As part of the Treaty of Versailles, Germany, as the aggressor declared responsible for WWI, was to be subjected to punishing financial consequences, as well as being placed under other constraints relating to its armed forces, for example. Keynes was a very outspoken critic of this plan, as he felt...
As part of the Treaty of Versailles, Germany, as the aggressor declared responsible for WWI, was to be subjected to punishing financial consequences, as well as being placed under other constraints relating to its armed forces, for example. Keynes was a very outspoken critic of this plan, as he felt it would lead not only to financial ruin for Germany, but also to social consequences which could have serious repercussions in future years. As was later proven, as Germany hobbled towards fascism in the early 1920s, Keynes's prediction was correct.
One of the main issues Keynes saw with the Treaty in its final form was that it was being driven by the French, who had suffered terribly in WWI and who also wished to emulate the punishment that had been enacted upon them by the Germans at the end of the Franco-Prussian war, almost forty years earlier. The French demanded reparations from Germany for all damages caused by the war; in effect, Keynes saw, the point of this was to destroy Germany entirely as a great power, as its economy had already been dealt serious blows by the war itself. Keynes was particularly horrified by provisions in the Treaty stating that if the German nation did not keep up its repayments, other countries (namely France) would be allowed to invade it. Note that the area between France and Germany, the Sudetenland, had been the focus of much fighting all the way back to the Franco-Prussian war and beyond, so this was evidently, Keynes felt, a "vengeance" move from France.
In "The Economic Consequences of the Peace," Keynes made very clear that he felt "the forces of Reaction and the despairing consequences of Revolution" could be the only possible outcome of impoverishing the German nation in this way. He also predicted that this would cause the "horrors" of WWI to "fade into nothing," so violent would be the German response to this humiliation and suffering at Allied hands. And indeed, by 1923, under the Weimar government, German inflation was such that people were pictured pushing wheelbarrows full of Deutschemarks to the shops to purchase single loaves of bread; it was no coincidence that German bitterness against the nations who had treated them so badly drove the rise of Adolf Hitler and subsequent fascist outrage.