The Rise of the Third Reich

Keynes is a famous economist in history. He became famous in the 1920s and is probably the most famous economic figure of this era. Not only was he an important economic adviser to the British government, he was also chairman of the National Mutual Life Insurance Company. Its annual report to shareholders has always been a must-read and early-listening news for those in the European financial community.

In addition, in 1919 he served as the chief representative of the British Treasury to the Paris Peace Conference. At the Paris Peace Conference, he took a more pro-German stance and resigned as a peace representative because the amount of compensation paid by Germany was too huge. Later he published "The Economic Consequences of the Peace", which gave a rather pessimistic forecast for postwar Europe. When this book was published, the British media called him a traitor because of his pro-German attitude, and the then Chancellor of the Exchequer, Austin Chamberlain, also accused him of betraying the trust of his motherland.

But by 1923, the book's pessimistic predictions were coming true! Instead of benefiting from punishing Germany, the European economy is collapsing as a result - Germany was an important engine of the European economy before the war, and losing Germany means that the European economy has lost at least one-third of its growth momentum. Moreover, there is a certain correlation between the German economy, the French economy, and the British economy.

The general strike caused by the occupation of the Ruhr area by France and Belgium not only caused the German economy to collapse, but also caused losses to the economies of France and Belgium. The Rhine River and the German railway system are important channels for European international trade, and the coke from Germany Also an important raw material for the French and Belgian steel industries, all is now lost.

The trend of social revolution began to stir again in 1922 and 1923. This time it was not Bolshevism that arose, but fascism!

As Keynes's predictions came true one by one, and the debate between the "gold standard" and "gold exchange" rose, Keynes once again became the most influential economist in the UK - behind the so-called "gold standard" and "gold exchange" was actually the The US dollar and the British pound are vying for international reserve currency status.

Because the United States has the largest gold reserves in the world, it actively promotes the restoration of the gold standard so that the U.S. dollar can replace the British pound. The UK hopes to use the system of pegging European currencies to the pound and the pound to gold to consolidate the pound's status as an international reserve currency.

Whether Germany can be saved is a litmus test for the two monetary rules of the "gold standard" and "gold exchange."

At the same time that political upheavals were taking place in Germany, in the office of the chairman of the National Mutual Life Insurance Company headquarters in London, an important meeting related to the future destiny of the entire Europe was also underway.

Only two people attended this meeting, Keynes and Dr. Schacht, who came all the way from Germany.

"Mr. Keynes, I think you should be very clear that the economic problems facing Britain and Europe cannot be solved by gold that does not exist. The gold you ask from Germany does not exist, and the gold you owe the United States Nor did there exist thousands of tons of gold shipped from New York to London and Paris during the World Wars, nor were the World Wars fought by throwing gold nuggets at each other.

What you get from the United States is a variety of materials, and what Germany owes is actually materials. For we did not destroy your gold reserves; it was houses, bridges, factories, roads and ships that were destroyed by the German war machine. Regardless of whether those things are worth 132 billion gold marks. I think what we need to come up with is the corresponding products that can be produced, rather than gold that does not exist at all... If you really want us to compensate you, rather than want the territory of the Ruhr and Saar regions, then Let’s start production! "

Dr. Schachter is also an eloquent economist, but what he is selling to Keynes is indeed Hirschman's point of view - if Hirschman is asked to build a complex mathematical model to prove any economic theory, he will definitely not be able to do it. But what he proposed was a very simple and very feasible solution.

Keynes showed an expression of surprise, and then frowned a pair of thick eyebrows, "Dr. Schacht, can I understand that you have to repay 132 billion gold marks in war compensation?"

"Yes! Repay with German industrial products of equal value!" Dr. Schacht said, "Because these things exist."

"Industrial products?" Keynes said, "Do you have enough industrial products? You have lost 1/3 of your coal mines and 3/4 of your iron ores."

"Coal mines can be reopened and iron ore can be imported from Sweden!" Dr. Schacht said, "As long as we can issue a new mark pegged to the pound, stabilize the German currency, and establish a more efficient and export-friendly industry. The industrial production, investment and consumption system of goods... we can use German factories to produce enough industrial goods.”

"Does this require a lot of investment?" Keynes said. "Do you have that much money?"

"We can borrow money from the UK," Schacht said with a smile. "If there is a gold exchange system, the banknotes printed by you British people will be capital! This is the power to dominate the world. Do you want to give this power to the United States? person?"

"America is powerful and very rich," Keynes said, frowning. "We still owe the American people a lot of money."

Schacht snorted softly, "We in Germany plus you in the UK can surpass the United States in terms of population alone. The combined output of steel, coal, automobiles and ships in the two countries is no less than that of the United States, and the number of aircraft is far greater. More than the United States.

If we can establish a stable monetary system in Europe with the pound at its core. Let Germany, France, Italy and other European powers, under the leadership of the United Kingdom, speak to the Americans with one voice. The British Empire can settle war debts according to its own wishes, and can also establish a gold exchange currency system according to its own wishes. Isn’t this what Britain wants? "

"It sounds very attractive." Keynes was silent for a while. "Can I understand that Germany really wants to use industrial products to repay its debts?"

"Yes! We are really willing to pay it back."

"But you must first establish an economic system that can produce large amounts of industrial products... This system must be able to operate in a closed manner under state control and must be oriented towards exporting industrial products."

"Of course, otherwise how could there be excess industrial product exports?" Schacht paused, "But we are not pursuing a trade surplus. We just want to pay off the compensation as soon as possible and then live a good life... We will not accumulate Excessive gold, our exports are only to obtain the necessary resources to meet the most basic domestic needs and compensation needs. If there is a surplus, whether it is a trade surplus or an investment project surplus, the gold obtained will be given to the Bank of England in exchange for pounds. ! Because the pound is the guarantee for the issuance of new marks!”

This is indeed what Britain dreams of!

Keynes said: "But there is no more free trade and free economy in Germany!"

"If we want to implement free trade and free economy, we must hand over non-existent gold to France. Perhaps we can also accept assistance from Wall Street, hand over the right to issue German currency, and let the Americans manage the German economy. , borrowing money from the United States to repay the reparations, Mr. Keynes, I think you know the consequences of this!”

Keynes seemed to be visiting the president of the German National Bank and the members of the Industrial Promotion Council, and said in a casual way: "If the United States really controls the German economy, then the dollar will become the world currency, and Britain will never have one." Opportunities to win back the glory of the past...Okay, I can try to convince the Prime Minister. But nothing is perfect in the world. The items to compensate for the compensation cannot be all expensive cars, planes and ships, and raw materials such as coal and wood are still available. It must account for a considerable proportion. And the German government's finances, the German central bank, must be subject to our strict supervision. In addition, the Baltic mark must also be pegged to the pound."

"Okay!" Dr. Schachter breathed a sigh of relief, "This is exactly the plan we wanted!"

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