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Lagarde Should Buck IMF Tradition and Get Tough

Author: Amity Shlaes, Former Hayek Senior Fellow for Political Economy
July 18, 2011


Men are from Mars, but the IMF is from Venus. Or should be. That's the message the International Monetary Fund's new managing director, Christine Lagarde, delivered when she was campaigning for the job.

"If I were elected as managing director," Lagarde said, "I would stand on my feet as a woman, not necessarily with a pair of trousers, and certainly with a level of testosterone that would be lower than many in the room today."

Lagarde was referring not only to her troubled predecessor, Dominique Strauss-Kahn, but also to the tendency of the world's financial leaders to quarrel. Lagarde holds comity to be crucial.

She's wrong on this count. The IMF is too much Venus, and too little Mars. It has been since it was founded 77 years ago this month at a conference in the White Mountains of New Hampshire.

July 1944 was a month when Mars ruled the globe. As emissaries from more than 40 nations settled into the Mount Washington resort at Bretton Woods, 15,000 Danes, armed only with guns, were defying Nazi tanks on the streets of Copenhagen.

The institutions created in New Hampshire that year -- the IMF, the World Bank and the postwar gold-exchange standard -- weren't just about creating an orderly global monetary system. They were also intended as a check against mankind's aggressive impulses. President Franklin D. Roosevelt wrote in to the conference that nations must “cooperate in peace as we have in war.”


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