The conference of Bretton Woods, held in the summer of 1944 with the goal of redesigning the world monetary order, represents one of the most ambitious and exciting moments in financial history. Economic theory and diplomacy came together to shape a system that functioned at world level until the 1970s. In his book, Benn Steil provides a vivid account of this conference as well as its premises and reverberations, proposing new anecdotal evidence and insights as well as historical interpretations.
The saga of Bretton Woods cannot be disentangled from the two main characters that dominated it: the head of the US delegation, Harry Dexter White, and his British counterpart, John Maynard Keynes. Steil starts his account by providing detailed portraits of the two. White, son of Lithuanian immigrants, was born and raised in Boston. His late interest in economics had led him to obtain a PhD at Harvard. Shortly after, he started his career in the US Treasury Department where he served, climbing up its hierarchy, until he was appointed head of the US delegation at Bretton Woods. White is portrayed as more ambitious than intellectual, with a strong personality and a fair amount of arrogance. Keynes could not have been more different. He was one of the most famous and respected economists of his time. He is described as much more reserved and introspective than White. The book also provides a complete description of the US–UK relationship during the years of the war and immediately after. The US was eager to create a new order based on their leadership, both political and financial. The UK was fighting to preserve as much as possible of its glorious past. White and Keynes seem to be in some way the mirrors of the countries they represented at the time. The author also extends the description to the other protagonists of the period, namely Winston Churchill and Franklin Delano Roosevelt, whose relationship also needs to be analysed in light of the unbalanced relationship between the US and the UK.
Throughout the whole book, the author is concerned with the discussion of the connection between White and the Soviet Union. Harry Dexter White died in 1948, only three days after testifying before the House Un-American Activities Committee. His timely disappearance made the assessment of his involvement with the Soviet Union food for historians. Steil gives a very accurate account and concludes that White, in spite of his fascination with the Soviet Union and his contacts with Soviet spies, was not influenced by Marxist ideology either before or during the Bretton Woods conference.
The book then proceeds to explain how the two plans discussed at Bretton Woods, and named after White and Keynes, were developed. Here Steil's account moves from politics to economic thinking. In so doing, he manages to provide a clear picture without being too technical. The two plans reflected how White and Keynes were light years away from each other not only in personality but also in their theoretical elaborations. White envisaged a financial order centred on the US dollar, with a strong role for gold, of which the US vaults were full because of the war. Keynes had defined gold as a ‘barbarous relict’ as early as 1923 and his proposal was intended to implement his theories on money and clearing that did not require gold to be a standard but only a reserve of value. The differences between the two plans concerned many aspects (the amount of overdraft facilities, the governance of the system and the level of controls to be implemented). However, from a theoretical point of view, the main ideological difference between the two was what standard to use in the new monetary order. Keynes saw White's proposal as a mere modified version of the gold standard while White was mostly driven by the idea that the good of the US was the good of the world and therefore the dollar was meant to be at the centre. White's view would prevail at the conference thanks to the immeasurable advantage in bargaining power held by the US delegation. Keynes's critical view on the agreement, however, would later be revealed to be well motivated. Neither of the two protagonists of Bretton Wood would live long enough to see the system fully working or its collapse in the 1970s.
The book dedicates the next chapters to the conference events. Here the account becomes more concerned with the political and diplomatic history of Bretton Woods. Steil describes several important figures both in the US and the British delegation as well as the role of the other delegations at the conference. Special attention is devoted to the Soviet delegation and its role in the shaping of the agreement. This is because of the well-known relationship between White and the Soviet Union. What emerges is the independence of White with respect to the Soviet delegation, which was often unhappy with the development of the negotiations.
The final chapters of the book are dedicated to the post-conference development and give an account of the reaction to the agreement by the governments and public opinions. What makes this account very interesting, like the previous chapters about the conference, is the extensive use of extracts from newspapers of the time.
In conclusion, The Battle of Bretton Woods is a remarkable work that embraces many disciplines: history, economic history, political economy and international relations. Benn Steil is able to merge the different perspectives from all these disciplines, taking the reader into both the political battle and the economic thinking that took place at Bretton Woods.
