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’s work argues that for Britain the Second World War was in fact two wars, one pitting Britain under Winston Churchill against Nazi Germany, the other lying behind the facade of the Western alliance and pitting the British empire, led by Keynes, against the United States. America’s main war aim after the defeat of the Axis powers, he argued, was to destroy the British empire. “Churchill fought to preserve Britain and its empire against Nazi Germany; Keynes fought to preserve Britain as a Great Power against the United States. The war against Germany was won; but in its effort to win it, Britain spent its resources so heavily that it was destined to lose both its Empire and its Great Power status.”2 Keynes himself outlined one of his central aims as he negotiated in Washington: “America must not be allowed to pick out the eyes of the British Empire.”3

The arguments are complex, not least because Keynes’s main negotiating partner in Washington, Harry Dexter White, was almost certainly passing information to the Soviet Union. But Skidelsky’s account leaves no doubt that the two countries were quietly locked in a titanic struggle for financial dominance, as the thrusting new American superpower began to displace the old empire.

It was only long after the war that the two economic competitors would eventually work out a suitable arrangement for coexistence. It happened, as I shall explain later, through the construction of the modern offshore system. This chapter, however, explores what came before it: an international arrangement that Keynes helped design, where nation-states cooperated with each other and tightly controlled flows of financial capital between them. This system was, in a sense, the very opposite of today’s fragmented, laissez-faire system, where wild, unregulated, and untaxed tides of capital flow across borders with almost no restraint, much of it through offshore centers.

For all its problems, the years of the anti-offshore system that followed the Second World War were a period of tremendous, broad-based growth and prosperity—not just for the American middle classes but for the world as a whole. The collapse of the system in the 1970s and the explosion of global offshore finance after that ushered in a period of lower growth, recurring economic crisis, and stagnation for most Americans, while wealth at the top of the income pile soared.

Keynes was as complex a character as any who have taken the world stage. He crammed the intelligence, and seemingly the lives, of twenty people into one. The aging Alfred Marshall, arguably the leading economist of his generation, once declared after reading a pamphlet from the young economist that “verily, we old men will have to hang ourselves, if young people can cut their way so straight and with such apparent ease through such great difficulties.”

Keynes first properly made his reputation in 1919 with his pamphlet The Economic Consequences of the Peace, arguing that the vast reparations being heaped on Germany after the First World War would ruin it, with terrible results for the wider world. He was quite right: The stringent demands for reparation helped trigger the rise of Adolf Hitler and the Second World War. Years later, while writing his General Theory of Employment, Interest and Money, arguably the most famous economics textbook of the last century, Keynes was building a theater in Cambridge with his own money, drawing graphs of receipts from the theater restaurant, collecting tickets when the clerk failed to materialize, and, improbably, turning it into a huge artistic and commercial success. He became a respected art critic, a towering civil servant and diplomat, a hyperactive editor of economic publications, and a journalist whose articles could make whole currencies swoon. He wrote a book on mathematical probability that the polymath and philosopher Bertrand Russell said was “impossible to praise too highly,” adding that Keynes’s intellect was “the sharpest and clearest that I have ever known.” Russell felt that when he argued with Keynes, he “took his