The Battle of Bretton Woods

John Maynard Keynes, Harry Dexter White, and the Making of a New World Order

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As World War II drew to a close, representatives from forty-four nations convened in the New Hampshire town of Bretton Woods to design a stable global monetary system. Leading the discussions were John Maynard Keynes, the great economist who was there to find a place for the fading British Empire, and Harry Dexter White, a senior U.S. Treasury official. By the end of the conference, White had outmaneuvered Keynes to establish a global financial framework with the U.S. dollar firmly at its core. How did a little-known American bureaucrat sideline one of the greatest minds of the twentieth century, and how did this determine the course of the postwar world?

The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order tells the story of the intertwining lives and events surrounding that historic conference. In a book the Financial Times calls "a triumph of economic and diplomatic history," author Benn Steil, CFR senior fellow and director of international economics, challenges the misconception that the conference was an amiable collaboration. He reveals that President Franklin D. Roosevelt's Treasury had an ambitious geopolitical agenda that sought to use the conference as a means to eliminate Great Britain as a rival.

Steil also offers a portrait of the complex and controversial White, revealing the motives behind White's clandestine communications with Soviet intelligence officials—to whom he was arguably more important than the famous early–Cold War spy Alger Hiss. "Everything is here: political chicanery, bureaucratic skulduggery, espionage, hard economic detail and the acid humour of men making history under pressure," writes Tony Barber, reviewer for the FT.

With calls for a new Bretton Woods following the financial crisis of 2008 and escalating currency wars, the book also offers valuable, practical lessons for policymakers today.

A Council on Foreign Relations Book


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Reviews and Endorsements

Winner of the 2013 Spear's Book Award in Financial History
 

Third prize in the Council on Foreign Relations' 2014 Arthur Ross Book Award
 

Shortlisted for the 2014 Lionel Gelber Prize
 

One of The Motley Fool's 10 Great Books on Economic History
 

2014 Axiom Business Book Awards Bronze Medal in Economics
 

Bloomberg News top pick of CEOs, policymakers, and economists for Best Book of 2013
 

Named one of the Financial Times' Books of the Year for 2013
 

Named one of Bloomberg News' Top Business Books of 2013
 

One of Kirkus Review's Best Nonfiction Books of 2013
 

One of China Business News' Financial Books of the Year for 2013
 

Should become the gold standard on its topic. The details are addictive.

New York Times

A superb history. Mr. Steil . . . is a talented storyteller.

Wall Street Journal

Steil's book, engaging and entertaining, perceptive and instructive, is a triumph of economic and diplomatic history. Everything is here: political chicanery, bureaucratic skulduggery, espionage, hard economic detail and the acid humour of men making history under pressure.

Financial Times

Steil, a senior fellow at the Council on Foreign Relations, understands the economic issues at stake and has done meticulous research on the history. Every good story that has ever been told about the major actors involved and the happening itself is in his book, and a few more besides. For those who come fresh to the subject, and even for those who know most of it, it is an excellent and revealing account.

Robert Skidelsky, New York Review of Books

An object lesson in how to make economic history at once entertaining and instructive.

Financial Times, 2013 Books of the Year Reading Guide

This masterful account dismantles the idyllic picture of the 1944 Bretton Woods international economic conference, situating it firmly in the tense atmosphere of the final months of World War II.

Laurie Muchnick, Bloomberg Top Business Books of 2013

The publishing event of the season.

Tom Keene, Bloomberg Radio

A superb, carefully researched history that enables readers to view today and tomorrow from the vantage point of the past. Steil's story weaves together geopolitics and geoeconomics, money and currencies, trade and growth—all in the context of the institutions that shape policy choices and the people who struggle to make them. He even includes spies! Steil's closing chapter draws connections between past monetary orders and debates about new ones.

Robert B. Zoellick, former president of the World Bank Group

Benn Steil, a distinguished American economist and writer, has gone behind the myths of Bretton Woods and written a provocative, lively and perceptive book that pulls together economics, politics, diplomacy and history and relates it to our current crisis. . . . This book should be read by George Osborne, Ed Balls, the new governor of the Bank of England and Andrew Tyrie, the grand inquisitor of the [UK] Treasury select committee.

Keith Simpson, Total Politics

This is a fantastic book. Gold and money, two of my favorite topics. It's also brilliantly insightful history, and a gripping spy thriller to boot.

