For over sixty years now, the International Monetary Fund (IMF) has served as a key instrument of the liberal international economic order (LIEO). Free trade, loans to aid development, and the decline of command economies have all been results of this institution—much to the delight of countless actors across the international stage. Yet the past decade has hosted a particularly strong wave of criticism. The 2007-08 financial crisis, as Eric Helleiner shows us, damaged the legitimacy of both IMF policies and leadership. From that time through today, many have insisted that a “new Bretton Woods” occur as to totally begin again in our structuring of global finance. Helleiner and I are, at our cores, opposed to such a move. This is largely because a “new Bretton Woods” is almost impossible, but also because a “new Bretton Woods” seems rather counterintuitive.
In brief, brief summary of Helleiner’s work: the Bretton Woods Conference that created the IMF came about under highly specific conditions. The predominance of U.S. economic leadership in the middle of the twentieth century, the consensus of “embedded liberal” economic experts across the world, and the wartime context that pitted the LIEO of the Allies against the “new order” aspirations of the Nazis were all crucial to the so-called “Bretton Woods moment” (Helleiner, 621). That having been said, we lacked many of these conditions during the most recent financial crisis and continue to lack them today, placing us in an “interregnum” defined by heated debates concerning the direction in which the IMF and the global financial system ought to head.
This “interregnum” is, in my opinion, exactly where we want to be at the moment. Statistic after statistic demonstrates that the U.S. and the U.K. hold unprecedented power within the IMF. The (in)famous Washington Consensus—a name true to its shockingly unilateral nature—has arguably done as-much-if-not-more harm than good (e.g., countries like Jamaica). The 1997-98 financial crisis, strangely foreboding with respect to the crisis of 2007-08, saw the IMF hold many East Asian countries accountable to what Helleiner calls the “Anglo-American experience” (628). This accountability would soon after be abandoned in a double standard by the Anglo-Americans themselves as they took far more interventionist measures once the crises arrived on their own figurative doorsteps in the 2000s. Additionally, let us not forget about the IMF’s current role in the Ukraine. All of this considered, history has shown the IMF to be a bold synonym for Western power.
Gordon, Sarkozy, and the like surely would not call for a radically new system when the old one benefits the national interests of their respective countries. Nor would the U.S. be anxious to enact a new approach beyond the LIEO, and from what I gather, it isn’t. Instead, it is my firmest opinion that if a “new Bretton Woods” were to ever occur, the same key players who sat at the table in 1944 would be sitting there again, presumably still calling the shots. The rhetoric of a “new Bretton Woods” is just that: rhetoric (and the rhetoric of copping-out, at that). In closing, more normative substance in the current IMF debates is necessary. And given the circumstances, it would be much more meaningful to change the fundamental structure of the current system to a more egalitarian one, than it would be to throw more than half of a century into a metaphorical garbage bin and start “anew.” Another system perpetuating the imbalances between developed and developing actors is the very, very last thing that we need.