Stephen Foley - 12 November 2008

For the Prime Minister, Gordon Brown, it is a “new Bretton Woods”, as important as the 1944 convention that established the modern financial world order. For Nicolas Sarkozy, President of France, it is a once-in-a-lifetime chance to remake the global financial architecture and usher in an era of “regulated capitalism”. But beware the headlines that these leaders try to manufacture when they assemble for their credit crisis summit in Washington this weekend.

What we have is a summit without an agenda, on a crisis without an agreed cause, in a country without a functioning government. The US – whose outgoing President agreed to hold the meeting under French pressure, and whose President-elect, keen to stress that the US has “only one president at a time”, won’t even be there – has already bristled at European talk of a creating new supra-national regulators and international rules.

So little wonder everyone else is scrambling to downplay expectations for what might emerge, and to lengthen the timetable for achieving results. As one person from the UK delegation put it, “Bretton Woods took two years”.

Bretton Woods created the International Monetary Fund, which endures as the one international body powerful enough to prop up governments and economies that run into trouble. It also created a system of fixed exchange rates that failed to endure into the Seventies. Today, despite a financial crisis that is agreed to be the worst since the Great Depression, little yet under academic discussion rises to the level of ambition on display in the New Hampshire mountains in 1944. Certainly, nothing likely to be on the table on Friday and Saturday rises to that level.

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G-20 Summit In DC On 11-15-8

Webster Tarpley - 11-10-8

This is a confidential strategy paper for the November 15 G-20 summit in Washington DC. This is not a new Bretton Woods in any sense, but rather a British-steered attempt to impose the dictatorship of the International Monetary Fund (IMF) on the entire planet, wiping out all hope of economic recovery, the modernization of the developing countries, and national sovereignty at the same time.

Under this plan, the IMF would dictate the economic policies of all states. The IMF orthodoxy is austerity, sacrifice, deregulation, privatization, union busting, wage reductions, free trade, the race to the bottom, and prohibitions on advanced technologies. These policies would strangle humanity.

The Brazil-Russia-India-China bloc is reportedly objecting to putting so much power into the hands of the IMF, which is dominated by the US and the British, with Prime Minister Gordon Brown and Treasury Secretary Paulson of Goldman Sachs laying down the party line.

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Christopher J. Petherick - American Free Press

International bankers and speculators are calling for a global gathering of the world’s top moneymen and policymakers along the lines of the meeting in Bretton Woods, N.H., in 1944, which spawned three powerful global financial organizations, the International Monetary Fund, the International Trade Organization and the World Bank.

Already, critics have come out against the proposed “BrettonWoods II,” saying it will do little to help working-class Americans, who have seen their life savings vanish as a result of the collapse of financial markets.

Most Americans recognize that the economic crisis in the United States is largely due to unbridled capitalist greed on Wall Street. The world’s leading financial institutions, seeking to maximize profits, exploited loose fiscal and regulatory policies in the United States to create a complicated system of investment vehicles.

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J.D. Seagraves - Oct 20, 2008

On October 13, British Prime Minister Gordon Brown called for a new-world financial order. “We must create a new international financial architecture for the global age,” Brown said. “We must have a new Bretton Woods.”

Brown’s statement echoed the sentiments of French and EU president Nicolas Sarkozy, who on September 26 said, “We must rethink the financial system from scratch, as at Bretton Woods.”

So is a new “Bretton Woods” a good idea? Before we can answer that question, we need to take a look at the original Bretton Woods System, which was the world’s first fully negotiated international monetary order. What inspired global leaders to create it, and what ultimately led to its demise?

The Monetary Role of Gold

By 1900, most Western European nations had evolved from centrally planned monarchies to pseudo-capitalist republics. This resulted in the heyday of the International Gold Standard, in which market economies of the West engaged in relatively free trade, facilitated by the ultimate global currency of gold.

Gold, according to Austrian economist Carl Menger, emerged as money millennia ago. In fact, gold’s monetary nature predates the existence of the nation-state. It is “real money” in the sense that no one has to be forced to accept it: they do so willingly. And thus, gold presents a problem for nation-state governments—they can’t manipulate it as easily as paper money.

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With war raging across the globe in July 1944, ministers from all 44 Allied nations met at the imposing Mount Washington Hotel in Bretton Woods, New Hampshire, to thrash out a set of rules that would govern world finance once Hitler was defeated.

Gordon Rayner - 08 Oct 2008

Knowing that greater international trade would help to prevent future wars, and determined to avoid another Great Depression, the delegates signed the Bretton Woods Agreements, creating the International Monetary Fund and the World Bank. It was a big vision, driven by grand historical figures: Winston Churchill, Franklin D Roosevelt and the British economist John Maynard Keynes.

But a system that was designed 64 years ago has, not surprisingly, proved ill equipped to deal with the fiendishly complex practices of 21st-century banking that led to the current worldwide crisis.

Neither the IMF, the World Bank nor any other institution has the power to police the global financial system in a way that might have prevented the excessive risk-taking which led to the sub-prime mortgage crisis and, in turn, the credit crunch.

A more recent creation, the G8 group of industrialised nations, looks hopelessly out of date without the emerging economic giants of Brazil, India and China among its ranks. And the “beggar-thy-neighbour” policies of guaranteeing savings that have sprung up in Germany, Greece and Ireland in recent days have shown that even in Europe, co-ordinated economic policy is a myth.

“The current system is in crisis and we have an environment where dog eats dog,” said Bob McKee, of the economic consultancy Independent Strategy. “Electorates will expect more regulation, and politicians will push for it.”

The new Business Secretary, Peter Mandelson, argued last week that new global solutions are needed because “the machinery of global economic governance barely exists”, adding: “It is time for a Bretton Woods for this century.”

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