The Failure of Economic Diplomacy: Britain, Germany, France and the United States, 1931-36 (original) (raw)
Related papers
1970
From the ©nd of World % r X throu#i 1932. the Cniied Kingdom, til ©pit© of its economic depression, remained the primary soure# of capital for the world* Following the war, however, the United State© replaced t the United Kingdom as the major source of foreign capital in Europe. American postwar loans, combined with the effects of the war# brought monetary and economic instability to Europe, Consequently, throughout-_ the 1 9 2 0 *$ and early 1 9 3 0 '© the central banking establishment and a relatively small number of diplomats, ■ businessmen and economists made an effort, through the league of nations, to attempt to achieve monetary internationalism as the basis of European economic stability and political unity, these adherents of monetary internationalism were deeply interested in achieving world ■ ©commie recovery and opposed the rising tide of protectionism and monetary nationalism which they believed was tending to-stifle international finance and trad©.2 William Woodruff, Impaot of Western Mam (lew forks St. Martin*s Frets, 1 9 6 7), pp. 150, 15 2 / ? S .
Peter Temin and the Onset of the Great Depression in Germany: A Reappraisal
1999
I. Introduction Having rational expectations is not always comfortable. Archival historians tell us the story of the international central bankers' meeting at Long Island in 1927, where Benjamin Strong, then governor of the Federal Reserve Bank of New York, predicted that within two years' time, the worst depression in history would set in, the only question being whether it would break out in Germany or in the U.S. (see Link, 1970). What concerned central bankers at the time was the stabilization of the gold standard in a heavily changed international environment. The prewar monetary system had largely rested on Britain's unquestioned role as the world leader in capital exports. The flow of revenues these overseas investments generated helped to stabilize the British balance of payments in times of recession. This, in turn, made it easy for the Bank of England to conduct the international orchestra of monetary policies (using a phrase coined by Eichengreen, 1987) even in the absence of large gold reserves of her own. After World War I, these conditions no longer existed. Britain had used up many of her foreign investments, notably in the U.S. to finance World War I. In addition, large war loans had flown from the U.S. to Europe. As a consequence, the U.S. converted into the world's largest creditor and would now have to assume the role of the orchestra's conductor. The fundamental difference with prewar times was that Europe's recovery from the war was not going very well. Britain had suffered severely from the deep recession of 1920 and later followed deflationary policies to stabilize its currency at the prewar parity.
The Historian, 2016
Battle of Bretton Woods provides a detailed historical account of the events and key players surrounding the Bretton Woods conference of 1944 and the rise and fall of a new world order. While the book focuses on Harry Dexter White, the main architect of the revamping of the global financial system, the story behind the Bretton Woods system, as Steil reveals was essentially a battle between two influential thinkers, White and John Maynard Keynes, each defending the economic interests of their respective countries. The book describes not only the central economic ideas, sources of contention, and personas of White and Keynes, but also offers important implications for the future of global financial stability today. In Chapter 1, Steil explains his motivation. Following the 2008 global financial crisis, political leaders have called for a rethinking of the global financial system. A similar demand followed World War II, which resulted in an international conference in Bretton Woods, New Hampshire, and the establishment of a new monetary system in 1945. Fortyfour nations attended, and Bretton Woods became a battle between White and Keynes. Both sought to establish global financial stability by ending gold shortages; also, each wanted to secure international prominence for his country's currency. Through these two characters, Steil uncovers overlooked details of historyin particular, a Soviet-minded White representing US anti-colonial interests, and a discouraged, powerless Keynes representing British imperialist interests. Chapter 2 describes the historical backdrop of the conference, which took place during the Allied invasion of Normandy, and provides a brief history of the conference location, the Mount Washington Hotel. War developments are interspersed to capture this turbulent period in history. The chapter also elaborates on the US perspective on Bretton Woods by outlining the conference's opening speech, given by US Treasury Secretary Henry Morgenthau. His assertions reveal that the conference was largely based on defining an agreement between the United States and Great Britain that would secure the United States as an economic superpower and put an end to British imperialism. The next two chapters return to White and Keynes. They describe each man's upbringing and career to shed light on their motives in creating a new global financial system. Steil first focuses on White, tracing his progression from humble upbringings to US Treasury economist. Again, Steil alludes to White's secret Soviet relations, which began in 1935, almost 10 years before the conference. Although his views were not Marxist, White nonetheless did expect an eventual convergence of Western economies to the Soviet economic model of complete government control. Keynes began his career in the British Treasury and became a highly respected economist. His celebrity, however, is thoroughly downplayed and even overshadowed by White's character. Both had Keynesian economic views and defended the gold standard, although Keynes advocated progressively reducing gold's economic role. Both sought to promote their country's financial capital as a global financial center. Such motives underpinned their dissent.
