John Maynard Keynes in his book 'Economic Conse-quences of the Peace' discussed the virtual impossibility of Germany to meet reparations payments the victors imposed after the 1914-1918 war.

Their concerns didn't really centre on reconstructing economic life as the foundation of the peace.

Keynes argued, "Reparation was their main excursion into the economic field".

Assessing prospects for renewed production and exchange he thought post-war Europe's currency situation - the inflation problem - was a key.

His sharp, insightful, often sardonic indictment of the settlement is highly instructive; well worth careful periodic re-reading.

"Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some," he wrote.

"The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their desserts and even beyond their expectations or desires, become 'profiteers,' who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat.

Utterly disordered

"As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery."

"Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."

Keynes decided to use his huge influence to avoid the destruction. Some may argue with him on moral or ideological grounds, but realism played a big part in his comments.

He was convinced that the "immense accumulations of fixed capital which, to the great benefit of mankind, were built up during the half century before the war, could never have come about in a society where wealth was divided equitably.

wilbe65@yahoo.com