The director of international economics at the Council on Foreign Relations revisits the 1944 conference that created “the new global monetary architecture” for the postwar world.
As the American Army entered Rome and the Russians drove the Nazis out of Minsk, delegates from 44 Allied nations gathered in Bretton Woods, N.H., to hammer out the ground rules for international economic equilibrium following the defeat of the Axis powers. The American delegation, led by Treasury Secretary Henry Morgenthau and his right-hand man for international affairs, Harry Dexter White, pressed for a “New Deal for a new world,” looking to strengthen government control of monetary policy and central banking and to install the dollar as the “world’s sole surrogate for gold.” The war-shattered British, mindful of their historic prerogatives, opposed the White plan, but their only leverage lay in the intellectual brilliance of John Maynard Keynes, the 20th century’s most influential economist, and the possibility that they might simply walk away and, thereby, cripple any agreement. Steil (co-author, Money, Markets, and Sovereignty, 2009, etc.) sets the stage for this contest between the cuttingly eloquent Keynes and the acerbic, technocratic White—neither man tailored for diplomacy—with especially deft potted biographies of each and a look at the infighting between the U.S. State and Treasury departments in the lead-up to the conference. For general readers, the author masterfully translates the arcana of competing theories of monetary policy, and a final chapter explains how, while some of the institutions created by Bretton Woods endure—the World Bank, the International Monetary Fund—many of the conference’s assumptions were swiftly overtaken by the Marshall Plan. Throughout Steil’s sharp discussion runs the intriguing subplot of White’s career-long, secret relationship with Soviet intelligence.
A vivid, highly informed portrayal of the personalities, politics and policies dominating “the most important international gathering since the Paris Peace Conference of 1919.”