The Great War and the Post-War Years

A peace treaty that harshly punishes the defeated nation, often aiming to weaken them and prevent future aggression.

Payments made by a defeated nation to compensate for the damages caused during a war.

Policies that prioritize a nation's own economic interests over international trade and cooperation.

Government measures to reduce spending and debt, often involving cuts to public services and social programs.

When countries lower the value of their currency to make their exports cheaper and more competitive.

The physical damage to infrastructure, factories, and other assets caused by war.

The process of adapting industries from wartime production to peacetime production.

A situation where a country imports more goods and services than it exports, leading to a loss of wealth.

A powerful force that redefined political identities and priorities, leading to intense competition for influence and territory.

The assassination of Archduke Franz Ferdinand, heir to the Austro-Hungarian throne, sparked a chain reaction of diplomatic tensions leading to war.

The pursuit of strategic dominance and expansion, particularly in terms of territorial control, played a major role in WWI.

WWI significantly diminished global interconnectedness by disrupting trade, finance, and migration.

The war severely disrupted global trade and financial networks, halting international commerce and weakening economic ties.

Many nations abandoned the gold standard during the war, contributing to a fractured monetary system.

The war drastically reduced the flow of people across borders, hindering migration worldwide.

The Balkans, a region with growing nationalist tensions, became a focal point of competition for influence, ultimately triggering the war.

John Maynard Keynes, in The Economic Consequences of the Peace, criticizes the Treaty of Versailles for being too harsh and likely to lead to future conflicts.

Keynes highlighted how deeply intertwined European economies and societies were, arguing that punishing one nation could have catastrophic consequences for all.

Keynes argued that the Treaty of Versailles was not a path to lasting peace, but rather a setup for future conflicts due to its harsh treatment of Germany.

World War I abruptly ended the first wave of globalization by destroying its key pillars: free trade, the gold standard, and commercial and financial integration.

The war led to the fall of empires, reshaping the global balance of power and the rise of new influential players like the United States and Japan.

The war catalyzed the communist experiment, leading to significant political changes across Europe, and sparking the Russian Revolution.

The war was a modern global conflict, using new technologies, and engaging soldiers from countries across the world.

World War I brought about dramatic and rapid changes in the global economic and political landscape, unlike the gradual shifts seen in previous eras.

The total public debt of the countries involved in World War I rose significantly from 26 billion dollars before the war to 225 billion dollars in 1920, excluding international loans.

Inflation, caused by an increase in circulating money, was a consequence of World War I. The level of inflation varied depending on the specific financing sources used by each country.

'Biennio Rosso' (Red Biennium) was a period in Italy characterized by social unrest, strikes, high unemployment, and a lack of human capital. It was a consequence of the social and economic upheaval following World War I.

The material destruction caused by World War I was extensive, with buildings, infrastructure, machinery, and agricultural assets decimated, resulting in a total cost of over 400 billion dollars (in 1914 prices).

World War I disrupted global economic relations and foreign trade, with negative effects lasting into the 1920s and 1930s, even though neutral countries increased their exports.

European countries lost foreign markets as overseas countries began producing their own goods or sourced them from outside Europe. Latin American and Asian countries established new manufacturing industries, while America and Japan gained control of markets previously held by Europeans.

World War I spurred agricultural production in established countries like the United States and new territories like Latin America. This led to overproduction in the 1920s, resulting in lower prices.

World War I resulted in losses from foreign investments and services like shipping. England lost its dominance to the United States, which had benefited from its neutrality in the war.

During WWI, countries like Great Britain and France had to sell off some of their foreign investments to fund war expenses. Germany's investments were confiscated and used for reparations, as outlined in the Treaty of Versailles.

The First World War shifted the global financial center from London to New York and Switzerland. This occurred as neutral countries like Switzerland offered safe haven for financial activities while the US emerged as a major player despite not actively seeking that role.

Post-WWI, Europe experienced significant labor shortages due to the war's high death toll, injuries, and civilian casualties. The Spanish Flu pandemic further aggravated this shortage.

The Treaty of Versailles aimed to end WWI, but it didn't prioritize international cooperation. Instead, it imposed punishments and debts on Germany, primarily driven by France's desire to prevent Germany's economic and military resurgence.

The Council of Four, comprised of Clemenceau, Lloyd, Wilson, and Orlando, focused on immediate national gains in the Treaty of Versailles, neglecting Europe's economic rehabilitation. They prioritized punishment over economic recovery.

Punitive reparations were a key part of the Treaty of Versailles. These forced Germany to pay substantial sums to the victors, aiming to cripple its economic recovery and prevent future aggression.

Keynes argued that the punitive policies towards Germany, like the reparations imposed in the Treaty of Versailles, were counterproductive and harmful to Europe's economic recovery, ultimately leading to further instability.

France's policy after WWI aimed to cripple Germany economically, reversing its progress since 1870 by targeting its industrial base and reducing its population.

The Council of Four, responsible for shaping the peace after WWI, neglected Europe's economic crisis, prioritizing national interests and short-term political gains.

After Germany failed to meet reparations obligations, France and Belgium occupied the Ruhr, Germany's industrial heartland, escalating tensions and sparking resistance.

Despite becoming a major world power, the US remained isolated, refusing to ratify the Treaty of Versailles or join the League of Nations, avoiding international responsibilities.

Keynes believed that the peace after WWI was not about a new era but a continuation of old rivalries, failing to recognize the need for cooperation and economic rebuilding.

The German government encouraged workers in the Ruhr to resist the occupation through strikes and non-cooperation, showcasing their defiance.

Keynes' book, The Economic Consequences of the Peace, highlighted how the harsh terms of the Treaty of Versailles threatened to cripple Europe's economy, setting the stage for future conflicts.