The Economic Consequences of the Peace · Theme
Instability of the Pre-War Economic Order
How The Economic Consequences of the Peace develops Instability of the Pre-War Economic Order.
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.
Where it surfaces
- 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.