The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order

by Benn Steil

When turmoil strikes world monetary and financial markets, leaders invariably call for 'a new Bretton Woods' to prevent catastrophic economic disorder and defuse political conflict. The name of the remote New Hampshire town where representatives of forty-four nations gathered in July 1944, in the midst of the century's second great war, has become shorthand for enlightened globalization. The actual story surrounding the historic Bretton Woods accords, however, is full of startling drama, intrigue, and rivalry, which are vividly brought to life in Benn Steil's epic account.

Upending the conventional wisdom that Bretton Woods was the product of an amiable Anglo-American collaboration, Steil shows that it was in reality part of a much more ambitious geopolitical agenda hatched within President Franklin D. Roosevelt's Treasury and aimed at eliminating Britain as an economic and political rival. At the heart of the drama were the antipodal characters of John Maynard Keynes, the renowned and revolutionary British economist, and Harry Dexter White, the dogged, self-made American technocrat. Bringing to bear new and striking archival evidence, Steil offers the most compelling portrait yet of the complex and controversial figure of White--the architect of the dollar's privileged place in the Bretton Woods monetary system, who also, very privately, admired Soviet economic planning and engaged in clandestine communications with Soviet intelligence officials and agents over many years.

A remarkably deft work of storytelling that reveals how the blueprint for the postwar economic order was actually drawn, The Battle of Bretton Woods is destined to become a classic of economic and political history.

Genres: History, Economics, Nonfiction, Finance, Politics, Business, American History

464 pages, Kindle Edition

First published January 1, 2013

About the author

Benn Steil is an American economist and writer.[1] He was educated at Nuffield College, Oxford and at the Wharton School of the University of Pennsylvania. Steil is the senior fellow and director of international economics at the Council on Foreign Relations. He is the founder and editor of the journal International Finance. He has been awarded the Hayek Prize and the Spear's Book Award.

Reviews

[Breakingviews · Rating 4 out of 5]

By Martin Hutchinson

Benn Steil calls his study “The Battle of Bretton Woods” but in reality the 1944 conference which created a new financial system after World War Two was more of a massacre of British interests by the U.S. Treasury’s Harry Dexter White.

Steil is a senior fellow at the American think-tank, the Council on Foreign Relations, and a well-known writer on financial topics. He tells the story as personal, political and economic. John Maynard Keynes, the principal British negotiator, was an hereditary member of the Cambridge intellectual elite and the first “celebrity economist”. White, from a poor background, was a protégé of Henry Morgenthau, Treasury secretary since 1934. He was also an active agent for the Soviet Union.

Both men were determined to replace the pre-war financial system. Keynes thought he had something better. White (and Morgenthau, who generally followed his lead) blamed it for much of the poor performance of the world economy and U.S. exporters during the 1930s.

Steil brings out nicely the parallels between White’s wish for a rigid exchange rate system and today’s U.S. policymakers’ wish for a floating rate system; the common desire for a weak dollar to help U.S. exporters led to diametrically opposed policy prescriptions. Then, fixed rates kept the currency of a country with a payments surplus from rising. Now floating rates allow the currency of a deficit country to sink.

Thus when Keynes brought out his scheme for a new world currency “bancor” to be created by what became the International Monetary Fund, White preferred to restrict the new institution to receiving gold as capital and making loans from that capital. Eventually, by sleight of hand during the drafting process, White ensured that the dollar would be given a special position of convertibility into gold and use for settlement of international transactions. White was also highly sensitive to Soviet demands, but since their main monetary objective was to retain a major position for gold (of which they were a large producer) there was little potential conflict in that area.

Politically, White and the Soviets were also aligned; they both favored a system of fixed exchange rates and the dismantling of Britain’s modest Imperial Preference tariffs. But Keynes also favored government control and distrusted free markets, refusing to explore the possibility of a post-war credit to Britain from Wall Street (which would have greatly strengthened his bargaining position). He made little effort to defend UK tariffs or to obtain the post-war sterling devaluation which British exporters such as Morris Motors desperately needed.

In the event, Morgenthau, White and the Soviets achieved almost all their principal objectives at Bretton Woods, and then went off to play golf. Keynes was left to defend to the House of Lords a deal far different from the one he had contemplated, and to return the following year for a pathetic and only partially successful effort to obtain a post-war credit from the U.S. government.

Steil brings out well the difficult interpersonal dynamics between the two prickly personalities, and makes clear his own view that Britain would have done better to send a diplomat to lead its delegation, who would have been more aware of U.S. procedural shenanigans and more skilled in negotiation, perhaps getting the friendly Dean Acheson at the State Department to help neutralize Treasury’s hostile Morgenthau/White tandem. Steil does not offer a name, but the best alternative might have been Oliver Lyttelton, then minister of production, with a 20-year City and industrial career behind him and a genuine commitment to both free markets and the needs of the British and Dominion economies.

The book shows personal sympathy for the combative White and some political and economic sympathy for the common desire to meddle with free markets. Still, Steil is both a fair-minded and engaging writer, and those with different proclivities, even imperialist Brits, can still enjoy his account of one of the defining struggles in a crucial part of the modern world.

[Marks54 · Rating 4 out of 5]

Books about Keynes are generally interesting and this one is no exception. This book is attempting to pursue many objectives, however, and after a while I was marveling at the balancing.

The book is first of all a history of the 1944 Bretton Woods conference in New Hampshire, where the outlines of the post WWII monetary system was agreed on. Such a conference brings together in one fell swoop macroeconomics and international currency and trade flows. Both of these areas are sufficiently wooly to deter most readers. Just try to explain to someone about a multinational effort to supplant the pre-war gold standard at a time when the US was the dominant creditor nation and the onset of "dollar diplomacy" was feared ... and you will get the idea. The book does a good job at sorting out the issues and is one of the better books I have seen for communicating these ideas to a more popular audience.

The book is also a dual biography of the two major players in the Bretton Woods event, J.M. Keynes for Britain and Harry Dexter White for the US. The life of Keynes is well documented, but the portrayal here is informative. The life of Harry White is less well known. He was a brilliant man who was skilled as both an economist and an administrator. His system was the chief competitor to that of Keynes at the system and the one that eventually triumphed, due to the superior financial and political position held by the US at the end of the war. .... Oh, by the way, Harry Dexter White was also spying for the Soviet Union, a story that is also well developed in the book.

The broader economic and political position of WWII and the postwar period, including the dissolution of the British Empire, is also a critical part of the context of the book.

The book reads as well as can be hoped for, given the complex cast of characters and it filled in grey areas for me about a very important historical period. This is a fine book.

[Micah Cummins · Rating 4 out of 5]

The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order by Benn Steil is an exhaustively researched and incredibly page turning work, that answered so many of my questions regarding the history of exchange rates and the international need of fixed rates for stable trade between countries. Four Stars.

[Randal Samstag · Rating 1 out of 5]

When I picked up this book I was looking for background on Keynes's plan for a Clearing Union. It is there, but the author's perspective is consistently from the American side and he is always looking for evidence that Keynes was simply arguing for British geopolitical advantage rather than seeing his plan as potentially preventing the bizarre condition in which we now find ourselves of having the global hegemon the world's largest debtor. The author seems to have really wanted to write a spy thriller and to revel in the fact that he has outed White as a Soviet agent. I probably should have guessed all of this from the author bio on the dust jacket saying that his previous book had been the winner of the "Hayek Book Prize."

[Jeffrey Sylvester · Rating 4 out of 5]

The “Battle of Bretton Woods” by Benn Steil is a comprehensive account of the multi-nation negotiations that led to the creation of the post-WWII capitalist framework for Western nations. The primary actors in this drama were Britain and the U.S.A., the latter of which imposed terms as the world’s new creditor nation.

Essentially, Britain ran itself broke trying to maintain her empire during and immediately following WWI. Throughout the ordeal, Britain borrowed U.S. funds and gave a lot of these funds to their allies and dominions in the form of munitions, food, oil and metals. They also ran down their gold reserves to pay for imports and sold the bulk of their American and Canadian securities to finance the war effort.

By using gold to pay for imports, Britain reduced its money supply, which led to higher interest rates, increased burdens of debt, and decreased demand for borrowing, which dramatically reduced economic growth. In response to this spiral, Britain realized it would not be able to redeem foreign reserves for gold if there were a run on her bank. As a consequence, Britain devalued its currency which exacerbated the aforementioned spiral.

