Authors Debate Impact of Bretton Woods on IMF, Past and Future

Bretton Woods conference epitomized multilateral cooperation

Views diverge on Harry Dexter White: hero or Soviet spy?

IMF’s new “intellectual suppleness” bolsters its credibility

The authors of three books on the IMF and Bretton Woods and The Economist U.S. economics editor Greg Ip discussed their books and the future of the IMF, in a first-ever F&D-sponsored event moderated by University of Waterloo professor Bessma Momani, during the IMF-World Bank Spring Meetings on April 19.

The discussion was kicked off by Jim Boughton—former IMF historian and author of two histories of the Fund—describing the context of the Bretton Woods conference, which was ultimately an attempt to create financial stability and global peace.

He vigorously disputed the argument in Benn Steil’s book, The Battle of Bretton Woods, that Harry Dexter White “had a soft spot for socialism” and was in fact a spy for the Soviets. Boughton pointed out that the Soviet Union and the United States were not enemies at the time, and Dexter White was simply doing his job as a U.S. Treasury official by meeting regularly with his Soviet colleagues.

Treasury hunt

Kurt Schuler, co-editor of The Bretton Woods Transcripts, described his discovery of the previously unpublicized transcripts of the founding conference, complete with handwritten notes, on an out-of-the-way shelf in the U.S. Treasury’s library. While the results of the conference were well known, it was fascinating to read the blow-by-blow accounts of compromises that had been reached and who had advocated what.

An underlying theme in the transcripts was the need for the institutions to take into account the views of countries both large and small, Schuler added. That gave their decisions the universality needed for international legitimacy. For example, a suggestion from a Mexican delegate led to the requirement that decisions by the IMF’s Board of Governors attain not only a two-thirds majority of the votes, but also the support of one half of the institution’s member countries.

The spirit of multilateral cooperation described in the transcripts presented a romantic view of the Bretton Woods conference, observed Momani.

By contrast, Steil viewed the conference more cynically, arguing that it had succeeded because the United States held all the cards. It controlled two-thirds of the world’s monetary gold stock at Bretton...