Treasure Islands - Nicholas Shaxson [34]
Global economic might had already shifted decisively across the Atlantic from London to New York, but Britain still held India by force, along with much of Africa and the Middle East. Keynes’s combative and too-clever-by-half style fitted Americans’ stereotypes of the British as super-wily imperial puppeteers, ready to bamboozle them. When Keynes first met U.S. Treasury Secretary Henry Morgenthau, who was no lover of technicalities, Keynes spoke for an hour, in great detail—and Morgenthau “did not understand one word,” a Washington insider later wrote to a friend.9 Harry Hopkins, one of Roosevelt’s advisers, called Keynes “one of those fellows that just knows all the answers.”
But Keynes’s problem was more fundamental. America wanted Britain to fight fascism, and it was prepared to give huge military aid under its Lend-Lease Act of March 1941, but it also saw the war as the chance to dethrone Britain and its empire once and for all. As Keynes wrote later, the U.S. administration took every possible precaution to see that the British were as near as possible to bankrupt before giving any help. “Why do you persecute us like this?”10 he once asked his American counterparts. In response to the challenge, Britain’s chief aim was, as Keynes put it, “the retention by us of enough assets to leave us capable of independent action.”11
It was a grueling war for Keynes, in a decidedly unequal contest. He was seriously ill, diagnosed with septic tonsils and a “large heart and aorta,” and he was representing an empire on its knees. When Keynes disagreed with his American counterpart Harry Dexter White, the American economist Brad DeLong wrote, “he usually lost the point because of the greater power of the United States. And in almost every case it seems to me that Keynes was probably right.”12
As the war went on, Keynes turned his attention in Washington to negotiating the construction of a new cooperative international monetary order to govern future economic relations among the nations of the world, grounded upon efforts to restrain the international financial freedoms that had preceded and helped cause the Great Depression. The rampant capitalism of that era, founded upon an old alliance between Wall Street and the City of London, had involved freely floating currencies, strictly balanced government budgets, and free flows of capital around the world—a little like the modern global financial system. “The decadent international but individualistic capitalism,” Keynes wrote, “is not a success. It is not intelligent, it is not beautiful, it is not just, it is not virtuous—and it doesn’t deliver the goods. In short, we dislike it, and we are beginning to despise it.” On this broad point his American colleagues were with him: Morgenthau said that the aim must be “to drive the usurious money-lenders from the temple of international finance.”13
Keynes’s negotiations culminated in the Bretton Woods Conference in 1944, the outcome of which would shape the international financial architecture for decades. The conference involved many nations but was an American production: The U.S. Treasury stage-managed the drafting committees and the conference to produce the desired results. U.S. Commission chairmen would prevent a vote on anything they didn’t want voted on and would arrange the discussion to stop inconvenient topics from being aired.14 It was hard to see what the international “monkey house