So as I read this, a Bretton-Woods–style system of stable exchange rates would be a potent weapon in the war on terror. You identify the countries harboring problematic insurgencies, set your adjustable peg high enough that insurrections can’t operate effectively, and watch the rebellion wither! Is there any problem FDR’s policies can’t help us solve?

Actually, rhetoric like this — pinning hopes for world peace to the Bretton Woods system of stable exchange rates, and thus freer trade and capital flows — was not at all uncommon. As one participant later recollected,

Peace was seen as linked with world prosperity, and prosperity, with free trade, free capital movements, and stable exchange rates.

He goes on to admit, “Although the causality was ambiguous….”1


1Raymond F. Mikesell, “The Bretton Wood Debates: A Memoir,” Essays in International Finance no. 192 (March 1994), International Finance Section, Department of Economics, Princeton University, 4.

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