that Britain had lent, they'd borrowed the money from the United States, but they'd lent it to their own imperial allies. so Canada, Australian, New Zealand. So the debt sort of went through Britain and out into the empire.

And the empire states were, they were growing in independence themselves. So it complicated intra-imperial relations. And the same was true for France. So this was a huge problem. And there was always an expectation that because the United States had entered the war, well, in the British mind late, of course the Americans had not planned to enter the war at all, that they were, this was their part, this is their part of waging the war

because actually sort of what Britain had also hoped it would do in 1914. You know, it would be business as usual, only it turned out it wasn't. So this was a, and it became a longer-term position from the British government than actually the United States would at some point need to drop the debt, but actually the American position hardened. You know, Calvin Coolidge, when he becomes, president says, well, they hired the money, didn't they?

And the debt itself is hugely important to the way that America is now positioned internationally because the First World War turns America from a debtor nation into a creditor nation. It's now the world's banker. It's the leading source of international capital in the world. It's replaced Britain. New York is now competing with the city of London. So this is also an international opportunity for the United States. and they might be withdrawing from international affairs.

They don't want to support plans for a collective security to keep France safe and all of that. But this financial power is really important to them. So they're not going to let Britain or the French off the hook. And that's the complication because now Britain and France have to pay off this debt or they have to find the money to do it from somewhere. And that somewhere is the defeated powers. Margaret McMillan, to what extent were Cain's powerwriters in tune with the public opinion in this country?

I think... As this goes everywhere, I mean in Britain. Yeah, public opinion was changing, and it was changing even while the peace conference was going on. I mean, the initial view of a lot of the British was the Germans lost they should pay. And that was actually quite traditional. If you lost a war, you paid a fine or an indemnity. This time around it was called reparations. It sounded better.

It was to repair damage done during the war. It was a sort of dressing up of it. And I think initially there was a lot of bitterness against the Germans. They, after all, had started the war. This is certainly how it was seen in Britain and, of course, in France. But over the months of the peace conference, opinion seems to have softened. This was before public opinion polls. But more and more British was saying, particularly in the business community,

actually, if we squeeze Germany too much, we won't be able to trade with it, and that will hurt us. And so you begin to get, and you get people like, you know, the bishop saying, saying we should show forgiveness and so on. And so I think in Britain you get a diminution, you get a winding down of that really anti-German feeling very, very early on, and a sense growing that the French are being ridiculous and vindictive. Why?

Because the French, well, my sympathy actually is with the French in a way. The French had lost a lot. They had not started the war. Germany had invaded them. And most of the war on the Western Front, pretty well all the war in the Western Front, was fought in Belgium and the North of France. And that had been the great powerhouse of Europe for coal, iron, steel.

The factories were devastated. The mines were flooded. The infrastructure was ruined. I mean, France lost economically, and of course lost a huge number of killed and wounded as well. And so I think in France, the feeling was we didn't start it. Why should we have to pay to repair everything here? When we look at Germany, it had almost no fighting on its soil. Its infrastructure remains intact. They should pay.

In Britain, you begin to get, the division of, opens up between the British and the French, and the British and the Americans are much more inclined to forgive and forget, except, of course, when it comes to debts on the part of the Americans. The other thing that the French are paranoid about it is the fact that Germany's got a much larger population. It's got 20 more million people in it than France has, and they have no or very limited functioning tax system. So the other thing I didn't mention about how they were going to pay all this debt is Britain actually had a pretty good tax system, income tax, and all that was in place. France passes a lot.

law, the first law for it to collect income tax in 1914, but it actually doesn't kick in until 1917. So there's no real way of trying to generate this money at home. So that's another kind of really big problem because you then also have to decide who is it you're going to tax. So the kind of questions of, you know, pitting one group of the population against the other is a really big challenge. So it drags on. Mick, what was the real tough point to get through? There were several, but can you tell the listeners where they felt really stuck and didn't know where to go. It sounds amazing if there were places like that all along the way.

