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Bretton Woods and Dumbarton Oaks: American Economic and Political Postwar Planning in the Summer of 1944
254 pages, Hardcover
First published April 15, 1995
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October 10, 2018
Presenting a lively discussion of the diplomatic process during and after the second world war, this book reminds us that it remains important to reflect on the internationalism that the US advocated at that time, after it had been a principal participant in the defeat of fascism, at great cost to itself—and to compare the present moment, wherein the US has turned away from these cosmopolitan principles and instead endorsed those antediluvian ideas that should have been buried with the ~75 million persons who died in defeating them.
This begins with a summary that “ultranationalist forces gained popularity in Germany by openly condemning the peace settlement” of WWI (ix); thereafter the US wanted to avoid a peace that would lead to “renewed turmoil, economic disintegration, and ultimately to a third world war” (ix-x): “the most important consensus was the rejection of isolationism” (x). One goal, perhaps at odds with the first, was “to maintain full employment in the United States” (xi)—and the UK was “interested in maintaining the British empire” (id.) for their part of the peace process. There was also always the concern that the Soviet Union would “create a cordon sanitaire of dependent socialist states” (xii), which I regard as completely reasonable from a realist perspective, considering the repeated invasions by rightwing states to the west—but which also is inconsistent with the diplomatic process, contrary to the norms of the UN Charter, and violative of the dependent states.
In the US, isolationism had been crushed, despite the passage of neutrality laws in the late 30s (6). Even hapless Wendell Willkie wanted peace “on a world basis” (4). Whereas Wilson, in negotiating the peace after WWI, had to deal with isolationists, FDR was looking at negotiating a peace with surly allies (6). The problem became one of “overcoming nation-states and creating a true world government” (7). The text surveys the various positions of the debate in the US on how to approach the Soviet Union post-war; Kennan and other hawks are well known—but persons such as Morgenthau thought it “madness” to be suspicious of Russia while simultaneously trusting Germany to guard world peace (13). Overall, the US approached the peace process from the perspective of belligerence, as summarized by Berle: “we have learned from the last war that military victory is not total victory and that it may be translated into disaster. The uses of victory cannot be determined after the victory is won. They must be planned for exactly as one plans a major military operation” (14).
The argument works through the wartime cooperation of the Allies, including the contradictions engendered by the British deal with the Soviets regarding spheres of influence in the Balkans on the one hand and the US deal with the Soviets in eastern Europe (45 ff)—all of which undermines the collective security regime envisioned by the UN Charter. The UK apparently “was primarily interested in preserving the British imperial position” (46), also not entirely consistent with collective security. One problem to overcome was the legacy of nationalistic interest at general peace conferences, such as the problem at Versailles of how “the European Allies insisted that Germany assume sole responsibility for the outbreak of the war and should reparations” and simultaneously how the US “was equally determined that the Allies should repay their war loans” (76), as described deftly in Hudson’s Superimperialism.
Detailed discussion follows of the US State Department’s preparation for Dumbarton Oaks (41-73) and the Department of Treasury’s preparation for Bretton Woods (75-108), followed by detailed discussion of each respective conference (109-72)—all riveting, actually. The text acknowledges that the US during the war was willing to make ideological compromises in the post-war world (62), even though it reversed course on that policy as soon as the war ended (and perhaps before); it is also plain that “the Soviet Union was engaged in a life-or-death struggle in 1942 that left few resources for planning the post-war world” (70).
The US Treasury was concerned that “another acute economic depression” would develop after the war (83), a classic crisis of overproduction, and therefore gunned for the discrimination “at the heart of the British trading system” (84)—i.e., “the reduction of foreign economic barriers to promote American exports again became the core of American economic philosophy” (87). The British resisted this, based on Keynes' belief that the US position was uncommonly silly: “if only we trust to methods of laissez faire is a doctrinaire illusion which disregards the lessons of historical experience” (95). Despite the differences, the US and UK positions agreed on “the government-arranged system of credits to facilitate international trade, set principles for monetary conduct, and created an international monetary authority empowered to enforce those principles” (id). The Soviet Union was also interested in the embryonic Bretton Woods institutions (103), but overall these preparations “neglected the future treatment of the World War II enemy states” (106). The Economist regarded the US plan to be “revolutionary,” a “genuinely new conception of world order,” based on “expanding markets” with “global mass consumption great enough to use mass production” (107) and thereby get out of the overproduction trap described in Dutt’s Fascism and Social Revolution, incidentally.
