Bretton Woods is the famous 1944 conference that created the postwar financial world and gave us the International Monetary Fund and the World Bank. The Times calls this book the "gold standard" on the topic, but acknowledges it's a bit "dense". When you are as economics challenged as I am, the more apt characterization is that it's Greek to me. The Allies required a system that would make certain there was no repeat of the economic evils of the 30's that were considered contributing causes to the war. The twin evils were protectionism and currency devaluations, which FDR called "economic weapons". However, the two principal creators of the new era would bring conflicting goals to the table. The Americans, particularly FDR and his Treasury Secretary, Henry Morgenthau, wanted an end to the imperial preferences that propped up the British Empire. Furthermore, the American public and Congress agreed with Calvin Coolidge's famous comment about Europeans seeking to avoid paying their WW1 loans : "They hired the money, didn't they?" The American side was very reluctant to continue to provide men, munitions and money to prop up the Empire of a nation that didn't pay its earlier debts. We, of course, know that Winston many times had said that he did not become the Kings First Minister to dismantle the Empire.
The adversaries in the two-year battle were an American I had never heard of, Harry White. He was a poor boy from Boston who scrambled to the top of the Economics profession and was the Asst. Treasury Secretary at the Bretton Woods Conference. His opponent was a man referred to by all as God, albeit playing a very weak hand. The amazing thing about Keynes is that six and a half decades after his death, a reader of financial news cannot go more than a few days without seeing his name. Actually the British hand turned out to be a dead mans hand, and the Yanks prevailed on every single issue before, at, and after the Conference. Indeed, the effort Keynes expended in the battle are generally conceded to be the reason for his death in the spring of 1946 at the age of 62. I do not believe I can accurately summarize the many issues that were contested. The primary one was currency convertibility, and the Americans clobbered the world with an insistence that the dollar was the "only gold-convertible currency". Keynes tried for a newly created reserve currency or a floating system. The Bretton Woods system was abandoned in 1971 and as we all acknowledge now, Keynes was correct seventy years ago and the Americans were wrong
. Although I could barely (if at all) follow the economics, I still learned some interesting things about the war from this book. Churchill called Lend-Lease the "most unsordid" act of any nation. He was being polite and appreciative. America wrung every last penny out of Britain in exchange for our "loan" of materials. We required them to sell their American assets at discount prices to the US and squeezed at every opportunity. Truman cut it off Lend-Lease almost immediately after V-E day. Henry Morgenthau is best remembered for his recommendation that we impose a Carthaginian peace on Germany, destroy its industry and make it an agrarian society. Ike acknowledged to Marshall that after Goebbels played that up to the troops the Germans fought twice as hard, clearly prolonging the war. Perhaps Economics isn't a dismal science.
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