Larry Kudlow, CNBC

[T]he author masterfully translates the arcana of competing theories of monetary policy, and a final chapter explains how, while some of the institutions created by Bretton Woods endure--the World Bank, the International Monetary Fund--many of the conference's assumptions were swiftly overtaken by the Marshall Plan. Throughout Steil's sharp discussion runs the intriguing subplot of White's career-long, secret relationship with Soviet intelligence. A vivid, highly informed portrayal of the personalities, politics and policies dominating 'the most important international gathering since the Paris Peace Conference of 1919.'

Kirkus Reviews, starred review

President Obama would be wise to take it to Martha's Vineyard this summer.

John Tamny, Forbes

In his masterful account, 'The Battle of Bretton Woods,' Steil situates the conference firmly in the tense, heightened atmosphere of the final months of World War II. . . . Steil's book comes alive in his description of [Keynes' and White's] contrasting experiences at the conference.

Sam Knight, Bloomberg Businessweek

Benn Steil not only produces the finest account of the conference that established the Pax Americana economic system after World War II, he does it with the skill of a fine novelist.

Jon Talton, Seattle Times

The Battle of Bretton Woods sets forth in smooth prose and concise detail an authoritative narrative of the who-what-when-why of the great monetary conference of some 70 years ago. It is jam-packed with heady discussions . . . If we're fortunate, Benn Steil will deliver a follow-up.

Kevin R. Kosar, Weekly Standard

[Benn Steil's] new book The Battle of Bretton Woods is perhaps the most accessible study yet of a key moment in world economic history that nonetheless is poorly understood.

Kevin Carmichael, Globe & Mail

[F]ascinating. . . . Steil . . . spins the tale of how U.S. Treasury Secretary Henry Morgenthau, a close friend of President Franklin D. Roosevelt, allowed White, a little-known economist who wasn't even on the U.S. Treasury's regular payroll, to dominate the department's monetary and trade policies beginning in the 1930s.

John M. Barry, USA Today

[A] well-written, fascinating history of the Bretton Woods conference on the international monetary system in July 1941. The book is deep, well researched, and hard to put down. Benn Steil . . . has produced a book that will help us to understand history, but also one we can use to contrast with the current international economic situation. . . . This is a very good book.

John M. Mason, Seeking Alpha

I do hope the title of this riveting read does not put off readers who mistake Benn Steil's latest work for an arcane discussion of exchange rates, the gold standard and the stuff of debates in commons rooms. This book is more than that, much more. It is a tale of a battle of titans and of a war between nations, each intent on establishing the economic architecture that would ensure its postwar economic domination of world finance.

Irwin Stelzer, Sunday Times

[T]hought provoking and well written.

Kathleen Burk, Literary Review

Benn Steil shows that what happened in the mountains of New Hampshire that summer [of 1944] is not quite the story we have been told.

Neil Irwin, WashingtonPost.com

Steil understands the economics at the heart of the tortuous negotiations, but he is also very good at explaining the politics, the power and the passions--the professional and personal rivalries--of the people at the negotiating table. He turns what could have been a dry account of economic accords into a thrilling story of ambition, drama, and intrigue.

Keith Richmond, Tribune Magazine

Epic

. . . Ashok Rao, Vox

This thorough, fascinating account of the international conference that culminated in the 1944 agreement to maintain stable exchange rates skillfully places it in its economic and geopolitical context. . . . Steil not only recounts the intricacies of the deal making but also details the economic dimensions of Bretton Woods. . . . Steil has tirelessly tracked down minute details of the Bretton Woods story and its epilogue [and] offers excellent insight into the tribulations of the key players. He also tells the interesting tale of how, if not for the well-founded suspicions regarding Harry Dexter White's cooperation with Communist spies, the tradition of an American heading the World Bank and a European heading the IMF would have been reversed.

Financial Analysts Journal

[A] masterful (and readable) account of American realpolitik and British delusion.

Andrew Hilton, Financial World

Benn Steil's book combines an economic history with a portrayal of the characters involved in the epoch-defining talks at Bretton Woods . . . entertaining the reader with vivid personality portraits and a lively writing style.