There were, there were. And for France, and I do agree with Margaret very strongly, the war had been fought on French soil. France had lost enormously. By the way, all of the money had lent to Russia before 1970, they lost as well. So one could understand the French position. The problem for Keynes in thinking about the French position was,

I understand perfectly why politically, but from an economic point of view, if you pursue what he called a Carthaginian peace, then the consequence... What did he mean? What did he remember? Well, I think he was going back into his old classical mode. He loved talking about the classic. But what was a Carthaginian peace?

Well, it was basically the piece which was imposed on Carthage by the Romans when they destroyed Carthage. It wasn't a Carthaginian peace. I mean, this was a piece of metaphor, which was overdone. Nonetheless, people always remember it because he talked about this Carthaginian peace. But he understood quite well that even if France, was understandably

not entirely happy, was more happy with the peace. He could understand the domestic politics what he didn't get. And this is where he comes in as the economist, and this is so important. He does see this, I think, through a very narrowly economic, economic, optimistic perspective. And I think

that was both his strength and in some ways his weakness. Because he saw it from a purely economic point of view. And there's France, you know, on its back. And not surprisingly, pretty unsympathetic to anybody's going to be sympathetic to Germany as Keynes was. And that was, frankly, a circle that could never be squared, it seems to me. Patricia and Mick have both mentioned the political side, and I think that's absolutely crucial.

I mean, these countries are democracies. The politicians, rightly or wrongly, have to think of the next election, and they have to think of what is feasible. And in France, Clemenceau said, my middle classes would rebel if I said, you know, we're going to forgive and forget with Germany. you know, we cannot do it. And I think even in Britain, although British feelings

were becoming less vehement against Germany, there still was a feeling that someone should pay up for everything the British had lost. So I do think politically, I'm makes absolutely right, politically what Keynes wanted was economically sensible, politically impossible.

I'll come back to you, but Patricia. Just a mixed point about Keynes seeing things in a very economic way. I mean, I think the difficulties he sees it in a financial way. So he's looking at reparation, he's also looking at rapidly rising levels of inflation

because one of the problems is when you say, I've got a debt, the easiest thing to do is let you just print the money and the debt will sort of disappear. The inflation levels, it's also all the controls on the economy after the end of the First World War have been removed in Britain and France. So Britain has an inflation rate of 50%, never mind what it's like in France or in Germany. What he doesn't see, which the French do see,

is that German economic power is still intact. you know, German industry is still there. Germany still has massive resources of coal, of iron ore. And so that also feeds into it. So it's kind of, you know, where Keynes is wrong, it's that he's also missing the fact that quite a lot of German power, he wants to reconstitute it further to help European reconstruction because Britain's best customer is Germany.

Germany's best customer was Britain in 1914. But it's also this kind of very narrow fixation on what money is doing, I think that's where he gets it wrong. I was going to come in on Clemenceau. It's interesting that Keynes' portrait of Wilson, I think is pretty vituperative and pretty damning. Clemonsso, oddly enough, was in a sense the villain of the piece. He was the man who wanted the Carthaginian piece imposed on Germany.

Nonetheless, it's quite a sympathetic portrayal of Clemenceau, it seems to me, at least a respectful one. And he took the view, and this was Clemence's view. This is the end of the first. phase of a war with Germany. This is a truce and we're going to move at some point in the distant future or not so distant

future to another war. He kind of saw an inevitability about the rise of Germany, the power of Germany, which has been described by Patricia, and that's going to come back again. And everything I must do now is to keep Germany as weak as possible for as long as possible

because there's going to come another big conflict with Germany in the not too distant future. And in many ways, that turned out proved to be the case. Well, he was a bit undone by the fact that the Americans had promised to keep France safe, and then that promise. So that's the kind of, you know, the Americans were supposed to bind themselves to Britain and French security. And then by denying the Treaty of Versailles and denying the idea of having an international

organisation like the League of Nations, that's what actually reinforced the French position, doesn't it? Yeah, and then the British backed out. The British said, well, it was an Anglo-American guarantee. but we only did it because the Americans were doing it, therefore it falls down. I mean, you know, I think the French, and the other thing about France is, I mean, Clemonsso had been, he'd lived through two German invasions. He'd been there in 1870 when the German Confederation had invaded France.

