We must offer this [the Bretton Woods agreements] to the men in the armies
and on the sea and in the air. We must offer them some hope that there is
something to look forward to a little better than in the past and I like to
think that Bretton Woods is the hope in somewhat concrete form.
–U.S. Treasury Secretary Henry
Morgenthau, July 1944
While respect for the fundamental sovereignty and integrity of the state
remains central, it is undeniable that the centuries-old doctrine of absolute
and exclusive sovereignty no longer stands, and was in fact never so
absolute as it was conceived to be in theory. World Bretton Woods, the UN, and the Birth of the Cold War Discussion Paper.
–U.N. Secretary General Boutros
Boutros-Ghali, 1992
We must clearly recognize that the Soviet program is the establishment of
totalitarianism, ending personal liberty and democracy as we know and
respect it.
–Averell Harriman, U. S. Ambassador
to the Soviet Union, April 1945
From Stettin in the Baltic to Trieste in the Adriatic an iron curtain has
descended across the Continent.
–Winston Churchill, 5 March 1946
Two weeks after the 1944 D-Day invasion of France, the representatives of 44 Allied nations met
at the Mount Washington Hotel in Bretton Woods, New Hampshire, and created a new
international monetary system designed to prevent the economic and financial turmoil that had
triggered the Great Depression. The conference was the final act of an extended process that had
spanned more than a decade following Wall Street’s disastrous 1929 decline. At Bretton Woods,
Britain’s giant of modern economic theory, John Maynard Keynes, met with American Harry
Dexter White, the Treasury Department’s chief international economist (who also passed
government documents to the Soviets), and the two hammered out a new monetary system
ultimately endorsed by the remainder of the group. Countries now settled their international
accounts in dollars, convertible to gold at a fixed exchange rate of $35 an ounce. World Bretton Woods, the UN, and the Birth of the Cold War Discussion Paper.The United
States had the responsibility to keep the price of gold fixed as well as to assure that gold was
available to back the supply of dollars. Other world currencies became fixed to the dollar, with
the dollar pegged to gold. The conference also created the International Monetary Fund (IMF) to
monitor exchange rates and serve as a lending institution for nations with balance-of-payments
deficits, and the International Bank for Reconstruction and Development (now known as the
World Bank) to provide financial assistance for both postwar rebuilding and less-developed
countries.
The Bretton Woods system did not become fully functional until 1958, when most of the world’s
currencies became convertible to dollars (the Soviet Union had representatives at the conference,
but the USSR chose not to participate in the monetary system Bretton Woods created). By then,
the economies of (West) Germany and Japan had begun to recover significantly from wartime
devastation, and heavy American investments in Europe and Japan began to lead to an American
deficit in balance of payments and a corresponding loss in gold reserves. In 1971, President
Richard Nixon concluded that the deficits exceeded the amount of gold maintained by the United
States and removed America from the gold standard, in effect ending the Bretton Woods system.
Soon afterward, governments let their currencies “float” against one another to establish
respective values. That procedure endures to the present.

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Just as the perceived failure of the economic instrument of power to stymie the Great Depression
spurred Bretton Woods, the perceived failure of the diplomatic instrument to prevent World War
II led to the founding of the United Nations. The original term “United Nations” stemmed from
the late December 1941 meeting of British and American political and military leaders at the
White House. On 1 January 1942, the governments of 26 nations signed the “Declaration by the
United Nations” which proclaimed a unified commitment to defeat the Axis powers. The desire
not only to defeat the Axis, but also to create a global representative body that could—unlike the
defunct League of Nations—maintain international peace and security and foster economic and
social cooperation spurred other nations to join the organization. On 26 June 1945 in San
Francisco, 50 nations signed the United Nations Charter, and, with the Soviet Union’s
ratification of the charter on 24 October 1945, the United Nations officially came into existence.
Thomas Weiss, David Forsythe, Roger Coate, and Kelly-Kate Pease contend that the UN has
consisted of three distinctive parts: the institutional framework of member states, where the more
powerful have the greater say; the office of the Secretary General and the international civil
service, which staff many agencies; and the network of non-governmental organizations (NGOs),
corporate executives, media representatives, and academics. The UN’s institutional framework
has rested on the sovereign equality of states, peaceful settlement of disputes, non-use of force,
and non-intervention into domestic politics, as well as promoting and protecting human rights.
Yet the goal of “promoting and protecting human rights” has spurred changed perspectives on
issues like sovereignty. The 1648 Treaty of Westphalia in Europe maintained that states could conduct activities as they desired within their own borders, but recent attitudes of collective UN members have dictated that intervention is appropriate in instances such as genocide or slavery.
Additionally, the UN Charter notes that states will not use force except for self-defense, but the
definition of self-defense has also not remained a constant.
Soviet Premier Joseph Stalin would have agreed with that last statement. He shunned ratification
of the Bretton Woods agreement, and was lukewarm about joining the United Nations. As
historian John Lewis Gaddis notes, Stalin insisted “on equating security with territory.” (p. 15)
The Soviet dictator viewed negotiated compromises with scorn. Thus, as the Western Allies
turned to the economic and diplomatic instruments to restore order in the aftermath of World
War II, the Soviets emphasized the military instrument to prevent a similar catastrophe, and their
occupation of much of Eastern Europe provided the foundation for the Cold War.