Mike Foster, Dow Jones' Financial News

Benn Steil has just completed a fascinating book that looks at what really happened in the small New Hampshire town of Bretton Woods in 1944. Perhaps most surprising is that the real story that emerges isn't a tale of how 44 countries came together to rebuild the world. And the real story has different lessons for the 21st century than ambitious idealists might expect.

Andrew Sawers, Economia

[H]ypnotically readable

Peter Passell, Milken Institute Review

[F]ascinating . . . [an] often riveting account of these two remarkable men [Keynes and White] and their attempt to design a stable global monetary system, an International Monetary Fund and a World Bank.

Glenn C. Altschuler, Tulsa World

The clash between Keynes and White forms a central theme in Benn Steil's absorbing book, which should be required reading for anyone who wants to understand the not-so-special relationship between the US and Britain.

Geoffrey Owen, Standpoint Magazine

[A] well-documented, engaging account of the Bretton Woods Conference. . . . The material on Harry Dexter White is fascinating . . . an essential reference [with] much to teach economic historians.

Joshua Hausman, Journal of Economic History

The Battle of Bretton Woods is a remarkable work that embraces many disciplines: economic history, political economy and international relations. Benn Steil is able to merge the different perspectives from all these disciplines, taking the reader into both the political battle and the economic thinking . . .

Anna Missiaia, Financial History Review

My visit helped place Bretton Woods in the real world. Steil's book does much the same thing. Individual persons are at the center of the story, which also comes loaded with tales of international intrigue, spycraft, and famous personalities. It's not just for history buffs and economics geeks.

Douglas French, Foundation for Economic Education

Benn Steil [of the] Council on Foreign Relations has written a fascinating book on the two main architects behind the Bretton Woods system . . . Steil's book is an outstanding piece of political science research . . . extremely well written and well documented . . . It is strongly recommended.

Morten Balling, SUERF

[A] splendid book . . . If you want to understand the gold standard, the always-doomed dollar standard, why the IMF is in Washington, how the US deliberately humiliated Britain over debt before, during and after WWII as part of a very real currency war (but also out of genuine anti-colonial sentiment that the British never understood), this is the book for you . . . Every year publishers come out with a couple of purportedly serious books on FX, some by VIPs, and I read them all. This is the only one since Paul Volcker's Changing Fortunes in 1979 that is worth the price. It is non-partisan, well-written, thorough, and chock-full of the historical perspective that can so easily and so often get lost in the hurly-burly of the daily market.

Barbara Rockefeller, Harriman Intelligence

This is an excellent book.. . . [It] also contains some explosive revelations about White's work as a Soviet spy, very well documented I might add.

Tyler Cowen, Marginal Revolution

If you think economics and finance are dry subjects at best, Steil's book offers a refreshing surprise. It's a political thriller in which the protagonists, one whom you think you know and one whom you probably don't, are much more intriguing (in both senses of the word) than they first appear.

Daniel Altman, Big Think

[A] very well-written history, with lively personalities [which] also serves as a great overview of the analytical issues in international monetary arrangements.

Diane Coyle, The Enlightened Economist

[T]his thought-provoking book is about much more than the 1944 conference that established the architecture of the postwar international monetary system, leading to the establishment of the International Monetary Fund and the World Bank.

Foreign Affairs

A gripping account . . . John Le Carre meets international monetary history: this is clearly a different kind of page-turner.

Jayati Ghosh, Economic & Political Weekly

Seduced by Keynes's rhetorical repudiation both of the 'austerity' implied by [promptly paying off Britain's war debts] and the 'temptation' of accepting a loan, the British shipped Keynes to Washington . . . to seek 'justice', to wit, the third option. In his recent history of the period, Benn Steil deftly paints what ensued.

Patrick Honohan, The Irish Times

Steil breathes new life and controversy into a familiar story by emphasizing the intellectual and political clash between John Maynard Keynes and Harry Dexter White.

James McAllister, H-Diplo/ISSF Roundtable

Steil rarely puts a foot wrong. His analysis of policies and personalities . . . reflects a sophisticated understanding of the inner workings of financial diplomacy.

Stephen Schuker, H-Diplo/ISSF Roundtable

[A]n ably crafted narrative.

Darel Paul, H-Diplo/ISSF Roundtable

[The book] is a welcome departure from less political, or more American-centric, accounts of Bretton Woods.

