How John Maynard Keynes' most radical idea could save the world

"Bancor," explained

John Maynard Keynes.
(Image credit: Gordon Anthony/Getty Images)

As the Second World War was drawing to a close, the economic experts of the Allies met in a New Hampshire resort to try to hammer out an international monetary system that would help prevent a recurrence of the Great Depression. The ensuing debate centered around two main proposals, one from the British delegation and one from the American. John Maynard Keynes, the greatest economist of the 20th century, presented the British case while Harry Dexter White, one of FDR's key economic advisers, presented the American one.

Keynes lost on many key points. The result was the Bretton Woods system, named after the small town in which the conference was held. As part of the agreement, it also created what would later become the International Monetary Fund and the World Bank. That served as the system of managing international trade and currencies for nearly three decades. Today the IMF and World Bank survive, but Bretton Woods was broken in 1971 when Nixon suspended the convertibility of the dollar into gold.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up
To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us