Keynes, Globalisation and the Bretton Woods Institutions in the Light of Changing Ideas about Markets

For most of the twentieth century, pessimism about, and hostility to, markets was prevalent and this pulled in an anti-globalist direction. Indeed, the global institutions set up in 1944 were constructed by two market pessimists, John Maynard Keynes, on whom this article concentrates, and Harry Dexter White. The main shift in thinking in our own day has been towards a renewal of the market optimism of the nineteenth century, providing the necessary intellectual condition for the emergence of globalisation as a policy project. Anti-globalism has switched from poor to rich countries. Globalisation offers the best hope for poor countries to catch up with the rich. But growth has become less important for rich countries which could probably abandon the globalist project without much damage to their material standards, and with possible gain to their quality of life. And they may be tempted to do so if the political costs of maintaining a global economy become too high. The implications of such a shift are profound. But Keynes would at least demand that we start thinking about them.