The discussion here of the making of the IMF, World Bank, and the GATT, as well as the UN, is laden with detail. Those familiar with the law of the relevant treaties may find it enlightening, and there is much historical interest otherwise. Whereas the US, for instance, regarded the quota for the Fund as a “specific financial commitment,” the Soviet Union viewed it politically as symbolic of “the state’s economic importance in the postwar world” (119), which is what caused the Soviets to advocate for an increase in their proposed quota to a level just under the British empire. The gold standard was debated, with the parties ultimately agreeing to “a system under which the value of the United States dollar would be fixed in terms of gold” (125), and which lasted until the Nixon regime, as it happens. Other states’ currencies were to be expressed in terms of gold or US dollars, and “had to stay within 1 percent deviation from the original” initial value as determined by the Fund (126). The US wanted to prevent states “seeking economic aims separately” as this “would lead to ruinous competition” and “start our steps irretracebly down the steep, disastrous road to war” (127). We are long way from this sort of clear-headed reasoning in the era of Trump’s flirtation with rightwing populist proto-fascism.
Plenty more, including the presentation of left and right critiques of the conferences and treaties thereafter. We know that the process was being challenged by its participants even while it was occurring, which is likely to be the norm, insofar as “traditional Soviet and British realpolitiker” was opposed by the purported “American idea of maintaining peace and territorial integrity by creating a single global security institution” (176), which, for all its merits, certainly enhanced “the successful penetration of global markets by American businesses” (186), and which was less by design than by post-war a fait accompli.
Recommended for those who wear MAGA hats—maybe y’all will learn something.
This begins with a summary that “ultranationalist forces gained popularity in Germany by openly condemning the peace settlement” of WWI (ix); thereafter the US wanted to avoid a peace that would lead to “renewed turmoil, economic disintegration, and ultimately to a third world war” (ix-x): “the most important consensus was the rejection of isolationism” (x). One goal, perhaps at odds with the first, was “to maintain full employment in the United States” (xi)—and the UK was “interested in maintaining the British empire” (id.) for their part of the peace process. There was also always the concern that the Soviet Union would “create a cordon sanitaire of dependent socialist states” (xii), which I regard as completely reasonable from a realist perspective, considering the repeated invasions by rightwing states to the west—but which also is inconsistent with the diplomatic process, contrary to the norms of the UN Charter, and violative of the dependent states.
In the US, isolationism had been crushed, despite the passage of neutrality laws in the late 30s (6). Even hapless Wendell Willkie wanted peace “on a world basis” (4). Whereas Wilson, in negotiating the peace after WWI, had to deal with isolationists, FDR was looking at negotiating a peace with surly allies (6). The problem became one of “overcoming nation-states and creating a true world government” (7). The text surveys the various positions of the debate in the US on how to approach the Soviet Union post-war; Kennan and other hawks are well known—but persons such as Morgenthau thought it “madness” to be suspicious of Russia while simultaneously trusting Germany to guard world peace (13). Overall, the US approached the peace process from the perspective of belligerence, as summarized by Berle: “we have learned from the last war that military victory is not total victory and that it may be translated into disaster. The uses of victory cannot be determined after the victory is won. They must be planned for exactly as one plans a major military operation” (14).
