5 - Keynes’s Road to Bretton Woods: An Essay in Interpretation

Summary

“The delegates did not reach an “agreement.” They merely signed a paper which looked like an agreement.” As the well-known story of Bretton Woods has it, there were two plans, the White Plan and the Keynes Plan. The White Plan, from the U.S. Treasury, championed liberal internationalism; the Keynes Plan, from the British Treasury, tried to secure for Britain sufficient freedom from international pressures to be able to pursue full employment and other desirable social policies. The British saw internationalism as a constraint, the Americans as an opportunity. The Bretton Woods Agreement was a successful attempt to reconcile these two views; each country accommodated the requirements of the other, without sacrificing its own aims. The result was the “golden age” of the 1950s and 1960s, so different from the interwar years. In 1946, President Truman called the Agreement “a cornerstone upon the foundation of which a sound economic world can - and must - be erected.” And a leading historian of the Agreement wrote in 1978 that “during a quarter of a century” it had stood as the “foundation upon which world trade, production, employment and investment were gradually built.”