He'd been a young man in Paris, part of the siege of Paris by German troops. He'd spent his life worrying about Germany. And, of course, he'd lived through the First World War. He'd become prime minister in the dark days of the war. And he and Marshall Fosh, the Supreme Allied commander, the great French general, were aware that Germany was stronger, and it was not just that there were more Germans, there were going to be even more in the future

because German women were having more babies than French women. The demographic gap was growing, and they knew by the middle of the 1930s they were going to have something called the hollow years. There weren't going to be enough men to conscript in the armed services. So where were they? Can we come and put a graph on these discussions at the moment? How long did they go before they realized

they didn't have a solution at all. I mean, Keynes had proposed that Germany, when he was working for the government, he said, let us have reparations. He offered about a billion rice mark, I think, gold rice mark. But it was tied into the plans for a stabilisation loan because you had to stabilise the German currency, which was inflating in order to pay these loans. So it would be, Germany would pay some reparations

as France had been made to pay reparations and the Franco-Prussian war the century before, but it would be tied in with a chunk of money that would have to come from America that would stabilise the European continent. And in the end, Keynes is right that that's actually what they do in 1922, 22, 23, 24. They have a loan that goes first to Austria in 1920

that stabilises the Austrian currency, and then in 1924, they have something called the Doors Plan that stabilises the German currency and they can redesign the reparation package. So that brings an end to inflation and it stabilises the debt situation. The real irony is that Germany or ends up paying the allies

end up giving Germany more money through this loan system than Germany ever pays in reparations. And it's an absurd situation because the Americans are insisting on their loans being paid back by the British. The British are trying to collect their loans from the French and so on. So the Americans then lend money to Germany

that pays reparations to the French and the British who then pay the pay. back the United States. And it is ramshackle and it causes all sorts of bad feeling as it goes and the total amount Germany owes keeps on being negotiated down. But it causes huge bad feeling in Germany. The Nazis, of course, make a great deal of play with it. So do a lot of Germans. A lot of Germans don't think they've lost the war. And that becomes a conviction among most Germans, I think. They don't think they've lost the war. They think the treaty is deeply unfair. They've read their canes. Why should they keep on paying? Everyone should pay. And the view more

and more about how the war started becomes one that Lord George actually mentions in his memoirs, Europe slithered over the edge into war. I mean, it was no one's fault. We just sort of got into a mess and we had a war. And so Germans more and more see reparations as a totally unfair burden. And of course, when Hitler comes to power, he basically just cancels them. Can we come back to Maynard Keynes at this point? Where is he in this congested argument? He's beginning, I think, to change his views a bit. He begins to think that he dealt unfairly with Lord George and the other peacemakers. And he does more or less make his peace with Lloyd George. And the two men work together at the beginning of the 1930s, especially when

the Great Depression hits to try and do something about it. And so I think Keynes learns to recognize, but I'm going to defer both to Patricia and Mick on this because they know much more, but I think he begins to recognize that what he proposed in 1919 was not possible, but he begins to think of ways of making it possible in the future. And he's going to be enormously important when it comes to trying to build international economic institutions during the Second World War, which will prevent some of the tragedies that happened as a result of the First World War. At the end of the economic consequences of the piece, there is a section which has hardly ever read. It's called Remedies.

And actually, if you look through that, that's quite interesting because one of the things he says is, we're simply going to have to scale down the reparations, which effectively had, and that somebody is going to have to give us enormous loans to Europe to get it back on its feet, largely to Germany, which Patricia was talked about. I, we're still dependent on the United States economically. So, you know, he does kind of see a long-term process in which what had been discussed in the fevered atmosphere of Paris will simply diminish. And memories of what had happened in 17 and 18 will go away. Did he change his mind?

