Be Careful What You Wish For

Toward the end of the Second World War, at a conference in Bretton Woods, New Hampshire, the United States put forward a radical—some said utopian—plan for world peace. Having watched the worst war in history follow on the heels of the worst economic crisis in history, American policy makers were convinced that the answer to global peace lay in spreading global prosperity. Or as President Franklin D. Roosevelt put it, “we cannot succeed in building a peaceful world unless we build an economically healthy world.” The bold aim of the Bretton Woods architects was to construct an open, integrated and dynamic world economy on the foundations of a triumvirate of new international organizations. An international monetary fund would restore exchange rate stability and encourage monetary cooperation—preventing a return to the currency wars and financial chaos of the 1930s. A world bank would provide soft loans for rebuilding war-torn countries and for accelerating economic development...