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New Cold War History
Gold, Dollars, and Power: The Politics of International Monetary Relations, 1958-1971
How are we to understand the politics of international monetary relations since the end of World War II? Exploiting recently declassified documents from both the United States and Europe and employing economic analysis and international relations theory, Francis Gavin offers a compelling reassessment of the Bretton Woods system of fixed exchange rates and dollar-gold convertibility.
Gavin demonstrates that, contrary to the conventional wisdom, Bretton Woods was a highly politicized system that was prone to crisis and required constant intervention and controls to continue functioning. More important, postwar monetary relations were not a salve to political tensions, as is often contended. In fact, the politicization of the global payments system allowed nations to use monetary coercion to achieve political and security ends, causing deep conflicts within the Western Alliance. For the first time, Gavin reveals how these rifts dramatically affected U.S. political and military strategy during a dangerous period of the Cold War.
Gavin demonstrates that, contrary to the conventional wisdom, Bretton Woods was a highly politicized system that was prone to crisis and required constant intervention and controls to continue functioning. More important, postwar monetary relations were not a salve to political tensions, as is often contended. In fact, the politicization of the global payments system allowed nations to use monetary coercion to achieve political and security ends, causing deep conflicts within the Western Alliance. For the first time, Gavin reveals how these rifts dramatically affected U.S. political and military strategy during a dangerous period of the Cold War.
280 pages, Hardcover
First published January 26, 2004
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Displaying 1 - 6 of 6 reviews
October 19, 2021
The most important part of the book is the strange reminder that for 13 years, from 1958 to 1971, the US balance of payments deficit, and the US's loss of gold, was one of the most important issues in international politics. JFK often said that the two things that scared him most were nuclear war and the balance of payments. LBJ said that besides Vietnam, the balance of payments was the single most dangerous issue to the nation.
Unfortunately, this book focuses almost entirely on negotiations between the US and France, UK, and Germany, most especially Germany, on the issue. The book could almost be called "negotiating German monetary 'offsets' to the US provision of six divisions in the nation." Kennedy, who, as Under Secretary of State George Ball said, was "obsessed with the balance of payments," negotiated a deal in October 1961 with Germany to offset all US expenditures in Germany with equivalent military purchases in the US. This requirement was gradually whittled down by the Germans until President Ford abandoned the attempt to negotiate it in the 1970s. For years, however, the Treasury, for instance, led by Secretary Douglas Dillon, tried to remove troops from Germany entirely to improve payments, while the State Department and others tried to retain them (ironically, Dillon, as Under Secretary of State during Eisenhower's administration, had argued from his position to keep troops.) For years U.S. troops in Germany were kept despite constant pleas (including former President Eisenhower's article in 1962 that said they should be removed) to get them out, mainly because it was seen to keep Germany under control and in the NATO alliance, and would prevent them from demanding nuclear weapons, rather than because of the Soviet threat alone (Kennedy thought they were only necessary to protect Berlin, and that complete nuclear war would deter any actual Soviet attack.) In fact, when Senator Mike Mansfield again proposed a resolution to remove troops, it was Soviet Premier Leonid Brezhnev who asked them to remain.
This focus, however, means the book almost ignores Vietnam, other emerging nations, and Japan, all of which played a big part in the monetary debate, especially in the late 1960s. Yet placing gold and dollars at the center of international affairs in the mid-20th century is an important reminder on its own. The biggest problem is that international scholars ignorant of monetary issues will continue to ignore the books message and contribution.
Unfortunately, this book focuses almost entirely on negotiations between the US and France, UK, and Germany, most especially Germany, on the issue. The book could almost be called "negotiating German monetary 'offsets' to the US provision of six divisions in the nation." Kennedy, who, as Under Secretary of State George Ball said, was "obsessed with the balance of payments," negotiated a deal in October 1961 with Germany to offset all US expenditures in Germany with equivalent military purchases in the US. This requirement was gradually whittled down by the Germans until President Ford abandoned the attempt to negotiate it in the 1970s. For years, however, the Treasury, for instance, led by Secretary Douglas Dillon, tried to remove troops from Germany entirely to improve payments, while the State Department and others tried to retain them (ironically, Dillon, as Under Secretary of State during Eisenhower's administration, had argued from his position to keep troops.) For years U.S. troops in Germany were kept despite constant pleas (including former President Eisenhower's article in 1962 that said they should be removed) to get them out, mainly because it was seen to keep Germany under control and in the NATO alliance, and would prevent them from demanding nuclear weapons, rather than because of the Soviet threat alone (Kennedy thought they were only necessary to protect Berlin, and that complete nuclear war would deter any actual Soviet attack.) In fact, when Senator Mike Mansfield again proposed a resolution to remove troops, it was Soviet Premier Leonid Brezhnev who asked them to remain.
This focus, however, means the book almost ignores Vietnam, other emerging nations, and Japan, all of which played a big part in the monetary debate, especially in the late 1960s. Yet placing gold and dollars at the center of international affairs in the mid-20th century is an important reminder on its own. The biggest problem is that international scholars ignorant of monetary issues will continue to ignore the books message and contribution.
May 6, 2024
Surprisingly fascinating- "the politics of international monetary relations" is hardly a great attraction, and yet it's just a fascinating exploration of the interplay between the Bretton Woods system and great power nuclear politics of the time. Just another world when you think that the balance of payments was one of the top concerns for JFK and LBJ, and is barely a topic of discussion now. Bretton Woods was a bit of a mess.
October 8, 2023
主要講述1958-1971年間美國在國際政治的兩難與黃金不斷地流出之背景下，如何讓布列敦森林協議最終不得不落幕的歷史，其中當然有不少國際政治角力與不少美國作為二戰後西方頂樑柱的困境，不過也可以看出戰爭是如何在很長時間下對世界格局持續影響的事實，以及對美國貿易赤字的重新理解，戰爭平息後讓國力大衰導致改朝換代在中國歷史上可說是屢見不鮮，今天俄烏戰爭不論何時結束，一定會對之後的全球國際局重新洗牌，貿易戰與芯片戰相信也是整個大戰略的一環，不過因為這是一本美國作家的作品，所以不知道從英、法、德這些國家的角度來看是否會截然不同就是了。
March 26, 2025
A lot of relevant information about what’s going on in today’s society. Good read so you can understand the political talk.
January 24, 2026
Good book, but I def needed a crash course in half of these economics concepts beforehand lol. Still readable for my relative lack of economic understanding though.
Also for grad seminar
Also for grad seminar
January 22, 2021
The main points that economics problems are political and that the formative experience of the Great Depression weighed heavily were well supported.
Displaying 1 - 6 of 6 reviews