Stage: Proof Chapter No.: 1
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Comp. by: SSENDHAMIZHSELVAN Stage: Proof Chapter No.: 1 Title Name: GEYERandTOOZE Date:2/2/15 Time:14:35:35 Page Number: 50 Such liberal sentiments were easy to agree on. The dif ficult work of post-war economic planning had begun in a much more con flictual way over the demands of Article VII of the 1940 Lend-Lease Agreement, which speci fied
that Britain ’s receipt of American aid was contingent upon its commitment to non-discrimination in post-war trade – in other words, to the removal of the system of imperial preference it had erected at the 1932 Ottawa Conference. Under in
fluence of the free trade Secretary of State Cordell Hull, the USA targeted the economic blocs created by the British as well as the Germans and Japanese in the 1930s as one of the primary causes of the outbreak of the war and the first set of obstacles to be removed in reshaping post-war international order according to American globalist designs. 30 For the British, on the other hand, the commonwealth system of trade restrictions and currency controls, even if it was tarred with the brush of Schachtianism, seemed to offer the surest means of coping with what promised to be its catastrophic post-war balance of payments de ficits, particularly if the US economy went into downturn after the war, as many feared, and transmitted the de flationary effects of its recession abroad. British imperialists and conservatives feared that abolishing imperial preference would threaten the political survival of the Empire, while the left worried it would make the pursuit of full employment and post-war social insurance schemes impos- sible.
31 In December 1942 the publication of William Beveridge ’s scheme for comprehensive post-war social security had attracted attention across Europe and spurred on a flurry of economic and social planning. 32 With the publica- tion of the White Paper on Employment Policy in 1944, Britain ’s wartime coalition had of ficially committed itself to guaranteeing post-war employ- ment. 33
reconciled with the constraints of a liberal international order? In August 1941, in an effort to seize the initiative, Keynes had begun working on a plan to guarantee that the British re-entry into a multilateral 30 G. John Ikenberry, ‘Creating Yesterday’s New World Order: Keynesian “New Think- ing
” and the Anglo-American Postwar Settlement’, in Judith Goldstein and Robert O. Keohane, eds., Ideas and Foreign Policy: Beliefs, Institutions, and Political Change (Ithaca: Cornell University Press, 1993), pp. 57 –86 (pp. 63–6). 31 Richard N. Gardner, ‘Sterling–Dollar Diplomacy in Current Perspective’,International Affairs 62 :1 (1985), 21 –33 (p. 23). Alfred E. Eckes, A Search for Solvency: Bretton Woods and the International Monetary System, 1941–1971 (Austin: University of Texas Press, 1975), p. 51. 32
1945: British Politics and the Second World War (London: Quartet, 1977), p. 171. 33 Jim Tomlinson, ‘Why Was There Never a “Keynesian Revolution” in Economic Policy?
’,Economy and Society 10:1 (1981), 72–87. a d a m t o o z e a n d j a m e s r . m a r t i n 50
Comp. by: SSENDHAMIZHSELVAN Stage: Proof Chapter No.: 1 Title Name: GEYERandTOOZE Date:2/2/15 Time:14:35:36 Page Number: 51 system would be as little damaging to its post-war position as possible. His original designs called for the creation of an International Clearing Union that would settle payments by means of a new international currency called bancor. Rather than facing the merciless discipline of the financial markets, member states would have access to overdraft facilities in a new international bank, which they could use to cushion any necessary adjustment in their balance of payments. This system would accommodate Britain ’s status as international debtor, as it would force creditor countries, like the USA, to make their surplus available to countries in de ficit. Keynes envisioned a system of quasi-automatic rules requiring adjustment by surplus as well as de ficit economies, thus replicating by organizational means the self- equilibrating powers once attributed to a certain idealized vision of the gold standard. In late 1941 of ficials in the USA began work on their own schemes for an international monetary system, one better re flecting the dominant position of the USA as the world ’s dominant creditor. Responsibility for post-war economic planning had moved from the State Department into the hands of a group of Keynesian-minded economists around Harry Dexter White in Henry Morgenthau ’s Treasury. Perhaps not surprisingly, the Americans showed little interest in a synthetic global currency. Instead, in April 1942, White
