Pillaging the World
Pillaging the World
The Bretton Woods Conference:
Starting out with Blackmail
While the Second World War was still raging in Europe, in July 1944, the United States invited delegations from 44 countries to the small ski resort of Bretton Woods, New Hampshire. The official aim of the conference, held for three weeks in the luxurious "Mount Washington" hotel, was to define the basic features of an economic order for the post-war period and to provide the cornerstones of a system that would stabilize the world economy and prevent a return to the situation that had existed between the two world wars. The 1930s in particular were distinguished by high inflation, trade barriers, strongly fluctuating exchange rates, gold shortages and a decline in economic activity by more than 60 %. Furthermore, social tensions had constantly threatened to break down the established order.
The conference had been preceded by several years of secret negotiations between the White House and Downing Street which had already been working on plans for a new world monetary order since 1940. A recorded comment from the head of the British delegation, the economist Lord Keynes, sheds light on the former elite's attitude towards the interests and concerns of smaller countries: "Twenty-one countries have been invited which clearly have nothing to contribute and will merely encumber the ground... The most monstrous monkey-house assembled for years." 2
It did not take long before their contemptuous attitude rebounded on Lord Keynes and his compatriots. During the course of the conference, it became increasingly clear how much the global balance of power had shifted to the disadvantage of Great Britain. Excessive war spending had turned the country, already severely weakened by the First World War, into the world's biggest debtor and pushed it to the brink of insolvency. Great Britain's economy was on its knees and the rise of the liberation movements around the world already heralded the final breakup of its once global colonial empire.
The undisputed victor of the Second World War, however, was the United States. Having become the largest international creditor, it held nearly two-thirds of the world's gold reserves and commanded half of all global industrial production. In contrast to most European countries its infrastructure was intact and while its delegation engaged in negotiations at Bretton Woods, the US army's general staff planned a nuclear assault on the Japanese cities of Hiroshima and Nagasaki in order to emphasize America's claim to global dominion.
As a result of this new balance of power, Lord Keynes' plan for a new economic order was flatly rejected. Representing a country with substantial balance of payments problems, he had proposed an "international payments union" that would have given countries suffering from a negative balance of payments easier access to loans and introduced an international accounting unit called "Bancor" which would have served as a reserve currency.
The US, however, was unwilling to take on the role of a major creditor that Keynes' plan had foreseen for it. The leader of their delegation, economist Harry Dexter White, in turn presented his own plan that was finally adopted by the conference. This "White Plan" conceptualized a world currency system never before seen in the history of money. The US dollar was to constitute its sole center and was to be pegged to all other currencies at a fixed exchange rate while its exchange relation to gold was to be set at $ 35 per ounce of fine gold. The plan was supplemented by US demands for the establishment of several international organizations designed to monitor the new system and stabilize it by granting loans to countries facing balance of payments problems.
After all, Washington, due to its size and rapid economic growth, ha