In 1920 John Maynard Keynes wrote 'The Economic Consequences of the Peace' as a critique of the Paris Treaty which outlined the repayment plan for the damages done by the Axis during the First World War. Keynes pointed out that the damage claims were largely excessive and would bankrupt Germany within short order. Nevertheless debt ridden Europe looked to Germany for capital to rebuild their economies. The consequence was the inevitable collapse of the Reichsmark which drew the Weimar Republic in to the abyss with it. Some even argue that the economic collapse, and the consequent large scale poverty, put Germany with its back against the wall giving the Nazi party room to seize Power. Continue reading
Skidelsky the author of the monumental trilogy biography on Keynes is back with Keynes The Return of the Master. And his timing couldn’t have been better. In his new book he uses Keynes ideas and theory to analyse the current crisis in what only can be seen as a clear and relevant analysis. Not only does it discuss how we got into this mess, how we could have known it would end as it did, but more importantly what needs to be done to get the economy back on track.
Skidelsky takes the reader on a journey to reinvent economical theory. Last week’s G20 summit in Seoul becomes an interesting thriller once one applies the framework presented by Skidelsky. Do we want a return to a 1944 Bretton Woods style Agreement and fix exchange rates between countries, or should they float. The G20 turned out to be a G2, dollar versus yuan, Barack Obama versus Hu Jintao, US versus China, free market versus controlled markets.
Conclusion, if you haven’t yet pick up this book its a magnificent read!
originally posted on http://financialagile.uglyduckling.nl/finance/keynes-the-return-of-the-master/