Benn Steil > Quotes

“The Bretton Woods saga unfurled at a unique crossroads in modern history. An ascendant anticolonial superpower, the United States, used its economic leverage over an insolvent allied imperial power, Great Britain, to set the terms by which the latter would cede its dwindling dominion over the rules and norms of foreign trade and finance. Britain cooperated because the overriding aim of survival seemed to dictate the course. The monetary architecture that Harry White designed, and powered through an international gathering of dollar-starved allies, ultimately fell, its critics agree, of its own contradictions.”
― Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order

“From the viewpoint of the vital interests of the United States, the principal issue in Europe today is whether or not it will be totalitarian. If the virus of totalitarianism spreads much farther, it will be almost impossible to prevent its engulfing all western Europe. This would mean communist totalitarianism almost everywhere on the continent with the iron curtain moving to the Atlantic. In the event of a totalitarian Europe, our foreign policy would have to be completely re-oriented and a great part of what we have fought for and accomplished in the past would be lost. The change in the power relationships involved would force us to adopt drastic domestic measures and would inevitably require great and burdensome sacrifices on the part of our citizens. The maintenance of a much larger military establishment would undoubtedly be required. The sacrifices would not be simply material. With a totalitarian Europe which would have no regard for individual freedom, our spiritual loss would be incalculable.”
― Benn Steil, The Marshall Plan: Dawn of the Cold War

“Truman knew, Republicans would duck responsibility and attack the White House for partisan gain.”
― Benn Steil, The Marshall Plan: Dawn of the Cold War

“the Molotov walkout” was a watershed. It made it “transparently clear that Russia was not interested in European reconstruction, but in chaos.”
― Benn Steil, The Marshall Plan: Dawn of the Cold War

“Under the gold standard, exchange rates were fixed, so that the balance of payments had to adjust through domestic deflation. White, like Keynes, concluded that it should be the other way around. “I believe there is definitive evidence,” White wrote, “that alterations in the domestic price level are far more costly to the nation than frequent alterations in the exchange rate would be.” The United States “would be courting trouble to place ourselves in a position similar to that which we found ourselves between 1929 and 1933,” a period of persistent deflation.”
― Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Council on Foreign Relations Books

“a strong case can be made for July 7, 1947—the day that Molotov ordered further cables to be dispatched to the satellites, rescinding his previous day’s instructions for them to send delegations to Paris. It was only at this point that both sides, the United States and the Soviet Union, became irrevocably committed to securing their respective spheres of influence—politically, economically, and militarily—without mutual consultation. Europe, which had previously been divided into allies, former enemies, and neutrals, was now divided between Marshall states and the Soviet bloc”
― Benn Steil, The Marshall Plan: Dawn of the Cold War

“The Marshall Plan,” New York Times correspondent William White wrote, “appears to draw its greatest strength not from any special feeling that other peoples should be helped for their own sake, but only as a demonstration against the spread of communism.”67 Communist “overlords,” South Dakota Republican Karl Mundt said, were disrupting economic activity “so as to produce chaos and put an end to freedom.” We must, he said, “turn the Red tide.” Herter himself cited the danger posed by Communist-controlled labor unions in western Europe. Freshman California Republican Richard Nixon, assigned to tour Italy, wrote that “the great difficulty [here] is not so much the physical destruction of the war, but the fact that the Communists have chosen this country as the scene of one of their most clever and well-financed operations against the forces of democracy.” Alabama Democrat Pete Jarman, who traveled in eastern Europe, spoke of the “feeling of strangulation that one has behind the iron curtain.” We in the United States, he concluded, had to recognize “the absolute necessity of our doing whatever is necessary to prevent [communism’s] spread.”
― Benn Steil, The Marshall Plan: Dawn of the Cold War

“President Herbert Hoover had tried to preserve the gold standard by means of trade restrictions; Roosevelt maneuvered in the other direction, moving away from multilateralism in money while trying to preserve it in trade.”
― Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Council on Foreign Relations Books

“White therefore wanted to rewrite the rules of the American monetary system to give a revamped Federal Reserve far more discretionary powers than the gold standard could accommodate, and then convince the rest of the world to help make such a new system stick internationally.”
― Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Council on Foreign Relations Books

“There was, finally, the critical question of how to define the program’s borders. To exclude the East was to invite blame for creating the iron curtain; to include it was to invite Soviet sabotage. The solution, Kennan argued, was to advance the project as a “general European (not just western European)” one, but in a manner ensuring that “the Russian satellite countries would either exclude themselves by unwillingness to accept the proposed conditions or agree to abandon the exclusive orientation of their economies.” Either way the satellites chose, the United States would win diplomatically”
― Benn Steil, The Marshall Plan: Dawn of the Cold War

“The drama of the final collapse of the gold-exchange standard would poison Anglo-American relations for decades. To the British way of thinking, Britain had been ignominiously forced off gold by selfish and short-sighted American and French policies: the Americans with their abominable import tariffs, and the French with their wretched devaluations. The Americans, for their part, saw themselves as innocent victims of an odious British default.”
― Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Council on Foreign Relations Books

“The years 1880–1913 constitute the great era of laissez-faire in world economic history—the reign of the classical gold standard, in which governments around the globe had allowed an unprecedented degree of economic activity within and between their nations to be regulated by the market-driven transfer of gold claims across borders (the physical stuff itself just shifted around in central bank vaults). The year 1933, in stark contrast, saw the world mired in the Great Depression, with the gold standard in tatters, trade decimated, and unemployment at previously unimagined levels.”
― Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Council on Foreign Relations Books

“The fraying relic of the gold-exchange standard that remained at the end of the 1920s had collapsed entirely by 1934. Britain, its inspiration and foundation in the nineteenth century, abandoned it with great reluctance and bitterness in September 1931. Twenty-five nations followed in short order. The United States refused to throw in the towel until April 1933, shortly after Roosevelt took office.”
― Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Council on Foreign Relations Books

“We told the Americans, and asked for 200,000 or 300,000 tons of wheat. And these idiots started the usual blackmail. . . . At this point, Gottwald got in touch with Stalin, [who] immediately promised us the required wheat. . . . [T]hese idiots in Washington have driven us straight into the Stalinist camp. . . . The fact that not America but Russia has saved us from starvation will have a tremendous effect inside Czechoslovakia—even among the people whose sympathies are with the West rather than with Moscow”
― Benn Steil, The Marshall Plan: Dawn of the Cold War