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How to Fix Globalization – The Atlantic


Few ideas today are more unfashionable than globalization. Across the ideological spectrum, a once-robust consensus about the liberating power of free trade and financial markets has transformed into the conviction that the world has spun out of control. Economic inequality is rising in developing and developed countries alike. Hopes for a global human-rights awakening have given way to frank assessments of the persistence of slave labor and extreme poverty. Climate change is accelerating, diplomatic relations between the United States and China have reached a new nadir, and the European Union has devolved into a forum for resentment. A project forged to spread democracy has brewed a new authoritarian politics on multiple continents.

These horrors were evident before the outbreak of COVID-19; the pandemic has escalated them all. But this is not the first time globalization has run aground. Seventy-six years ago, leaders of the world’s democracies gathered in the mountains of New Hampshire hoping to end the chaos and enmity spawned by the collapse of the global trading system known as the gold standard. Guided by the great British economist John Maynard Keynes, more than 700 delegates from 44 nations sought to establish a new international order in which democracies would cooperatively tame the excesses of high finance in the name of international harmony. The fruits of their labors would become known as the Bretton Woods Accord, and the 25 years of unprecedented prosperity that their effort inaugurated offer profound implications for our own age of calamity.

For it is not globalization that has brought us to the brink of the abyss, but the peculiar strain of globalization that emerged in the 1990s—a system in which international financial markets would discipline the bad habits of democratic governments, not the other way around. Instead of linking countries together in shared investment priorities and social goals, the World Trade Organization and other institutions of global commerce have thwarted government interference in the profits of international investors—profits that often come at the expense of public health, environmental protection, and geopolitical stability.

International crises demand international solutions. If today’s leaders hope to escape the havoc on our horizon, they cannot succumb to the temptations of nationalist demagoguery. It is time to relearn the lessons that once brought a generation’s greatest economic minds to Bretton Woods in the summer of 1944.

The Mount Washington Hotel was not a healthy place. The American hosts had believed that the resort’s remote locale would ease wartime security concerns, but the building was a relic of another age, and its slapdash upgrades simply couldn’t handle the burdens of the conference. It had barely enough rooms for the 720 delegates, never mind the hundreds of journalists from around the world who crammed the hallways for interviews and photographs.

“The taps run all day, the windows do not close or open, the pipes mend and unmend and no one can get anywhere,” Keynes’s wife, Lydia Lopokova, wrote on July 12.

Delegates worked through a haze of scotch and sleep deprivation. Negotiations began before breakfast and dragged on past midnight, ballrooms filling with smoke, talks at times giving way to bawdy drinking songs. (The unofficial anthem of the conference included the line “And when I die, don’t bury me at all / Just cover my bones with alcohol.”) Privately, Keynes half-expected the “monstrous monkey house” to founder on a wave of “acute alcohol poisoning.” Though he was strictly forbidden from attending cocktail hours by his wife, who demanded reasonable bedtimes, Keynes nevertheless collapsed from the event’s sheer strain on the evening of July 19—an episode so severe that German newspapers printed premature obituaries for him.

But this boozy mayhem was better than the conference that had made Keynes’s career 25 years earlier. In 1919, Keynes had joined other victors of the Great War in Paris to craft a peace settlement with Germany. With all the delights of the French capital at their disposal, the affair became a vector for the transmission of the Spanish flu, which knocked Keynes into a hallucinatory, bedridden stupor for days. Talks dragged on for six months, and their product—the Treaty of Versailles—had appalled Keynes as a blueprint for authoritarian violence. The compact failed to establish a workable international economic system, Keynes had argued, leaving victor and vanquished alike with unpayable debts that would breed misery and resentment before marching Europe into another catastrophe.



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