The argument works through the wartime cooperation of the Allies, including the contradictions engendered by the British deal with the Soviets regarding spheres of influence in the Balkans on the one hand and the US deal with the Soviets in eastern Europe (45 ff)—all of which undermines the collective security regime envisioned by the UN Charter. The UK apparently “was primarily interested in preserving the British imperial position” (46), also not entirely consistent with collective security. One problem to overcome was the legacy of nationalistic interest at general peace conferences, such as the problem at Versailles of how “the European Allies insisted that Germany assume sole responsibility for the outbreak of the war and should reparations” and simultaneously how the US “was equally determined that the Allies should repay their war loans” (76), as described deftly in Hudson’s Superimperialism.
Detailed discussion follows of the US State Department’s preparation for Dumbarton Oaks (41-73) and the Department of Treasury’s preparation for Bretton Woods (75-108), followed by detailed discussion of each respective conference (109-72)—all riveting, actually. The text acknowledges that the US during the war was willing to make ideological compromises in the post-war world (62), even though it reversed course on that policy as soon as the war ended (and perhaps before); it is also plain that “the Soviet Union was engaged in a life-or-death struggle in 1942 that left few resources for planning the post-war world” (70).
The US Treasury was concerned that “another acute economic depression” would develop after the war (83), a classic crisis of overproduction, and therefore gunned for the discrimination “at the heart of the British trading system” (84)—i.e., “the reduction of foreign economic barriers to promote American exports again became the core of American economic philosophy” (87). The British resisted this, based on Keynes' belief that the US position was uncommonly silly: “if only we trust to methods of laissez faire is a doctrinaire illusion which disregards the lessons of historical experience” (95). Despite the differences, the US and UK positions agreed on “the government-arranged system of credits to facilitate international trade, set principles for monetary conduct, and created an international monetary authority empowered to enforce those principles” (id). The Soviet Union was also interested in the embryonic Bretton Woods institutions (103), but overall these preparations “neglected the future treatment of the World War II enemy states” (106). The Economist regarded the US plan to be “revolutionary,” a “genuinely new conception of world order,” based on “expanding markets” with “global mass consumption great enough to use mass production” (107) and thereby get out of the overproduction trap described in Dutt’s Fascism and Social Revolution, incidentally.
The discussion here of the making of the IMF, World Bank, and the GATT, as well as the UN, is laden with detail. Those familiar with the law of the relevant treaties may find it enlightening, and there is much historical interest otherwise. Whereas the US, for instance, regarded the quota for the Fund as a “specific financial commitment,” the Soviet Union viewed it politically as symbolic of “the state’s economic importance in the postwar world” (119), which is what caused the Soviets to advocate for an increase in their proposed quota to a level just under the British empire. The gold standard was debated, with the parties ultimately agreeing to “a system under which the value of the United States dollar would be fixed in terms of gold” (125), and which lasted until the Nixon regime, as it happens. Other states’ currencies were to be expressed in terms of gold or US dollars, and “had to stay within 1 percent deviation from the original” initial value as determined by the Fund (126). The US wanted to prevent states “seeking economic aims separately” as this “would lead to ruinous competition” and “start our steps irretracebly down the steep, disastrous road to war” (127). We are long way from this sort of clear-headed reasoning in the era of Trump’s flirtation with rightwing populist proto-fascism.
Plenty more, including the presentation of left and right critiques of the conferences and treaties thereafter. We know that the process was being challenged by its participants even while it was occurring, which is likely to be the norm, insofar as “traditional Soviet and British realpolitiker” was opposed by the purported “American idea of maintaining peace and territorial integrity by creating a single global security institution” (176), which, for all its merits, certainly enhanced “the successful penetration of global markets by American businesses” (186), and which was less by design than by post-war a fait accompli.
Recommended for those who wear MAGA hats—maybe y’all will learn something.
to-keep-reference
October 18, 2016...un relato histórico que ofrece un comprensivo enfoque de la preparación de Estados Unidos para la hegemonía en el período de posguerra, mediante la planificación económica en Bretton Woods junto con la planificación política en Dumbarton Oaks.
Imperio Pág.200
Imperio Pág.200
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