What Enabled Bretton Woods?

PRINCETON – The proximity of the 70th anniversary of the Bretton Woods conference, which established the World Bank and the International Monetary Fund, to historical anniversaries like the Allied landings in Normandy highlights just how ambitious its organizers were. 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 John Maynard Keynes’s wife, a Russian ballerina, that kept the US Treasury Secretary awake, and charges of espionage for the Soviet Union against the main American negotiator, Harry Dexter White. But the real drama of the conference lay in the systematic evolution of an institutional structure that underpinned global stability and prosperity for at least three decades.

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 the United States, the United Kingdom, the Soviet Union, China, and France – the same countries with permanent seats on the United Nations Security Council.