Bretton Woods Revisited: Hegemony, Stability, and Territory

Abstract

In this paper I examine the achievements and lessons of the Bretton Woods System (BWS) fifty years after its founding in 1944. I do so with particular reference to propositions associated with hegemonic stability theories. In section 2 I challenge the view that the BWS was successful because it was a unique embodiment of US ‘benign hegemony’. I join with Walter, Strange, and other revisionist historians in arguing that the BWS was less a formal monetary system than a broad set of guidelines that was adopted and adapted by member states quite flexibly. The BWS was the product of a series of compromises reached by the USA and its West European allies in the period between 1944 and 1971. The Golden Age of Capitalism that coincided with the BWS in the advanced industrial world was also the product of factors that cannot be reduced to the BWS. US hegemony in the 1950s and 1960s was most obviously embedded in its military commitments overseas. I further suggest that international economic disorder after 1971 cannot be explained with reference to the alleged disappearance of a hegemonic power in the world economy. The USA has remained broadly hegemonic since 1971, but the nature of hegemony is changing in a changing global political economy. In section 3 I consider the claim that the international economy must become more unstable in the absence of a benign hegemon. The concept of order or instability is rendered problematic, and a model of ‘ordered disorder’ is set out. I suggest that a degree of order is being maintained in a dispersed hegemonic core at the cost of increased disorder in peripheral regions and communities that cannot positively access the emerging circuits of transnational capitalism or liberalism. Section 4 concludes the paper with some reflections on the lessons of Bretton Woods in the wake of the changes described in sections 2 and 3.