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Politics : Foreign Affairs Discussion Group

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To: Raymond Duray who wrote (9350)	11/8/2001 4:35:51 AM
From: maceng2	Read Replies (1) of 281500

Re German WW1 reparations. An alternative view, with Australian denigrations included... This view from the "New Australian" indicates the reparations were payable. It's a general critical review of actions in Australia to recover the economy. newaus.com.au quote ....Mr Dingbat asserted that Keynes got it right when he said reparations would cause the German economy irreparable damage. Really? Keynes was largely a lonely and erroneous voice on this issue and was challenged by a number of continental economists, among them Bertil Ohil (Sweden), Jacques Rueff (France), Ludwig von Mises, Gottfried Haberler, Fritz Machlup, (Austria), etc. Ludwig von Mises was able to show that Germany was capable of paying reparation without suffering the economic harm that Keynes predicted. Looking at the period from 1925 to 1930: Year.......income....reparations.....%reparations. 1925........961........16.25..............1.69 1926........997........18.30..............1.84 1927.......1118........24.37..............2.18 1928.......1185........30.75..............2.60 1929.......1187........38.47..............3.24 1930.......1092........26.10..............2.39 If Germany could not have easily made these payments, perhaps Dingbat will care to tell us how she was able to quickly rearm and spark off World War II and then fight ferociously for six long years? (And please spare me any drivel about the “transfer problem”). The truth is that von Mises blew Keynes out of the water. That Percy Dingbat has no idea what Keynes was really about is self-evident. So let us turn from Dingbat the monkey to Keynes the organ grinder. On page 9 of the General Theory Keynes writes: “Whilst workers will usually resist a reduction of money-wages it is not their practice to withdraw their labour whenever there is a rise in the price of wage goods [consumer goods]”. In plain English, use inflation to price people back into work by cutting real wage rates. And that is what the smarter Keynesians, of which dingbat is not one, really mean by “increasing demand”..... end quote

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