The European Journal of the History of Economic Thought, 2009
This paper examines Jacob Viner's contribution to the debate and the policy decision making concerning international monetary policy from the Great Depression to the Bretton Woods agreements. An outstanding member of the so called "early Chicago School of Political Economy", Viner was actively engaged in the debate over the causes and cures of the depression, emphasizing the important role international economic problems played in producing its onset and in reinforcing its duration. During the 1930's Viner was an outspoken supporter of international monetary cooperation, set up to secure exchange rates stability, which he regarded as a paramount factor in restoring business confidence and fostering recovery. As a close assistant to Secretary of the Treasury Henry Morgenthau, Jr. Viner was able to exert a positive influence on the administration's foreign economic policy, from the Gold Stabilization Act of 1934 to the Tripartite agreement of 1936. Though not directly involved in the Bretton Woods Conference, he played a role in preparing the ground for the establishment of multilateral agencies such as the IMF and the IBRD. By means of his unpublished papers and other archival sources, as well as his writings, we will examine Viner's analysis of the Great Depression, his contribution to the debate over American foreign economic policy and his work as economic adviser from 1930 to 1945.
Floating the System: Germany, the United States, and the Breakdown of Bretton Woods, 1969?1973
Diplomatic History, 2007
Any number of physical metaphors might describe the crumbling, unraveling, or just plain collapse of the American-made postwar order during the late 1960s and early 1970s. In the realm of international monetary relations, the closest approximation might be a whirlwind: fixed exchange rates came flying apart. The Bretton Woods system, constructed so painstakingly by the "architects of globalism" two and a half decades earlier, proved all too susceptible to centrifugal motion. 1 The rupture in stable monetary relationships was permanent; viewed from a longer-term perspective, the early 1970s marks a caesura in the way the industrial West conducts its business. Before this time, fixed exchange rates had prevailed as an ideal for a century or more, despite the strains of the interwar years. 2 After the breakdown of Bretton Woods, corporations, governments, and even tourists learned surprisingly quickly to navigate amid the ebb and swell of continually floating currencies. But the moment of transition was traumatic for all involved. Americans saw their almighty dollar humiliated as currency traders fled the greenback; European and Japanese exporters felt their competitive edge slipping as their currencies swayed to and fro. An ill-timed experiment in European monetary union swiftly blew away. Even before the famous "oil shock" in late 1973, the Western industrial economies were in disarray. Typically, historians identify American behavior as the driving force of this ill wind. In this reading, Washington's inability to control inflation and trade deficits led to a steep decline in confidence in the dollar. "Benign neglect" of the balance-of-payments problem and a ruthless, neomercantilist pursuit of American interests led the Nixon administration to suspend the convertibility of the dollar into gold in August 1971. One last, American-brokered effort to reestablish fixed exchange rates at the Smithsonian Conference of December 1971 soon faltered, thanks to Richard Nixon's demand for "easy money" in advance 3. For overviews along these lines, see Diane B.
The Global Economic Crisis through the prism of the Great Depression
Management: Journal for Theory and Practice Management, 2014
This paper presents the main aspects of the 2008 global economic crisis through the prism of the Great Depression of the 1930s. The aim of this paper is to illustrate the importance of the lessons learned in the Great Depression in overcoming the modern global economy disorders by analyzing the causes of the crisis and the response from the US economic policy. The methods employed in the paper are the following: the method of analysis, the comparative method and the method of deduction. An analytical review of the US anti-crisis economic policy based on relevant statistical data has been presented. The survey results clearly indicate that the crisis has led to a sudden reaffirmation of Keynesian economic policies. The monetary policy was extremely expansionary. The Fed cut its key interest rates to a record low and through open market operations significantly expanded its assets. Confidence in the banking system was preserved and the risk of deflation avoided. The fiscal policy was ...
The ‘Hemisphere Isolationists’ and Anglo-American Economic Diplomacy during the Second World War
The years following the entry of the United States into the Second World War have often been characterised as witnessing the triumph of internationalism in the country. In this analysis the Japanese attack on Pearl Harbor in December 1941 finally forced the US to abandon its former isolationism, which had shaped the country's foreign policy over the previous decades. In its place the US took the leading role during the war years in the construction of a new world order, based on internationalist principles. The most dramatic expression of this polity came in the US support for an international organisation, based on collective security, to preserve world peace. 1 Such internationalist principles can also be construed in the Franklin D. Roosevelt administration's advocacy of a multilateral economic system for the post-war world, based on free and equal access for all nations to the world's markets and resources. The chief proponents of this system were a group of economic internationalists in the State Department, led by Secretary of State Cordell Hull. 2 The motivation behind economic multilateralism, according to this group, went way beyond the realm of commerce. Rather, advocates of Thomas C. Mills 2 multilateralsim believed the freer trade achieved by nations would lead to greater prosperity for all. Such prosperity, so the argument went, would eliminate the bases of the economic nationalism that had ultimately led to war. 3 Economic multilateralism, then, would pave the way for lasting international peace. Understood in this way, the Roosevelt administration's economic ambitions for the post-war world were much more than a single constituent part of a broader internationalist agenda; they were the vital lynchpin upon which an internationalist conception of the post-war world rested.
The 1930s and the present day - crises compared
Economic Affairs, 2009
Journal Vol.29,Issue 4, pages 80-82 Many analysts are comparing the deep crisis of our times with the crash of 1929 and the Great Depression that followed in the 1930s. They generally argue that Barack Obama is driving the world to recovery along Roosevelt's ‘state superiority’ line. Alas, today's crisis rings alarm bells for the manner in which we must manage the future of democracy, the state and markets. Markets cannot be ‘ordered about’ and when in the face of sound logic and practice an attempt is made to do just this, markets become refractory, or – even worse – they may collapse.