Are we at the end of 'Bretton Woods'?: White House reconsiders post-WWII world financial system

Omni Mount Washington, Bretton Woods
RJ Peltz-Steele CC BY-NC-SA 4.0

"Bretton Woods," I said.

"Are you sure it's still on?" he asked.

That was part of my conversation with a motel manager in Carroll, N.H., a couple of weeks ago when I was at Bretton Woods for the annual meeting of the New England Political Science Association (NEPSA).

We were talking about where I was headed in the north of New Hampshire, and I answered the man that I was bound for an event at Bretton Woods. I realized later that he thought I meant the ski resort. I could see the slopes from the Omni Mount Washington Resort opposite, where NEPSA was meeting, and the snow cover was waning, yielding to rain.

I did not think he meant, but thought it would be funny if he had, that "Bretton Woods" might be over: meaning not the ski season, but the global financial system built around the International Monetary Fund (IMF) and World Bank.

That system, and the twin institutions (one a predecessor of the World Bank), were conceived at the Mount Washington hotel at the Bretton Woods Conference in July 1944, before the end of World War II. It was widely understood by then that a lack of multilateral economic cooperation was a key failing of the interwar period that led to a second global catastrophe. 

Nevertheless, world leaders, including the Americans and British, were not all yet convinced in 1944 that economic cooperation, especially with a reconstituted Germany, much less Japan, would be in their national interests. Bretton Woods welcomed a who's who of the times at the intersection of economics and politics, such as the British economist John Maynard Keynes. So in the end, the conference proved persuasive to skeptics.

"The Room Where It Happened":
the Gold Room, where the Bretton Woods Agreement was signed
RJ Peltz-Steele CC BY-NC-SA 4.0

 

On a tour of the stunning, now-Omni hotel while I was there, I learned that Bretton Woods was chosen as a location for the high-level meeting in bello because its location between two notches in the New Hampshire mountains afforded it remarkable physical security. I found that that security is still a thing even in the information age, as my cell phone found signal only intermittently. I had to use the public library in Carroll to meet with my International Law class on Zoom.

The Bretton Woods Conference resulted in a system of consistent currency convertibility and installed the IMF as a kind of backstop, or currency reservoir, to help countries avert spiraling domestic destabilizations that might otherwise threaten global security—such as the collapse of the German economy that fueled the rise of Nazism. The Bretton Woods conversion system lasted as long as the gold standard, until the 1970s, and what followed, what still functions today, is a direct descendant.

And now all that might change. As a headline asked in The New Republic (TNR) on April 21, three days before I arrived at Bretton Woods, "Will Trump Finally Kill the Bretton Woods System?" 

As TNR explained, Project 2025 is not on board with the global financial system, despite its facilitation of American dominance of the world economy since World War II. The rightest wing rather sees the Bretton Woods system as part of the globalist agenda to subordinate U.S. interests to a new world order. In this telling of it, the IMF and the World Bank are just two more UN-adjacent intergovernmental organizations that suck resources from the American economy to subsidize the world's welfare-indulgent masses.

It is true that the IMF and World Bank invest in poorer parts of the world. But those poorer relations sometimes see these investments as more imperialism than charity. I studied World Bank projects as long as 30 years ago and witnessed the thorns of economic hegemony that came with the roses of infrastructure development in Latin America. There's been a lot of reform since, but nationalist critics see thoughtful multistakeholderism as an ebbing of commitment to quid-pro-quo foreign aid, rather than an all-boats-float scenario.

The IMF has long been at the middle of similarly conflicting perspectives. High-GDP contributors complain about the organization's generous loans and patient debt restructuring. Meanwhile, countries on the receiving end see IMF loans as a Hobson's choice, complemented by promises of private investment that never materializes and delivery into an addiction-like cycle of economic dependence that knows no off ramp.

Bretton Woods ski slopes
RJ Peltz-Steele CC BY-NC-SA 4.0

Climate change has exacerbated these tensions. Small-island and economically weaker nations have experienced an uptick of costly, destabilizing events, increasing demand for aid from developed economies. Meanwhile, aid recipients point out, not without reason, that the loan sharks got where they are through the very resource exploitation that they seek to restrain in the developing world. And with global temperature set to rise for the near future no matter what we do, no amount of economic and governance reform can turn back the clock on the damage sustained.

