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In the wake of the 2008 financial crisis and the ensuing global economic downturn, it has become commonplace for politicians, pundits, and economists to invoke the memory of Bretton Woods. In July 1944, in the midst of World War II, representatives of 44 nations gathered in this remote New Hampshire town to create something that had never before existed: a global monetary system to be managed by an international body. The gold standard of the late nineteenth century, the organically formed foundation of the first great economic globalization, had collapsed during the previous world war. Efforts to revive it in the 1920s proved catastrophically unsuccessful. Economies and trade collapsed; cross-border tensions soared. In the 1930s, internationalists in the U.S. Treasury Department saw a powerful cause and effect and were determined to resolve the flaws in the international economic system once and for all. In the words of Harry Dexter White, a then little-known Treasury official who became the unlikely architect of the Bretton Woods system, it was time to build a "New Deal for a new world." Working in parallel and in prickly collaboration with his British counterpart, the revolutionary economist John Maynard Keynes, White set out to create the economic foundations for a durable postwar global peace. Governments would be given more power over markets but fewer prerogatives to manipulate them for trade gains. Trade would in the future be harnessed to the service of political cooperation by ending shortages of gold and U.S. dollars. Speculators who stoked and profited from fears of such shortages would be shackled by strictures placed on the frenetic cross-border flows of capital. Interest rates would be set by government experts schooled in the powerful new discipline of macroeconomics, which Keynes had been instrumental in establishing. A newly created International Monetary Fund (IMF) would ensure that exchange rates were not manipulated for competitive advantage. Most important, budding dictators would never again be able to use barriers to trade and currency flows as tools of economic aggression, ruining their neighbors and fanning the flames of war.Despite having never held any official title of importance, White had by 1944 achieved implausibly broad influence over U.S. foreign and economic policy. Grudgingly respected by colleagues at home and counterparts abroad for his gritty intelligence, attention to detail, relentless drive, and knack for framing policy, White made little effort to be liked. "He has not the faintest conception how to behave or observe the rules of civilized intercourse," Keynes groused. Arrogant and bullying, White was also nerve-ridden and insecure, always acutely conscious that his tenuous status in Washington depended wholly on his ability to keep Treasury Secretary Henry Morgenthau, a confidant of President Franklin Roosevelt with limited smarts, armed with actionable policies. White often made himself ill with stress before negotiations with Keynes, and then exploded during them. "We will try," White spat out during one particularly heated session, "to produce something which Your Highness can understand."...Over the course of 11 years, beginning in the mid-1930s, White acted as a Soviet mole, giving the Soviets secret information and advice on how to negotiate with the Roosevelt administration and advocating for them during internal policy debates. White was arguably more important to Soviet intelligence than Alger Hiss, the U.S. State Department official who was the most famous spy of the early Cold War.
The Keynesian/Roosevelt economic system was work of a Soviet spy