William Glenn Gray, H-Diplo/ISSF Roundtable

[E]ngaging and instructive . . . Benn Steil has written a book full of historical insight and human color.

Robert L. Hetzel, Federal Reserve Bank of Richmond Econ Focus

[T]his is a beautiful narrative of the making of Bretton Woods, based on serious archival research and with some nice old photos as illustrations.

Ivo Maes, History of Economic Ideas

[A] fascinating account of the developments leading up to the Bretton Woods conference and its immediate aftermath, from the point of view of the two main characters involved: John Maynard Keynes and Harry Dexter White. The book is based on extensive archive work, so often the participants speak for themselves, which makes for interesting reading.

Isaac Alfon, Central Banking Journal

Steil's book . . . shows how normally abstruse economic and diplomatic history can be made palatable and even alluring to the general reader.

Christopher Silvester, Spear's

Benn Steil's remarkable book . . . is an account of how the IMF first came to be, back in the sleepy New Hampshire summer of 1944. . . . The Battle of Bretton Woods is an essential volume in any understanding of John Maynard Keynes, who though now seven decades gone is as influential a mind as we may yet see in the twenty-first century.

Brian Domitrovic, Library of Law and Liberty

[A] powerful tale depicting a clash of economic ideas and political motives amidst a war-torn era . . .

Brittany Baumann, Eastern Economic Journal

[A] terrifically written, gossipy account of the origins of Bretton Woods … Since the world spent several decades under the clumsy (and, to the U.S., costly) Bretton Woods regime, and since you sometimes hear people harkening back to that time as a golden age (which it surely was not), … it is an important read for our day.

Dan Littman, Federal Reserve Bank of Cleveland

It's always nice when you can combine outside reading for fun with something that is educational . . . [a] good read that is also good for you.

Daniel Shaviro, Jotwell

[A]n amazing true story . . . highly entertaining.

Ian McMaster, Business Spotlight

This highly accessible and exhaustively researched book tells a truly gripping tale of how, against formidable political odds and global chaos nearly 70 years ago, two iconic economic theorists created a legal framework based on controversial theories that resulted in the basic structure of our global marketplace today.

James Srodes, DC Bar

A valuable addition to the economic history literature.

Choice

Absorbing . . . as an account of history-making at the highest level, this entertaining, informative, gossipy and, for the lay reader, often challenging book provides an excellent read.

Richard Steyn, Financial Mail

Benn Steil provides a well-researched and interesting account of the historic monetary conference . . . His efforts make for an enjoyable read . . . Steil is perhaps at his best when articulating how the Bretton Woods system differed from the classical gold standard – a difference that would ultimately lead to the failure of Bretton Woods . . . Steil's excellent book should serve as a gentle reminder of which monetary systems have worked well in the past – and which should not be repeated.

William J. Luther, Social Science Research Network book review

With extensive original research, Benn Steil has rewritten the history of the conference . . . Steil has made a major contribution to economic, intellectual, and political history, which is accessible to a wide audience and presents an endlessly fascinating portrait of two complicated men.

Carl J. Strikwerda, The Historian

The Battle of Bretton Woods offers a tantalizing peek into another time of financial stress compounded by a world war. . . . The chess match between White and Keynes is well worth the price of admission – the price of the book and the time it takes to read it.

Don R. Leet, American Economist

The Battle of Bretton Woods is a well-researched and excellently written book that is recommended for everyone interested in economic and diplomatic history.

Tobias Leeg, Political Studies Review

An informed citizenry includes an understanding of our economy and how it is integrated into the global financial system. For this, it is important to start from the . . . discussions that occurred among 44 nations in the idyllic and calm resort at Bretton Woods, N.H., in 1944. [Benn Steil's] new book details not only the meeting but the deep arguments between the British economist John Maynard Keynes and [American Treasury official] Harry Dexter White . . . This is a serious book of political economic history.

Cmdr. Youssef Aboul-Enein, DCMilitary

Benn Steil has crafted a fine history. . . . Characterized by fine and entertaining writing, The Battle of Bretton Woods is economic and political history in engrossing detail.

Satyajit Das, Naked Capitalism

Benn Steil has written a wonderfully rich and vivid account of the making of the postwar economic order. The Battle of Bretton Woods tells the fascinating story of the contest between the United States and Britain, led by the outsized personalities of Harry Dexter White and John Maynard Keynes, to reconcile their competing visions and interests.