A devalued currency meant international lenders to Britain would be paid less while demand for British exports increased. Britain hoped devaluation would boost growth but it encouraged other countries to also devalue their currencies instead in order to remain competitive, which they did in domino succession. In response to this foiling, Britain took the additional steps of developing bi-lateral trade agreements between themselves and other dominant players in global trade. This crowding out ensured Britain would maintain its external trade preferences in addition to those within her dominions. Eventually, however, this level of protectionism would collapse world trade, deepen the depression, and ultimately, threaten the use of the pound/sterling as the primary world reference currency.

By WWII, Britain was in dire need of American money to sustain the empire and to carry out her imperial objectives throughout the war. The British also hoped to influence the development of the new post-war international economic order at Bretton Woods in an effort to retain their globally dominant position. America had different ideas…

At the beginning of the war many Americans supported an isolationist policy to avoid what they perceived as “Old World” entanglements. This reluctance provided America with an opportunity to profit handsomely from both the Axis and the Allies, until the Axis disrupted American commerce. By that time however, Britain was broke, and America had become rich which altered the creditor debtor relationship between the two countries. The Americans eventually accepted having to provide the Brits with financial assistance but not without several contingencies.

The Americans developed a bill entitled Article VII in 1942 that was designed to aid the British war effort in exchange for market reforms, namely, the elimination of tariffs and other imperial trading preferences. The Americans were also well aware of Britain’s desire to maintain global dominance and kept a tight hold on the credit made available to them accordingly. Lean credit would ensure the Brits remained weak, relative to America, which helped solidify America’s creditor status and primary authorship of the new economic order. The funds provided were just enough to keep Britain fighting, which kept America out of the war, enabling them to further develop their commercial pre-eminence. The two central figures involved in the British and U.S. negotiations leading up to and during Bretton Woods were John Maynard Keynes, and Harry Dexter White.

Keynes was an eloquent yet arrogant upper-class intellectual with an international mind and domestic heart. By comparison, White was only a marginally brilliant with a penchant for climbing U.S. bureaucracy. Both were tasked with creating the architecture of the new world order but only White was backed with the bargaining clout required to satisfy his country’s interests given America’s creditor position. Their primary term of reference was to stabilize exchange rates in an effort to encourage the free-flow of global commerce which would ensure a speedy and peaceful post-war recovery for all nations.

The period between 1880 and 1913 marked the end of “laissez-faire” economies and the classical gold standard whereby economic activities were regulated by the market driven transfer of gold claims across borders. When gold flowed in, credit loosened; when it flowed out, it tightened. The problem, as Keynes understood it, was that the quantity of gold in the world is too small to sustain worldwide economic activity at, what were then, current gold prices. Alternatively, Keynes suggested a paper fiat currency was required.

Keynes argued that governments, via a central bank, needed to intervene actively in domestic economies in order to mitigate the implications of recessions by varying the supply of paper currency and the ratio of bank cash reserves to deposits. For example, by increasing the money supply, institutions could expand credit to increase employment and offset the other ill effects of deflation.

One rationale was that the private sector cannot be relied upon to take the necessary steps to end a recession (as evidenced after WWI). Although investors (lenders) typically benefit from deflationary circumstances, they tend to hoard their money until the recovery and stability of the economy has fully ensued, a cyclic and ironic contradiction. In the short-term, this can improve disastrous in terms of exacerbating unemployment and undermining the stability of capitalist states. Consequently, Keynes recommended governments’ run deficits to fund public works employment as a short-term cost of bridging the gap to long term benefits in the form of stability and growth that results once the private sector is back and rolling. His critics, however, argued that self-interested bureaucrats would not pay off debts as intended, which would lead to the threat of tax increases down the road that act as a disincentive for private investment.

Although White agreed with the need for domestic economic management, he felt Keynes’s reservations as to whether an ever abundant dollar could be credibly moored to a fixed quantity of gold was beside the point. White recognized Britain’s financial desperation and the fact Britain borrowed American money to preserve the sterling-dollar peg. The British also used borrowed funds to pay back American bankers and to support dominion troops when in reality their focus should have been on letting go of their dominions (they eventually did through independence agreements) and accepting that they were no longer a dominant military or international market player.

Nevertheless, the British tried to maintain this façade and clung to the view that the World Bank (WB) would be a passive source of international credit whereas the Americans viewed the institute as a tool they could use to police international finance. The U.S. had a keen interest in controlling the WB and the International Monetary Fund (IMF), and rightfully so, given the funds being lent were American, the distribution of which would be decided by an internationally diverse board whose decision-making was not necessarily in America’s interests. Eventually, the Americans succeeded in imposing their proposed models despite how Keynes’s predictions regarding world events, and how economies should react to them, proved accurate.

After the war, the countries that were to become the liberalized market democracies signed the General Agreement on Tariffs and Trade (GATT) and avoided the world trade strangulation that characterized the post-WWI era, but this didn’t change Britain’s immediate financial realities.
The Article VII plan that doled out American funds to Britain’s war effort stopped unexpectedly once the Axis surrendered to the dropping of A-bombs. Suddenly Britain had no cash coming in so a panic ensued where Brits began claiming that America owed them a “moral debt” for abstaining and profiteering from the war for so long. Americans never bought this claim but were forced to acknowledge that the post-war world was divided into two polarized powers: Russia and America; both of whom attempted to draw in as many remaining countries into their sphere as possible (the Cold War). This was the reason for the development of the American-based post-war reconstruction loans that fell under the “Marshall Plan”, the plan largely responsible for the post-war recovery. A plan that also required debtor countries to adopt American-style market reforms, which helped solidify American dominance.

For Keynes’s part, he died a respected intellectual heavyweight. Keynes has also enjoyed a post-mortem renaissance given how virtually all western governments employ Keynesian economics. White, on the other hand, died in shame.

Throughout his career, White was a ladder-climbing bureaucrat simultaneous to being a U.S. Treasury-based Russian spy. Obsessively curious about socialist economics, he always maintained contact with the Russians, albeit secretly, as a way to enhance his perceived relevance. He also, by proxy, supported a woefully dumb idea developed by his immediate superior, Henry Morgenthau.
Throughout Morgenthau and White’s relationship, Morgenthau routinely took credit for White’s work even though he lacked the intellectual rigour to publicly back these ideas himself. Nevertheless, Morgenthau’s hubris bloomed to the point of trying his hand at developing a post-WWII reconstruction plan. Within that plan, he sought to punish Germany similar to the plan that had failed post-WWI, and arguably led to WWII.

Morgenthau’s plan was to deindustrialize Germany and make them pay heady reparations without realizing they couldn’t pay void of industry. This “plan” was also leaked to the Germans who dramatically strengthened their fighting resolve in response, which prolonged the war, and increased Allied casualties. Taken together, White’s spying, and Morgenthau’s ignorance, ended their careers.
Overall, I enjoyed this book but found the overly academic tone unnecessary. In my opinion, Henry Kissinger is of the same or greater calibre than Steil but writes far more clearly enabling readers’ broader access to important ideas. And, outside of the financial intricacies explained, I enjoyed Steil’s characterization of Russia’s approach to negotiating. Negotiate by omission and quietude, always imposing last minute brinkmanship until they could favourably force terms in disproportion to their actual contributions to world trade. You have to love the Russians.

4 out of 5 stars for Steil!

[Nick Klagge · Rating 2 out of 5]

I can't say that I got much out of this book. It wasn't clear to me exactly where the author was trying to go with it. It certainly covers too much ground to be just a history of Bretton Woods. At times it seems like a book about Harry Dexter White, but it also ranges pretty far away from that subject at times. My feeling is that the book was basically supposed to be about HDW, but with a lot of Keynes and other stuff thrown in to make it seem more exciting. Neither HDW nor any other player is portrayed with sufficient artistry to make them into compelling characters. I suppose I learned a fair amount about what happened at Bretton Woods, but none of it really grabbed me. The main interesting fact I took away from the book is that the tradition of a European heading the IMF and an American heading the World Bank came from the fact that people didn't want HDW running the IMF (too much of a Communist).

