When America Remade the World Economy
Over a single weekend in August 1971, US President Richard Nixon and a crack team of advisers set in motion developments that would inaugurate a new world order. Though there was little choice but to end the dollar's convertibility into gold, how the US went about it holds lessons that remain valid today.
NEW HAVEN – At 2:29 p.m. on Friday, August 13, 1971, US President Richard M. Nixon walked out of the White House, boarded Marine One, and traveled to Camp David, where several members of his administration were waiting for him. His chief-of-staff, H.R. Haldeman, had organized the meeting just one day before and given everyone instructions not to tell anyone – not even their families – where they were going. On arrival at Camp David, they were ordered not to phone anyone outside of the retreat.
Still, on the previous day, one of Nixon’s top advisers had foreshadowed the significance of the gathering, suggesting that the weekend would bring “the biggest step in economic policy since the end of World War II.” Similarly, another adviser, on his way out of town, let it slip to a journalist that, “This could be the most important weekend in the history of economics since Saturday, March 6, 1933,” the day Franklin D. Roosevelt closed all the banks in America.
They were not exaggerating. Between Friday afternoon and Sunday evening, Nixon and six top officials (backed by nine senior staff members) made a series of momentous decisions that the president would then announce in a quickly arranged prime-time televised speech. Forty-six million Americans, a quarter of the population, tuned in, while finance ministers, central bankers, and market makers from London to Tokyo huddled around their radios.