Renew the Bretton Woods System

The gradual disintegration of the global rules-based economic order requires a new ‘Bretton Woods’ conference to reaffirm the benefit for all countries of internationally accepted, treaty-based economic relationships – and to reinvent the institutions to manage those rules.

The gradual disintegration of the global rules-based economic order requires a new ‘Bretton Woods’ conference to reaffirm the benefit for all countries of internationally accepted, treaty-based economic relationships – and to reinvent the institutions to manage those rules.


Stephen Pickford / June 12, 2019 / Chatham House, the Royal Institute of International Affairs

QUOTE:

Towards the end of the Second World War, the Allied powers came together in 1944 to plan a new economic order for the post-war world which would avoid a repeat of the disastrous policy mistakes of the 1920s and 1930s.

At the conference in Bretton Woods, New Hampshire, 44 Allied countries met under the intellectual leadership of Harry Dexter White (a senior US Treasury official) and John Maynard Keynes. The conference envisaged new rules of the game to prevent countries following the ‘beggar-thy-neighbour’ policies that had led to the Great Depression.

This new structure was initially successful in allowing the world to recover after the war.

Over the subsequent 50 years the structure of the global economy changed rapidly.

But these institutions, and the rules that they manage, have not adapted quickly enough over the last decade to the changing world order, and to the growth of popular discontent with globalization and internationalism.

To tackle this erosion of support, a new ‘Bretton Woods’ conference is needed. As with its predecessor in 1944, its aim would be to reaffirm the benefits for all countries of international cooperation rather than unilateralism.

Risk versus reward

But the current challenges require a substantial rethink of the international economic and financial architecture. Incremental changes are unlikely to be able to address these challenges. And without changes, the Bretton Woods institutions – and the international economic system that they support – will continue to erode, until at some point they break.

UNQUOTE

The Bretton Woods Conference, 1944 / US State Dept. Archive

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