The Role of the International Monetary Fund in the Post-Bretton Woods Era

Abstract

This paper examines the changing role of the International Monetary Fund (IMF) in the world economy in the 1970s and into the 1980s. Though the IMF was established in 1945 by the Bretton Woods Agreement to aid countries with short term balance of payments problems, its role in recent years has changed dramatically. Many people argue that the IMF is becoming a world central bank with powers of surveillance over domestic economic policies, conditional loans to deficit countries, and control of world liquidity. The extent to which this is the case is a main focus of this paper. In order to do this, it is necessary to review the events in the international monetary system in the 1970s with special attention given to those factors which affected the IMF's role. Though there are various interpretations of the IMF's role from both the mainstream and the radical-left, an alternative interpretation, which differs from those interpretations in many respects, is presented. My argument is that the IMF emerged in the 1970s as a global capitalist planner in response to the international economic crisis. Through international monetary reforms which occurred in the 1970s the IMF has played a pivotal role in the attempt to restore global accumulation. The failure of the IMF to accomplish this goal has been a direct result of global working class resistance to its policies.