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Err. "Obviously under duress"? It was Keynes (GB) and White (US) who initially inched toward Bretton Woods. The French were keen right from the start of their i

Err. "Obviously under duress"? It was Keynes (GB) and White (US) who initially inched toward Bretton Woods. The French were keen right from the start of their involvement. It was the USA that insisted on watering down Keynes' proposals. Well Harry White really, with the US as sole nation profiting from WW2, and now world's creditor which gave leverage, not victory. It was the end of Bretton Woods that started the ball rolling that led to the Euro. The end of Bretton Woods and US abandonment of the gold standard, was hugely inflationary - the mark of the seventies - and saw Europe trying to continue with a Bretton lite, though the first attempts didn't survive long.

MR4D 7y ago
Duress - meaning the war was still on, and the only government that could save them was offering terms effectively defining a new world order - definitely completely different from the world before the war. Further, Bretton Woods was effectively a bribe, at least from the perspective of import tariffs. So, yes, I believe that it was both carrot and stick, so that the US would be able to get the former colonial powers to fall in line. Doing so also destroyed the colonial status (witness India, a mere 2 years after the war as but one example).
- NeedMoreTea 7y ago
  A new world order built on Keynes' plan. I'm not downplaying US part, Bretton Woods was, in essence an Anglo-US deal, but was hardly a US plan to save the rest. All the major nations of the time knew the progression that had followed Versailles, banking and currency crisis then Depression and war. The carrot to save Europe was the Marshall Plan. That the USA had all the money by 1944 certainly changed the conference dynamic, and undoubtedly contributed to White being able to overrule Keynes. As an aside, US economist Brad DeLong claims Keynes was ultimately proved right on every point he was overruled on. Indian independence was completely unconnected to any US action. Independence was inevitable from the 1930s. In a sentence: mid 30s Roundtables with Ambdekar, Gandhi, and McDonald; the outbreak of war in 39; and agreement to grant independence after supporting the war effort.
  - MR4D 7y ago
    The Marshall Plan was a huge carrot, but came 4 years after Bretton Woods (which implies that Bretton Woods was not enough - or at least, not fast enough). Also, the fact that the US had more soldiers in Britain than Britain did was a huge fact in their inability to keep the Empire together. I agree completely that the Indians wanted independence, but the sheer might of the US limited the British ability to hold on to it. In fact, the Suez crisis just a handful of years later (1956) demonstrably showed that the Americans were going to get what they wanted when they did not back the British takeover of the canal. That being said, it is a very complicated picture, and all of these clearly were contributing factors. Had the US not had all the money (good point, btw), and the European powers infrastructure not been so damaged, the negotiations would have been very different. At least, that's what I believe. For instance, the ability of countries to set up import tariffs, while exporting to the US without tariffs clearly supported lower cost labor, which the colonies had in spades. That gave the colonies more power to fight off their weakened colonial masters. That shift in power came at the most inopportune time for them - while they were capital poor and rebuilding. Keynes was a mountain of a man, but the US could not afford to let him run the show - as with any display of power, that's just not done. Even though Keynes may have been right about some aspects, the US had reason to distrust the Brits, as the US clearly knew the Brits would not give up their hegemonic place unless the US took it firmly. Under that thinking, the US was smart to shunt Keynes off to the corners (despite his huge influence). I think that the Suez Crisis showed that the Americans took the right approach here. Excellent conversation - I love to see the vast knowledge of folks like you on HN !
    - NeedMoreTea 7y ago
      That it came 4 years after was, in good part, thanks to the "agriculture only in Germany" Morgenthau Plan. The subsequent disclosure, possible extension of the war[1] with Goebbels making broadcasts against it in 44 & 45, and US media, politicians and public turning against it thankfully thoroughly poisoned it. It took a while to spin up a workable replacement (and one that would pass Congress), though the sheer extremity of the Morgenthau Plan undoubtedly helped that along. I have never got the impression Bretton Woods contributed to the demise of Morgenthau/rise of Marshall, but I can't rule it out. I haven't enough of the detail of Presidential and Congressional machinations. It's always read like Marshall was result of reaction to, and fallout from Morgenthau, as well as the inconvenient truth that a bankrupt Europe can't trade much at all. :) That the US was going to be the new hegemon was clear in hmm, probably 43, perhaps even late 42. It just wasn't yet remotely palatable. Thus it wasn't unexpected that was the stance of the US going into Bretton Woods. The US had been pushing against European empire since earliest talk of lend-lease before Pearl Harbor, and obviously pre-war with less consequence. Even going back into the era the US still spoke overtly of an American Empire. Of course there was GB reluctance to accept their new role as junior partner - and some degree of not realising the actual implications of this. One easy example of that being famously difficult Monty during Market-Garden in 44. Some parts of the UK political spectrum has still not recognised our place in the post-war scheme of things. Cough Brexit cough. More among some who voted Brexit than the instigators necessarily. Suez was merely the first concrete demonstration of France and Britain's new lowered significance. Not accepting UK decline has been something of a post-war Tory party theme. By Suez, the US absolutely had the strength, politics and attitude that their wish was prime. Course UK Labour had the very overt post-war policy to shed Empire in this period. So during Labour administrations, far from everyone having to fight off colonial masters, some were positively pushed, somewhat reluctantly and surprised out the exit... Which is another can of worms far too complex to play out on HN. In France I don't think de Gaulle ever got past having to ask the US for the 45 loan. So in summary, yes, it's hugely complex. Had the US not been the only nation not near bankruptcy, the power dynamic of negotiations would have been very different. At the very least with more balance the World Bank and IMF would have looked different. Yet even so, the hope in Europe was it was still a better model to avoid 1929-1945 ever again. FWIW Post-Suez under Nasser didn't turn out at all well for the Egyptians. Let's leave that one unopened though. ;) [1] We'll never know, but there's a very credible case to be made that the proposed toppling of Hitler in 44, and subsequent surrender would have actually come, but for the publicity around Morgenthau. Being sent back to an agrarian age made surrender pointless, even though they had obviously already lost the war.