[Peter · Rating 4 out of 5]

Benn Steil’s The Battle of Bretton Woods (2013) describes the development of the Post-WWII international financial systems as the outcome of a contest between the British Treasury delegation headed by John Maynard Keynes and the U. S. Treasury delegation headed by Harry Dexter White. This was not just a contest of ideas, it was also a contest of personalities and of relative power.

Steil is an economist at the Council on Foreign Relations. There are some moments in the book when I just couldn’t follow a connection he made, as when he argued that Keynes believed the goal of monetary policy should be to manage the demand for money, then seems to claim that this is done by managing the supply of money. Confusion between demand and supply is a province of the novice economist. But for the most part it is a lucid and well-written tale and well worth reading.

(Another excellent personal and intellectual biography of Maynard Keynes I’d recommend is Zachary Carter’s recent The Price of Peace (2019), a very readable book devoted solely to Keynes.)

John Maynard Keynes

John Maynard Keynes was known by his middle name because the given name for all males in his immediate family was “John.” Maynard Keynes was 61-years old when the Bretton Woods Conference began on July 1, 1944. He was the patrician son of John Neville Keynes, a professor of moral science at Cambridge, and his Cambridge degree was in mathematics though primary interest was in monetary theory and, later, in macroeconomics—a field of study he initiated.

Long before FDR‘s brain trust the British had blended the intellectual academy and practical public policy: academics were brought into the commissions and departments that designed the nation’s institutions. In this vein, Keynes’s career was in both the academy and the British Treasury, where he was a highly-placed consultant on matters of international finance.

During a brief civil service career in the 1920s he had been posted to India and worked on matters related to the internal and external operations of Indian finance. Following that he became a lecturer at Cambridge and the life-long editor of the Economic Journal. His 1930 A Treatise on Money laid out his theory on how money affected economic activity, and his 1936 A General Theory of Employment, Interest and Money attempted to explain business cycles and launched the study now called macroeconomics. By 1944 Keynes was probably the world’s most eminent economist. His ideas were loved by some, hated by others, and the source of extremely lively debate.

Keynes was charming, extraordinarily articulate, and persuasive; he met opposition with wit and reason and usually prevailed. Married to a noted Russian ballerina (though he was a homosexual), he was a member of high society who loved to party, to dance and to play cards. He belonged to the Bloomsbury group of intellectuals and literary figures that included George Bernard Shaw and the Webbs. He was comfortable with both royalty and with normal people. He had become accustomed to being listened to, an experience he would find lacking at Bretton Woods though his ideas established the architectural skeleton for the Bretton Woods Agreement that would emerge.

Still, Keynes could be caustic and unpleasant. When he accompanied a Treasury official to America in 1916 to get the Americans to open up their wallets, the British Ambassador to America reported that Keynes was

. . . too offensive for words . . . a Don and . . . also a young man of talent . . .I presume the rule for such nowadays is to show his immense superiority by crushing the contemptible insignificance of the unworthy outside.

Another Treasury official described Keynes as “rude, dogmatic and disobliging.” This behavior might have been a cultural misunderstanding—the British university system cultivated debate and caustic response; this was not the American way. But that the British Ambassador felt Keynes was rude says there was more to it.

Harry Dexter White

Harry Dexter White was 51 years old and an experienced U. S. Treasury official. He was the opposite of Keynes in both birth and manner. His father had been a peddler, and to his credit White aspired to an academic career, though his early performance was not very successful. Eventually he earned a Ph. D. in economics at Harvard—the eminent Jacob Viner was his thesis supervisor—and he hoped for a faculty position at Harvard. He would be disappointed: he became a professor at a small mid-West college but found it unsatisfying. In 1934 Viner, who had strong connections at the U. S. Treasury, invited him to join the Treasury. White became the go-to man and brain bank on monetary matters for the rather dull-witted Secretary of the Treasury, Henry Morgenthau Jr.

White was the opposite of charming: he was stiff, irascible, and he approached those with opposing ideas with brittleness, scorn, and tenacity. He was widely feared and disliked. As head of the American delegation at Bretton Woods he wielded the club of American power and he would use it to America’s advantage: The Americans had sent a pit bull to a tea party. If Keynes’s ideas were the skeleton of the Agreement, White’s were the muscle and sinew.

Unknown at the time of Bretton Woods, White was also an extreme socialist and an admirer of Stalin’s Russia. His argument in favor of communism was that “it worked.” And he was an undercover assistant to communism—in the 1950s it was discovered that White was a spy for Russia, sending confidential Treasury documents to the KGB. Steil’s interpretation of White’s motives is forgiving: White was not selling his soul for Stalin or for money; rather, he believed that Russia must be an equal partner in the community of nations after the war, and that it should get any information that would further that goal. This was not an uncommon view at the time.

Keynes vs. White at Bretton Woods

The Bretton Woods Conference of 44 nations convened on July 1, 1944 at the massive Mount Washington Hotel in the ultra-tiny village of Bretton Woods, New Hampshire. The location was perfect for a conference with 700 participants and a super-sensitive agenda —the design of a new international monetary system to replace the failed gold standard. The new standard would address two problems that underlay the gold standards ills: the inability of the international gold supply to increase along with the volume of international trade, and the increasingly unequal international distribution of the world’s gold supply.

The first had contributed to the international deflation during the 1930s; the second had been partially the consequence of the reparations required by the 1919 Treaty of Versailles, which transferred gold from the Central Powers to the Allied nations, particularly to France. Added to this was the bleeding of European national treasuries during WWII. As the Conference met, most of the gold supply was in American hands.

The British and Americans came to the conference with different agendas. During WWII Britain had lost its status as the world’s financial center; that position—and the gold that came with it—had shifted to the United States. The British delegation wanted to shape an agreement that would increase its status as a financial center. The Americans, on the other hand, wanted to maintain their new position as financiers du monde. The outcome would be that while the British won the intellectual battle, creating the general shape of the new system, the Americans would win the practical battle, designing the details to best serve their interests.

The British Proposal

The British (Keynes) Proposal was a two-step international monetary system based on new international institutions. The first step was creation of an International Clearing Union (ICU) which would make loans in a new international currency called the Bancor. The Bancor would be used as what we now call an international reserve currency—nations could settle their account balances in Bancors, which would be freely convertible into any national currency. It would be the modern replacement for gold except that its supply would be determined by the ICUs lending, not by mining ore and smelting it. The second step of the British proposal was that each nation would fix the price of its currency relative to the Bancor, just as it had fixed its currency price relative to gold under the gold standard.

The result would be a “gold exchange standard” replicating the gold standard in its effect on relative national currency values, but using Bancors instead of metal. The exchange rates of nations would be fixed relative to each other, as before, but the vagaries of gold production and of the distribution of gold would be eliminated from international finance.

The American Proposal

White’s proposal was that the new financial system would rest on two international organizations: An International Monetary Fund (IMF) that, like Keynes’s ILU, would lend the international reserve currency to nations with insufficient international reserves to maintain their exchange rate; and an International Bank for Reconstruction and Development (IBRD) that would lend to nations to finance investments in tangible infrastructure; the IBRD is now the World Bank.

In this sense White’s vision was broader than Keynes’s: Keynes’s goal was resolving international monetary imbalances, while White also addressed funding for reconstruction and development. But while Keynes was willing to forego raising his nations currency to international reserve status, White was intent on elevating the dollar to the status of gold. Steil tells us that,

The most important of White’s aims . . . was very deliberately left unstated: to elevate the status of the dollar to that of the world’s sole surrogate for gold, such that cross-border gold movements would no longer have the power to dictate changes in U. S. monetary policy.

This was, of course, precisely what Keynes and the British had feared.

The Bretton Woods Agreement

The outcome of Bretton Woods was that the U. S. would set the price of gold and agree to trade gold at that price with other nations. U. S. monetary policy, by determining the supply on U. S. dollars, would be the source of growth in the international reserve asset. One wonders what longevity the Bretton Woods solution would have had if Keynes had prevailed and an international organization had determined the world’s supply of the reserve asset (Bancors).

