The End of Laissez-Faire: The Economic Consequences of the Peace [Paperback]

John Maynard Keynes (Author)

Book Description

Publication Date: March 25, 2009

In THE END OF LAISSEZ-FAIRE, Keynes presents a brief historical review of laissez-faire economic policy. Though he agrees in principle that the marketplace should be free of government interference, he suggests that government can play a constructive role in protecting individuals from the worst harms of capitalism's cycles, especially as concerns unemployment. When the Great Depression struck a few years later, this work seemed very prescient. Keynes first earned widespread prominence immediately following World War I, when he published THE ECONOMIC CONSEQUENCES OF THE PEACE. This book gained a good deal of notoriety because of its withering portraits of both French premier Georges Clemenceau and US president Woodrow Wilson. Keynes criticized the Allied victors for signing a treaty that would have ruinous consequences for Europe, if not modified as he suggested. Unfortunately, few leaders appreciated Keynes's criticisms, and he saw his worst fears realized in the rise of Hitler and the devastation of World War II. Keynes's brilliant mind and lucid writing are evident on every page. Both of these works are well worth reading for his profound knowledge of economics.

Editorial Reviews

About the Author

John Maynard Keynes (1883 –1946), was a British economist whose ideas have profoundly affected the theory and practice of modern macroeconomics, as well as the economic policies of governments. He greatly refined earlier work on the causes of business cycles, and advocated the use of fiscal and monetary measures to mitigate the adverse effects of economic recessions and depressions. His ideas are the basis for the school of thought known as Keynesian economics, as well as its various offshoots. In the 1930s, Keynes spearheaded a revolution in economic thinking, overturning the older ideas of neoclassical economics that held that free markets would in the short to medium term automatically provide full employment, as long as workers were flexible in their wage demands. Keynes instead argued that aggregate demand determined the overall level of economic activity, and that inadequate aggregate demand could lead to prolonged periods of high unemployment. Following the outbreak of World War II, Keynes's ideas concerning economic policy were adopted by leading Western economies. During the 1950s and 1960s, the success of Keynesian economics resulted in almost all capitalist governments adopting its policy recommendations, promoting the cause of social liberalism. Keynes's influence waned in the 1970s, partly as a result of problems that began to afflict the Anglo-American economies from the start of the decade, and partly because of critiques from Milton Friedman and other economists who were pessimistic about the ability of governments to regulate the business cycle with fiscal policy. However, the advent of the global financial crisis in 2007 has caused a resurgence in Keynesian thought. Keynesian economics has provided the theoretical underpinning for economic policies undertaken in response to the crisis by Presidents George W. Bush and Barack Obama of the United States, Prime Minister Gordon Brown of the United Kingdom, and other global leaders. Keynes is widely considered to be one of the founders of modern macroeconomics, and to be the most influential economist of the 20th century. In 1999, Time magazine included Keynes in their list of the 100 most important and influential people of the 20th century, commenting that: "His radical idea that governments should spend money they don't have may have saved capitalism". --This text refers to an alternate Paperback edition.

Product Details

• Paperback: 300 pages
• Publisher: BN Publishing (March 25, 2009)
• Language: English
• ISBN-10: 1607960869
• ISBN-13: 978-1607960867
• Product Dimensions: 8.8 x 6 x 0.8 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 3.6 out of 5 stars  See all reviews (5 customer reviews)
• Amazon Best Sellers Rank: #922,168 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

13 of 14 people found the following review helpful:

5.0 out of 5 stars Prophetic, December 31, 2008

By 

Stergios D. Marangos "Tanthallas" - See all my reviews
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This review is from: The End of Laissez-Faire: The Economic Consequences of the Peace (Great Minds Series) (Paperback)

In Keynes' polemic work, he breaks the confines of what was the normal economist and focuses on the remaking of the structure of the international ordnance after World War I. Indeed, many things were either in the process of changing or had changed by this time: the European Powers had never fully recovered their relative status, but remained the de facto world powers for the next two decades; the rise of United States into the international Great Power arena, bringing with them a high degree of idealism - perhaps explainable by their relatively benign international conditions at home; A supposed new found morality in International Relations championed by the Wilsonians and their vision of a world where the security of the United States was inseparable from the security of all other peoples in all nations around the world, much similar to the Habsburg Empire, however valuing universal rights and shared values in the stead of religious tenets.

Woodrow Wilson's attempt to legitimize America's claim to leadership on its altruism, with his League of Nations and fourteen points, is indeed interesting and quite relevant to the present. In analyzing systems in anarchy it is hard to avoid the greater question of the parallels between the state system and the free market. The notion that it is acceptable, indeed that is our right, to bring order and stability to the anarchical state system while we must live within the confines of the anarchy in the market are just one of the many contradictions in our general philosophy.

Continuing on the subject at hand, Keynes main focus is centered on the "war reparations" that the heirs of Wilhelmine Germany were forced to pay the victors of WWI at Versailles. Keynes believed this attitude to be ancient and outdated - that war may indeed stem from the provisions of the peace treaties that end conflicts. Ultimately, he viewed the impoverishment of Germany to be both unnecessary and potentially harmful to future progress and cooperation. Best said in the eloquent words of Keynes himself:

"If we aim deliberately at the impoverishment of Central Europe, vengeance, I dare predict, will not limp. Nothing can then delay for long that final war... that which will destroy...the civilization and progress of our generation..."


Keynes warning fell upon deaf ears. What seemed such matter of fact to the statesmen at the Congress of Vienna seemed to allude those at Versailles - this despite the new found morality in international relations championed by the Wilsonians. Germany was forced to pay an unprecedented amount of war reparations to the victors. The peace would, as Keynes predicted, not last. The treaty of Versailles would set the stage for the conflict to follow.

The relevance of Keynes' argument comes not only form its insightfulness, but also from the impact it had on melding the "dismal science" of economics with geopolitics and International Relations. Keynes fully realized that Germany must be allowed to enter into the legitimization of the post-war World. The impoverishment and exclusion of such a force as Germany from Versailles would at best accomplish a punitive peace. The stability of the international order would then be quite precarious, as the victors are now set with the task of dealing with a country determined to undermine the settlement. Additionally, any county with a grievance may find an ally from the disaffected party. This is precisely what happened with Italy and, even though ideologically opposed, the Soviet Union's early alliance with Germany. Japans dissatisfaction with the international ordinance and allocation of power due to it not having any legitimizing say is also observable; Germany, Italy, Japan and the Soviet Union were no longer part of the romanticist Wilsonian League of Nations by 1938. From this analysis, it should be clear that the message Keynes was attempting to put forth was just this. Truly prophetic and groundbreaking.

16 of 21 people found the following review helpful:

5.0 out of 5 stars J.M. Keynes & his relevance today, June 19, 2008

By 

T. Taylor "freelance dilettante" (New Mexico) - See all my reviews
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This review is from: The End of Laissez-Faire: The Economic Consequences of the Peace (Great Minds Series) (Paperback)

Having never read Keynes before, and having only heard politicians and pundits either lionize or pillory him, I am in awe of the depth and substance of his thinking. This book, written after World War I is, in my opinion, required reading for all who would analyze our current politico-economic situation. I can't wait to get more of his stuff.

1 of 3 people found the following review helpful:

4.0 out of 5 stars economcs, history, April 24, 2010

By 

Michael F. Bocchinfuso (brooklyn, ny USA) - See all my reviews
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This review is from: The End of Laissez-Faire: The Economic Consequences of the Peace (Paperback)

By a man way ahead of his time. Almost prescience in what would happen. He really deserves more study then the 're-written" text books show today.