The Economic Consequences of the Peace · Question
How does The Economic Consequences of the Peace develop the theme of Instability of the Pre-War Economic Order?
Answer
The Economic Consequences of the Peace by John Maynard Keynes develops Instability of the Pre-War Economic Order across the chapters the companion marks for this theme.
Keynes highlights the fragile and temporary nature of the pre-war economic boom, which was based on unsustainable population growth, inequality, and dependence on foreign food supplies, making it vulnerable to collapse.
Keynes emphasizes the 'intensely unusual, unstable, complicated, unreliable, temporary nature' of the economic organization Western Europe relied on for the last half century.
Highlights three factors of instability: excessive population dependent on a fragile organization, psychological instability of classes, and precarious food supplies from the New World.
The German machine is compared to a top that must spin ever faster to maintain equilibrium, highlighting the fragility of the pre-war economic order.
Evidence in the book
- I: Introductory
Keynes emphasizes the 'intensely unusual, unstable, complicated, unreliable, temporary nature' of the economic organization Western Europe relied on for the last half century.
- Europe Before the War
Highlights three factors of instability: excessive population dependent on a fragile organization, psychological instability of classes, and precarious food supplies from the New World.
- Population
The German machine is compared to a top that must spin ever faster to maintain equilibrium, highlighting the fragility of the pre-war economic order.
- Organization
The description of the delicate organization and reliance on internal and external factors hints at the fragility of the pre-war system, which was disrupted by the war.
- III: The Psychology of Society
The system depended on 'unstable psychological conditions' that the war has shattered, making it impossible to recreate.
- IV: The Relation of the Old World to the New
The system was threatened by diminishing returns, population growth overseas, and Europe's precarious claim on food supplies.