What the world lost in accepting (under duress) the American plan was not international currency stabilization in the near term—both plans provided a mechanism for that. Rather, it was that with a single nation (the U. S.) controlling the supply of the world’s reserve asset, circumstances might change over time so and that nation’s currency would become inconvertible. And that was exactly what happened in 1971 when Nixon suspended the convertibility between dollars and gold.

The Post-Bretton Woods Demise

It the time of Bretton Woods the U. S. owned most of the world’s gold and had a large trade surplus. The rest-of-the-world had little gold and it faced a significant shortage of dollars to finance the much-needed trade deficit required for reconstruction and restoration of its economies. Thus, it’s no mystery that the British wanted to eliminate gold as an international reserve asset, or that the U. S. wanted to maintain the link between gold and international finance. The inevitable victory of White over Keynes was a battle won but a war lost for the U. S.

With its dollar linked to gold, and with large gold reserves and a foreign need for dollars, post-Bretton America used its ability to create dollars to finance a large trade deficit, enjoying the benefits of foreign-produced goods and sending dollars abroad to finance trade deficits. As the supply of dollars rose relative to the supply of gold, an international inflation began. At some point, with the world accumulating an increasing amount of dollars relative to the U. S. supply of gold, foreign governments would choose to convert their dollars to gold, setting off a stampede by other governments to get gold before the U. S. raised the gold price or suspended convertibility.

A train wreck was coming, and it would be 27 years before the collision. In 1971 the French French government—ever ready to poke a stick in the U. S. eye—submitted a demand request to convert its dollars into gold. It was, in effect, a speculative attack on the dollar. If accepted, it would have led other nations to lose confidence in the dollar and submit similar requests; if rejected, the U. S. would be suspending convertibility. In either case, the Bretton Woods system would be dead and a brave new world of floating exchange rates would emerge. In response to a lose-lose situation, President Nixon ended the U. S. commitment to buy gold from, or sell it to, foreign governments.

One wonders what longevity the Bretton Woods solution would have had if Keynes had prevailed. But it was not to be: the British delegation had the better ideas, but the American delegation had the clout, the money—and the pit bull.

[Frank Stein · Rating 4 out of 5]

There's been a fair amount of praise for and criticism of this book. Both reactions have concerned themselves largely with Steil's political stances (he's an unreconstructed goldbug) and some of his more strident claims (that Harry Dexter White was a significant impetus in Japan attacking Pearl Harbor). To my eye, these issues are secondary. The book largely treads on familiar ground, but it does so in a way that makes the journey seem fresh, original and even entertaining.

The exhausting negotiations behind the Bretton Woods agreement that created the post-World War II international financial order have been chronicled elsewhere, most notably in Skidelsky's biography of John Maynard Keynes, and frankly there are not many revelations here about that battle. Perhaps the most notable difference is one of emphasis. Previous works have acknowledged that Harry Dexter White, the American economist who negotiated much of the agreement for the U.S. government, was a Soviet spy, but Steil's book tries to explore the full gravitas of this incredible fact. It does seem to bear some exploration that the man who created some of the greatest bugbears of the contemporary anti-globalization left, such as the IMF, the World Bank, and the WTO, was in fact acting as an inside agent for the KGB. And, from examining White's archives, Steil shows that White did not have a mere passing fondness for the Soviet Union, but was its earnest champion (nearly repeating Lincoln Steffens's famous phrase about the country in one of his personal memos, claiming "And it works!").

Ironically, the most powerful manifestation of White's Soviet sympathies laid not in the negotiations (to which the Soviets contributed little and eventually abandoned, despite White's extreme attempts at inclusion), but in White's endless animus against Britain, which he saw as an dying imperialist power which needed to be denuded of resources. Of course this offended the fiercely British John Maynard Keynes to no end, who failed utterly to convince White and the Americans to create an international bank which would allow Britain to run deficits in order to rebuild. Keynes had to swallow his pride and continuously stroke White's ego to achieve even minor concessions, yet Keynes's very reputation for intelligence caused the Americans to blanch. They thought, often correctly, that Keynes was trying to trick them in some barely discernable way. In the end, these two combative personalities did iron out a deal, almost entirely on American terms, but did little for furthering international partnership.

Steil's view of Bretton Woods as an unmitigated disaster seems a little far fetched, considering the generally solid economic growth and international stability that followed the pact (albeit with a payoff when the system crashed in the 1970s). Yet again, such claims are not the theme of the book. The book actually shows the importance of American domestic politics in organizing the deal, American insistence on free trade in all its negotiations, and the looming dilemmas of the vast debts accumulated by Britain (and just paid back in 2006) from American Lend-Lease "assistance." Most importantly, the book shows the importance of personality in the affairs of nations. Despite its more outlandish claims, this makes the book a very welcome addition to history.

[Jj Li · Rating 2 out of 5]

I've yet to read a more depressing book about economics and finance, and I did a BBA, so that says something about what I'm comparing it to. I picked this up thinking it was going to be a treatise on the ripple effects of some medieval battle, and imagine my surprise when Keynes and White and the World Wars were thrown in my face.

This book describes Great Man History at its worst, when megalomaniac and fanatic traitor bumped heads and built an economic fairy story whose crash still has reverberating impacts on the world. Yet for all this cynical tone and set up, this book also commits the unpardonable sin of being boring. It bogs down in economic detail that I had a hard time understanding (and I have a background in finance, so I'm not your average reader) and it skips around such that it will mention someone dying, and yet then turn back around and treat them as if they're alive. It's a mess.

All in all, it's a sweeping and dramatic story of egos, dire international consequences, and politics, told not with the apparent flair or passion of John Keynes, but with the plodding mendacity of Harry White. While not an unredemable book, it's not a recommendable one either.

[Kars · Rating 4 out of 5]

The kind of history that is rigorous but also makes for great bedtime reading. Being interested in political economy I kept coming across mention of Breton Woods so decided I should educate myself on what it was about. If you’re wondering where things like the IMF and the world bank came from, and why we are now stuck with the dollar as the only global reserve currency, this is the book for you. It may sound boring but this really is an epic struggle for the post-war world order fought by bureaucrats and intellectuals, with a soviet spying sub-plot, and grand debates about politics and economics that resonate with today’s major issues on the national and global stage. I have less of a head for economics that I do for politics and history so I did struggle in a few spots where things got a bit too technical. But on the whole this is marvelous and much more well written than it has right to be.

[The Uprightman · Rating 4 out of 5]

Ben Steil’s ‘The Battle of Bretton Woods’ tells the story of British imperial twilight where the US wrested power from the rusting empire through accumulated WWII allied obligations. American policymakers used British and European liabilities as leverage to negotiate better trade access into formerly protected imperial markets and replace the pound with the USD as the dominant global currency.

Stylistically, Steil strikes a good balance between monetary policy detail and the personalities driving them. However, at times he belabours the point with more detail than any but the most enthusiastic would care to consume.

The two key players shaping British and American 20th century economic policy are mentioned in Steil’s title: John Maynard Keynes and Harry Dexter White. Each man experienced formative events which shaped their economic policy preferences, reflecting the relative national positions each occupied during the closing years of WWII.

In broadest terms, both countries were seeking national advantage in the post war financial architecture. Harry White was keen to stem debt expansion and facilitate USD global ascendancy; Maynard Keynes desired capital account controls, a flexible sterling exchange rate, and protected trade markets.

White argued in the throes of economic depression that the US needed trade expansion to stimulate recovery. In order for this expansion to occur, a new model for international monetary stabilisation was also required. In 1936, amid French currency devaluation and ruffled British feathers regarding departure from the gold standard, then Treasury secretary Henry Morgenthau Jr. negotiated a tripartite agreement between the US, France and Britain to bring international monetary stability. The agreement sought international cooperation to ensure minimum exchange fluctuations and prevent beggar-thy-neighbour policies. This experience was the benchmark through which White pursued a stabilised global system.

Enter Keynes. Steil outlines Keynes’ formative years and entry into the British Treasury – a place where he was never truly at home, at least, not in the same sense as he was with the Bloomsbury bohemians. Still, he did find passion in his first posting overseeing the Jewel of the Empire, remarking to Arthur Waley that employing his theories on prices correlated with flows of gold trade provided him with heightened stimulation that can only elsewhere 'be found in copulation.' Keynes’ principal concern in office was how to reduce German reparation payments from WWI to a manageable level, while simultaneously shrinking Britain's obligations to their United States wartime financiers. He feared unmanageable debt-servicing at the expense of rebuilding the German economy would stoke future military aggression.