Liaquat Ahamed, author of Lords of Finance

A riveting, exceptionally well-written account of the birth of the postwar economic order, and the roles of two determined men who were competing to define it. The Battle of Bretton Woods is a must-read work of economic and diplomatic history with great relevance to today.

Alan Greenspan, former chairman of the Federal Reserve

This is a fascinating study of monetary affairs and the politics of international finance, all tied up in the history of the Bretton Woods system and its ultimate demise. The book is full of lessons that are relevant today in a world that still resists international monetary reform.

Paul Volcker, former chairman of the Federal Reserve

Benn Steil has written a fascinating book with far-reaching consequences. In seeing the creation of the postwar economic system through the prism of the harsh interaction between Keynes and White, he makes complicated financial issues easy to fathom. Above all, Steil conclusively establishes the truth of an astonishing paradox--that White, the architect of the global capitalist financial architecture, was also a secret agent of the Soviet Union!

Andrew Roberts, author of The Storm of War

Beautifully and engagingly written, deeply researched, and of great contemporary interest, this book addresses how Bretton Woods really worked. One virtue of the book is that it places the United States and its chief negotiator, the enigmatic Harry Dexter White, at the center of the narrative. It also documents more fully and convincingly than any previous account the extent of White's espionage on behalf of the Soviet Union, a story that enhances an already gripping narrative.

Harold James, author of Making the European Monetary Union

Excerpt Up

Chapter One

Introduction

In late 2008, with the world engulfed in the worst financial crisis since the great depression, French President Nicolas Sarkozy and British Prime Minister Gordon Brown each called for a fundamental rethinking of the world financial system. They were joined in early 2009 by Chinese central bank governor Zhou Xiaochuan, who pointed a finger at the instability caused by the absence of a true international currency. each invoked the memory of “Bretton Woods,” the remote New Hampshire town where representatives of forty-four nations gathered in July 1944, in the midst of the century’s second great war, to do what had never been attempted before: to design a global monetary system, to be managed by an international body.


The classical gold standard of the late nineteenth century, the organically formed foundation of the first great economic globalization, had collapsed during the previous world war, with efforts to revive it in the 1920s proving catastrophically unsuccessful. Economies and trade collapsed; cross-border tensions soared. internationalists in the U.S. Treasury and State department saw a powerful cause and effect, and were determined in the 1930s to create, in the words of Treasury’s Harry Dexter White, a “new deal for a new world.”


White, working in parallel and in frictional collaboration with his British counterpart, the revolutionary economist John Maynard Keynes, set out to create the economic foundations for a durable postwar global peace, one that would allow governments 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 on the frenetic cross-border flows of capital. Interest rates would in each nation be set by government experts, schooled in the powerful new discipline of macroeconomics that Keynes had been instrumental in establishing. An international Monetary Fund (IMF) would ensure that exchange rates were not manipulated for competitive advantage. Most importantly, budding dictators would never again be able to use “economic aggression” to ruin their neighbors and fan the flames of war.


Robust economic recovery in the 1950s and ’60s served to make Bretton Woods synonymous with visionary, cooperative international economic reform. Seven decades on, at a time of great global financial and economic stress, it is perhaps not surprising that blueprints for revamping the international monetary system from the likes of hedge fund guru George Soros, Nobel economist Joseph Stiglitz, and policy wonk Fred Bergsten all hark back to Bretton Woods, and the years of Keynes-White debate that defined it.


But can the story of Bretton Woods actually light the way?


To be sure, there were major flaws in the monetary framework that emerged from Bretton Woods, which contributed directly to its final collapse in 1971. Indeed, the life span of the Bretton Woods system was considerably shorter, and its operation more troubled, than is commonly reckoned. It was not until 1961, fifteen years after the IMF was inaugurated, that the first nine European countries formally adopted the required provisions that their currencies be convertible into dollars, by which point deep strains in the system were already manifest. Any successor system will bang up against the same difficult trade-offs between multinational rules and national discretion that bedeviled American and British negotiators in the 1940s. Since 1971 the world’s economic statesmen have repeatedly called for the creation of “a new Bretton Woods”: the Committee of Twenty in 1973– 74, the group of Twenty-Four in 1986, and the European members of the G7 in 2009, among others. They have all been disillusioned.


