## A New Global System

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### Overview of the volume
- Marks the 75th anniversary of the Bretton Woods Agreement of July 20, 1944.
- Presents basic documents and essays on the Bretton Woods system and its institutional ensemble (IMF, IBRD, and, three years later, the General Agreement on Tariffs and Trade).
- Situates these institutions as technically subordinate parts of the United Nations and as part of a broader reaction against laissez-faire capitalism and the interwar economic disorder of 1929–32 and the 1930s.

### Monetary history and debate
- Editors Naomi Lamoreaux and Ian Shapiro, and Jeffrey Frieden argue the pre-1914 gold standard worked because of wage and price flexibility; this view is contrasted with Charles Kindleberger’s thesis that success was due to British management of the standard.
- Barry Eichengreen contributes a detailed essay; the review questions whether the 1944 fixed-but-adjustable peg system was brought down in 1971 specifically by the US dollar’s link to gold.
- Argument noted: Any reserve currency must maintain confidence of its holders; modern inflation targeting can be as much a commitment to sound money as gold convertibility.
- Michael Bordo’s view highlighted: it was US inflation from the late 1960s — not the gold link per se — that broke the system.

### Institutional and geopolitical themes
- The IMF was part of an interlocking set of institutions including the IBRD (progenitor of the World Bank).
- Harold James’s essay: the Bretton Woods agreement insulated monetary settlement from interminable trade disputes, contributing to a 70 years period that held off trade wars.
- The volume gives significant attention to the Global South:
  - Selwyn Cornish and Kurt Schuler show Australia’s unsuccessful efforts to make full employment a central IMF concern.
  - Eric Helleiner documents pressure from countries like China, some in Latin America, and India (tracing an antecedent to a Sun Yat-sen paper in 1920 proposing an “International Development Organization”) as leading to the IBRD’s creation as a “new kind of multilateral framework for development.”

### Paths taken and not taken
- Includes Keynes’s International Clearing Union plan (not widely discussed elsewhere) and proposals for flexible exchange rates (Douglas Irwin).
- Notes an omission worth mentioning: opponents of flexible rates, including Keynes, argued exchange rate depreciation could move away from balance of payments equilibrium depending on price elasticities of exports and imports.

### Critiques and limitations
- The reviewer finds the book’s treatment of the role of a British-managed gold standard underemphasized relative to wage/price flexibility arguments.
- The reviewer expresses disappointment that little thought is given to how the world might escape a looming confrontation between market-led globalization and economic and political nationalism.

### Publication details and reviewer
- Review authored by LORD SKIDELSKY, British economic historian, emeritus professor of political economy at Warwick University, and author of a three-volume biography of John Maynard Keynes.
- Book: Naomi Lamoreaux and Ian Shapiro, eds., The Bretton Woods Agreements, Yale University Press, New Haven and London, 2019, 504 pp., $29.50.

*Finance & Development | June 2019. Review by Lord Skidelsky.*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2019/june/book-review-bretton-woods-agreements.pdf_