This is a very interesting question because later on a very famous writer, Elizabeth Whiskerman, made the point that Keynes once said that he wish he had never written that book. There's no strong evidence about that. But there is a sense that by the time of the 1930s, the rise of Hitler, the coming of fascism and Nazism in Germany, the context has changed so dramatically that the way people read Keynes now is very, very different to the way they read Keynes. They seem as a harming journey of the Second War. Well, that's putting it a little bit too strongly. And I wouldn't want to use those words to describe. But somebody who had created the...

Which words would you use? Well, okay, Melvin, I'll put it this way. somebody once called him the Isaiah of appeasement the great historians Martin Gilbert called him the Isaiah of appeasement a wonderful phrase and there's no doubt that when we get to the late 1930s, it's 37, 38 he does talk appeasement

with German, he still feels that somehow or another there's that guilt, there's still that overhanging guilt amongst a section of British public opinion and I think he contributes to that I don't think he intended it but I think that's it So the context is so important. We've been circling around this book by Keynes. What impact do you think it had at the time on the participants

who were making these or not making these deals? Margaret, to start with. Well, many of the deals were made before the book came out. The ones in Paris were made. But he was proposing his ideas. Well, he did have an impact on Lloyd George. I mean, Lord George was very taken with the idea of canceling the inter-allied war debts in order to make reparations unnecessary.

And Keynes actually drew up a proposal which Lloyd George showed to Clemenceau and Wilson in the course of the negotiations. I think it was in May 1919. And they looked at and said very interesting, thank you, but we're not, you know, more or less, thanks. We're not going to do anything about it. But I think Lloyd George, who did try

while he remained Prime Minister, and then when he was in opposition, did try and come up with schemes for getting Europe integrated again economically. I mean, he had, at Genoa, he came up with a plan to try and bring Russia back into the European community as well. And so I think Lord George was very conscious of the argument that Keynes made that there was once an integrated economic system which served Europe and the world very well, and were foolish not to try and reconstitute it. Was there a sense, I'll say with you from a moment, come in, was there a sense that looking back, and with glory of hindsight, that a trick was missed by the Allies, a big, a two. or three tricks is a too silly a word, but still, I know what I mean, do you? I mean,

that they missed an opportunity. That's a bit better, isn't it? They did miss an opportunity, but whether the opportunity was really there. I don't know. I mean, again, you run into the political obstacles. You know, and if you think at the end of the Second World War, people now look back and say, well, why couldn't they have done the equivalent, why couldn't the United States have done the equivalent of a Marshall Plan after the First World War? The only reason, in my view, the Americans did a Marshall Plan, two years after the end of the Second World War in 1947, is because they were scared stiff of the Soviet Union taking over the whole continent.

But in 1919, they didn't have that fear. They were worried about upheavals, but they weren't worried about the whole continent being dominated by a single power. And so the pressure behind the Marshall Plan was one of fear. And it did make a difference. But that sort of pressure wasn't there. I mean, the pressure in the U.S. was to get out, bring our boys back home, we probably shouldn't have gone into this war anyway.

Yeah. What impact did the book have in Germany? A huge impact. A huge impact. Keynes, I mean, one of the things that's amazing about it is how quickly it appears in the German language. And that's because Keynes is good friends with Morgzbon, who's on the German delegation, who's married to a British woman, who's a German liberal. Moritzbond is a very gifted translated, becomes a very important political commentator.

And so the book is translated and published in Germany as quickly as it is anywhere else. and it very quickly incorporated into German foreign policy as a way of, well, this suggestion that actually eminent people inside, well, connected people inside the British government, recognize that reparations is a non-starter and that the peace itself, by implication, is unfair. And so that becomes the kind of, and that's the logic that drives appeasement. And it's a logic that drives foreign policy in the 1920s to some good effect, actually, because it does generate stabilisation. it does generate some rapproch more. Keynes anticipates, I mean, I suppose to think about the tricks that were missed, one of the things that Keynes also talks about is the need for international coordination and cooperation on economic and financial questions,

and that that should be instituted. So he's one of the people that says, actually, this new thing about the League of Nations is about politics and about disarmament. It really needs to be about economic and social cooperation. And that's at the forefront of everybody's mind. in the Second World War. So that is, I mean, that builds up in a piecemeal way, but Keynes anticipates it and it becomes a really important lesson.

