By mid 1943 the tide of war had turned against the Germans. The Russians had started their counterattack and soon were near Kiev in Ukraine. By the fall of that year Mussolini was deposed and American troops landed in Italy. Perhaps a sane person would have surrendered. The Allies now could look forward to the end of the war and the kind of world that would emerge although planning for the post-war economic environment had started as early as 1942 in the United States and England. In both countries the planners—Harry Dexter White in the United States and John Maynard Keynes in England—were at work to come up with arrangements and innovations that would prevent a repeat of the 1930s. Their efforts culminated in the Bretton Woods Conference of 1944, and both can be considered as architects of the post-War international economic order.
I believe that we should make available to peace-loving peoples the benefits of our store of technical knowledge in order to help them realize their aspirations for a better life.
Inaugural speech of President Truman , 1949
Idleness is not the same as Want, but a separate evil, which men do not escape by having an income. They must also have the chance of rendering useful service and feeling that they are doing so. This means that employment is not wanted for the sake of employment, irrespective of what it produces.
William Henry Beveridge , Full Employment in a Free Society
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
It was “An Act to provide Federal Government aid for the readjustment in civilian life of returning World War II veterans.” Thus, it is called The Servicemen’s Readjustment Act of 1944. A good read on the subject is Over Here: How the G.I. Bill Transformed the American Dream by Edward Humes, 2006.
- 2.
Based on data from the US Census Bureau, I estimated the median price of a house in the United States to be about $2500 in 1940 and $6250 in 1950.
- 3.
Henry A. Wallace (1888–1965) was the Vice President during FDR ’s third term (1941–1945). He also served as FDR ’s Secretary of Agriculture and Secretary of Commerce. In 1948 Wallace ran as the presidential candidate of Progressive Party and lost to President Harry S. Truman .
- 4.
Henry Wallace , Sixty Million Jobs (1945). The general pattern of unemployment in Wallace ’s data resembles that shown in Fig. 2.1. The last year in Wallace ’s data was 1944.
- 5.
For a short history of the Employment Act and opposing views see G. J. Santoni (1986).
- 6.
Here we speak of the modern welfare state. Welfare of citizens has been the concern of governments for many centuries. It is not difficult to find precedence for welfare measures in ancient China or other parts of the world. Here we are talking of a deliberate, comprehensive, and sustained policy of modern governments.
- 7.
The report is entitled Social Insurance and Allied Services and was prepared by a committee under the chairmanship of Sir William H. Beveridge . The members of the committee were drawn from different departments concerned with the well being of citizens including Home Office, Ministry of Labour and National Service, Ministry of Health, and Treasury. The report was submitted to the British Parliament in November 1942.
- 8.
The Organization for Economic Co-Operation and Development was established in 1961 and presently has 30 members. They include Canada, the United States, Mexico, many European countries, Australia, Japan, and Korea. Member countries are committed to market economy and democracy.
- 9.
Harry Dexter White (1892–1948) was a Harvard educated economist and a high ranking official in the US Department of Treasury. He was the principal architect of the Bretton Woods Agreement , the IMF , and the World Bank . White has been accused by several sources of being a Soviet spy. He died of a heart attack three days after testifying before the House Committee on Un-American Activities (he had had several heart attacks before that testimony).
- 10.
The Soviet Union was one of the 44 countries participating in the conference, but it decided not to join the fund. Later on, nations other than the original 44 joined the fund.
- 11.
They included Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China, Cuba, Czechoslovakia, France, India, Lebanon, Luxemburg, the Netherlands, New Zealand, Norway, Pakistan, Rhodesia, Syria, South Africa, United Kingdom, and the United States.
- 12.
Among the more famous ones are the Kennedy round (1962–1967), Tokyo round (1973–1979), Uruguay round (1986–1994), and the Doha round (2001–2008). The Doha round ended in failure. Negotiators from different countries gathered in Geneva Switzerland in July 2008. Despite extended discussion they could not reach an agreement. The sticky point was developing nations’ demand to be able to impose temporary tariff barriers to control prices or block a surge in imports. On one side stood the United States and on the other China and India.
- 13.
General George C. Marshall (1880–1959) as the Chief of Staff of the United States Army (1939–1945) was instrumental in the Allies’ victory in World War II . He served as Secretary of State (1947–1949) and Secretary of Defense (1950–1951) during the Truman administration. He was awarded the Nobel Peace Prize in 1953 to honor his “great work for the establishment of peace.” During the ceremony in the University of Oslo, communists protested by shouting and throwing leaflets.
- 14.
Barry Eichengreen (2007), p. 65.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2009 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Dadkhah, K. (2009). The Post-War Economic Order. In: The Evolution of Macroeconomic Theory and Policy. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-77008-4_2
Download citation
DOI: https://doi.org/10.1007/978-3-540-77008-4_2
Published:
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-77007-7
Online ISBN: 978-3-540-77008-4
eBook Packages: Business and EconomicsEconomics and Finance (R0)