Bretton Woods was embedded in a unique diplomatic context, surrounding the political and economic rise of the United States and precipitous fall of Great Britain. on the eve of the First World War the ratio of British debt to gross domestic product was a mere 29 percent; by the end of the Second World War it had soared to 240 percent. A nation that had in the 1920s controlled a quarter of the earth’s territory and population was, in Keynes’s words, facing a “financial Dunkirk.” The story of the Faustian bargain Britain struck with the United States in order to survive the war would become an essential element in the Bretton Woods drama.


Central to that drama were the antipodal characters of Keynes and White: the facund, servant-reared scion of Cambridge academics, and the brash, dogged technocrat raised in working-class Boston by Lithuanian Jewish immigrants.


Keynes at Bretton Woods was the first-ever international celebrity economist. The American media could not get enough of the barbed, eloquent Englishman, who was both revered and reviled for his brash new ideas on government economic intervention. Keynes had assaulted the intellectual orthodoxy of the economics profession the way that Einstein had done with physics two decades earlier. In his monumental 1936 General Theory, Keynes had argued, with his unrivaled wicked wit and self-assuredness, that what governments thought was eternally sound policy was actually reckless when it came to confronting a depression. The key insight, he held, was that the very existence of money at the heart of the economy wreaked havoc with the self-stabilizing mechanisms that classical economists believed to be at constant work. Keynes would apply his insight in the design of a new global monetary architecture, built around a new international reserve currency—one that would be a threat to the global supremacy of the U.S. dollar and which White was determined to keep from seeing the light of day.


His visionary monetary schemes notwithstanding, Keynes had ultimately come to the United States with the mission of conserving what he could of bankrupt Britain’s historic imperial prerogatives—what little room for maneuver it would be allowed in what seemed sure to be a dollar-dominated postwar world. his unlikely emergence as Britain’s last-ditch financial ambassador—its chief voice in the Bretton Woods, lend-lease, and British loan negotiations—was grounded in the repeated failure of his country’s politicians and Mandarin class to make headway in what amounted to increasingly desperate begging operations in Washington.


A piece of British doggerel from the period neatly frames how the country’s emissaries saw its plight: “in Washington Lord Halifax once whispered to Lord Keynes, it’s true they have the money bags but we have all the brains.” Halifax having been one of many in the British political establishment who failed to loosen the strings on America’s money bags, Keynes was sent off to the front lines in Washington and Bretton Woods in the vain hope that, if brains were to be the key to solvency, he might have more success.


No one grasped Britain’s dire financial circumstances and needs more acutely than Keynes. He also had an effortless facility with words that might have made him a master diplomat, had he actually been more concerned with converting opponents than with cornering them logically and humiliating them. “That man is a menace to international relations,” came one observation—not from an American interlocutor, but from a British war cabinet adviser, future Nobel economist James Meade, who considered Keynes “God.” “The lobbying for votes, the mobilisation of supporters, the politics of the lunch and the dinner table were not arts in which Keynes excelled,” observed Treasury colleague Paul Bareau.


Keynes struggled both mentally and physically to adapt to the strange circumstance of people, specifically denizens of Washington, D.C., who could be neither swayed by his superior command of facts and logic nor even compelled to get out of the way. The Americans never deviated from their hard-line geopolitical terms—at least until after the war, when Truman’s team reshuffled the deck. Keynes frequently compounded the problems of the bad hands he was dealt by playing them inaptly. An astute, dedicated career diplomat would have played off the New York bankers, who were dangling loans in return for British opposition to the U.S. Treasury’s monetary reform plans, against FDR’s moneymen. But Keynes had a legacy to think of, and his place in the Bretton Woods pantheon was critical to it. The psychological price he paid for his persistence was bouts of a Stockholm syndrome variant, whereby he would persuade himself—and, with his unmatched rhetorical skills, the political class in London—that the American government, for all its intolerable legalism and defiance of reason, truly meant well and would do the right thing by Britain in the end.