Keynes' monetary policy, which developed over the 1920s, was that government and central banks should aim to stabilise the demand for money rather than its supply. Price stabilisation required 'active and continuous' intervention through altering money supply and bank reserve to deposit ratios. Here, Keynes and White were in broad agreement about the objective. It was the means to achieve their ends where they differed.

Despite his command of economics, Keynes was a poor diplomat. He lacked an understanding of the US political system, and his capacity for self-agrandizement over tact did not sit well with Secretary Morgenthau and other senior officials. Keynes’ attempts at consensus-building resulted in Treasury's heels dug in over Lend-Lease. The policy that unravelled protected imperial markets and turned Britain from a creditor to a debtor nation was on its way.

My one glaring criticism is over how a primary source is employed. Steil gives White outsized agency in events which are clearly beyond his (or the Soviet’s) ability to predict or control. The claim that, through White, Soviet-crafted US truce agreement terms which were knowingly unacceptable would result in Japanese military aggression towards the US – favourable to Soviet interest – is ludicrous. Uncovering previously unseen primary sources is always a thrilling event. Overemphasising the document’s importance is a temptation which must be moderated by scrupulous scholarship.

I thoroughly enjoyed the Yank’s vulpine feasting on the wasting British carcass. The FDR and subsequent Truman administration, like any government official who had dealings with a certain breed of twentieth-century British bureaucrats with immovably-grafted, Empire-tinged glasses, found British conceited arrogance and inborn superiority complex an intolerable nuisance. This pervasive attitude served only to entrench opposition. Steil sums up British thinking wonderfully, replete with Keynes-like rhetorical flourish: 'these Americans are in a lamentable muddle, yet once things are explained to them all will be well'. There is something to be admired about American obstinacy, especially considering their unwillingness to succumb to British appeals to morality which wouldn't have been even fleetingly entertained were situations reversed.

[Sten · Rating 2 out of 5]

I almost learned something in the back third.

[Mark Lisac · Rating 4 out of 5]

A highly informative, deeply researched review of how the post-World War II international monetary system was created — and probably as understandable as any description of that somewhat intangible but fundamental structure is likely to be. It also demonstrates again that seeing how political and economic sausages are made may blunt your taste for them even if it's good for you to know.
The book is rife with tales of contradictions. Keynes, a brilliant English patrician given to mercurial changes of mind, clashed almost constantly with White, a dogged and cunningly manipulative American son of an immigrant storekeeper. White served an agenda of making the U.S. the dominant player in the world economy and making the world more open to American exports, but moonlighted as a source for Soviet intelligence. Most U.S. players in the drama were highly motivated to disassemble the British Empire and British influence in world economic affairs, yet they blithely and out of serene self-interest created what would become widely known as "dollar imperialism." The single-minded pursuit of U.S. self-interest nevertheless blended into an eventual stimulus to many national economies, especially in war-torn Europe, to an extent that could have been read as altruistic.
The book makes a nice prequel to Steil's later work, The Marshall Plan. He is particularly good at maintaining a nicely balanced overview rather than resorting to subtle cheerleading (some reviewers would not agree), despite his reputation as a supporter of returning to a gold standard as a basis for international monetary policy.
Despite Steil's efforts, international monetary policy can be an opaque subject. Readers will be in good company, however. The book has the U.S. Treasury Secretary of the day unclear about the details of the plan White was putting together that became known as the Bretton Woods Agreement. And the chair of the U.S. Federal Reserve board is quoted as telling White, "Harry, your plan is so darned complicated. I asked our people to put (it) down briefly in layman's language so I could understand the darned thing, just what it means."
Annoyances in the text are minimal. There is occasional lack of clarity about time sequences, and a particularly glaring passage in which a Soviet spy in the U.S., a man who died in 1943, is referred to as still alive in 1945. But then, the Bretton Woods Agreement eventually was shown to have mistakes of its own. The internal contradictions inherent in making the U.S. dollar both an international reserve currency and convertible to gold brought it down in 1971, as some economists had warned more than a decade earlier would happen. Steil reportedly believes in anchoring currencies on gold again, despite the dangers that the gold standard showed in the 1920s, but the book itself leaves unanswered the question of what might serve as a sturdy basis for international monetary policy.

[Nilesh Jasani · Rating 5 out of 5]

If Harry Dexter White was not tainted by the spying incidents, he could have gone down as the person deserving most credit for engineering the US dominance in the global financial system today. Bretton Woods is perhaps the single biggest path-defining economic event of history, and this book beautifully lays bare what was won and lost at this conference.

If White's feats are unsung - let's say because of his nefarious spying activities - it is quite astonishing that Keynes is so little tarnished despite being so comprehensively outsmarted at such a critical juncture in the world economic and market history. The book's descriptions of his egotistic handling and careless omissions are eye-popping for anyone who has observed the impact of those measures in global monetary system even today.

More than anything else, White possibly belonged to the pioneering period when bureaucrats started forming hard-to-reverse long-term policies based on short-term interests and assumptions of perpetual continuity of then prevailing phenomena (US trade surplus in this case). From this viewpoint, this ideological forefather of the later-day practicalists like Greenspan or Bernanke appears far better than the likes of Keynes who was also shown as a bumbling pragmatist driven by the policy needs of the hour but spending more time on formulating the theoretical underpinnings for the decisions rather than the decision-formation itself.

The book excels in delineating how Keynes, and the UK financial dominance was methodically deconstructed by the US team led by White. The side-story of the Soviet methods is equally interesting, once again for the signs it contained for many events that came in the later decades. The book also handles the touchy subject of what White's true intentions possibly were rather well.

All in all, our monetary, economic, financial world is a hotchpotch of massive decisions taken by the likes of White - driven by the career goals, short-term national interests/exigencies, whatever then-prevailing economic notions and possibly even more by their adversaries and their positions. Over time, such constructs turn more and more unwieldy as imbalances introduced in the far earlier eras foster monsters that turn unsustainable. Bretton Woods and White has created a construct that positively aided a large part of the world ever since but may eventually be remembered by all the imbalances whose seeds were sown back then.

This is the book to know about this historic event and everything that happened around it. Great topic. Well-researched and well-written.

[JImC · Rating 4 out of 5]

The Battle of Bretton Woods, by Ben Steil, concentrated on the Bretton Woods meeting (or Bretton Woods agreement), which took place on 1944. The Bretton Woods meeting was arranged by the US to decide on the new economic system and solidify its position as world economic leader after WWII. As a reader who knows nothing about the economy, this book amplified my understanding of the economy, international diplomacy, and current international relationships. The book provided an intense and comprehensive historical review of Bretton woods meeting and its context. However, It is not only about currency, gold standard, and exchange rate, it is also much more than that. It is, essentially, a description of intense international political fights among nations to behold their best economic interest after World War II. It is true that this book would take some time to read without a basic understanding of economics, but it is absolutely fine to understand the whole Bretton Woods currency debate by just looking at the political and ideological conflicts. Despite the excellence of the book, the details are undermining the joy of reading the book; the author seems to care more about declaring his objectiveness than people’s enjoyment of reading the book, but it is exactly the people who Steil intend to give better insights on this matter.

Considering only the capability to illustrate historical facts, the Steil was an absolutely a great writer. The event was explained crystal clear: the whole so-called “battle” was mostly about the two “giant” countries after the war, the United States and Britain. From the U.S. side, the United States’s representative Harry White “wants to make the US dollar, and only the US dollar, synonymous with gold, which would give the US government a virtual free hand to set interest rates and other monetary conditions at will--- not just for the United States, but for the world”(pg 148). At the meantime, Britain expected to maintain her worldly economic dominance and London’s position as a world economic center. The actual reason for the Bretton Woods meeting was the Lend and Lease treaty signed by Britain and the US and US’s intention to gain substantial international influence out of the treaty. The author demonstrated how the two countries came to present their final position all the way from the beginning, where Britain signed Lend and Lease and called it “the most unsordid act”, to where the two representatives, White and Keynes, originated their initial ideas on the future world economy. It went all the way to where Britain “beg like Fala” for better terms on the Bretton Woods meeting when Keynes had “never seen the final text of the clauses now under discussion at the time I(Keynes) signed the paper.” (pg 251) For every single process from either side on the new economic plan(changes in position, ideas on currency), there accompanied the reactions from Britain sides and US sides. The author did not state any obvious subjective inference but historical facts and results from investigations. Not only did the author delicately sort out the whole storyline to the Bretton Woods meeting and the establishment of the Bretton Woods system, but he also discussed the collapse of the Bretton Woods system, a system that emphasizes the superiority of US dollars, and the later economic interactions with foreign countries the US took. In the book, every sides’ interest is explained perfectly well, it can absolutely serve as a very credible and persuasive tool to help you understand true history.


