The Bretton woods Conference and the subsequent Marshall Plan was a game-changer in the global economic power. The conference resulted in a shift of economic power from Britain to the United States of America. It is regarded to have changed the economic system and was a first of its kind monetary arrangement. It was at this conference that the seeds of future discord were thrown and decades after the conference, we still feel its effects.
When delegates from around 44 Nations including Britain, France, Russia and Germany met in New Hampshire in 1944 after the Second World War, the economic and military power of the United States were the strongest at the time. Most ideas of the American side were given importance and this led to the US Dollar emerging as the global currency, replacing the gold standard that was in use then. America led the talks at the conference and proposed the setting up of an international system of currency fixed on the Gold standard. They put the Gold standard as a fail-safe. The Americans said that they ‘must end the era of economic Nationalism’ which led to the opening up of markets globally. By now, it was clear to everyone that the United States of America would emerge as global leaders.
The interests of the United States were kept in mind, with the nation-leading the reconstruction efforts. They saw themselves as a surplus nation and handed out loans of nearly 13 Billion Dollars, making them the world’s greatest creditors and leaving most other nations in debt. The United States pegged a dollar to gold so that the dollar became the comparable unit of currency and exchange. Apart from this, the International Monetary Fund (IMF) and the World Bank were set up in order to ensure the nations complied with the new rules made at the conference. Many said ‘the iron curtain has fallen’ when the Soviet refused to be a part of the conference. The Soviet, along with its allies, did not agree to the terms of the conference which clearly favoured the west and took themselves out of the global economic system. Tensions between the western allies and the Soviet then became more apparent and visible.
The post-war economic domination of the Americans can still be felt, even today; thanks to Bretton Woods’s intricate vision and execution via the Marshall Plan. After the Second World War, most countries were left with nothing and were nearly ruined. Thanks to the ‘Goodwill’ of America, they were able to reconstruct their cities and recover, but at a heavy cost. They would forever be indebted to the Americans. Most countries to date are heavily influenced by the culture of America; right from the products used to the language spoken. In fact, most countries even today devalue their currency against the dollar. The US Dollar is still the king of currencies, with people trading in US Dollars. Many places around the world accept only American Dollars and people convert local currency into Dollars while storing money at home, even in countries like India.
In spite of its collapse in the early 1970s, the Bretton Woods agreement impacted the world in a global sense and cemented America’s position as a world leader at a time when America was merely an emerging superpower. The conference added fuel to the fire with regard to growing tensions between the Soviets and the western allies and gave an impetus to the cold war. Thus, it was the Bretton Woods Conference and the Marshall Plan which was the tool with which the economic colonialism, originated by America; is enforced.
Kisana, R. (2019). Presentation.