The chief barrier to Keynes’s blueprint for the postwar monetary order was, at the time of Bretton Woods, still a little-known U.S. Treasury technocrat, one who bristled at suggestions from the skeptical conference press that he might have few ideas save those fed to him by Keynes’s General Theory. yet Harry White had, in spite of his carrying no official title of consequence, by 1944 achieved implausibly broad influence over American foreign policy, having even played a critical role in the diplomacy leading up to war with Japan three years earlier. 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 civilised intercourse,” Keynes groused. Arrogant and bullying, White was also nerve-ridden and insecure. Being wholly dependent on his ability to keep his boss, Treasury Secretary Henry Morgenthau, an FDR confidant with limited smarts, continually rearmed with actionable policies, he was always acutely conscious of his tenuous status in Washington. He often made himself ill with stress before negotiations with Keynes, and then exploded during them. “We will try,” White spat out in one particularly heated session, “to produce something which your highness can understand.”


White’s role as the chief architect of Bretton Woods, where he outmaneuvered his far more brilliant but willfully ingenuous British counterpart, marks him as an unrelenting nationalist, seeking to extract every advantage out of the tectonic shift in American and British geopolitical circumstances put in motion by the Second World War. White had a vision of a postwar order antithetic to long-standing British interests, particularly as they related to the empire. What even his closest colleagues were generally unaware of, however, was that White’s vision involved a much closer American relationship with a new, rising European power, and that he was willing to use extraordinary means to promote it. Making sense of White’s larger agenda is important, not only to grasp why the British found him such a difficult interlocutor, but also to understand why the lurch in American foreign economic policy was as sharp as it was after the war, when Truman shifted its control from the Treasury to the State department.


White had a long-standing fascination with the Soviet Union, having decided in 1933, shortly after becoming an economics professor at Lawrence College in Wisconsin, to try to get a scholarship to go to Russia and study its economic planning system. He was diverted only by an invitation from Treasury adviser Jacob Viner in June of 1934 to come to Washington for a spell to help him with a monetary and financial reform study. It was there that he met George Silverman, Whittaker Chambers, and others working for the Soviet underground. By as early as 1935, White—idealistic, eager for influence, and dismissive of bureaucratic barriers to action—began the sort of dangerous double life that attracted many of his Washington contemporaries during the ’30s and ’40s.


Though White’s official writings paint him squarely as a Keynesian new deal democrat, his private musings put him firmly further left. White envisioned a postwar world in which the Soviet socialist model of economic organization, while not supplanting the American liberal capitalist one, would be ascendant. An unpublished, handwritten essay of White’s, newly uncovered in the course of this research, bears this out unambiguously. Written just prior to the end of the war, the piece contains highly provocative commentary on American attitudes toward the Soviet Union that undoubtedly would have led, had the piece been made public, to widespread calls for his dismissal.


“I have seen the future,” wrote radical journalist Lincoln Steffens after a trip to Petrograd in 1919, “and it works.” By the time of Bretton Woods a quarter century later, White believed that Soviet socialist economics had proven itself a success. “Russia is the first instance of a socialist economy in action,” White writes. “And it works!” Much of the animus toward the Soviet Union within the American political establishment was, he argued, political hypocrisy born of an ideological inability to acknowledge the success of socialist economics.


A critical question that must obviously be asked is whether White’s Soviet connections actually had any impact on the outcome at Bretton Woods. The broad “White Plan” for postwar monetary reform certainly bore no imprint of Soviet monetary thinking, as there was none to speak of. To be sure, White was notably solicitous of the obstructionist Russians at the conference itself—more so than any of his American negotiating colleagues, and vastly more so than the Europeans, some of whom were angered by it. Yet this meant little in the end, as the Soviets never ratified the agreements. Had White become the first head of the IMF, his views might have been more consequential—we will never know. however, we will see that the primary reason White did not become the institution’s head—and no American has ever since become its head—was emerging revelations of White’s activities on behalf of the Soviets.


Winston Churchill once famously remarked that “we can always count on the Americans to do the right thing, after they have exhausted all the other possibilities.” he was ultimately vindicated two years after Keynes’s death, and a half year after White’s, in the form of the Marshall Plan—an act of extraordinary American statecraft built on the epiphany that Britain was not actually a rival for power, as White had pegged it, but in fact a desperate ally to be bolstered in the face of a growing Soviet threat.


This is the story of the rise and fall of Harry White’s blueprint for a new world order, and the vestiges of that fall that we wrestle with today.