The Economics of Reparation

Two years after Versailles, one of Britain's most independent economists set out plainly what the victors were asking of Germany, and why the sums could never be paid.

John Atkinson Hobson (1858-1940) was an English economist and social critic whose Imperialism: A Study (1902) shaped Lenin's thinking, and whose account of underconsumption ran well ahead of the orthodox economics of his day. He wrote The Economics of Reparation as chairman of the Peace Revision Committee, formed after an international conference held in London in November 1920, and George Allen & Unwin issued it as a shilling pamphlet the following year.

Hobson works through the reparation clauses of the treaty, the demands made at Paris, and the terms of the London ultimatum, then measures all three against what Germany could realistically earn. Payment on that scale, he argues, would require an export surplus so large that the very countries pressing for it would have to throw open their own markets to German goods - which none of them intended to do. Printed alongside is the essay 'Reparations and Inter-Allied Debt' by John Maynard Keynes, who had resigned from the British delegation at Paris over the same question.

This edition features:

• The complete text, written while the size of the reparation bill was still being fought over
• The essay 'Reparations and Inter-Allied Debt' by John Maynard Keynes, printed in full alongside it
• A clause-by-clause reading of the Versailles settlement, the Paris demands, and the London ultimatum
• Hobson's case on Germany's capacity to pay, and on the export surplus that payment would demand
• Useful background for anyone studying the peace settlement and the economists who argued against it