On the tricks missed, I kind of completely agree with Margaret at the very beginning. I mean, the possibility of building a stable Europe at that time, given the conditions which have been described, it seemed to me nigh impossible. The really interesting question moving the dial forward is what happens after World War II. And in some ways, I'd say Keynes could not have been implemented, after World War I, no more than a decent peace could have been implemented after World War I. It's some of the lessons learned and the conditions have changed so dramatically by 45 that many of the things that Keynes wanted in 1990 actually become more feasible, it seems to me, after World War II.

A united Europe, Franco-German reconciliation, not the opposite, a beginnings of a solution of a German question, although that involved in the end, the division of Germany, as we know. And more importantly, as Margaret alluded, the United States is in a very, very different position with a very different international outlook after World War II. And later on, I think it was Paul Volker, the great American economist and most important person at the time, said, you know, Keynes is hopeless in 1990.

I kind of don't agree with much of what he said, but it does make so much more sense after World War II, when the United States, as Margaret said, fearful of communism and already beginning to think much more internationally rather than in terms of self-interest as they get off to World War I. Do you want to take that up? No, I absolutely agree. I mean, I think it's a very different world.

And I think we also tend, because we know the Second World War was going to come along, we tend to look at the 1920s and say it was all hopeless. In fact, as Patricia mentioned earlier, the fighting had stopped. The civil wars had mostly stopped by the mid-1920s. Reparations were being managed. The bill was being negotiated down. And Europe's economic recovery was taking place. I mean, trade was back.

to pre-war levels. Production was back to pre-war levels. And there was real hope, I think, in the 1920s that somehow the horrors of the war would be put behind them. Germany joins the League of Nations. It pledges that it will respect its borders, at least in the West, and not try and change them by force. The borders in the East were another matter, but there was hope that that could one day be agreed upon. Even Russia, the great Soviet, which was now the Soviet Union, the great revolutionary power, was now becoming much more player in international relations. It was signing agreements. And so I think there was hope. I mean, the peace settlements at the end of the First World War weren't great, but they were constantly being amended and changed. I mean, there were all sorts

of conferences in the early 1920s and late 1920s. And if you had looked back in 1929, you'd say we've come a long way. Things are looking good. We're getting over the Second of the First World War. They didn't know, and nobody knew what was going to happen next. I think Keynes did in a way, because, of course, I mean, Keynes anticipates that. And that's one of the reasons he has his resonance is because the way that they stabilize the economic and financial system is by returning to a fixed exchange mechanism, the gold standard. And Keynes is one of the first people to say the way that we're doing this is not going to work. And it's that goal standard that then lies behind after the Wall Street crash in

1929, which is the American stock market collapse. It's the way that the gold standard operates that pushes the Great Depression out into the global economy and with catastrophic consequences for Germany that helps bring the Nazis to power. So he does see that. And which in turn leads, of course, to Keynes' great book, the general theory, which is in a sense the anti-Orthodox statement

that markets alone and orthodoxy, economic orthodoxy, are no solution to the problems either facing the world or Germany or the United States. And he becomes a great admirer, too, remember of the New Deal and of Roosevelt, with whom he had substantial conversation. So this story, Melvin, moves forward into the 30s and then into the post-war period as well.

No, no, I agree with both my colleagues. I think it does. And I think Keynes saw very clearly the economic weaknesses and the problems in the structures that were meant to manage the world. And those became very clear at the beginning of the 1930s. And I think that did then lead him to play this enormously important role in developing the Bretton Woods' instance. institutions, the World Bank, the General Agreement on Trade and Tariffs, which became the World Trade Organization, the International Monetary Fund, which were going to be enormously important after the Second World War in preventing the sorts of things that had happened after the First World War.

