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The Battle of Bretton Woods

The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order

Copyright Date: 2013
Pages: 472
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  • Book Info
    The Battle of Bretton Woods
    Book Description:

    When turmoil strikes world monetary and financial markets, leaders invariably call for 'a new Bretton Woods' to prevent catastrophic economic disorder and defuse political conflict. The name of the remote New Hampshire town where representatives of forty-four nations gathered in July 1944, in the midst of the century's second great war, has become shorthand for enlightened globalization. The actual story surrounding the historic Bretton Woods accords, however, is full of startling drama, intrigue, and rivalry, which are vividly brought to life in Benn Steil's epic account.

    Upending the conventional wisdom that Bretton Woods was the product of an amiable Anglo-American collaboration, Steil shows that it was in reality part of a much more ambitious geopolitical agenda hatched within President Franklin D. Roosevelt's Treasury and aimed at eliminating Britain as an economic and political rival. At the heart of the drama were the antipodal characters of John Maynard Keynes, the renowned and revolutionary British economist, and Harry Dexter White, the dogged, self-made American technocrat. Bringing to bear new and striking archival evidence, Steil offers the most compelling portrait yet of the complex and controversial figure of White--the architect of the dollar's privileged place in the Bretton Woods monetary system, who also, very privately, admired Soviet economic planning and engaged in clandestine communications with Soviet intelligence officials and agents over many years.

    A remarkably deft work of storytelling that reveals how the blueprint for the postwar economic order was actually drawn,The Battle of Bretton Woodsis destined to become a classic of economic and political history.

    eISBN: 978-1-4008-4657-3
    Subjects: History, Economics, Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
    (pp. ix-xii)
  4. CHAPTER 1 Introduction
    (pp. 1-7)

    In late 2008, with the world engulfed in the worst financial crisis since the Great Depression, French President Nicolas Sarkozy and British Prime Minister Gordon Brown each called for a fundamental rethinking of the world financial system. They were joined in early 2009 by Chinese central bank governor Zhou Xiaochuan, who pointed a finger at the instability caused by the absence of a true international currency. Each invoked the memory of “Bretton Woods,” the remote New Hampshire town where representatives of forty-four nations gathered in July 1944, in the midst of the century’s second great war, to do what had...

  5. CHAPTER 2 The World Comes to the White Mountains
    (pp. 9-15)

    “The majestic beauty of the surroundings,” wrote theNew York Timescorrespondent, newly arrived in the remote and chilly northern New England mountains, is “in striking contrast to the temporary bedlam which broke out on this plateau in the shadow of Mount Washington.”¹ It was July 1, 1944, and hundreds were descending on the hastily refurbished Mount Washington Hotel, the full postal address of which was Bretton Woods, New Hampshire. The town’s only other landmark—there being no main street, or even store—was the Fabyan railway station, which received the unusual inflow of foreigners on trains dubbed “the Tower...

  6. CHAPTER 3 The Improbable Rise of Harry White
    (pp. 17-59)

    By Harry White’s reckoning, his life started in 1930, the year he received his doctorate from Harvard. He notes nothing before it in the biography he provided forWho’s Who.

    Harry’s life had actually started across the Charles River thirty-eight years earlier, in much less refined surroundings. Yet Harvard represented a rebirth of sorts. The son of a peddler, he had an epiphany at age thirty, in his second attempt at an undergraduate degree. Having failed entrance exams in civics and American history the first time around, he was nonetheless incubating a growing passion for politics. Economics was a means...

  7. CHAPTER 4 Maynard Keynes and the Monetary Menace
    (pp. 61-98)

    Harry White’s American journey was as winding and obstacle-strewn as Maynard Keynes’s rise in England seemed effortless and preordained. White felt his life truly started nearly four decades after his birth, with a doctorate from his country’s most famed university. Keynes never bothered with one; he hadn’t even a degree in economics. Yet chosen as a teaching assistant by the storied Cambridge economist Alfred Marshall in 1908, Keynes was elected to a life fellowship at his alma mater—Kings College, Cambridge—at age twenty-six.

    Keynes’s academic success would have been a surprise to no one. His father, Neville, spent four...

