What Is the Bretton Woods Agreement?

The Bretton Woods system refers to the international monetary system centered on the US dollar after World War II.

Bretton Woods

In the 20 years between the two world wars, the international monetary system split into several competing currency groups, and currencies of various countries competed to depreciate and become volatile.

At the end of the Second World War, the US and British governments conceived and designed the post-war international monetary system for their own national interests.

The Bretton Woods system is based on dollars and gold

The Bretton Woods system was established

On July 1, 1944, economic envoys of 44 countries or governments in the United States

After the outbreak of the Second World War, after several years of war, people found that the United States became the biggest winner of the war at the end of World War II. The United States not only won the war in the end, but also economically the United States made war money. According to Statistics show that at the end of World War II, the United States owned more than 75% of the total official gold reserves of the world at that time, and almost all the gold in the world flowed to the United States through the mechanism of war.

In July 1944, the United States invited representatives of the 44 governments participating in the establishment of the United Nations to hold a meeting in Bretton Woods. After intense disputes, the parties signed the "Breton Woods Agreement" and established "

Compared with the international monetary system in history, the international monetary system after World War II has made significant improvements.

First, established a permanent

The international monetary system centered on the US dollar can operate smoothly for a long period of time,

Gold has been used as a payment method for a long time. It is precisely because gold is small and cannot be copied that it is more reassuring to use it as a payment method. The collapse of the Bretton Woods system has nothing to do with gold at that time. Directly linked, the problem should be that as a currency that can be used to exchange gold, that is, the excessive issue of US dollars cannot support the US-Gold swap, which has led to the confusion and collapse of the system.

Bretton Woods basic information

Title: Bretton Woods Currency War: How the Dollar Ruled the World ^[1]

ISBN: 978-7-111-45130-3

Author :( US) Ben Steil

Translators: Fu Jingjie, Chen Ying

Publication time: 2014.4

Number of pages: 444 pages

Publisher: Machinery Industry Press

Introduction to the Bretton Woods system

A book about the duel between the U.S. dollar and the British pound has taken the US and Europe by storm, and it has been surprisingly well-received. What is the charm of Bretton Woods's past as an event that has been "made for a long time" to re-attract contemporary people's attention?

It turned out that history has once again reached a special moment: how does the world re-establish a new international currency order? Is the renminbi capable of challenging the dominance of the dollar? These questions can be answered after reviewing the Bretton Woods story.

On the one hand, the United States, then a huge creditor and trade surplus country, could end British control of world trade and finance with a conference and a contract. The world situation, diplomatic situation, and political games behind it are worth exploring. . The author regards the Bretton Woods conference as a connection point, and integrates World War I, World War II, the Marshall Plan, the international financial system, and China-US issues, making the entire work quite deep, broad, and highly economic and political.

On the other hand, the New York Times, The Wall Street Journal, and the Financial Times all claim that the book's historical details are exciting and entertaining, while also shaping the direction of history. Keynes, who negotiated on behalf of the United Kingdom, was hard to beat the American negotiator White at a decisive moment, although his thoughts were glorious. What is even less known is that White, who created the Bretton Woods system in one hand, turned out to be Soviet intelligence personnel, so the direction and results of the Bretton Woods conference were unbelievably affected, including the International Monetary Fund and the World Bank today. pattern.

History is fascinating and thought-provoking. Today, many of the US arguments are the same as those of the British bankruptcy, and China has adopted the views held by Americans. The real currency war is far more complicated and incredible than imagined. Let us remember the reasons for the failure of that great attempt of 1944.

Bretton Woods author profile

Benn Steil

Director, Senior Fellow, Department of International Economics, American Institute of Foreign Relations, and former Director of the Department of International Economics, Royal Institute of International Affairs. The above two institutions are the top think tanks in the United States and Britain for studying international relations issues. Steyr's research fields are international finance, currency issues, financial markets, and economic history.

Currency, Market and Sovereignty, co-authored by Steyr and former El Salvador Treasury Secretary Manuel Heinz, won the 2010 Hayek Book Award.