But, you know, he was learning as much as anyone was. Even his profession, economics was a very new profession. So this was a process of trial and error. And I think we can look back and see where they went wrong. But at the time, the choices before them were very, very difficult. I'm not excusing what they did, but I'm saying we have to try and understand it given what they were facing. Taking a big

hindsight breath, what did they get right about that, Armacusus? They all, a lot of very clever people assembled and gave themselves time and they had the American back, and so on and so forth. What do you think worked

there? In 1940, After the first rule, after the first book, what worked, one of the things that we would pull out now is actually the articulation of rights, actually. It's about, though self-determination is quite problematic, the way that you might organise ethnic groups within a particular nation state. What Wilson articulated and what many people expected, and that's why he comes to Europe, he's fated everywhere. you know, he's seen as this great hero, is that there's an expectation that this peace settlement will recognize the rights of groups and to a certain extent the rights of individuals

and that there'll be a platform to articulate that at the League of Nations. And of course, I mean, Margaret's mentioned it already, you know, the expectations are so great after such a terrible conflict and the expectation of peace is so great when in fact there's war being waged around everywhere. So I think that that's, it's one of the United States, of the few places in a way they got it right,

but they were facing enormous, enormous challenges. I would also add, and often it doesn't get left out of the narrative, but I think it's like we need to come back to again and again and again, the League of Nations. I mean, okay, we know it, quote-unquote failed. It didn't stop war. It didn't stop German aggression, no more than stopped Italian fascism or Japanese imperialism in Asia.

Nonetheless, it erected a possibility of discussion, debate, the use of international law of treaties as a way of discussing and if not fundamentally resolving all differences, but at least a platform, a parliament of the world if you like, in which you could have that kind of discussion. I think too much

faith was put in it, but it's not surprising, and by the way it's important to know that what does the world do in 1942, 43 and 44, in the middle of World War II they start talking about creating a united nations on the back of some

of the failures of the League, but at least the League was an inspiration. I also want to bring this back in that the League was so inspiring, not just for elites, but for masses of ordinary people around Europe. League of Nations unions were created all over Britain, all over Europe, and all over the United States. So it's a very inspiring idea. It didn't solve all the problems of the world, which we've already discussed, but nonetheless, it gave a vision of a new world order and a new possibilities for the world. Yeah, well, and it was popular all over the world, actually. It was popular in Japan. It was popular in India. It was popular in some of the colonial possessions. And I think what was very important about it with the institutions it built up, which Patricia's

written about, of course, so well, institutions to deal with economics, institutions to deal with labor. The International Labor Organization was part of the League of Nations, international health organizations. I mean, these are the sorts of things in a world that is globalized we need so that we can deal with things like pandemics. And so what the League did was not just the sort of high-profile stuff of getting people together to talk about peace and avoiding war. It was actually building ways in which different peoples around the world could deal with each other and we could deal with common problems, which as we know we still need very much today. I agree.

And to add to the list of things the League did, it also was very, very instrumental in discussing slavery. And it was also a very interesting work on drugs. You know, one of the very first moments in the historical time, I think, where you had proper international discussions about the drug trade. I think too often people in my profession in international relations have kind of dismissed the League of Nations a piece of idealism which was bound to fail but I think as Margaret has said and Patricia has written so well

the League opened up possibilities of many discussions on many fronts which still remain with us today. Well thank you all very much. That was a tour of force and thank you very much indeed. Thank you to Margaret McMillan Patricia Clabin and Mick Cox and to our studio engineer Duncan, Duncan Hannan. Next week, Plankton,

the source of most of the oxygen we breathe. Thanks for listening. And the In Our Time podcast gets some extra time now with a few minutes of bonus material from Melvin and his guests. Well, I'm afraid if we can touch you for a few minutes more. What did we really want to say? No, no, no, no, it isn't anything like that.

