Unrealised ideals the other side of global governance from 1942 to 1950

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This is an essay about a narrative not told. About great moments in history that never were. In all the revolutionary idealism of creating a new post-war order, three institutions were proposed that never came into existence.

Featuring a cast of beloved characters including John Maynard Keynes, Harry Dexter White, Cordell Hull, Franklin D. Roosevelt, and introducing a Great Scot, Sir John Boyd Orr, who was way ahead of his time.

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Unrealised ideals the other side of global governance from 1942 to 1950

  1. 1. Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950 Unrealised ideals: the other side of global governance from 1942 to 1950This is an essay about a narrative not told. It concerns great moments in history that neverhappened. It forms a foil to such works as ‘Act of Creation’ by Stephen Schlesinger, whose titlenot-so-subtly hints at the god-like nature of the architects of our post-war world. But thesearchitects were not gods, they were men. And as mortal beings they could fail. Some would seetheir innovations in institutional creation smashed against the hard realities of power,suffocated as the oxygen of idealism dissipated into the post-war context and abandoned asstates retreated to pre-war ideals of national interest and state sovereignty.The essay is in two parts. The first part will examine the proposals for three global institutions,made during or immediately after the second world war. For each unrealised institution, a shortintellectual history is given, followed by an explanation of what became of each one, and a briefcounterfactual suggestion as to what might have been. The second part will ask why theseinstitutions were not realised. It suggests firstly that the fraternal moment in time created bythe atmosphere of war was short-lived, secondly that individuals, cognisant of that moment,could only do so much and often overreached their ability or capacity to make change, andthirdly, that as that moment dissipated, the world saw the return of realpolitik and national self-interest.It concludes by briefly assessing the institutions’ intellectual remains, and suggests that theirfailings provide us with lessons for future institutional creation. In an era where better globalgovernance is urgently required, the experience of this post-war time should guide us inadvance of the dawn of any new creative moment. Part one: Global governance institutions that never wereThe three institutions considered here are Keynes’ version of the Bretton Woods system ofglobal economic governance, Boyd Orr’s World Food Board, and the International TradeOrganisation, all of which were envisaged and unrealised within the period from 1942 to 1950. 1.1. Keynes’ Bretton WoodsNestled in the New Hampshire woods, somewhere in the grounds of the Mount WashingtonHotel stands a green sign, commemorating the ‘Bretton Woods Monetary Conference’. This titleis technically incorrect, but perhaps better suits what happened. The United Nations Monetaryand Financial Conference was in reality a show run by the United States from start to finish. Theinstitutions created there in 1944 have become symbols of Western imperialism, are the focusof regular criticism from civil society organisations, and perhaps worse, are in danger of beingleft behind by regional replacements. However, the International Monetary Fund and theInternational Bank for Reconstruction and Development were not the only institutions to beproposed at this time. Two other proposals, one for an International Clearing Union and thesecond for an altered International Monetary Fund, may have led to a very different history ofglobal monetary governance. 1
  2. 2. Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950The International Clearing Union was proposed to the House of Lords in the UK Parliament byLord John Maynard Keynes in his maiden speech before the Chamber: “The principal object can be explained in a single sentence: to provide that money earned by selling goods to one country can be spent on purchasing the products of any other country. In jargon, a system of multilateral clearing. In English, a universal currency valid for trade transactions in all the world. Everything else in the plan is ancillary to that.”1This rather simplifies his mission to stabilise or equalise the terms of trade around the world.The union would take the form of a central body that would award an amount of internationalcurrency to each member based upon their trade history over the previous five years. At the endof the trading year, those nations that had a negative balance of payments, i.e. who hadimported more than they had exported, would be able to draw down on the credits in order topay their creditors. Those nations who had a positive balance of payments would add to theircredits. In both cases, repeated imbalances would be discouraged by a system of interestpayments, transfers and ultimately currency adjustments.2The union would have benefited the European nations whose economies were severelydamaged by the war, essentially providing a large overdraft facility needed to cover theexpected deficits in their balances of payments. It would have encouraged the Americannations, both North and South, who were the main suppliers to post-war Europe not to hoardtheir surplus earnings, but to spend them. The union was also designed to encouragetransparency, as it would need to keep a record of all members’ imports and