So need rising and prospects dimming for a return on investment, the Trump Administration contemplates bailing on Bretton Woods. You see it in the President's infamous tariff chart, which, analysts worked out, was not calculated to impose reciprocal tariffs, but to use tariffs as a weapon against trade deficits.

I as much as the next guy want the overworked American laborer to get a fair shake in the world. For a post-industrial economy, we work too many hours, enjoy too few benefits, and suffer an outrageously high cost of living, all summing wretched prospects for socioeconomic mobility. Trump is right that the IMF could care more about trade imbalances. 

But foreign social democracies are a scapegoat. Most of Americans' economic misery is self-imposed at the beckoning of a fat corporatocracy feasting on the deepening wealth divide.

An America-first policy that requires exiting the Bretton Woods institutions gives off an eerily 1930s vibe. And that didn't work out so well the last time.

As Jacoby talk commemorates Kristallnacht, Ukraine recurs in historical record of flights from oppression

An upcoming talk on Kristallnacht, a recent experience in the Paraguayan Chaco, and the ongoing war in Ukraine have me thinking lately about cultural and religious freedom.

In commemoration of Kristallnacht, award-winning Boston Globe columnist Jeff Jacoby will speak at the S. Joseph Solomon Synagogue of the Maimonides School in Brookline, Massachusetts, on Sunday at 7 p.m. The talk will be livestreamed.

Jacoby's father was the sole survivor of his family at Auschwitz. 

"He didn’t hate God for what he had lost and didn’t abandon the Judaism in which he had been reared," Jacoby wrote of his father. "On the contrary, he deepened it with observance, study, and prayer."

Last week I had the privilege of visiting Mennonite communities in the Chaco region of Paraguay. Mennonites arrived in Paraguay in three waves, circa 1875, 1930-32, and 1947. Each time, they sought refuge from regimes that wished to extinguish their religious freedom, if not their lives.

Restored "Koloniehaus" at Filadelfia, Paraguay
RJ Peltz-Steele CC BY-NC-SA 4.0

On a world map at the Fernheim Colony House in Filadelfia, I was struck in particular by one remarkable line tracing Mennonite migration. The journey ran eastward from Ukraine, then Austria-Hungary, to Siberia in 1908; then further east to China, turning south to Indonesia in 1927; then turning back westward across the Indian Ocean and isthmus of Suez, to Europe; and at last on to Paraguay to join the end of the second migration there in 1932.

Besides the astounding odyssey it represented, the line resonated with me both because of the current conflict in Ukraine and because my own grandfather's Jewish family fled what is today western Ukraine at about the same time.

Map at the Filadelfia Mennonite Museum,
similar to the one at the Colony House
RJ Peltz-Steele CC BY-NC-SA 4.0
with no claim to underlying work

As has been widely reported, one Russian strategy in the present war in Ukraine is the forced relocation of Ukrainians, especially children, to Russia, whether to be given passports and politically and culturally Russified, or, in the case of dissenters and combatants, to be condemned and disappeared in remote parts. The strategy is not new.  Just before the Russian invasion of Ukraine in February, I wrote about the forced relocation of Polish ethnic minorities, such as the Lemkos, from western Poland to Soviet Russia in 1947.

The parallels are not coincidental.  The Mennonites fled increasingly unstable Austria-Hungary for Russia before the outbreak of World War I. Then, scarcely a decade after the Russian Revolution, rising nationalism rendered even Siberia inhospitable, prompting the exodus of the late 1920s. After World War II, Mennonites remaining in an eastern Germany about to be gifted to the Soviet Union departed in another migratory wave, in 1947. They were not alone; justifiably afeard Christians of other sects departed as well.

Engrossed in the map in Paraguay, I muttered something unkind about Putin. Standing nearby, Fernheim archivist Gundolf Niebuhr said quietly, "History repeats itself."

Niebuhr and I talked about the complex relationship of the contemporary Mennonite Paraguayans with their Latino and indigenous neighbors.  They work closely together, literally, on farms, in schools, and in governance.

