A world economy restored: expert consensus and the Anglo-American postwar settlement

Abstract

Although British and U.S. officials held markedly different views during the initial negotiations for a postwar economic order, they were able to reach watershed trade and monetary agreements that set the terms for the reestablishment of an open world economy. How does one explain this Anglo-American settlement reached at Bretton Woods in 1944? Structural explanations, based on underlying configurations of power and interests, are helpful but leave important issues unresolved. Given the range of postwar economic “orders” that were possible and potentially consistent with underlying structures and also given the divergent and conflicting views both within and between the two governments, why did the economic order take the particular shape it took? This article argues that agreement was fostered by a community of British and American economists and policy specialists who embraced a set of policy ideas inspired by Keynesianism and who played a critical role in defining government conceptions of postwar interests, shaping the negotiating agenda (for example, shifting the focus of negotiations from trade issues, which were highly contentious, to monetary issues, about which there was an emerging “middle ground” created by Keynesian ideas), and building coalitions in support of the postwar settlement.