exports and thustheir creditor or debtor status. In turn, it was hoped that this information would preventcompetitive currency devaluations and thus take a form of ‘financial disarmament’ in the sameway that the Atlantic Charter had already proposed military disarmament.3The union was never established, as outlined below, but Keynes had other proposals for theinstitution, the International Monetary Fund, that rose in its place. After he was appointed theUnited Kingdom’s representative at the fund’s first conference in Savannah, Georgia, heproposed to the assembly that the institution must be headquartered in New York. This wouldadd to the institution’s international credibility, help ensure that a balance of voices be heard,and enable greater ties with the United Nations, especially the Economic and Social Council.Keynes went on to argue that the fund’s management board should be staffed by part-timeleaders of national finance ministries, in order that its policy would be directed by nationalconcerns. He envisaged the fund as the servant of nations, not the master.4 White’s victoryKeynes got his way on neither account. In the early 1940s, while Keynes worked on his plans forthe union, Harry Dexter White was working on milder, more US-friendly proposals for theinternational monetary order. White, like his boss, US Treasury Secretary Henry Morgenthau,was not averse to Keynesian economics, but the importance of government spending and fullemployment was never held in the same regard in the United States as it was in Europe. Moreimportantly, the US treasury officials were not prepared to provide the vast reserves thatKeynes’ union would require. Instead, White envisaged an International Monetary Fund inwhich members would fix their exchange rates to the dollar, which was convertible to gold, inorder to prevent nations from competitive currency devaluation. The risk that Keynes foresaw, 2
  3. 3. Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950of severe imbalances in the terms of trade, was not mitigated with a sufficient funding facilitythat would enable debtor nations to continue to seek full employment. For example, Keynes’plans suggested that the fund hold reserves of up to 75% of the value of pre-war trade; White’ssuggested closer to 10%.5It was White who carried the day at Bretton Woods. By virtue of organising the conference, theagenda was arranged to ensure that Keynes chaired the commission on the International Bankfor Reconstruction and Development. It was thus difficult for him to negotiate on the fund at thesame time. By the end of the conference, Keynes had not had the time to examine the decisionsof the commission on the fund before he signed it off as the lead British delegate. Despite this,some elements of the union would live on in the Fund, such as some flexibility on exchange ratesin the event of severe imbalances.6White had a fuller, swifter victory at the first International Monetary Fund (IMF) conference inSavannah. The US, supported by what Keynes referred to as Latin American and Chinese‘stooges’, established that the Fund would be headquartered in Washington, and Keynes’ pleasfor management by part-time representatives of member nations was rejected in favour of well-paid, full-time positions with no specific duties for the fund’s managers. Keynes predicted thiswould result in the positions becoming retirement postings for international bureaucrats. TheIMF was established ‘a five minute walk’ from the centres of US government power: the WhiteHouse and the State and Treasury departments. As Kemal Dervis wrote, fifty years later: ‘thereis little doubt...that the involvement of the US government...in week-to-week operations of theBretton Woods institutions goes much beyond what the seventeen per cent voting power of theUS would suggest’.7 An alternate post-war economic orderCounterfactual history is a difficult thing. It risks becoming unsupported conjecture. But foreach institution, some brief suggestions are helpful in driving home the importance ofconsidering these issues at all. These risks noted, there follow some thoughts on Keynes’Bretton Woods.Had the world followed Keynes’ vision for a union, a hugely well-resourced international bankwould have been established, acting as a lender of last resort - a kind of central bank for theworld. Further, by creating a system that strongly encouraged all states to move towardsequilibrium in their balance of payments, the clearing union may have lessened the dollarshortage that quickly arose after the war due to vastly positive balance of payments that the USran post-war. The IMF in reality had little concern for what creditors got up to, prioritisingcurrency stability over full employment.Keynes recognised something that US officials have only recently awoken to in their critique ofcontemporary Chinese monetary policy: there are two sides to every trade imbalance. It is notonly the behaviour of debtors that matters, but creditors too. The dollar shortage would havebeen avoided by Keynes’ system, which did not rely on gold. This would have allowed forgreater liquidity in the monetary system, and avoidance of the real Bretton Woods system’scollapse in 1971. The ongoing financial crisis in the West may ultimately relate to these events:a clearing union may have devalued the dollar and raised the Renminbi long before China’senormous dollar surpluses led to asset bubbles in US sub-prime mortgage markets.8 3
