Justin Talbot Zorn*1 and Merle Lefkoff “John Maynard Keynes died 70 years ago. We ignore his wisdom at our peril” http://www.theguardian.com/commentisfree/2016/apr/21/john-maynard-keynes-capitalism-us-economy
What we got instead was the IMF, structural adjustment policies and more than half a century of largely unnecessary pain and suffering for the world’s poorest countries.
Looking back at the final years of Keynes’ life underscores an important point about the world we live in today: some of the key decisions that define it were made more than seven decades ago by an elite group of white men in a meeting at a swanky New Hampshire ski resort.
To steer away from an economic system marked by rising inequality, environmental devastation and a lack of accountability, we need to do what Keynes tried to do 70 years ago: imagine a different kind of Bretton Woods.
The ideas and institutions enshrined at Bretton Woods set the stage for a new age in which governments at all levels took on an unprecedented orienting mission to maximize GDP growth. For the US in particular, Bretton Woods led to GDP growth coming to serve as the foremost indicator of national progress*5 .
So what might a Bretton Woods for the 21st century look like? Is it possible to design an economic gathering that prioritizes the design of frameworks to advance the interests of people and the planet? It’s not only necessary – it’s increasingly possible.
The Next Systems Project*6, a network of hundreds of creative thinkers and activists, is putting forward actionable blueprints for the new economy, from old post-industrial cities to rural agricultural communities. Leaders of that movement, including Gar Alprowitz, Ai-jen Poo, Medea Benjamin, Danny Glover, the congressman John Conyers, Sarita Gupta, Daniel Ellsberg and others, have been working to compile something as comprehensive as the framework the world got in 1944.
Next year, a separate initiative, the Ecos gathering, is seeking to bring thinkers and activists from marginalized communities and indigenous cultures to systematically envision a new political and economic system.
As the Allied victory began to look certain, Keynes was heavily involved, as leader of the British delegation and chairman of the World Bank commission, in the mid-1944 negotiations that established the Bretton Woods system. The Keynes-plan, concerning an international clearing-union, argued for a radical system for the management of currencies. He proposed the creation of a common world unit of currency, the bancor, and new global institutions – a world central bank and the International Clearing Union. Keynes envisaged these institutions managing an international trade and payments system with strong incentives for countries to avoid substantial trade deficits or surpluses. The USA's greater negotiating strength, however, meant that the final outcomes accorded more closely to the more conservative plans of Harry Dexter White. According to US economist J. Bradford DeLong, on almost every point where he was overruled by the Americans, Keynes was later proved correct by events.
The two new institutions, later known as the World Bank and the International Monetary Fund (IMF), were founded as a compromise that primarily reflected the American vision. There would be no incentives for states to avoid a large trade surplus; instead, the burden for correcting a trade imbalance would continue to fall only on the deficit countries, which Keynes had argued were least able to address the problem without inflicting economic hardship on their populations. Yet, Keynes was still pleased when accepting the final agreement, saying that if the institutions stayed true to their founding principles, "the brotherhood of man will have become more than a phrase."
*3:Mentioned in http://d.hatena.ne.jp/sumita-m/20050604 http://d.hatena.ne.jp/sumita-m/20070305/1173063168 http://d.hatena.ne.jp/sumita-m/20071119/1195448051 http://d.hatena.ne.jp/sumita-m/20100712/1278894145 http://d.hatena.ne.jp/sumita-m/20120528/1338230225 http://d.hatena.ne.jp/sumita-m/20130528/1369701582 http://d.hatena.ne.jp/sumita-m/20130925/1380121265
*4:See George Monbiot “Keynes is innocent: the toxic spawn of Bretton Woods was no plan of his” http://www.theguardian.com/commentisfree/2008/nov/18/lord-keynes-international-monetary-fund
*5:See Umair Haque “GDP Needs Help: Let's Build a Second Measure of Economic Strength” http://www.theatlantic.com/business/archive/2012/01/gdp-needs-help-lets-build-a-second-measure-of-economic-strength/250689/