’s team proposed the creation of an International Stabilization Fund, which would provide financial assistance to member states experiencing temporary balance of payments dif ficulties, and a Reconstruction Bank, for post-war relief and redevelopment. Membership in the Fund would require states to remove exchange controls, lower tariffs, and relinquish sovereignty over adjusting their exchange rates without supranational approval. 34 With funds of $5 billion subscribed by its members, White ’s Stabilization Fund would have broad discretionary powers to determine which de ficit countries were eligible for its financial assistance. Crucially, this would give the USA, as the largest contributor to the Fund, the right to exercise oversight over all its members and to have the final say in who received assistance. 35 Unlike in Keynes ’s project, no requirements were placed on the surplus members of the system to address the inadequate level of domestic demand that was the necessary concomitant of their export surplus. 34 Eckes, A Search for Solvency, p. 48. 35 Harold James, International Monetary Cooperation since Bretton Woods (Oxford University Press, 1996), p. 41. The economics of the war with Nazi Germany 51
Comp. by: SSENDHAMIZHSELVAN Stage: Proof Chapter No.: 1 Title Name: GEYERandTOOZE Date:2/2/15 Time:14:35:36 Page Number: 52 While the plans of Keynes and White differed on the roles to be played by their proposed international institutions, both the British and the American negotiators shared a broad understanding of what ‘the economic lessons of the 1930s ’ called for. Whilst British and American experts agreed on the need to return to a system of fixed exchange rates and to remove exchange controls and clearing arrangements as quickly as possible, they also envi- sioned a system that gave states greater latitude to intervene in their national economies than had been possible under the gold standard. Given the speculative attacks which had undone the global financial system in the early 1930
s there could be no return to the world of before 1914 when capital had moved without restrictions. Nor should maladjusted parities force damaging de flations. Better to adjust the par value of currencies in a coordinated fashion, on the lines of the Tripartite Agreement with France in 1936, thus enabling stimulative and full employment policies to be maintained even in the face of external pressure. In this way, the tools of national economic governance, which had been used to underpin aggressive rivalry in the 1930s, would be reconciled with the disciplined cooperation of a restored inter- national economy. 36 Negotiations over the Keynes and White plans began in the summer of 1942 , and a compromise on monetary matters, unlike on the politically explosive issue of trade, was achieved relatively quickly. In September 1943, Keynes dropped his idea of the Clearing Union and by April 1944 the British had accepted a modi fied version of the original White Plan with a larger stabilization fund. 37 A conference to finalize the details of the Keynes–White plans was organized for July 1944, just three weeks after the D-Day invasion, at the Bretton Woods resort in New Hampshire, to which representatives from forty-four non-Axis countries were invited. Whilst a lot of time was spent in arguing over IMF quotas and the topic of trade barriers was avoided for fear of producing an immediate deadlock, the conference was decisive in another respect. During the proceedings, it became clear that as the war had taken such a disastrous toll on the stability of all the other major world economies, the US dollar alone would play the key role at the heart of the new monetary system. Fixed to gold at $35 an ounce, the US dollar would become the world ’s de facto currency of reserve, with the value of all other currencies pegged at adjustable rates. 36 John Ruggie, ‘International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order ’, International Organization 36:2 (1982), 379–415. 37 Eckes, A Search for Solvency, p. 105. a d a m t o o z e a n d j a m e s r . m a r t i n 52
Comp. by: SSENDHAMIZHSELVAN Stage: Proof Chapter No.: 1 Title Name: GEYERandTOOZE Date:2/2/15 Time:14:35:36 Page Number: 53 While the Bretton Woods Conference itself was hailed as a success, in the face of the ruined state of the European and Asian economies it did not by itself guarantee an immediate return to the multilateral world economic system that US planners had envisaged. For economies in the state of Italy or France any immediate return to full-blown international competition was unthinkable. As the war ended, a high stakes struggle began in which questions of grand strategy, financial and economic reconstruction were inextricably intertwined. Already in December 1945, the Soviets, with whom Harry Dexter White had carried on surreptitious negotiations, indicated that they would refuse to join the Bretton Woods institutions, in one of the first
moves that suggested the wartime alliance would not long outlast the peace.
