Bretton Woods, 1944
New Books in EconomicsNew Books in HistoryNew Books in National SecurityNew Books in Peoples & PlacesNew Books in Politics & SocietyNew Books in World AffairsNew Books Network May 18, 2015 Christian Peterson
The functioning of the global economy remains as relevant a topic as ever before. Commentators continue to debate the causes and consequences of the financial crisis that hit the United States from 2007-2008. They also continue to ask questions such as: How long will China keep purchasing the treasury bonds that the U.S. government needs to help finance its ever-increasing debt? Just how long can the dollar remain the global reserve currency before being replaced by another national currency or some sort of international monetary unit? Will the global flows of capital facilitated by “free-floating” exchange rates eventually undermine the healthy functioning of international economy and usher in another global depression?
In his new book The Summit: Bretton Woods, 1944 (Pegasus Books, 2014), journalist Ed Conway uses the story of the Bretton Woods Summit to help readers better understand the difficulties involved in creating a stable and prosperous global monetary system. In easy-to-follow and engaging prose, he recounts the rise and fall of the gold standard. Drawing on many previously unused sources, he also explains how actors as different as the British economist John Maynard Keynes and U.S. treasury official Harry Dexter White worked to create a more flexible, cooperative global monetary system that would prevent future World Wars and Great Depressions. Conway’s section on the Summit tells the fascinating stories of how the participants ended up creating the Bretton Woods framework by linking the dollar to gold and creating the International Monetary Fund and World Bank.
Unlike many accounts of the Bretton Woods Summit that paint the gathering as a dull economic conference, Conway’s book succeeds in portraying the human drama of the event and the complex ways that personalities influenced the final agreements. In ways that will appeal to the general reader and expert alike, he embeds his cogent economic analysis within stories as diverse as the drinking songs that attendees belted out at the Mount Washington Hotel bar and the volleyball match that took place between U.S. and Soviet officials. A magician and dance instructor also make appearances in the story.
Like any good book should, Conway gives readers much food for thought. While the Bretton Woods framework had many faults, it largely coincided with the longest economic expansion in human history. Even if this framework’s inherent limitations make it an impractical option today, policymakers would be wise to reflect on how their predecessors worked to promote global economic stability. As history shows, they could do worse than the motley collection of individuals who came to Bretton Woods in 1944.