Development and Underdevelopment in the History of Economic Thought

Making of the BW Order: Harry Dexter White on Gold

Bitsen Aisenour, The London School of Economics and Political Science

The Bretton Woods (BW) was essentially an Anglo-American negotiation with two proposals for the post-WWII monetary order on the table: one by the US Treasury official Harry Dexter White (HDW), the other by British representative and economist John Maynard Keynes. While Keynes remains synonymous with BW, the arguably more influential White remains obscure and enigmatic. In fact, contemporary representations of White—White the communist spy, White the gold bug, White the Keynesian, White the nationalist—are so divergent as to be mutually exclusive. Debates between HDW and Keynes have often been seen as a clash between American and British interests under the very same Keynesian framework. Paralleling national objectives, White advocated for fewer capital controls, smaller borrowing quota size, and much less ER flexibility, while Keynes favored more capital controls, larger borrowing quota size, and more ER flexibility. As the US came relatively unscathed out of the war, and had larger gold reserves in its Treasury, it did not wish to be the creditor of the world. The common consensus on the BW seems to be that the material circumstances and the asymmetry of bargaining power – a rising hegemon supplanting a declining Britain – dictated the outcome. In short, it is a narrative of American power v. British ideas all operating in a Keynesian universe, with White’s role sidelined as merely trying to dilute Keynes’s elaborate proposals. There is ground to drive a wedge into this common narrative. Did HDW value gold for it was in the US national interest, or did he believe in the virtues of gold more generally – as an ideational issue? Is it the case that they did not operate in a Keynesian universe, but rather HDW was an ideological supporter of a gold-based world as well? This paper uses new primary empirical research to focus on White’s gold-centric thoughts.


Keywords: Bretton Woods; global monetary order; Keynes; Harry Dexter White; gold