The shaping of the characters is also a strong aspect of the book. I get to know Maynard Keynes and Harry White throughout the facets of personal values and ideology, understanding of the economy and early life experience (academic performances, reputation, etc). Instead of utilizing general conclusions to describe a character, the author shaped every character by words from themselves and people who interacted with them. The book had succeeded in shaping Keynes as an insightful but arrogant scholar; his early support gold standard was clear: “The various currencies, which were all maintained on a stable basis in relation to gold and to one another, facilitated the easy flow of capital and of trade to an extent the full value of which we only realize now, when we are deprived of its advantages.”(pg 72) yet years later, he is the one supporting total elimination of gold standard. The emotional Keynes was depicted vividly by Steil: “‘Everybody agrees that he is jealous and suspicious and subject to moods of depression and irritation,’ Keynes wrote of the Secretary, sounding more like a scorned lover than a professional envoy.”(pg 114) Roosevelt’s attitude regarding the US and Britain’s benefits was presented with his own words with humor: “Roosevelt was nonetheless wholly receptive to the possibilities of putting British penalty to American advantage. ‘ I had no idea that England was broke,’ he remarked to Morgenthau after a briefing on British fiancés in August. ‘I’ll go over there and make a couple of talks and take over the British Empire.’” (262) To shape White and Keynes as aggressive negotiators, the author deployed words from their own sides: the current Secretary of State Acheson had“often been so outraged by Harry White’s capacity for rudeness… that the charges made against him” of ‘communist sympathies...would have seemed mild compared to expressions I have used.’”(pg 225); “‘(Keynes) is too offensive for words. .’ He is ‘a Don and . . . also a young man of talent. . . I presume the rule for such nowadays is to show his immense superiority by crushing the contemptible insignificance of the unworthy outside.’” wrote “Washington Treasury Financial Representative Sir Basil Blackett.”(pg 69) To give an all-sided impression of Harry White, the author also deploys results of investigations, where White claimed in his never-published memo, “Russia is the first instance of Socialist economy in action. And it works!”(pg 6) The illustration of characters was highly authentic and meticulous, but it is, sadly, such meticulousness that harms the book’s artistic value.

General kinds of good books appeal to readers’ emotions, and the book had failed to deliver any emotion in the text. It is thus a shame as it is a fact that the book is only brilliant as a history book. The book put too much focus on being objective, being unbiased, just like a rigorous research paper. The author was educated at Oxford, Nuffield College and at the Wharton School of the University of Pennsylvania as an economist. It is thus reasonable to see why the book is so much more academic than others. Though the writer had put many more elements other than economics, such as politics and academics, into the book, it is mostly about economics (currency, exchange rate, gold standard). If you do not have any basic understanding of economics and have zero interest in politics, this is not a fun book for you to read. Plus, the book entails a naked description of capitalism, of how people only cared about their own side’s interest. So I do not recommend any young kids to read the book.

In general, I’ve learned a lot from the book, I’ve grown an intuitive understanding of contemporary international relations and a great interest in economics and politics. This book is a great book, but only as a history book on economics. Again, I don’t recommend anyone with no interest in economics or politics to read it.

[Tasos Nikitakis · Rating 5 out of 5]

Ben Steil's book is an exciting, accurate and insightful examination of the Bretton Woods monetary system treaty. An unprecedented feat, the treaty truly established a New World Order by cementing the dollar's status as a reserve currency. The story behind the making of the new system is an exciting tale with two remarkable heroes: Harry Dexter White and John Maynard Keynes. Keynes immediately spring to mind whenever Bretton Woods is mentioned, but it was Harry Dexter White that orchestrated the whole thing having the insight, the intellect and the energy to seize the moment and impose his designs for a new international monetary system controlled by the US with the dollar as the primary reserve currency instead of the sterling pound and with gold as the universal anchor. The background of the treaty's formation related to the geopolitical conditions at the time reveals much about international relations and the moral standing between debtor and creditor nations. Steil draws great parallels with the current situation of the international monetary system and the fact that the US is now the largest debtor nation; a position diametrically opposed the one before the Bretton Woods. Steil could have a good book in his hands ending it with the signing of the treaty in 1944 and the close examination of the lives of his main protagonists and their efforts from that moment until the end of their lives. What makes this book a great one is that he continues past that point examining the evolution of the treaty, its effects through the law of unintended consequences, its adjustments during the Marshal Plan era and the dollar shortages (the work of another unsung great American administrator William Clayton) all the way up to 1971 when Richard Nixon terminated the gold convertibility of US dollars bringing the system to an end, declaring through John Connally that the dollar now was "Our currency, but your problem" to the rest of the world.

[Carlos · Rating 4 out of 5]

The book summarizes the life of Keynes and White and the chronology of all the meetings that led to the construction of a new architecture of the international monetary and financial system (IMFS). There are a couple of highlights in this book. It contains a fine description of the White's and the Keynes' plans for the IMFS. Since White plan ended up been the one adopted, it is interesting to learn what was the framework proposed by Keynes. The most interesting thing is the conception that both men were more concerned about their national interests when thinking about the international financial architecture. White wanted to consolidate the dollar as the main global reserve currency as well as boost New York as the international financial centre. Keynes was concerned about keeping the sterling status and avoiding the bankruptcy of the UK. A great deal of the discussions in Bretton Woods revolved around the financing of the UK after the second world war. In the end, White was successful because of the inevitable uphand of the American condition as the provider of capital to the rest of the word, but also because White learned to play with Keynes's vanity. The book also describes very well how White was able to produce an outcome very close to what he wanted by unashamedly manipulating his power to set the agenda during the conference. The delegates from 44 countries would vote for general descriptions of the text and the American delegation would fill the details as pleased them. It makes us wonder about the legitimacy of international organizations such as the IMF. The book also contains a very good analysis of White working as a Soviet spy. His loyalty to the USSR clearly shaped his efforts as the father of the new architecture of the IMFS. I took off a star because the book could be better edited. Sometimes the author repeats himself and embarks in long descriptions of themes that are not essential to the narrative.

[Jim Gulley · Rating 3 out of 5]

