Despite the economic focus of the book, it is written in a surprisingly easy to read style, and offers a deep thoughtful insight into the economic underpinning of the peace established in the aftermath of World War I. The book consists of several chapters describing the situation in Europe before and after the war, the peace conference and the Treaty, reparations, and remedial actions suggested by the author.
One of the key points emphasized by Keynes throughout the book is the need for a non-vindictive peace treaty. The essence of this suggestion is that the victorious Allied states should minimize the burden of reparations and repayments borne by Germany. Keynes believes that settlement of frontiers and confiscation of property owned by the German governments would be a better solution because huge reparations envisaged by the Peace Treaty would discourage German domestic production and entrepreneurship. The result would be production of only subsistence minimum and eventual economic failure of Germany and its inability to pay the imposed reparations.
Keynes claims that the negotiating parties were predominantly concerned by the political aspects of future peace and had almost no vision of the economic outcomes of the peace. The Big Three leaders balanced between the long-term political benefits of their countries, varying interests of their partners, and the public opinions of their nations. Thus, French Prime Minister Clemenceau perceived Germany as a potential threat to stability and peace in Europe, and a threat to security of his country. Therefore, France tried to make economic conditions of the Treaty as harsh as possible for Germany arguing that light economic penalties would result in rapid recovering and further strengthening of Germany.
Keynes' position can probably be explained by the interest of his own country that was extremely concerned with the revival and further development of international trade which constituted the cornerstone of the country's economic potency. Lloyd George understood that Germany ruined by excessively hard economic claims of France and other Allies would seriously undermine marketability of British goods in the European market. The British representatives also viewed Germany as a potential barrier against Russia and reasonably considered that only country with healthy economy tied by strongly trade-based relationships could effectively fulfil such mission.
No wonder Keynes labels Versailles as 'the triumph of political passion over economic reason' (p.16). Bringing forth a number of serious arguments, Keynes also predicts impoverishment of Central Europe and growth of radical nationalism. He brilliantly predicted not only failure of Germany to pay the imposed reparations, but also the process of hyperinflation that occurred in Germany after the war and the political victory of reactionist parties in the country. The prediction made by the author relies on comprehensive analysis of Germany's exports, imports, and other aspects of economic life.On the other hand, the death of millions Germans from starvation also predicted by Keynes never occurred.
The list of remedies suggest by Keynes to avoid or mitigate the negative