It just turned out to be a completely unexpected hit. It came from a trade unionist friend of mine in the lawns. I like him a lot. And he just says, what happens after the program? And I said, oh, they just talk away about the subject. But I say very little. So I like to hear that. And so we said, well, let's have a go.

Just let's have a go now. I always like it. I mean, I listen to your program a lot, and I always like the end bit when people say, well, we should mention that. You're on the end. So my only question. It's a kick-up question.

I'll go around the table. What would you like to say that you didn't say? It didn't have time to say. Patricia? A couple of things about Keynes, really. I think that what's quite extraordinary about him and clearly intimidated everybody was he is extremely clever

and it's what jumps out of his correspondence. He has an ability to master technical material and summarize it really quickly. So when he's working in the Treasury, they send him to do all sorts of strange things when they're trying to pin down Winston Churchill, who's Minister of Munitions. And Keynes gets to the bottom of a really quite complicated issue really quickly. And I think that it's the kind of range of what he's able to do, this extraordinary text that's written with such brilliance.

And you can see Woodrow Wilson with his white gloves and his, you know, looking like the sort of swanky man around town and completely hopeless diplomat. And yet he's also doing these complicated, at the same time, you know, he has just been doing hugely complicated calculations of different types of debt and different types of trade. It's just an extraordinary range. And he's ill quite a lot of the time. That's the other thing that. Keyes is ill.

He's not a well child. He's ill at the Paris Peace Conference. And they all have the Paris Cold. But then through his career, he suffers. And in the Second World War, he has, he's dying of cancer. cancer. And he's still doing all of these incredibly difficult negotiations. They interview him about, but this is in response to Mick's point about, you know, does it have a resonance in the Second World War? Well, the Americans interview him in the Second World War as they're

preparing for the end of the war about reparations and whether they should try and impose reparations on Germany, because there is a plan to turn Germany into a pastoral land to kind of remove all of the industry and really make it agricultural and impose financial reparations. And Keynes is much more measured, much more careful about it this time around. But he's also in a policy setting. So it's, it's the way that I think anybody that writes about him finds it extremely difficult to capture all of the different aspects of this man because he's so mercurial and brilliant. And his passion for the arts as well. You know, he's extraordinary. I mean, and his marriage, I find so interesting.

He's a ballet dancer. Lydia Lopacrola. I mean, who sounds absolutely wonderful, but I don't suspect ever read his memos or was it the slightest bit interested in economics, but it seems to be an enormously successful marriage. So he is a fascinating man. He is, as you say, many

different facets and extraordinarily clever, and he has this great capacity which I may say not all economists have. We're writing very clearly. You can understand what he's saying. Well, I'm at the London School of Economics, so I've got to be a bit careful here. There's an abiding image in my mind, Melvin, about Keynes.

It's during the war, and he's writing a memo about war dead. And he's sitting at Charleston Farm, where his Bloomsbury friends had a farm, Duncan Grant, who had once been one of his lovers, and Vanessa. And he's sitting there, writing it in kind of almost, looking like a kind of farmer, almost, writing this memo.

And I recently visited Charleston again, and went to his room with that wonderful painting from Duncan Grant is. And I was kind of moved. And I thought, how many economists write one of the most important books in the world doing a bit of weeding in the morning, talking about art and literature with his literary friends in the afternoon, quite literally, and then getting back to write what clearly was one of the most influential books of the early part of the 20th century, which is still being talked about and read today?

So I find that kind of nice, not conflict, but the way he could combine all these things together. Now what makes him such a fascinating figure, not just that he was an economist, but he was an economist plus plus plus so many other things in the arts and many, many other things. No, and I think the whole question that comes up, which we did get into,

but how do you end a war so that you don't have future wars? and someone said at the time of the Treaty of Versailles, again in 1919, the key one with Germany, that it's neither strong enough nor weak enough. And I think that was the problem. It was strong enough to infuriate the Germans and make them feel it was deeply unfair, but there was no enforcement mechanism. There was no proper way of enforcing it.