  4. 4. Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950In sum, on the post-war international monetary order, Keynes was defeated by White, which ledto the creation of new Washington-centric institutions. The second part of essay will examinewhy White triumphed over Keynes. 1.2. Boyd Orr’s World Food BoardThe second institution considered here is the World Food Board, an intellectual product of thesecond world war and the Roosevelts’ idealism. In 1941, the President gave the State of theUnion address, which became known as the ‘four freedoms’ speech. The third of those freedomswas ‘freedom from want’. Due in part to the efforts of two Australian food scientists - one ofwhom had proposed a ‘marriage of health and agriculture’ at the League of Nations andcorresponded with the First Lady on the subject – Roosevelt decided that the first UNconference would concern food and agriculture. At Hot Springs in 1943, allied nations agreedthat that ‘the world has not had enough food to eat’ and that this was due to lack of incomes andproductivity rather than any Malthusian view of population growth. They agreed to meet inQuebec in 1945 to establish the UN Food and Agriculture Organisation (FAO).9One of attendees at Quebec was the nutritional scientist Sir John Boyd Orr who had helpedestablish nutrition guidelines before and during the war. Though not even an official delegate,having upset the British government with his claims about the malnourishment of Britishchildren, he was appointed as Director-General for a shortened term. He was the eighteenthchoice of the delegates present. His election is described as a reaction to his remarkableoratorical ability. Invited to address the assembly, he told delegates that ‘if the nations cannotagree on a food program affecting the welfare of people everywhere, there is little hope of theirreaching agreement on anything.”10Boyd Orr saw hunger as the world’s greatest problem. Hunger jeopardised any chance of peaceas it was a precursor to social unrest. Everywhere he looked he would find it. In the immediateaftermath of the war, Europe faced severe food shortages: much of Italy and Germany wassurviving on food aid provided by the UN’s Relief and Rehabilitation Agency. Three years earlierthe Bengal famine had taken an estimated 2-4m lives in British colonial India. In FAO’s firstWorld Food Survey in 1946, he found that one third of the world’s population were notconsuming a sufficient daily calorie intake. He stated that people would look to FAO for food, butthey would find only statistics. Boyd Orr was first a scientist, never a politician. He viewedproblems empirically and could prove that a solution to hunger existed. Thus he determinedthat the organisation would require a permanent executive agency to urgently improve worldnutrition. He was invited to suggest such a body at the first formal FAO conference inCopenhagen in 1946.11His answer was the World Food Board, for which he suggested three roles. Firstly, it wouldestablish buffer stocks in order to stabilise prices. This would mean that the board would setmaximum and minimum prices for commodities, and release or buy up stocks for storage asappropriate. This was aimed at ending the pre-war commodity price volatility, which wouldallow farmers to make more secure production plans and ensure a steady price for consumers.Secondly, faced with a growing world population, Boyd Orr knew that production must increasein the developing world. The board would provide large capital funds to developing countrieson affordable, long-term rates. Boyd Orr argued that estimates of a nation’s current capacity torepay the loans should not be seen as crucial, because only properly-nourished people could 4
  5. 5. Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950develop an economy that would generate enough revenue to repay a loan in the future. Thirdly,he recognised that at times it would be necessary to provide food in an emergency, even if therecipients had little hope of paying it back – the new world should not see its peoples’ starve.This would be funded from any surpluses generated by the buffer system.12 A swift put-downThe idea of the World Food Board met with muted approval at Copenhagen and was then killedin committee. The United States’ delegate in Denmark damned the proposal with faint praise,saying that the US wholeheartedly supported ‘the general objectives’ of the board. Many of theother delegates stated that they agreed with the ideas ‘in principle’. The result was agreementonly that they would found a committee to develop the proposals further. As soon as thecommittee began its hearings in Washington, the US made it clear she would not support it, andwas joined by the United Kingdom. The committee looking into the proposals reported back thatwhile food markets were global in character, and while there were deficits in developing worldand something should be done about these, they favoured bilateral agreements over any kind ofworld plan. The FAO was confined to exactly what Boyd Orr had argued against: a productionhouse for leaflets and statistics, lacking any binding authority.13 Opportunities lostThe absence of a World Food Board had three effects: lost decades in poverty reduction, anincreased likelihood of politicisation of food aid and slower innovations in development finance.Firstly, it was 15 years before the World Food Programme was set up as a multilateral supplierof emergency food aid. As Boyd Orr might have considered it, those were fifteen years of lostdevelopment opportunities, further worsening poverty. Secondly, the proliferation of foodbodies, such as the US’s Food for Peace programme, led to a bilateral approach, allowinginstitutions to be led by political and domestic