Blog author: jcouretas
by on Friday, November 14, 2008

Acton’s Sam Gregg on Public Discourse:

On November 15th, leaders of the world’s largest economies will gather in Washington, D.C., to discuss the ongoing international financial crisis. Figures such as Britain’s Prime Minister Gordon Brown view the summit as an opportunity to reform international financial structures and perhaps create new ones. He and others have spoken of a “new Bretton Woods”—the 1944 international meeting that sought to design an international financial structure for a post-war world.

Today, relatively little is left of the original Bretton Woods. Many of its provisions concerning exchange rates and currencies, for instance, were gradually abandoned. Bretton Woods’ most prominent institutional legacies are the IMF and the World Bank. For different reasons, neither is especially liked by developed or developing countries. In recent years, both have struggled to define their missions. The World Bank has additionally been dogged by allegations of ignoring or even facilitating corruption in developing nations, not to mention criticisms that, more than most bureaucracies, the primary objective of many of its staff seems to be institutional self-preservation.

The contemporary financial crisis has demonstrated, however, that the basic impulse for Bretton Woods-like solutions to international economic problems is alive and well. Some national leaders, for instance, have echoed (probably unconsciously) John Maynard Keynes’s call at Bretton Woods for a “world central bank”. More generally, there is a strong push, especially from Western European governments, for the creation of more intergovernmental planning and bargaining mechanisms as the means to impose a new international regulatory order upon national banking and financial systems.

But is this ‘top-down’ approach really the best way to address the financial crisis over the long term? One prominent twentieth-century figure who would have vehemently disagreed was the German economist Wilhelm Röpke (1899-1966).

Read the article at Public Discourse.


  • Clare Krishan

    The failure of vehicles to find owners is a commercial error — US auto makers make cars no one wants to buy — that’s not labors fault now, be fair …
    “Likewise the woes of Michigan’s car industry are largely attributable to decades of Michigan executives bowing to the seemingly-insatiable demands of Michigan-based unions.”

    (if Mr Gregg cannot find it in his heart to be charitable, at least be rational). Capitalists are still the one’s steering where they invest their capital, no? Chauvinism isn’t healthy, muscle cars don’t sell well when we expect the customer’s sons and daughters to go fight’n'die for the fuel they guzzle…

  • Clare Krishan

    n.B. 4 of top-10 European cars are made by US firms ..
    http://meganmcardle.theatlantic.com/archives/2008/11/why_cant_american_firms_make_s.php

    What factor of production so skewed US consumer preferences that they warped capital allocations? Low interest rates on consumer credit set by the Fed… Abolish it! They’re not a democratic institution, they’re merely an private association of bankers. And they’re a bigger threat to national security than the guys who flew their planes into the twin towers…