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Although I’m a long ways past high school, I wouldn’t be at all surprised to learn that students are still being taught that the main lesson Americans should draw from their country’s foreign policy during the early decades of the twentieth century is that standing aloof from world affairs is a catastrophic mistake.

The most familiar feature of this claim holds that by preventing the United States from joining the League of Nations after World War I, America’s so-called isolationists guaranteed that no effective counter to fascist aggression could be mounted, and thereby guaranteed the outbreak of a far more destructive global conflict. But an economic indictment has been leveled against U.S. policy during those years as well.

As made clear between the lines of a December 7 New York Times op-ed piece, supporters of the foreign policy globalism opposed by President Trump and most of his backers have long ardently believed that international financial policies after the First World War also took a disastrous, “America First”-type turn. One big problem, though – history actually shows that the fundamental mistake Washington made was not too little international economic engagement after the war, but too much during it.

In the article – which usefully commemorates the hundredth anniversary of a seminal book by iconic twentieth century British economist John Maynard Keynes – Boston University political scientist Jonathan Kirshner rightly lauds Keynes’ eloquent case against the economic punishments levied against Germany by the 1919 Versailles peace treaty. He’s also right in criticizing the United States’ “stubborn” and “shortsighted” insistence that its allies fully repay the enormous war debts they’d racked up to America.

As Keynes himself insisted, those obligations were “a menace to financial stability everywhere,” imposing a “crushing burden,” that would be “a constant source of international friction.” An international financial order that was little more than a tangle of debts and reparations, he warned, could hardly “last a day.”

Kirshner, though, looks like he has a hidden – globalist – agenda. Echoing today’s criticisms of Mr. Trump’s trade and foreign policies (which, I need to note, have been far from models of consistent America First-ism), he condemned American leaders of the 1920s for ending a “brief flirtation” with internationalism (a pre-Trump term for globalism) under President Woodrow Wilson and returning to “nationalism and nativism.” “Domestic demands,” he continued, were placed above “global concerns.”

Even more pointedly, he repeated Keynes’ contention that it “will be a disaster for the world if America isolates herself.”

Nonetheless, you don’t need to buy into America First-ism or even simply criticize globalism to recognize that Kirshner (and Keynes himself, for that matter), have completely ignored the financial run-up to Versailles. During these years, private American banks lent massively to the belligerents before the U.S. entry into the war in April, 1917 (overwhelmingly to the allies, but including minor credits extended to Germany), and after America joined the conflict, Washington took over.  (Here’s a handy brief history.)

In other words, the eventually ruinous war debts amassed by the European victors were possible largely because Wall Street massively intervened in the conflict financially in its early years, and because the U.S. government continued underwriting the fighting in its latter stages.

Also – and comparably – crucial: Just as America’s very entry into the war both guaranteed its prolongation and ensured that its ending would become a exercise in self-righteous, destabilizing, and ultimately disastrous vengeance rather than the kind of cold-blooded but hard-headed diplomacy that had contained the damage from previous conflicts, its loans to the belligerents worsened the destructiveness of the fighting and the consequent challenges of reconstruction. Indeed, Wilson himself was worried that Wall Street’s largesse was helping the allies in particular to wage war far longer than they otherwise could have afforded, and helped ward off the sheer exhaustion that would force a negotiated peace.

Thus the real lesson of America’s early 20th century financial diplomacy isn’t that international engagement is always bad, or that international non-involvement is always good.  It isn’t even that the United States should never seek to have its cake and eat it, too – which was clearly the expectation of Wilson’s successors.  It’s that in this particular instance, America’s combination of actions backfired. 

And let’s not forget a broader lesson for students of foreign policy and its record that’s reinforced by Kirshner’s article:  Beware of scholars cherry-picking history.