Revisiting Bretton Woods and the Origins of the IMF: Guardian Book Review by @RichardToye

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Richard Toye
History Department, University of Exeter
Follow on Twitter @RichardToye

You can read this book review article in its entirety at The GuardianRichard Toye is the author of The Roar of the Lion: The Untold Story of Churchill’s World War II Speeches. To order The Summit for £20 with free UK p&p call Guardian book service on 0330 333 6846 or go to

During the second world war, the British and Americans led a bold effort to create a new international economic architecture, in the hope of ensuring future stability and peace. That they pulled it off, more or less successfully, was not so much a miracle as the product of a specific set of propitious historical circumstances. But they didn’t achieve it by being nice to each other. During the planning phase, that led to the crucial Bretton Woods conference of 1944, John Maynard Keynes, Britain’s key negotiator, contemptuously threw some draft minutes prepared by the Americans to the floor, declaring them “intolerable”. Harry Dexter White, Keynes’s opposite number, shot back: “We will try to produce something which Your Highness can understand.”

Such anecdotes help turn Ed Conway’s account of potentially dry events into highly readable history. They also suggest a serious point. Keynes and White’s rudeness to each other was a slightly twisted indication of their mutual respect, a form of no-holds-barred combat in a highly privileged intellectual and political arena. It was said to be the happiest day of White’s life when he was permitted to call his long-admired sparring partner “Maynard”, but that did not make the two men’s relationship any less fraught. As for Keynes, his insulting behaviour towards the Americans – as others saw it – was, in his view, merely the frankness necessary to productive colloquy. If, by contrast, he was infinitely patient with his Cambridge undergraduates, this was no doubt partly because he did not take them particularly seriously as intellectual opponents. Clocking a choice piece of Keynesian abuse was a sign that, in his eyes, you had proved yourself worthy of receiving it.

But Keynes’s verbal robustness (which he alternated with conventional charm) often spilled over in to casual antisemitic slights. His elitism, moreover, included a tinge of disdain for those who fell outside the Anglo-American charmed circle; he notoriously referred to the 44 nations gathered at Bretton Woods as a “monkey house”. And, more worryingly from the diplomatic perspective, he didn’t seem to appreciate that not everyone shared his worldview. Comments that might have seemed deliciously provocative in Bloomsbury did not necessarily go down well with the hard-boiled US politicians who, in the end, held the fate of the new economic order in their hands. The two new organisations that emerged from the conference were the International Monetary Fund and the International Bank for Reconstruction and Development. Keynes, by then a very sick man, was present when they were inaugurated in 1946, and humorously hoped that “no malicious fairy” would curse their development. “I don’t mind being called malicious,” growled US treasury secretary Fred Vinson, “but I do mind being called a fairy.”

The Bretton Woods institutions fell far short of Keynes’s original vision for a “Clearing Union” that would exert as much discipline on countries that ran a balance of payments surplus as on those that ran a deficit. In practice, that idea implied a huge redistribution of resources from the US to the rest of the world, and unsurprisingly the Americans found it unacceptable. They wanted, and got, a more limited Fund that would provide short-term relief for countries in difficulties while at the same time creating pressure for them to adjust their economies. They also rejected the concept of an international currency, in spite of Keynes’s slightly desperate attempts to come up with a name for it that would appeal to them. (“Do you think it is any use to try unicorn on Harry?”) Conway’s clear-sighted book, though, is gratifyingly free of hand-wringing lamentations that the world would have been a better place if only Uncle Sam had had sufficient imagination to be more open-handed. In fact, the Americans were generous up to the limits of their capacity – not their economic capacity, by any stretch of the imagination, but their political one. Roosevelt’s officials knew they had to get any agreement past Congress, and even with former Republican isolationists on the back foot after Pearl Harbor, anything that smacked of bailing out foreigners was going to be a tough sell. The British liked to think that if the Yanks had all the money bags, then they themselves had all the brains; but what White had that Keynes lacked was a set of highly sensitive antennae that equipped him to understand what was saleable on Capitol Hill. That realism in the end served the world better than the acceptance of Keynes’s blandishments would have done, however compelling the latter’s intellectual case was in the abstract.

But what would all this have meant if, in fact, White was actually a Russian spy? [Continue Reading at The Guardian]