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Economic Interventionism, Arms Industries and the Genesis of Keynesian Theory in the Interwar Period

Fanny Coulomb, Sciences Po Grenoble
Alcouffe Alain, University of Toulouse

The crisis of the 1930s led to the establishment of public interventionist policies, in the United States and Great Britain in particular. These measures significantly changed the economic environment of the companies: thus, in 1931 the American president Hoover pleaded, among other measures, for a more vigorous enforcement of antitrust laws to end destructive industrial competition, as well as for work-sharing programs that would supposedly reduce unemployment. With the New Deal, Roosevelt's administration made significant investments and allowed access to financial resources through various government agencies. What were the effects of these policies on businesses? What were the economic analyzes of this public intervention in the sphere of the private economy? During the interwar period, international relations were marked by debates on interallied debts and German reparations. Keynes' thought was deeply nourished by his participation in international negotiations, in particular as adviser at the British Treasury. If he could perceive war as a laboratory of experimentation to test the validity of his theory of the effect of public stimulus spending, he can in no way be considered as a supporter of "military Keynesianism", i.e. the use of military spending as a privileged instrument of economic policy (justified notably by the expected technological spin-offs from military investments). Keynes was openly hostile to militarism and war, convinced that they were contrary to human nature. After the Second World War, Keynes wrote an open letter to President Roosevelt, but despite the seemingly Keynesian character of New Deal economic measures, there was deep dissension between the two men. If Roosevelt favoured social measures, he remained hostile to the organization of a state interventionism financed by borrowing, a solution nevertheless advocated by Keynes, to revive purchasing power. Our article aims to understand the birth of policies to support business investmen


Keywords: interventionism, keynesian theory, arm industries, interwar period

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