THE FOLLY OF EMPIRE by JOHN B. JUDIS

Author:JOHN B. JUDIS
Language: eng
Format: epub
Publisher: A LISA DREW BOOK/SCRIBNER
Published: 2004-07-15T00:00:00+00:00

In 1942, Morgenthau and White introduced a plan for what was originally called a United Nations Stabilization Fund and a Bank for Reconstruction of the United and Associated Nations. After negotiations, primarily between White and British economist John Maynard Keynes, forty-three nations, meeting in Bretton Woods, New Hampshire, agreed, in July 1944, to establish two institutions, the International Monetary Fund (IMF) and the International Bank for Recovery and Development (IBRD, later simply called the “World Bank”). Their purpose, the plan originally stated, was “to prevent disruption of foreign exchanges and the collapse of monetary and credit systems; to assure the restoration of foreign trade; and to supply the huge volume of capital that will be needed virtually throughout the world for reconstruction, relief and for economic recovery.” 30 But their broader purpose was to create the economic conditions for an enduring peace. By putting debt relief and development assistance in the hands of international institutions, the plan removed a principal means by which imperial powers had won control over the finances of Asian, African, and Latin American nations. Historian Carl Parrini writes that during the heyday of Western imperialism

governments and bankers of the industrial countries used currency loans to developing countries as levers to obtain monopolistic investment outlets. The IMF neutralized this by giving U.S. and European governments mutual vetoes over one another’s ability to do this. In similar fashion the IBRD was supposed to provide that [contracts for] infrastructure in the developing world would be parceled out on the basis of the Open Door of competitive bidding. 31

In the Senate, Republican nationalists threatened to defeat the Bretton Woods Agreement. Ohio senator Robert Taft described the treaty as “pouring money down a rat hole” and complained that “no international body should have any jurisdiction over the domestic policies of the United States.” 32 During Senate hearings, White responded to Taft’s charges:

And if you say that we are not in control in the sense that we should be in a position to ram down the throats of every other country whatever the opinion of the United States should be, I say that is not in the Fund Agreement, and I say that the representatives of this country at Bretton Woods would be the first to insist that it should not be. After all, the Fund Agreement provides for an international institution, not machinery to impose our views on others. 33

White’s candid explanation of the treaty was perfectly consistent with Wilson’s approach: the Roosevelt administration was seeking to fulfill its mission in the world through working cooperatively with other nations. But according to Richard Gardner, who wrote a definitive history of Bretton Woods, White’s candor enflamed the Republican opposition. White and the administration had better luck when they argued that the treaty would help American business and when they explained how it would prevent wars. Said White: “I think history will look back and indict those who fail to vote the approval of the Bretton Woods proposals in the same way that

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