But the legacy of repeatedly fleeing oppression, Niebuhr told me, is that even in prosperous and peaceful times, people are dogged by a lurking anxiety over the inevitable impermanence of the idyll. To look around, the Mennonites and their partners have defined the unique cultural identity of the human Chaco. Yet are the Mennonites still only visitors? Will the day come when Asunción says, assimilate, or else? And it will be time to move on again.

Struggle and perseverance are enduring themes in Jewish identity. The former seems inescapable, as expressions of antisemitism abound. Hate simmers now in the Twitter scandals of Kyrie Irving and Kanye West.  Last week, mourners marked the fourth anniversary of the Pittsburgh synagogue attack. Yet the Jewish tradition teaches that anxiety is counter-productive. God will light the way, as always he has. That seems to have been the remarkable faith walk of Jeff Jacoby's father. Still, there are scarce few among us who do not struggle to eschew fears and doubts.

The Jewish people have a strong claim to unrivaled familiarity with persecution. But assimilation and expulsion of the other seems well ingrained in the human mode of operation, regardless of the nature of the otherness. An elder of my Christian church reminded me yesterday that being Christian is not supposed to be easy. The "Good News" might offer salvation, but leisure and luxury are not part of the methodology, at least not in this life.

I live without fear of being alienated in, or exiled from the only home I know. That is a blessing. All of us possessed of that blessing owe open hearts to anyone who loses it, whether in Pittsburgh, Paraguay, or Ukraine.

Researcher recounts riveting history of Auschwitz infiltrator

Pilecki before 1939

Witold Pilecki was an officer of the Polish underground in 1940 when he allowed himself to be captured by the Nazis in a civilian roundup and sent to Auschwitz.  The underground sought to document German atrocities in the concentration camps with the aim of spurring the Allies to action.

Assuming a false identity using found papers, Pilecki passed himself off as "Tomasz Serafiński," the commanding officer of the Nowy Wiśnicz region unit of the underground Polish Home Army (Armia Krajowa, or AK).  He remained in Auschwitz for nearly there years and wrote reports for the underground that were smuggled to London and Washington.

At Easter in 1943, Pilecki and compatriots made a daring escape from Auschwitz.  Hunted by the Gestapo, they made their way through the Polish countryside and ultimately found refuge with the real Tomasz Serafiński, his wife, Ludmiła, their children, and their underground network.  Amid their run, the escapees had become suspected by the underground of being German spies.  As he grew close to his unexpected namesake, Serafiński found himself at odds with the AK, ultimately depending on Ludmiła to protect both men against underground suspicion and Nazi hunters.  Pilecki and Serafiński each had a grim fate yet in store.

Pilecki at Auschwitz

This riveting WWII story is the subject of a working research paper, replete with documentary images, authored by Elizabeth M. Zechenter, Ph.D., J.D.: Was it Really a Blind Fate? Interwoven Lives of Witold Pilecki and Tomasz Serafiński, and the Daring Efforts of Ludmiła Serafińska to Save Them Both.   The paper was featured in this month's (Oct. 2019, no. 20) Quo Vadis, the Philadelphia Chapter newsletter of The Kosciuszko Foundation.  The foundation is a New York-city based non-governmental organization dedicated to cultural and educational exchange between the United States and Poland.

Zechenter

By day an assistant general counsel for GlaxoSmithKline, LLP, Zechenter is an accomplished academic researcher (Academia.edu, ResearchGate), her UCLA Ph.D. in evolutionary archaeology, who has taught international law and human rights law at Georgetown University Law Center.  She also is president of the Jagiellonian Law Society (JLS), "a voluntary legal association comprised of a diverse group of professionals (lawyers, judges, law faculty, and law students) who are interested in, or have roots in Polish and Central/Eastern European (CEE) cultures."  She is related to the Serafińskis. 

I was privileged to learn about Elizabeth's work through membership in JLS ("open to any legal professional who shares [JLS] interests and goals") and my work in the Catholic University of America, Columbus School of Law, American Law and LL.M. program with Jagiellonian University (not associated with JLS) in Kraków, Poland, and Washington, D.C.