Nasar, Sylvia. "Keynes, Schumpeter and the Great Post-War Mistake." Bloomberg. September 8, 2011.

Excerpt:

In January 1919, as the Allied leaders met in Paris to hammer out a treaty ending World War I, famine and pestilence raged from St. Petersburg to Istanbul. To the Britons and Americans who came to survey the damage, the whole continent seemed to be in extremis.

Eight weeks after the signing of the armistice, peace had not been restored. The Allied blockade was still in effect. Dozens of small wars erupted, involving hundreds of thousands of troops. Entire populations were being terrorized by pogroms and expulsions. Eight and a half million men had died. Nearly as many were left physically disabled or psychologically maimed. A generation in Central Europe was growing up underfed and undersized — the Kriegskinder, or children of war.

Victors and losers alike were saddled with massive debts and faced pressure to compensate those who had sacrificed so much. Yet every avenue back to normalcy was blocked. Trade was at a standstill, credit frozen, production stymied by lack of raw materials, the workforce idle. The economic mechanism of Europe had to be unjammed, yet the men in Paris persisted in believing that their nations’ losses could be recouped by extracting reparations and redrawing borders.

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