Today’s readings examine controversial aspects of how democracies have attempted to employ
the economic and diplomatic instruments of power on the world stage to prevent disasters like
the Great Depression and the Second World War—as well as how an authoritarian power can
rely on military force to achieve its national security goals. Both methodologies endure in the
twenty-first century.
To provide us with provocative insights on this topic, NWC Dean Cynthia Watson will start us
off today with an Arnold Auditorium lecture.
Objectives:
• Analyze the key economic and diplomatic efforts to restore world order following the
Second World War.
• Analyze the origins of the Cold War.
Issues for Consideration:
1. What insights do you draw from the post-World War II period about the nature of the
various instruments, how they work in certain situations, and how to orchestrate them?
2. Do you agree with Eric Helleiner’s assessment of why Bretton Woods succeeded? Why
or why not?
3. Helleiner contends that after Bretton Woods, globalization and the deregulation of
financial markets produced a highly integrated world financial system driven by “neoliberal”
values “supporting freer financial markets and a more constrained role for the
state.” Many analysts might view today’s financial world in the same light. Is such an
economic environment a good thing for the planet, or would it be better to return to
something like the Bretton Woods system? Justify your answer.
132
4. What is the value of the UN today?
5. Should definitions of “sovereignty,” “self-defense,” and “non-intervention” have changed
over time? Why or why not? Why have they changed?
6. Is peacekeeping now the UN’s most important role? Why or why not?
7. Were the post-World War II efforts to establish international order more successful than
the post-World War I efforts? Why or why not?
8. What were the main causes of the Cold War?
Required Readings (62 Pgs):
1. Sandra Kollen Ghizoni, “Establishment of the Bretton Woods System, July 1944,”
Federal Reserve History. (3 pp.)
2. Robert L. Hetzel, “Overview of Bretton Woods, 1958,” Federal Reserve History. (5 pp.)
3. Eric Helleiner, “A Bretton Woods Moment? The 2007-2008 Crisis and the Future of
Global Finance,” International Affairs 86, 3, 2010, 619-627.
4. Thomas G. Weiss, David P. Forsythe, Roger A. Coate, and Kelly-Kate Pease,
“Introduction” in The United Nations and Changing World Politics(0830-1130)
Lecture-Seminar (L/S)
We must offer this [the Bretton Woods agreements] to the men in the armies
and on the sea and in the air. We must offer them some hope that there is
something to look forward to a little better than in the past and I like to
think that Bretton Woods is the hope in somewhat concrete form.
–U.S. Treasury Secretary Henry
Morgenthau, July 1944
While respect for the fundamental sovereignty and integrity of the state
remains central, it is undeniable that the centuries-old doctrine of absolute
and exclusive sovereignty no longer stands, and was in fact never so
absolute as it was conceived to be in theory. World Bretton Woods, the UN, and the Birth of the Cold War Discussion Paper.
–U.N. Secretary General Boutros
Boutros-Ghali, 1992
We must clearly recognize that the Soviet program is the establishment of
totalitarianism, ending personal liberty and democracy as we know and
respect it.
–Averell Harriman, U. S. Ambassador
to the Soviet Union, April 1945
From Stettin in the Baltic to Trieste in the Adriatic an iron curtain has
descended across the Continent.
–Winston Churchill, 5 March 1946
Two weeks after the 1944 D-Day invasion of France, the representatives of 44 Allied nations met
at the Mount Washington Hotel in Bretton Woods, New Hampshire, and created a new
international monetary system designed to prevent the economic and financial turmoil that had
triggered the Great Depression. The conference was the final act of an extended process that had
spanned more than a decade following Wall Street’s disastrous 1929 decline. At Bretton Woods,
Britain’s giant of modern economic theory, John Maynard Keynes, met with American Harry
Dexter White, the Treasury Department’s chief international economist (who also passed
government documents to the Soviets), and the two hammered out a new monetary system
ultimately endorsed by the remainder of the group. Countries now settled their international
accounts in dollars, convertible to gold at a fixed exchange rate of $35 an ounce. The United
States had the responsibility to keep the price of gold fixed as well as to assure that gold was
available to back the supply of dollars. Other world currencies became fixed to the dollar, with
the dollar pegged to gold. The conference also created the International Monetary Fund (IMF) to
monitor exchange rates and serve as a lending institution for nations with balance-of-payments
deficits, and the International Bank for Reconstruction and Development (now known as the
World Bank) to provide financial assistance for both postwar rebuilding and less-developed
countries. World Bretton Woods, the UN, and the Birth of the Cold War Discussion Paper.
The Bretton Woods system did not become fully functional until 1958, when most of the world’s
currencies became convertible to dollars (the Soviet Union had representatives at the conference,
but the USSR chose not to participate in the monetary system Bretton Woods created). By then,
the economies of (West) Germany and Japan had begun to recover significantly from wartime
devastation, and heavy American investments in Europe and Japan began to lead to an American
deficit in balance of payments and a corresponding loss in gold reserves. In 1971, President
Richard Nixon concluded that the deficits exceeded the amount of gold maintained by the United
States and removed America from the gold standard, in effect ending the Bretton Woods system.