  8. CHAPTER 5 “The Most Unsordid Act”
    (pp. 99-124)

    In 1939 the United States was under the spell of isolationist sentiment—or more accurately, sentiments, as the spectrum of views represented by those determined to keep the country out of war was enormous. It ranged from pacifists to pro-communists to profascists, from those sympathetic to Germany to those who believed French and British resistance hopeless. Fewer than 3 percent supported the United States entering the war at once on the side of France and Britain, whereas 30 percent were against even trade with any warring country.¹ Isolationist sentiments were reflected in a series of Neutrality Acts designed to keep...

  9. CHAPTER 6 The Best-Laid Plans of White and Keynes
    (pp. 125-154)

    In spite of his instinctive fiscal conservatism, Henry Morgenthau was a committed New Dealer. Characteristically American, he also believed that what was good for his country was good for the world. The United States was a benign emerging superpower, and would use its power, unlike the European imperialists before it, to create a world based on economic cooperation and nondiscrimination. Central to this idea would be to boost the authority of governments over the rootless, selfish financiers who, partly through their hold over the national central banks, wreaked havoc in the currency markets, disrupated trade, and sowed political conflict. In...

  10. CHAPTER 7 Whitewash
    (pp. 155-199)

    For Harry White, the war represented a unique opportunity to entrench the dollar as the world’s money. He would press for American and Allied soldiers to use the dollar, exclusively, as an invasion currency, and to overvalue local money so as to ensure that the populations gave the dollar an eager reception. In the case of each enemy Axis country, he wanted the dollar to operate as the only valid currency until a permanent economic settlement was reached between that country and the Allies.¹

    His monetary plan was the next step—the strategy for the postwar. The first full draft...

  11. CHAPTER 8 History Is Made
    (pp. 201-249)

    June 1944 was a momentous month. American troops reached the center of Rome on June 4. The following evening, British infantrymen landed by gliders in France, six miles north of Caen; by midnight June 6, 155,000 American, British, and Canadian troops were ashore in Normandy. By June 10 that total would reach 325,000; by June 20, half a million. The legendary Allied “Operation Overlord,” which had very nearly been grounded by relentless stormy weather, was in full swing.

    Despite setbacks—Churchill had feared much worse, and had unsuccessfully lobbied FDR for an alternative southern European front—the Allies were grinding...

  12. CHAPTER 9 Begging Like Fala
    (pp. 251-291)

    No sooner had the delegations departed Bretton Woods than controversy erupted between the British and the Americans over the meaning of what had been signed. “We, all of us, had to sign, of course, before we had had a chance of reading through a clean and consecutive copy of the document,” Keynes offered by way of explanation five months later. “All we had seen of it was the dotted line. Our only excuse,” he added, lifting some prose from Shakespeare, “is the knowledge that our hosts had made final arrangements to throw us out of the hotel, unhouselled, disappointed, unaneled,...

  13. [Illustrations]
    (pp. None)
  14. CHAPTER 10 Out with the Old Order, In with the New
    (pp. 293-329)

    On the evening of September 2, 1939, the day after Nazi armored columns rumbled into Poland, a nerve-ridden Whittaker Chambers downed a scotch and soda before spilling out names of U.S. officials involved in Soviet espionage to Roosevelt’s internal security adviser, Adolf Berle. Now an ex-Communist andTimemagazine writer, Chambers, fearful that the Nazi-Soviet Pact presaged German and Russian intelligence cooperation within and against the United States, had hoped to tell his tale to the president himself. But his interlocutor, anticommunistPlain Talkeditor Isaac Don Levine, had been unable to arrange it. Berle would have to do.


  15. CHAPTER 11 Epilogue
    (pp. 330-348)

    The sterling crisis of 1947 summoned forth howls of execration in Britain against American dollar diplomacy and its immiserating effects. “Not many people in this country believe the Communist thesis that it is the deliberate and conscious aim of American policy to ruin Britain and everything that Britain stands for in the world,” wrote theEconomist. “But the evidence can certainly be read that way. And if every time that aid is extended, conditions are attached which make it impossible for Britain ever to escape the necessity of going back for still more aid, to be obtained with still more...

    (pp. 349-350)
    (pp. 351-354)
    (pp. 355-370)
  19. NOTES
    (pp. 371-406)
    (pp. 407-426)
  21. INDEX
    (pp. 427-449)