The IMF, World Bank and the WTO
Appendix 1: Extract from Peter Coffey (1974), The World Monetary Crisis
THE BRETTON WOODS SYSTEM Two fundamental facts dominate any consideration of the Bretton Woods system. First is the fact of the overpowering strength, in 1944, of the United States economy. This fact was amply demonstrated on the one hand by the adoption by America of the gold exchange standard,1 and, on the other hand, by the use of the dollar as a currency of intervention. In turn, this economic strength meant that only a plan for international monetary co-operation that received America’s support stood any chance of being adopted – hence the adoption of the White Plan rather than the proposals put forward by Keynes. The important second fact which should not be ignored is that the Bretton Woods system was incomplete. Originally, it was intended to create three world organisations, a clearing union, an investment bank and a world trading organisation. Unfortunately, only the first two organisations were created. From the outset, this insufficiency created a basic gap in the system which has not yet been filled. THE KEYNES AND WHITE PLANS The two plans, the Keynes Plan and the White Plan, because of the vision exhibited in the former and the reality shown by the latter, are worthy of our attention. Regarding one point, both plans were the same – they were concerned exclusively with current account disequilibria. In this respect, they differ fundamentally from SDRs, which may be used both for current and capital account disequilibria. This is really a very important point which appears to have escaped...
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