Soon afterward, governments let their currencies “float” against one another to establish
respective values. That procedure endures to the present.
Just as the perceived failure of the economic instrument of power to stymie the Great Depression
spurred Bretton Woods, the perceived failure of the diplomatic instrument to prevent World War
II led to the founding of the United Nations. The original term “United Nations” stemmed from
the late December 1941 meeting of British and American political and military leaders at the
White House. On 1 January 1942, the governments of 26 nations signed the “Declaration by the
United Nations” which proclaimed a unified commitment to defeat the Axis powers. The desire
not only to defeat the Axis, but also to create a global representative body that could—unlike the
defunct League of Nations—maintain international peace and security and foster economic and
social cooperation spurred other nations to join the organization. On 26 June 1945 in San
Francisco, 50 nations signed the United Nations Charter, and, with the Soviet Union’s
ratification of the charter on 24 October 1945, the United Nations officially came into existence.
Thomas Weiss, David Forsythe, Roger Coate, and Kelly-Kate Pease contend that the UN has
consisted of three distinctive parts: the institutional framework of member states, where the more
powerful have the greater say; the office of the Secretary General and the international civil
service, which staff many agencies; and the network of non-governmental organizations (NGOs),
corporate executives, media representatives, and academics. The UN’s institutional framework
has rested on the sovereign equality of states, peaceful settlement of disputes, non-use of force,
and non-intervention into domestic politics, as well as promoting and protecting human rights.
Yet the goal of “promoting and protecting human rights” has spurred changed perspectives on
issues like sovereignty. The 1648 Treaty of Westphalia in Europe maintained that states could
conduct activities as they desired within their own borders, but recent attitudes of collective UN
members have dictated that intervention is appropriate in instances such as genocide or slavery.
Additionally, the UN Charter notes that states will not use force except for self-defense, but the
definition of self-defense has also not remained a constant.
Soviet Premier Joseph Stalin would have agreed with that last statement. He shunned ratification
of the Bretton Woods agreement, and was lukewarm about joining the United Nations. As
historian John Lewis Gaddis notes, Stalin insisted “on equating security with territory.” (p. 15)
The Soviet dictator viewed negotiated compromises with scorn. Thus, as the Western Allies
turned to the economic and diplomatic instruments to restore order in the aftermath of World
War II, the Soviets emphasized the military instrument to prevent a similar catastrophe, and their
occupation of much of Eastern Europe provided the foundation for the Cold War.
Today’s readings examine controversial aspects of how democracies have attempted to employ
the economic and diplomatic instruments of power on the world stage to prevent disasters like
the Great Depression and the Second World War—as well as how an authoritarian power can
rely on military force to achieve its national security goals. Both methodologies endure in the
twenty-first century. World Bretton Woods, the UN, and the Birth of the Cold War Discussion Paper.
To provide us with provocative insights on this topic, NWC Dean Cynthia Watson will start us
off today with an Arnold Auditorium lecture.
Objectives:
• Analyze the key economic and diplomatic efforts to restore world order following the
Second World War.
• Analyze the origins of the Cold War.
Issues for Consideration:
1. What insights do you draw from the post-World War II period about the nature of the
various instruments, how they work in certain situations, and how to orchestrate them?
2. Do you agree with Eric Helleiner’s assessment of why Bretton Woods succeeded? Why
or why not?
3. Helleiner contends that after Bretton Woods, globalization and the deregulation of
financial markets produced a highly integrated world financial system driven by “neoliberal”
values “supporting freer financial markets and a more constrained role for the
state.” Many analysts might view today’s financial world in the same light. Is such an
economic environment a good thing for the planet, or would it be better to return to
something like the Bretton Woods system? Justify your answer. World Bretton Woods, the UN, and the Birth of the Cold War Discussion Paper.
4. What is the value of the UN today?
5. Should definitions of “sovereignty,” “self-defense,” and “non-intervention” have changed
over time? Why or why not? Why have they changed?
6. Is peacekeeping now the UN’s most important role? Why or why not?
7. Were the post-World War II efforts to establish international order more successful than
the post-World War I efforts? Why or why not?
8. What were the main causes of the Cold War?
Required Readings (62 Pgs):
1. Sandra Kollen Ghizoni, “Establishment of the Bretton Woods System, July 1944,”
Federal Reserve History. (3 pp.)
2. Robert L. Hetzel, “Overview of Bretton Woods, 1958,” Federal Reserve History. (5 pp.)
3. Eric Helleiner, “A Bretton Woods Moment? The 2007-2008 Crisis and the Future of
Global Finance,” International Affairs 86, 3, 2010, 619-627.
4. Thomas G. Weiss, David P. Forsythe, Roger A. Coate, and Kelly-Kate Pease,
“Introduction” in The United Nations and Changing World Politics. World Bretton Woods, the UN, and the Birth of the Cold War Discussion Paper.