38 And even among the capitalist powers, the wartime visions of the post-war order proved bitterly divisive. Planning for the creation of an International Trade Organization (ITO) began in earnest only in December 1945 , by which point the wartime enthusiasm for internationalist experimen- tation had already mostly faded. 39 The Charter for the ITO laboriously agreed upon at Havana in March 1948 was promptly voted down by the US Congress, leading to the opening of a new round of conferences, known optimistically as the General Agreement on Tariffs and Trade (GATT). 40 Tariffs, however, were a secondary consideration if countries lacked the currency to make imports. And after 1945 one problem dominated all others – the world-wide shortage of dollars. In 1945 the booming US economy was responsible for a record share of 60 per cent of all manufacturing world-wide. The dollar gap thus came to stand as the main obstacle to reconstruction. The situation was particularly manifest in the British case, which emerged from the war as America ’s major ally and as the second largest economy in the world, but also as America ’s largest debtor, owing $12 billion to the USA, in addition to 3.7 billion in sterling balances, valued at between $12 and $16 billion depending on the exchange rate, to the Empire and other creditors. The UK thus became the crash test dummy for the new economic order. 41 In 1946, the USA agreed on a loan of $3.75 billion to Britain, on the condition that London move to the full implementation of the Bretton Woods model of fixed, but fully convertible 38 James, International Monetary Cooperation, pp. 68 –71. 39 Ibid., pp. 62 –3. 40 Richard Toye, ‘Developing Multilateralism: The Havana Charter and the Fight for the International Trade Organization, 1947 –1948’, International History Review 25:2 (2003), 282
–305. 41 Eckes, A Search for Solvency, p. 280. The economics of the war with Nazi Germany 53
Comp. by: SSENDHAMIZHSELVAN Stage: Proof Chapter No.: 1 Title Name: GEYERandTOOZE Date:2/2/15 Time:14:35:37 Page Number: 54 currencies in June 1947. As the other signatories to Bretton Woods looked on and its reserves rapidly drained away, Britain suffered a currency crisis so severe that within only six weeks it had to abandon convertibility and retreat to wartime exchange controls. Clearly any implementation of the wartime designs would have to wait. This debacle gave new impetus to the joint- European investment programme announced by Secretary of State George Marshall, which promised as much as $16 billion in investment to raise European productivity so that it could hold its own in trade with the USA. But not only was this a tall order in economic terms, it was a red flag to the Soviet Union. After Bretton Woods in 1945, the offer of Marshall aid to the countries occupied by the Red Army in 1947, followed in June 1948 by the introduction of the new currency the Deutschmark in the British and Ameri- can zones would mark crucial moments in the escalation of the Cold War. Rather than unifying the world, the Anglo-American post-war architecture would come to mark the front line, in a confrontation in which armed blocs de fined as much as their economic systems as their politics would divide the world between them. After the Second World War the idea of restoring something like a true state of peace as the foundation for a reconstructed world economy slipped away even more quickly and radically than it had done after the First World War. Within only five years of the end of the war, the communist invasion of South Korea turned the Cold War into a major shooting war that required a dramatic remobilization of both the US and British economies and unleashed a tidal wave of in flation in global commodity markets. The Marshall Plan was supposed to culminate in 1952 with restoration of competitiveness such that Europe could make good on the institutional design of Bretton Woods. The Korean War and the entanglement of the French and British in wars of decolonization set that back to 1958. Nor was this merely an adjustment in time line. What NATO believed itself to be facing after 1950 was the imminent possibility of all-out Soviet assault. The hypothetical of total war, which had overshadowed the 1930s, returned with a vengeance. In the early 1950
s defence spending in Britain and France exceeded 10 per cent. In the USA it peaked in 1953 at 15 per cent of GDP. These figures were high even by the standards of the 1930s arms race. They were triple the figures that had been normal among European powers before 1914 and ten times what the US federal government had been in the habit of spending on defence up to 1940. What we should be asking about the organization of the capitalist world after the Second World War is not how war was left behind, but how, unlike in the 1930s, a prolonged state of high mobilization was made sustainable. On a d a m t o o z e a n d j a m e s r . m a r t i n 54
Comp. by: SSENDHAMIZHSELVAN Stage: Proof Chapter No.: 1 Title Name: GEYERandTOOZE Date:2/2/15 Time:14:35:37 Page Number: 55 the weaker members of the Western coalition, above all France and to a lesser extent Britain, this took its toll. As in the 1930s high military spending was combined after 1950 with very rapid economic growth. But this time, despite the lop-sided quality of this growth boom and despite the fact that it favoured Germany, it was contained within a set of international economic, financial and security institutions. These were unprecedented in the sophisti- cation with which they interlinked military, diplomatic, economic, financial
and social concerns. But above all, unlike in the interwar era, they were securely founded on both sides of the Atlantic. The economics of the war with Nazi Germany 55 Yüklə 302,82 Kb. Dostları ilə paylaş:
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