MR4D 7y ago

Duress - meaning the war was still on, and the only government that could save them was offering terms effectively defining a new world order - definitely completely different from the world before the war. Further, Bretton Woods was effectively a bribe, at least from the perspective of import tariffs. So, yes, I believe that it was both carrot and stick, so that the US would be able to get the former colonial powers to fall in line. Doing so also destroyed the colonial status (witness India, a mere 2 years after the war as but one example).

NeedMoreTea 7y ago
A new world order built on Keynes' plan. I'm not downplaying US part, Bretton Woods was, in essence an Anglo-US deal, but was hardly a US plan to save the rest. All the major nations of the time knew the progression that had followed Versailles, banking and currency crisis then Depression and war. The carrot to save Europe was the Marshall Plan. That the USA had all the money by 1944 certainly changed the conference dynamic, and undoubtedly contributed to White being able to overrule Keynes. As an aside, US economist Brad DeLong claims Keynes was ultimately proved right on every point he was overruled on. Indian independence was completely unconnected to any US action. Independence was inevitable from the 1930s. In a sentence: mid 30s Roundtables with Ambdekar, Gandhi, and McDonald; the outbreak of war in 39; and agreement to grant independence after supporting the war effort.
- MR4D 7y ago
  The Marshall Plan was a huge carrot, but came 4 years after Bretton Woods (which implies that Bretton Woods was not enough - or at least, not fast enough). Also, the fact that the US had more soldiers in Britain than Britain did was a huge fact in their inability to keep the Empire together. I agree completely that the Indians wanted independence, but the sheer might of the US limited the British ability to hold on to it. In fact, the Suez crisis just a handful of years later (1956) demonstrably showed that the Americans were going to get what they wanted when they did not back the British takeover of the canal. That being said, it is a very complicated picture, and all of these clearly were contributing factors. Had the US not had all the money (good point, btw), and the European powers infrastructure not been so damaged, the negotiations would have been very different. At least, that's what I believe. For instance, the ability of countries to set up import tariffs, while exporting to the US without tariffs clearly supported lower cost labor, which the colonies had in spades. That gave the colonies more power to fight off their weakened colonial masters. That shift in power came at the most inopportune time for them - while they were capital poor and rebuilding. Keynes was a mountain of a man, but the US could not afford to let him run the show - as with any display of power, that's just not done. Even though Keynes may have been right about some aspects, the US had reason to distrust the Brits, as the US clearly knew the Brits would not give up their hegemonic place unless the US took it firmly. Under that thinking, the US was smart to shunt Keynes off to the corners (despite his huge influence). I think that the Suez Crisis showed that the Americans took the right approach here. Excellent conversation - I love to see the vast knowledge of folks like you on HN !
  - NeedMoreTea 7y ago
    That it came 4 years after was, in good part, thanks to the "agriculture only in Germany" Morgenthau Plan. The subsequent disclosure, possible extension of the war[1] with Goebbels making broadcasts against it in 44 & 45, and US media, politicians and public turning against it thankfully thoroughly poisoned it. It took a while to spin up a workable replacement (and one that would pass Congress), though the sheer extremity of the Morgenthau Plan undoubtedly helped that along. I have never got the impression Bretton Woods contributed to the demise of Morgenthau/rise of Marshall, but I can't rule it out. I haven't enough of the detail of Presidential and Congressional machinations. It's always read like Marshall was result of reaction to, and fallout from Morgenthau, as well as the inconvenient truth that a bankrupt Europe can't trade much at all. :) That the US was going to be the new hegemon was clear in hmm, probably 43, perhaps even late 42. It just wasn't yet remotely palatable. Thus it wasn't unexpected that was the stance of the US going into Bretton Woods. The US had been pushing against European empire since earliest talk of lend-lease before Pearl Harbor, and obviously pre-war with less consequence. Even going back into the era the US still spoke overtly of an American Empire. Of course there was GB reluctance to accept their new role as junior partner - and some degree of not realising the actual implications of this. One easy example of that being famously difficult Monty during Market-Garden in 44. Some parts of the UK political spectrum has still not recognised our place in the post-war scheme of things. Cough Brexit cough. More among some who voted Brexit than the instigators necessarily. Suez was merely the first concrete demonstration of France and Britain's new lowered significance. Not accepting UK decline has been something of a post-war Tory party theme. By Suez, the US absolutely had the strength, politics and attitude that their wish was prime. Course UK Labour had the very overt post-war policy to shed Empire in this period. So during Labour administrations, far from everyone having to fight off colonial masters, some were positively pushed, somewhat reluctantly and surprised out the exit... Which is another can of worms far too complex to play out on HN. In France I don't think de Gaulle ever got past having to ask the US for the 45 loan. So in summary, yes, it's hugely complex. Had the US not been the only nation not near bankruptcy, the power dynamic of negotiations would have been very different. At the very least with more balance the World Bank and IMF would have looked different. Yet even so, the hope in Europe was it was still a better model to avoid 1929-1945 ever again. FWIW Post-Suez under Nasser didn't turn out at all well for the Egyptians. Let's leave that one unopened though. ;) [1] We'll never know, but there's a very credible case to be made that the proposed toppling of Hitler in 44, and subsequent surrender would have actually come, but for the publicity around Morgenthau. Being sent back to an agrarian age made surrender pointless, even though they had obviously already lost the war.