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Chapter 12 Future Prospects of the Bretton Woods Order David M. Andrews In 1956, Richard Gardner published Sterling-Dollar Diplomacy, his magisterial study of the Anglo-American negotiations for the economic framework of the postwar world.1 In it, Gardner examined in some detail the rationales and strategies of U.S. wartime planners, especially with respect to the establishment of international organizations for the promotion and maintenance of multilateral commercial and financial collaboration.2 His study focused on how bilateral negotiations with counterparts from the United Kingdom, then the chief economic partner of the United States, led to the creation of the International Monetary Fund (IMF) and the World Bank but not the establishment of an authoritative international organization to oversee international trading relations—a failure he decried, attributing it to both entrenched interests and errors of judgment by political leaders.3 I am grateful to Benjamin J. Cohen, Eric Helleiner, Andrew Walter, and Thomas D. Willett for their comments on this chapter. I alone take responsibility for the views expressed. 1. Richard N. Gardner, Sterling-Dollar Diplomacy: The Origins and Prospects of Our International Economic Order (Oxford: Oxford University Press, 1957); republished in 1969 by McGraw-Hill with a new introduction. The citations in this chapter are from the 1969 edition. 2. For a broader historical perspective on the same questions, see Lloyd Gardner (no relation to Richard Gardner), Economic Aspects of New Deal Diplomacy (Madison: University of Wisconsin Press, 1964). 3. For example, Gardner writes that “the major objective set forth at the outset of this narrative was the reconstruction of multilateral trade. That objective was not achieved. We must try now, in a tentative way, to suggest some of the principal reasons for the failure.” Sterling-Dollar Diplomacy, 381–82. When he returned to the subject in 1969, exactly one-quarter century after the Bretton Woods conference, Gardner’s assessment of the postwar settlement had mellowed. He no longer maintained, as he had in 1956, that efforts to reconstruct multilateral trade had been deeply flawed.4 But, even though his judgment of the postwar negotiations had become more favorable, he remained concerned about the future. “We must not compensate for overly pessimistic judgments in the early 1950s by excessively optimistic conclusions now,” he wrote.5 His concerns were particularly acute because he believed that international monetary affairs, and the larger economic order of which they were a part, were at a turning point. As a result, “the big question” concerned the durability of the institutions whose origins he had earlier described. Would observers in the early twenty-first century look back on the quarter century after Bretton Woods “as part of a historic march toward free trade and economic integration, or as but a brief interlude between eras of trade restriction and economic nationalism”? Continuing, he asked, “Is some variety of statism, rather than a system based on individual initiative and market force, the wave of the future? If so, is the grand wartime design for a liberal international economy ultimately destined for the dustbin of history?”6 In contrasting statism with the wartime planners’ vision, Gardner was not simply an early exponent of what a later generation would call neoliberalism. He did not object to all forms of involvement of the state in economic affairs—far from it.7 Rather, by statism he had in mind the economic nationalism that characterized German, Italian, and Japanese policy during the 1930s, and that had found such willing imitators from central Europe to South America. Hence it was not the soft forms of postwar corporatism that troubled him, at least to the extent that these remained contained by robust democratic institutions and consistent with international law. Instead, what he feared was the organization of the world into rival economic blocs, each dominated by its own metropole, and with trade relations between the blocs subject to careful supervision. Any movement in that direction would represent a reversal of Cordell Hull’s program of robust trade internationalism and “a major detour from the movement toward the conscious and co-operative management of money on a global basis that was charted at Bretton Woods.”8 What would such a detour entail? To begin with, a return to statism would include not only extensive controls on trade but probably some variant of the restrictive currency practices that had accompanied these during the Nazi era.9 Writing shortly after the war, George Orwell explored the political corollary to the National 4. “I am not...

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