goals as opposed to universal, scientific goals.The US is still criticised for dumping its food surpluses on the world market as ‘food aid’, whichrisks ruining farmers more local to the famine, who may be able to produce supplies morecheaply. The World Food Board, and buffer stocks, stabilised prices and a multilateral aidapproach from the start, may have prevented this. Thirdly, Boyd Orr’s long-term credits planwas farsighted: similar length World Bank loans were only available years later, were smallerthan Boyd Orr envisaged and were conditional. Only very recently has the future economicvalue of a more healthy generation been accepted as a reason to ‘front-up’ additionaldevelopment spending, as in the work of the High Level Taskforce on Innovative Financing forHealth.14Global food policy, food security and food aid have never stopped being controversial issues.Debates rage on the effectiveness of the institutions, the political nature of donations, thebenefits to developed suppliers and the effects on developing markets. It cannot be assured thatthe board would have avoided these controversies, but critically, it would have had a head starton today. 1.3. The people’s International Trade OrganisationThe International Trade Organisation has perhaps the longest intellectual evolution of the threeunrealised institutions considered here. President Woodrow Wilson’s programme for worldpeace, given in his ‘fourteen points’ speech at the end of the first World War, had featured a 5
  6. 6. Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950clause suggesting the ‘removal, so far as possible, of all economic barriers and the establishmentof equality of trade conditions among all the nations...’. With these words, Wilson helped createthe American view that free trade would build up strong relations between nations, makingpeace more likely. Cordell Hull, US Secretary of State from 1933 to 1944, took up Wilson’ssuggestion, and had, in 1925, proposed the idea of an International Trade Organisation. In thecourse of the second World War, it was considered that it was time for Hull’s idea to befulfilled.15The US considered that the trade organisation would form the third part of the new economicorder alongside the International Monetary Fund and the International Bank. A charter wasdrafted and shared with the UK in 1944 and conferences were arranged in London and Genevafor international negotiation. At this time, Keynesian economics was still held in high regard; itsuggested that there should be limits to the laissez-faire attitude to trade. For example, nationsshould be able to restrict trade should it suit their strategy for reaching full employment.Indeed, the meetings at London, Geneva and then Havana were the United Nations Conferenceson Trade and Employment.16The remarkable story of the International Trade Organisation (ITO) negotiations was that overthe course of two years, the assembled nations managed to balance the aspects of free trade andfull employment; the international and the national interest. Even more remarkably, partly dueto the work of the delegation for the newly-independent India, the demands of the developingworld for a chapter on development in the Charter were met. This allowed for infant industrysupport and the possibility of expropriation, to the alarm, but not the exit, of the US delegates.The result was finalised at Havana in 1948. Fifty-six nations signed the Charter of theInternational Trade Organisation. Despite being the closest of the three institutions to befulfilled, it too was never realised.17 Two-speed negotiationsThe negotiations of the charter had been divided in two at Geneva. The chapter on tariffs,quantitative restrictions, subsidies and state trading was separated from the rest of the work onthe treaty, partly because tariff negotiations had to be kept secret from the markets and partlybecause the US Reciprocal Trade Agreements Act, passed during the depression by a Congressdesperate to boost the US economy, gave the US president powers to arrange tariff reductionswithout the Senate’s approval. The rest of the charter, however, required two-thirds support forratification by the Senate under normal treaty rules. As a result, when the charter was signed inHavana, the chapter forming the General Agreement on Tariffs and Trade could immediatelycome into effect, which removed the incentive for the Truman administration to press theSenate to approve the rest of the treaty. Although Truman did submit the full treaty to theSenate, this only happened in April 1950, partly due to competing legislative pressures, such asthe Marshall Plan. Two months later, the UN and US went to war in Korea, and the HavanaCharter was permanently withdrawn. The General Agreement on Tariffs and Trade morphedinto the de facto body for world trade negotiations, replaced by the World Trade Organisation in1995.18 A marriage of trade, employment and developmentDaniel Drache has argued that the unrealised Havana Charter was a unique opportunity for themarriage of three fields: trade, employment and development, often contemporaneously seen as 6
