The Summit by Ed Conway, book review: Did the economic convention of July 1944 leave an enduring legacy?

The convention was characterised by walk-outs, spying, revelry and even a heart attack
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The Independent Culture

It must say much about the world in which we live, that six years after coming to the brink of financial disaster, there is still no common ground between nations as to the cause of the near-meltdown, and no agreed measurers for preventing a recurrence.

So, we drift on to the next calamity, unable to cooperate to head off a repeat or something similar. Of course, plenty of hot air has been consumed in debates and discussions in the major economic capitals, and mountains of official reports have been issued. Countries have made their own, half-hearted individual reforms, if they've made them at all. But there's nothing tying it all together, and no combined steps have been taken that will guarantee future international stability.

There have been calls for a united approach, particularly for a "new Bretton Woods" from Tony Blair, Nicolas Sarkozy and Bill Clinton but nothing remotely along those lines has transpired. Sadly, reading The Summit by Ed Conway is it ever likely to be. Conway deserves enormous credit for producing an utterly absorbing, minutely researched study of the historic July 1944 Bretton Woods gathering.

Any assumption Bretton Woods was a dry-as-dust meeting out of which emerged the post-War International Monetary Fund, International Bank for Reconstruction and Development, and a foreign exchange system built around the US dollar, is wrong. Likewise, any thought that the agenda was agreed in advance and the conference was mostly a rubber-stamping exercise is also mistaken. The picture so gloriously painted here is of a three-week, intellect-sapping, emotionally draining roller-coaster, involving 700-plus delegates holed up at the Mount Washington Hotel in the depths of the New Hampshire countryside. They discussed, argued, manoeuvred, ate and drank; and then they discussed, argued, manoeuvred, ate and drank some more.

The vast, ocean liner of a resort doubled up as both a deeply serious meeting venue and a playground, replete with restaurants and bars galore. Once the sessions were over for the day the temptation to stay up late into the night was impossible to ignore. The result of everyone working and trying to relaxing together in such close proximity for weeks on end, against a backdrop of enormous political expectation, was that people went stir crazy, and deeply-held nationalist prejudices and suspicions bubbled to the surface.

At the heart of this heady cocktail of teams from 44 countries, were Harry Dexter White for the Americans, and John Maynard Keynes from the British delegation. White was joined, in spirit at least, not only by his US colleagues but also by the Russian representatives, to whom he was passing confidential tit-bits. Remarkably, the principal batter for the home team was a KGB spy, although one who acted entirely from innocent idealism rather than a desire to betray his own country.

Keynes, a towering figure, physically and intellectually, was his counterpoint. Keynes' wife, Lydia, an eccentric personality, who to the bemusement of the other guests would swim naked in the river beneath the hotel each morning, joined him on the trip. To add to the melee, White, the host, out of a romantic desire for the conference to be seen to be open, allowed some 500 journalists to attend. They stayed at their own hotel, the Twin Mountain, but that was six miles away, so, most days, they were to be found enjoying undreamt (and rarely repeated) press access, propping up the bars and lounging in the chairs of the Mount Washington side-by-side with those charged with reshaping the world.

As the tide of the Second World War shifted, those who could scent victory were anxious to avoid a re-run of the Versailles Treaty that had ended the First World War (Keynes' seminal work, The Economic Consequences of Peace, was a scathing attack on Versailles). Between the wars there had been depression and rampant inflation. The existing framework was clearly not fit for purpose, and Bretton Woods was earmarked as the opportunity to design a new structure.

So pronounced were the pressures and stresses involved that Keynes, already in poor health, suffered a heart attack during the conference. Later, in the immediate, post-Bretton Woods "wash up" talks with the Americans, conducted during a heat wave in Washington, his condition weakened again and it was only relieved by doses of sodium amytal, a barbiturate that also works as a "truth drug". This may explain why the great man's poker mask slipped and he negotiated what proved to be a disastrously unfavourable loan from the Americans rather than a straight grant.

The gnawing tension at Bretton Woods was not surprising. The war was still being fought in Europe and Asia. Indeed, the European parties had to delay their departures for the US because of a travel blockade surrounding D-Day, and when the British contingent did get to leave, Hitler's last throw of the dice, the V1 rocket, was terrorising London. For the British too, there was an added dimension. Not only were they tasked with creating a lasting economic structure for a world devastated by war, and a war that had its foundations in the poorly-drawn settlement of the previous global conflict, they were also heavily involved in the modernisation of the country with the founding of the Welfare State and all the financial demands that would bring. The backdrop of war, meanwhile, and the desire to avoid World War Three, was the elephant in the room.

Much of Bretton Woods was remoulded and undone down the subsequent years. Blair and the others are right, however: we urgently require a new model that reflects globalisation and the digital age. But the fire is not there. Unlike in 1944, the current world is not reeling from the ravages of war and is not stuck with a hangover from the previous Great War. The banking crisis, severe as it was, did not supply the same imperative as millions killed and entire countries ruined.

If we attempted another Bretton Woods it would be monstrous in scale – led by the emerging markets demanding seats at all the tables, and an even higher number of multi-media journalists seeking accreditation. The first one was a near miracle; a second is unimaginable.