The Battle of Bretton Woods is an account of the economic summit held in New Hampshire during the summer of 1944, where the Allied powers gathered to hammer out the details of the new world economic order once World War II came to an end. The book contains a history of international politics, two biographies, a treatise on macroeconomics, and a spy thriller all rolled into one.
The conventional history of World War II presents Great Britain and the United States as the closest allies, with an aligned interest to fight Nazi Germany and altruistic intentions to be helpful to each other’s difficulties. Benn Steil paints a different picture by reviewing the events and circumstances in the two countries leading up to the war and how these issues created tremendous problems and tensions. Until World War I, Great Britain reigned as the world’s great imperial superpower, and London led global finance. The war wrecked Great Britain’s finances, causing defaults on debts, including amounts owed to the United States. Consequently, World War II started with the British still on a financial brink due to these issues and the effects of the Great Depression. In desperation, they turned to the United States for military and financial support.
The United States emerged from the Great Depression and faced the conflict in Europe with two advantages: physical separation by the Atlantic Ocean and possessing a large stockpile of gold. American public opinion did not favor military intervention in European affairs, thus binding President Roosevelt’s options to aid the British. Roosevelt ingeniously crafted the Lend-Lease program, which managed to finance British procurement of arms and supplies without committing troops and outright payments for the war effort. Pearl Harbor ended America’s isolationism, and by the summer of 1944, Allied victory appeared inevitable. After the war, the Allied powers began planning for “a new world order” to shape international relations, focused on a reordered global economy. In July 1944, the United States invited delegates from all forty-four allied countries to an international summit at the Mount Washington Hotel in Bretton Woods, New Hampshire, to pound out the details.
Steil’s book on this historic conference delivers the account through the biographical prism of the two primary combatants in Bretton Woods: Harry Dexter White and John Maynard Keynes. White, a high-ranking bureaucrat in the United States Treasury Department, foresaw these events and spent his time devising an elaborate economic plan before and during the war. The story is about the rise and fall of White’s blueprint for “a new world order” and the aftermath we live with today.
Great Britain’s disdain for the United States as a boorish, ill-mannered culture clouded their judgment as they prepared for the conference. They resented the Americans’ lack of appreciation for their sacrifice in facing Hitler alone; they also resented the United States for driving a hard bargain with Lend-Lease terms and conditions. Steil quotes Winston Churchill, “we can always count on the Americans to do the right thing, after they have exhausted all other possibilities.” [pg 7] John Maynard Keynes, the leader of their delegation, embodied British snobbery and remained flummoxed that he could not persuade the Americans to agree to his views and proposals. Keynes was, after all, one of the leading economic intellectuals of the twentieth century, and his revolutionary economic theories of demand-side, government stimulus, and deficit spending became foundational for the Roosevelt Administration’s New Deal. Educated at Cambridge, his erudition and acerbic wit endeared him to his countrymen but antagonized his allies.
On the American side, Harry Dexter White came to Bretton Woods on a mission to establish the Dollar as the world’s reserve currency and construct a set of international financial institutions to reshape global economics fundamentally. He earned a Ph.D. in economics from Harvard but came from a working-class family. White, an adherent of Keynesian economics, modeled his economic system after the idealism of a socialist, centrally planned economy, as demonstrated by the Soviet Union. He was blunt, abrasive, and a tireless worker.
The book is a fascinating read when it talks about the United States and Great Britain’s domestic politics and the political tensions between the two countries. However, it becomes less accessible when it dives into the details of macroeconomics. Suppose the reader does not have an intermediate understanding of monetary policy, the gold standard, trade balances, and exchange rates. In that case, it is not easy to follow this necessary information to understand the history fully.
The book culminates with the international economic summit held at the Mount Washington Hotel in Bretton Woods, New Hampshire, in July 1944. Delegates from forty-four countries participated, but it was essentially a bare-knuckle negotiation between the United States and Great Britain. Roosevelt’s most trusted advisor, Treasury Secretary Henry Morgenthau, led the American delegation, but Harry White was the chief architect of the proposals. Keynes led the British delegation.
Steil gives a detailed account of the negotiations between the two sides. The United States maintained a superior position as the chief creditor nation while the British were powerless as the debtor. The Americans dictated the terms, which resulted in the US Dollar supplanting the British Pound as the world’s reserve currency. The conference agreed to a complicated set of international banks and funds to mediate exchange rates and trade balances. Two of those institutions, the International Monetary Fund and the World Bank, survive today.
The crux of the Bretton Woods accords entailed a centrally planned monetary system of fixed debt limits and credit exchanges, all allocated by country and tied to the US Dollar and a semi-gold standard. The accords proved rife with fallacies, and world economic forces eroded them over the next twenty years. They officially died when Nixon ended the gold standard again in 1971.
The book ended with a Cold War espionage twist when the FBI implicated White in the Alger Hiss, Oswald Chambers Soviet spy scandal. He died of a heart attack in 1948, two days after testifying before the House Un-American Activities Committee. Stiel softens the blow against White by pointing out that his cooperation with the Soviets occurred while the two countries were allied. The information shared was economic theory designed to help inform the Soviet intelligentsia of more effective ways to run their state finances. Nevertheless, the revelations irreparably harmed White’s reputation as a patriot and, ironically, overshadowed his responsibility for the subsequent failures of Bretton Woods.

[Julian Haigh · Rating 3 out of 5]

Intriguing book about the 1944 Bretton Woods conference where the IMF and World Bank were established. The UK economist-diplomat J.M. Keynes and US bureaucrat-diplomat H.D. White are profiled in separate chapters highlighting White's moonlighting as a Soviet spy and Keynes' big ideas for a better international monetary system, including a new global currency, the bancor.

Instead, White was able to hijack the conference through controlled disorder in committees, forcing the American position of equating the gold standard with the American dollar, thereby strengthening the US dominance of the international economy for the next 20 years, and rapidly destroying the old order with Britain's Imperial Preference system.

[Peter Moreira · Rating 4 out of 5]

Steil is meticulous, and no one has equaled his factual presentation of the events leading up to, during and following Bretton Woods. I don't agree with all his analysis. For example, it was obvious to everyone that the Americans would use the conference to make the dollar the world's researve currency, so there's no reason to treat White like he had a secret agenda. And Morgenthau was not the uninterested buffoon that Steil presents here. But all in all, this is a tremendous and welcome piece of scholarship.

[Kevin Kosar · Rating 4 out of 5]

The Battle of Bretton Woods sets forth in smooth prose and concise detail an authoritative narrative of the who-what-when-why of the great monetary conference of some 70 years ago. It is jam-packed with heady discussions of balance of payments, exchange rates, supranational currency, monetary reform, and tariffs... (a href="http://www.weeklystandard.com/article... more

[Nia · Rating 4 out of 5]

This topic and also the work of Sir J. M. Keynes and his 'General Theory on Interest, Inflation and Unemployment' as well as his 'Treatise on Money' should be read by everyone, imho.

This is one of the topics on which I read extensively for my PhD work, but then was forced to cut out of my thesis when it was accepted only as an MPhil rather than doctoral thesis. :-(


ShiraDest,
26.10.12015 HE

[Jordan Mcculloch · Rating 1 out of 5]

Had to put it down 200 pages in. Just wasn’t sure what I was reading. Probably too uninformed about the topic for this specific book.

[John · Rating 3 out of 5]

This was interesting, frustrating, intriguing, and "not bad" overall. I have always been interested in the Bretton Woods Conference and that period of time. I had not read anything on the specifics of the conference and how all of it went down, other than being mentioned in books about FDR, Truman, Ike, and George Marshall. So, I was really looking forward to this reading.

I knew a bit about Keynes, I mean who doesn't read economics and not know at least a bit of the man. On the other hand, I had only heard Harry Dexter White's name in passing and never really knew who he was.

All of this boring economics, I actually find very interesting. However, it was easy to get frustrated with the Freakonomics-styled conclusions about White and his "involvement" in the Japanese bombing Pearl Harbor (around page 55). I called bullshit on that pretty much right away. Not that there wasn't an element of truth perhaps, but because of the thin line drawn on chain-reaction occurrences as if they could be relied upon in real life.

Anyway, the author develops the character of White, as he is lesser known, and draws upon well-known ideas of Keynes to develop how each got to the point where they could begin to discuss the future of monetary policy in summer of 1943. That in itself was interesting to see how long in advance much of the moments in history germinated. I was totally unaware of the meetings in Atlantic City prior to Bretton Woods, so this was a very beneficial point.

The discussions of Bretton Woods itself was very thought provoking. I didn't know that 44 nations were present, nor did I know/realize that the US pretty much dictated the terms to the other 43 for the most part (according to this author).

The post-Bretton Woods part of the book was interesting to see how the British and Americans got both Parliament and Congress to approve and vote in both the IMF and the World Bank. Also the next few years of these programs beginning and then the death of both Keynes and White (in close succession). Also, I am amazed with all the conjecture journalism of today, nowhere do you hear that White was a Soviet/communist sympathizer. Keynes has been reviled in the conservative media the past 20+ years, but you would have figured that White's name would have come up to further disparage the efforts of current Macroeconomics, which is still in dispute.

Overall, I'm glad I read this book - I learned a lot, and slogged through some tedious writing (at times). If this is your bag, give it a try, but don't expect it to feel "real" or "true" - at least I didn't.

[Jackson Anderson · Rating 4 out of 5]

So cool.

Went in to this book with the goal of learning more about the gold standard, and Keynes' famous plans for an international currency. The mythical "Bancor".

