
Bretton Woods 1944: how 44 nations designed the postwar financial system
The three-week conference in New Hampshire that created the IMF, the World Bank, and the dollar as the global reserve currency
In July 1944, 730 delegates from 44 nations gathered at Bretton Woods to design the postwar international monetary system. The IMF, World Bank, and gold-dollar standard were born.
The problem to solve
In the summer of 1944, World War II was coming to an end. Allied leaders knew the postwar period would require a new international monetary system — the previous one (based on the classic gold standard) had collapsed with the Great War and contributed to the Great Depression.
Keynes vs. White
The conference was dominated by the debate between John Maynard Keynes (for the UK) and Harry Dexter White (for the USA). Keynes wanted a neutral international currency (the "bancor"). White wanted the dollar as the reference currency, with the USA as the center of the system.
The USA won — the dollar became the only currency directly convertible into gold at a fixed rate of $35 per ounce. All other currencies were pegged to the dollar.
The Bretton Woods legacy
The IMF and World Bank still exist today. The fixed monetary system lasted until 1971 (Nixon shock). But Bretton Woods' institutional structure — with the dollar as the global reserve currency — has remained.
- Economic power translates into monetary power: the USA had 70% of the world's gold reserves in 1944 — the dollar couldn't but win.
- International institutions reflect the power dynamics at the time of their creation: the IMF and World Bank are still dominated by the West.
- The global monetary system is always a political agreement, not an economic one: Bretton Woods was negotiated like a peace treaty.