W-12 Discussion Essay

1. The Allied powers officially ended World War I when they signed the Treaty of Versailles at the infamous palace of Versailles in the aftermath of World War I. John Maynard Keyes, a British economist, had attended the peace conference but left prematurely as an act of protest against the peace treaty itself. I found this unusual for a member of the Allied powers to react so strongly to a treaty that seemingly would benefit from the agreements made in it. Indeed, Keynes publically decried and critiqued the punitive nature of the Treaty of Versailles through his writings. He predicted that the draconian war reparations exacted upon Germany and other harsh stipulations imposed vis-à-vis the peace treaty would eventually result in the financial collapse and deterioration of Germany. Keynes opined that Europe has “been moved already beyond endurance and need[s] rest. Never in the lifetime of men now living has the universal element in the soul of man burnt so dimly.” Such economic hardship in Germany would in turn have profound political and economic ramifications on the European continent as well as on global civilization. By the end of 1918, German leaders conceded that defeat was imminent and that World War I was drawing to close. Keynes had publically critiqued the leaders of the Treaty of Versailles for paving the way for the European economy to collapse. By 1923, the German economy indeed collapsed, and the U.S. economy collapsed only seven years later. Keynes lamented that the Treaty of Versailles included “no provisions for the economic rehabilitation of Europe—nothing to make the defeated Central Empires into good neighbors, nothing to stabilize the new States of Europe, nothing to reclaim Russia.” The British parliament passed the Special Areas Act 1934, which provided aid to areas in England that suffered from high unemployment rates during the 1930s when the Great Depression in the United States was felt on a global scale. As such, it is unequivocal that the punitive nature of the Treaty of Versailles affected all global powers due to the fact that it placed the onus of World War I on Germany which—in an epoch defined by burgeoning globalization—adversely affected all global powers including Britain. Keynes warned that “the near destiny of Europe is no longer in the hands of any man” due to the “hidden currents flowing continually beneath the surface of political history of which no one can predict the outcome.” Keynes paints an ominous vision of what would become of Europe during the 1930s as he concludes his piece when he opines that “Never in the lifetime of men now living has the universal element in the soul of man burnt so dimly.” His portent would later materialize in that same decade once Hitler and the Nazis swiftly ascended to power and thus to the fore of the global consciousness.
2. Hauser considers how the Great Depression during the 1930s impacted Germany more profoundly than it impacted other countries. In the very first paragraph Hauser provides vivid imagery to convey to the reader the conspicuous despair witnessed in Germany as he notes that an “almost unbroken chain of homeless men extends the whole length of the great Hamburg-Berlin highway.” Unemployment skyrocketed to forty percent in Germany, a country that continued to struggle in the aftermath of the Versailles Treaty signed by Allied powers at the conclusion of World War I. The German economy collapsed in 1923-1924 and later again during the 1930s which amplified the deleterious effects of economic instability. Hauser analyzes how such squalid economic conditions undergirded the willingness to embrace Nazi rule under Adolf Hitler due to the trenchant despair that defined German society and economy during the 1920s and 1930s. Hitler and the Nazis effectively exploited such despair, which Hauser notes that “the air is poisoned with the breath of men who have stuffed too much food into empty stomachs.” Conversely, in the Special Areas report, Sir Percy Malcolm Stewart considers how Britain responded to the Great Depression in a way that was governed by classical economic theory. This approach argued for a solution that did not involve the intervention of the federal government. Such an idealistic point of view invokes the theory proffered by Adam Smith who claimed that a capitalistic economy retained self-correcting mechanisms. The lack of government response yielded very few successes, which rendered such an approach obsolete. Regardless, squalid economic conditions facilitated Hitler’s ascendance to power. These differences in approach with regards to the role of the federal government yielded different results. I think that Stewart’s approach is far too idealistic in addressing the structural defects that caused the depression. The United States is a perfect example of how the application of classical economic theory would impact a failing economy. Herbert Hoover adopted the approach Stewart articulates and met with very few successes. It was not until FDR and his New Deal legislation that the struggling economy ad skyrocketing unemployment reversed course.

Bibliography

Hauser, Heinrich. “With the Unemployed in Germany (1933).” N.d. Web. 7 Apr. 2015 file:///C:/Users/admin/Downloads/Heinrich%20Hauser%20-%20With%20the%20Unemployed%20in%20Germany%20(1933)%20(1).pdf
Keynes, John Maynard. “The Economic Consequences of the Peace: An Analysis of the Versailles Treaty (1920).” N.D. Web. 7 Apr. 2015. file:///C:/Users/admin/Downloads/John%20Maynard%20Keynes%20-%20The%20Economic%20Consequences%20of%20the%20Peace-%20An%20Analysis%20of%20the%20Versailles%20Treaty%20(1920).pdf
Stewart, Percy Malcolm. “First and Second Reports of the Commissioner for the Special Areas: Parliament Addresses the Great Depression in Britain.” 1934. Web. 7 Apr. 2015. file:///C:/Users/admin/Downloads/Sir%20Percy%20Malcolm%20Stewart%20-%20First%20and%20Second%20Reports%20of%20the%20Commissioner%20for%20the%20Special%20Areas-%20Parliament%20Addresses%20the%20Great%20Depression%20in%20Britain%20(1934).pdf