However, I did not realize the insanity that went along with the Bretton Woods conference. Specifically, the background of the lead American negotiator, Harry Dexter White, blows my mind. White slowly climbed the ladder of US politics, becoming one the most powerful men in Washington by the time WW2 was wrapping up. This led to his role as the main architect of the Bretton Woods system. White genuinely deserves the most credit of anyone for establishing the US as the global hegemon, along with it's dominance in global finance. He acheived this by ruthlessly sticking to his plan, generally outmanoevering Keynes, and by firmly establishing the USD as the global reserve currency. He never ceded any ground to Keynes' eloquent, innovative economic arguments.

MEANWHILE, his entire career in the public service he was leaking information to the Soviets as an undercover communist spy!? White, privately, supported socialism and marvelled at the Soviet system. Yet, he's also one of the key individuals responsible in setting up a global system where US capitalism dominates and sets the rules for countries across the world. He was also a key player leading to Japan's bombing of Pearl Harbour (perhaps due to Soviet influence).

Keynes' plan based on a global reserve currency is so interesting. Guy already revolutionized economics a decade prior, but at this point he wanted to completely rewrite the global monetary system, from an internationalist lense. Keynes saw the gold standard as a cage, an archaic concept of the past. His system prioritized global development, aiming to reduce imbalances and predatory situations that debtors find themselves in through an international clearing union, with the Bancor put in place as the global reserve currency. Keynes understood the nature of money, not as something with real intrinsic value, but as an instrument to direct productive capacity and allocate resources. We'll never know what that kind of system could have led to in terms of global prosperity and development. The US had complete leverage over Europe in the wake of WW2's destruction, and they showed no willingness to budge from their plan.

So instead of Keynes' plan we got the IMF and World Bank :( two organizations that are rightly critized for imposing harsh austeristy on developing countries, exploitative loans, and "one size fits all" neoliberal policies which increase inequality and poverty in many cases.

Also, Keynes and White were such divas lmao. Their egos were absolutely insane.

Anyways. Really interesting topic, good book.

[Peter Fox · Rating 5 out of 5]

There are few books that i have read that have altered my perspective of the world and society in general. The five stars i have given this book are a direct indication that this books is one of them. I place this book on my shelf with The Communist Manifesto, The Descent of Man, Collapse, The Social Contract and Eichmann in Jerusalem.

Benn Steil has not only written a book on The Battle of Bretton Woods , but he has placed it within the broader context of the world. History, finance, economics and international relations are applied with equal alacrity to show their combined and convoluted impacts upon the macro-view of government policy and the greater social-economy.

If you want to read a book that solely focuses upon the actual Bretton Woods conference then this is not the book, but if you want to understand the importance of the conference then you will find no greater book to read than this one. I had read reviews and two of my lecturers from university recommended this specific tome and i will do likewise.

Read this book: if you want to understand modern economics, why the United States is in such financial trouble and how Great Britain became only Britain. There is also a deeper dive into the two dominant protagonists - Harry Dexter White and John Maynard Keynes. These two men are exposed for their overt weaknesses and their intellectual capacities to take on complex and challenging tasks in the time of great conflict while trying to shape the future of their respective nations and the greater global community.

Go forth and learn from this book. I know i certainly have learnt a lot and been pleasantly surprised that a book that i thought would be a burden of labor turned into a compelling and fascinating story. The biggest revelation for me and this is not the opinion of the author, it is solely mine. I now understand why the IMF is such a basket case of inept and incompetent policies which have been consistently detrimental to so many sovereign states.

[Mathew Madsen · Rating 3 out of 5]

Reading The Battle of Bretton Woods recalled a memorable scene from the film adaptation of William Goldman's The Princess Bride. Princess Buttercup has been kidnapped, and her lover, Westley, a.k.a, the "Dread Pirate Roberts," pursues her captors. He engages the leader, Vizzini, in a high-stakes "battle of wits." Westley presents two cups of wine, one of which purportedly contains a deadly poison, and challenges Vizzini to select a cup for each man to drink. After making his selection, Vizzini confidently tells Westley, “You fell victim to one of the classic blunders! The most famous of which is, ‘never get involved in a land war in Asia,’ but only slightly less well-known is this: ‘Never go in against a Sicilian when death is on the line!’” Moments later Vizzini falls over dead mid-laugh.

Right down to Vizzini's ironic admonitions—though the relevant land war was in Europe, not Asia—this scene gives a good sense for Steil's portrayal of 1944's Bretton Woods conference. In one sense, death was on the line for the pre-war international order and Britain as its leader. This was a battle. A "battle of wits" between the self-assured John Maynard Keynes, who, like Vizzini, is someone conventional wisdom would suggest you don't want to "go in against," and the quietly cunning Harry Dexter White, who, like Westley, masks his true self and who also gets the better of his well-heeled counterpart.

There is a common refrain in economics that “institutions matter,” which is true. But by focusing the narrative on these two central characters, Steil reminds us that individuals create and shape those institutions. People matter. And in the case of Bretton Woods, personal preferences and temperament had lasting influence on important global institutions.

[Randy · Rating 2 out of 5]

You would think this book was written in the 60s the with how out of date with contemporary writing it is. It's information lends itself to be better as a reference than a book that's read through in one go, but it's obviously not formatted well enough for that either.

My problem with the book is it gets caught up on minute details and fails to focus on and reinforce the big picture. When giving background on Keynes, instead of presenting the main ideas in his seminal works, it feels like the author focuses more on the reaction of others to Keynes' work than the works themselves. I understand that this is a history book and should cover events more so than ideas, but the book is structured in a way that confuses that structure as well.

It has paragraphs about the timelines around ideas rather than a coherent general timeline of events and bounces around periods to show the future impact of certain ideas (like the ones presented in Keynes' Treatise):

"...Keynes believed that it was monetary policy itself that needed to adapt to the "natural tendencies" of society and "the earnings system as it actually is." This debate renewed itself with great force in the 1970s, a period of so-called stagflation: high unemployment and high inflation, a combination that puzzled many Keynesian-schooled economists at the time."

In his frequent asides, he takes time to address claims from obscure individuals like Vladimir Karpov even when it doesn't contribute to telling the driving narrative of the book (Bretton Woods). The book feels like a rough draft that was never perfected and not a tidbit of researched information was spared.

[Michael · Rating 4 out of 5]

The Battle of Bretton Woods provides an outstanding chronicle of the global political and economic environment and events surrounding the Bretton Woods monetary summit. Mr. Steil does an outstanding job of providing the dynamics between the global players leading up to the summit, the machinations led by Harry Dexter White and John Maynard Keynes at the summit itself and the immediate aftermath.

The twist in this story is Harry Dexter White's clear sympathies toward the Soviet Union, and his treasonous acts during the course of his leadership role at Bretton Woods (as well as before and after the summit). Although House Special Committee on Un-American Activities lives in deserved infamy, the case of Harry Dexter White shows that there was still plenty of smoke surrounding Communist sympathies that morphed into treasonous actions. This was especially true for a too-large contingent of the Treasury Department.

Although Mr. Steil provides a serviceable Epilogue that relates the events of Bretton Woods to today's monetary challenges for the United States and China (particularly), I would have liked a little deeper dive into the lessons of Bretton Woods and the implications to monetary solutions in the 21st century. I would have been interested to hear how the author sees all of this playing out. He hints at the possibility of war between China and the U.S.; is that Mr. Steil's prediction?

[Casey · Rating 4 out of 5]

A good book, providing detailed history of the development of the “Bretton Woods System.” The author, economist Benn Steil, delivers a very comprehensive history of the major characters, critical events, and foundational philosophies that established the structures of international finance for the post-WWII world. This book covers much more than the conference at Bretton Woods, New Hampshire in 1944. Instead, it is a focused biography of the two main protagonists of that Agreement, English doyen of Economics John Maynard Keynes and American financial technocrat Harry Dexter White. Steil covers each man’s economic philosophy and political influences in detail, arguing that the Agreement at Bretton Woods was ultimately the compromise reached between these two intellectual powerhouses. Steil makes sure to also describe the hidden influencers as well, Keynes ultra-nationalism as he fought for British relevancy after WWII despite the danger of crossing his own economic guide-rails and White’s strong covert ties to the Soviets. Steil does not shy away from technical discussions of international trade & finance, so readers should have handy any needed reference material. A great book for understanding the opaque and deep influences of finance and political economy.