Can America Be Fixed?
The New Crisis of Democracy
Capitalism and Inequality
What the Right and the Left Get Wrong
Why a Founding Father of Postwar Capitalism Spied for the Soviets
A Conversation With Stanley McChrystal
The Rise of Big Data
How It's Changing the Way We Think About the World
The Road to D-Day
Behind the Battle That Won the War
How Jewish Extremism Threatens Zionism
Who Is Ali Khamenei?
The Worldview of Iran’s Supreme Leader
Biology's Brave New World
The Promise and Perils of the Synbio Revolution
Google's Original X-Man
A Conversation With Sebastian Thrun
Making Sense of Mali
The Real Stakes of the War Rocking West Africa
Saving the Euro, Dividing the Union
Could Europe's Deeper Integration Push the United Kingdom Out?
The Real Reason Putin Supports Assad
Mistaking Syria for Chechnya
How Iran Won the War on Drugs
Lessons for Fighting the Afghan Narcotics Trade
The Egyptian State Unravels
Meet the Gangs and Vigilantes Who Thrive Under Morsi
Even Good Coups Are Bad
Lessons for Egypt from the Philippines, Venezuela, and Beyond
How Yemen Chewed Itself Dry
Farming Qat, Wasting Water
The Arab Sunset
The Coming Collapse of the Gulf Monarchies
Where Have All the Workers Gone?
China's Labor Shortage and the End of the Panda Boom
Love in the Time of Bollywood
India's Strained Romance Revolution
Special relationship: Keynes and White at an IMF meeting, Savannah, Georgia, 1946. (Getty)
In the wake of the 2008 financial crisis and the ensuing global economic downturn, it has become commonplace for politicians, pundits, and economists to invoke the memory of Bretton Woods. In July 1944, in the midst of World War II, representatives of 44 nations gathered in this remote New Hampshire town to create something that had never before existed: a global monetary system to be managed by an international body. The gold standard of the late nineteenth century, the organically formed foundation of the first great economic globalization, had collapsed during the previous world war. Efforts to revive it in the 1920s proved catastrophically unsuccessful. Economies and trade collapsed; cross-border tensions soared. In the 1930s, internationalists in the U.S. Treasury Department saw a powerful cause and effect and were determined to resolve the flaws in the international economic system once and for all. In the words of Harry Dexter White, a then little-known Treasury official who became the unlikely architect of the Bretton Woods system, it was time to build a "New Deal for a new world."
Working in parallel and in prickly collaboration with his British counterpart, the revolutionary economist John Maynard Keynes, White set out to create the economic foundations for a durable postwar global peace. Governments would be given more power over markets but fewer prerogatives to manipulate them for trade gains. Trade would in the future be harnessed to the service of political cooperation by ending shortages of gold and U.S. dollars. Speculators who stoked and profited from fears of such shortages would be shackled by strictures placed on the frenetic cross-border flows of capital. Interest rates would be set by government experts schooled in the powerful new discipline of macroeconomics, which Keynes had been instrumental in establishing. A newly created International Monetary Fund (IMF) would ensure that exchange rates were not manipulated for competitive advantage. Most important, budding dictators would never again be able to
Loading, please wait...