7.7: Postwar Planning and the Bretton Woods Conference
At the end of World War II in 1945, the allied powers resolved to avoid repeating their mistakes following World War I. Participants at the Bretton Woods Conference (1944) began establishing a new global financial system that would create a new system of foreign exchange, prevent competitive devaluations of currencies, and promote international economic growth. They created the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF) to help countries rebuild and develop local economies which had been decimated during the war.
Read this article about how World War II changed Europe. These changes reached far into the future, and some affect the world order even today.
Read this article, which takes its name from John Kenneth Galbraith's book about the postwar economic boom and political culture. It was undoubtedly an unprecedented time in American history, but it ultimately did not quite match mainstream expectations.
Watch this explainer video about the Bretton Woods institutions. The original aim of these institutions was to help all nations reach a higher economic and social potential. They would see mixed results, but their impact on the global economy is indisputable.
Read this article about the breakup of the Bretton Woods System. However, it is worth noting that the institutions still exist; this piece is a critique of their economic policies.