The proximity of the 70th anniversary of the Bretton Woods conference, which established the
Indeed, amid considerable tumult, the conference aimed to create a stable international monetary framework that could serve as a cornerstone of a peaceful global order. And it succeeded — at least for a while.
Bretton Woods retains a powerful fascination, with at least three recent books on the subject having achieved considerable commercial success. What makes an event in which a group of mostly men talk about money so intriguing?
Of course, there are some juicy incidentals, such as the dance of
The institutional vision was linked to a global security system. Indeed, in the original agreement, the five large powers that would be represented permanently on the IMF Executive Board were
Even within this framework, the negotiations were challenging. So how did 44 disparate powers, each seeking to protect its own national interests, manage to agree on a new global monetary system?
According to Keynes, the key was a process of international deliberation and planning, led by "a single power or like-minded group of powers." By contrast, a 66-country "pow-wow" like the abortive
The experience at Bretton Woods lends significant credence to Keynes's assessment. While 44 countries were formally represented at Bretton Woods, the
In fact, bilateral negotiations have enabled every major success of large-scale financial diplomacy. In the early 1970s, when the fixed exchange-rate regime established at Bretton Woods collapsed, the IMF seemed to have outlived its function. But, by renegotiating the Fund's Articles of Agreement, the US, seeking greater flexibility, and
Later that decade, efforts by
Nowadays, international economic diplomacy is centred on the US and
The bilateral nature of the negotiations certainly implies that they have a chance. But there was another critical factor underpinning the success of the Bretton Woods conference: the global political and security environment.
For starters, the conference occurred the month after the D-Day landings in Normandy, when the end of
In order to achieve an agreement of similar scale and influence, world leaders — especially in the US and
What would convince Chinese leaders that they must rapidly reinforce the open global economy that enabled
A contest for global leadership might serve that purpose as well. Or perhaps the stimulus will be fear that the world is sliding toward protectionism, with bilateral and regional trade agreements like the
Bretton Woods demonstrated that it takes a major crisis to produce a political dynamic of reform. Today's world, for all of its troubles, is simply not dangerous enough — at least not yet — for the countries at the helm of the global economy. — Project Syndicate
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