And once the United States withdrew slightly from world affairs, the British turned to their empire again, and the French and a few smaller allies were left trying to enforce it, and that was part of the problem. What I also find interesting is if you look at the end of the Second World War, Germany was actually treated far, far worse. The country was occupied, it was divided, its infrastructure, its cities lay in ruins. Reparations were extracted.

The Soviets took everything and they could get their hands on. I don't think we have a total bill of how much the Soviet Union took out. They actually took whole factories away. They took all factories, a lot of which sort of rusted away in box cars somewhere in Siberia because the Soviets weren't always terribly organized. But, you know, you never. never hear. I've never heard anyone, even on the German rights, saying we were very unfairly treated after the Second World War. And it's an interesting question. Why? Well, that's what I'm wondering, because the defeat was so total. And this time, it was brought home to the Germans in a way that it wasn't in the First World War. You know, they were occupied. Germany was occupied this time. It wasn't in the First World War. So, there could be no question about whether or not they'd lost. But it's not led to a desire for revenge, unlike the First World War. So how you end the war is, I'm not saying I know the answer, but we're facing it now with you.

Ukraine. How do you end a war so that it doesn't immediately create the grounds for a new war? I think what Keynes pointed out in that text too was, I mean, it was partly this stress on planning and looking to see where the problem is. So, you know, part of the argument he makes in the economic consequences of the peace is to say, you know, you haven't planned at all for this social and economic consequences of this war. There's been no, so there's a kind of focus on what governments might do. It's a focus on how populations are behaving. But that's about kind of constituting states and borders, but what you're not thinking about is the place of markets.

And I think that's why Keynes always has his resonance for people who are interested in understanding what markets are doing in relation to states and society, that this is a kind of key reference point and why he's so important to them. Just to add one other thing. Keynes wrote many more books and other books, not only the general theory,

not only the economic consequences. But who today reads his theory of probability written in 1921, 22, 3. Who today reads the thing on Indian currency reform, his very first book written about 1912, 1930, who reads his triathes on money? I mean, one of the great things about the economic consequences of the piece, whether you like it or hate it,

whether you think it's fair or unfair on Wilson or whoever, as people are still reading it. And I think one of the reasons is because it's written in such a way as to make it entirely readable. Winston Churchill said this later, It didn't read like economics, Maynard. I so enjoyed it because it didn't read like economics. I won't say this about my friends at the London School of Economics at all.

But nonetheless, there's a kind of lesson there for academics. How do you write in such a way that the general public, if I can use that overused term, want to read what you've actually... When you do programs like this, where the general public listeners are... This is why we're all here, Melvin. We wouldn't have come for anybody else. But you do it through history too, don't you? I mean, that Keynes is sort of...

writing with economics out of a time where economists thought about what economics looked like in the past. It's kind of historical change through time. Whereas Keynes, I mean, that's one of the kind of big debates he has in the late 1930s is as quantitative

economics starts to appear, he starts to question the value of this type of methodology. So it's another one of his important interventions. He's also a rather strange liberal because if you look at the people he admired historically, he admired Edmund Burke, the great critic of the French Revolution. And who did he think was the first and greatest

to the Cambridge economist? Thomas Malthus. You know, and he was a Malthusian himself. He thought that's actually one of the problems Europe was facing before the First World War was overpopulation. So it's kind of an interesting liberal, a rather dissident liberal, I think we'd have to say. The great producer himself, Simon Tillerson, is about to enter. Does anyone want tea to your coffee?

No, I'm fine, the water. The water's been more powerful. Melvin, would you mind if we all took a photo? In Our Time with Melvin Bragg is produced by Simon Tillotson. Hello, fellow fans of In Our Time. I'm Dr Michael Mosley and in my BBC Radio 4 podcast, just one thing, I'm investigating some quick, simple and surprising ways to improve your health and life.

Which will you try? Maybe a cup of tea to help your heart health. or breathing through your nose to fight off infection. How about a walk on a rainy day to boost your immune system? So to benefit your brain and body in ways you might not expect, here's just one thing you can do right now. Subscribe to the podcast on BBC Sounds.