  7. 7. Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950competing goals. He argues that the ITO represented a global trade system in whichuntrammelled free trade was not understood as a good in itself, but as something to supportemployment and development, each of the three elements working in each other’s favour. It wasan international work of careful compromise, granting national leaders the power, within limits,to do what they thought best for their economy.19Another example of the charter’s unifying nature can be found in chapter eight, which providesthat ultimate jurisdiction of trade settlements lies with the International Court of Justice, thenew court created by the Charter of the United Nations. This could have dramatically altered thedivide between private and public international law that exists today. It provided formultilateral, rather than bilateral solutions, which have become so important in contemporarytrade. Furthermore, the charter also contained a chapter on restrictive business conditions andan article on fair labour standards. It was a counter-hegemonic charter.20It is not unreasonable to suggest that a fairer, more equitable trade treaty, which had insignificant part been led by all parties of the world, including developing states, would haveavoided the North South conflict that was later to manifest itself in the demands for the NewInternational Economic Order. Although the Soviet Union never signed the Charter, they mayhave had little choice should the US and the rest of the world have done so. Instead, GATT wascreated, under which developing nations have felt excluded, and whose situation has notimproved under the World Trade Organisation (WTO). Unlike the ITO, the WTO made noprovision for labour rights, nor for the significant involvement of non-governmentalorganisations.21 2. Part two: Why did these institutions go unrealised?Part one has described the historical actors, ideas and processes behind the institutions, as wellas some elements that left them stalled. This section considers institutional non-realisation ingreater detail. Part two will also briefly ask if there are lessons for modern reform, innovationor institutional creation. Given the severity of today’s challenges, particularly on climate changeand financial governance, this question is timely and vital.The truth is that the institutions were never realised for a universe of different reasons. It ispossible, however, to identify some commonalities between each of the unrealised institutions.This part describes three commonalities: ideas in relation to time, the danger of individualoverreach, and the context of realpolitik and the sovereign state. 2.1. The passing of the creative momentThe first commonality concerns the post-war ‘moment’. This is the idea that in the aftermath ofthe ‘scourge of war’, greater political space for ideas was created. The war united the world, orcertainly the great powers, who, for a moment, partially relaxed their pursuit of nationalinterest to allow for the creation of the United Nations and other world institutions. The newspace gave room for leaders like President Roosevelt to rally their nations around institutionsthat may have been otherwise difficult to justify. Likewise, Sir John Orr’s speech at Quebec maynot have been received so well in more normal times, indeed he may not have been appointeddirector-general at all. But the moment was brief. As time passed, particularly after Roosevelt’sdeath and the exit of New Dealers from the White House towards the end of the war, this 7
  8. 8. Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950idealism began to fade. Right began to lose to might, and he who paid the piper realised he couldcall the tune.22The opening and closing of political space is perhaps best demonstrated by the case of theWorld Food Board. The idea had arisen during the war, promulgated by both Franklin Delanoand Eleanor Roosevelt, that food policy would change on a world-scale, that freedom from wantcould be realised, that this, in part, was what the war was being fought for. But Boyd Orrrecognised that this was merely a moment. As he wrote later, the ‘promise of the AtlanticCharter...the ‘fuller life, the true and great inheritance of the common man’ that Churchillenvisaged, ‘the relegation of poverty to the limbo of the past’ that Ernest Bevin, a member ofChurchill’s UK war cabinet foresaw... ‘would be quickly forgotten’’. He worked with urgency totry to create the executive food agency, but for this institution, the moment had already passed:‘the political atmosphere had changed’: the US and Britain were not willing to cede control tothe UN organisation. 23Moments and spaces for institutional creation vary in space and time. Although the BrettonWoods conferences were held in 1944 when war in Europe was still raging, albeit with apredictable outcome, it was already clear that the United States would emerge as the unequalledeconomic world power. Keynes, the advocate for the International Clearing Union, could do littleto appeal to the American sense of humanity: for them the union was just too expensive. Yetsomething of the moment still existed in Havana in 1948, where the US negotiator Will Claytonsigned the Charter of the International Trade Organization. This was ‘a singular moment whenideas, institutions and actors shared a common interest and...created a common ground wherenone existed previously.’ That somehow the negotiators had, by the time of the signing of thecharter in Havana, amalgamated the values of free trade, full employment and developmentmust be understood as a remarkable alignment of ideals: a true post-war moment. Yet thismoment may have only existed in the bubble of negotiations in Havana: back in Clayton’scapital, inflation, strikes, negotiations over both the Marshall Plan and the new North AtlanticTreaty Organisation, meant that the will to expend political capital on the ITO had passed.24 2.2. Too brilliant, too exhaustedA second commonality looks to the individual actors involved and asks whether theyoverreached their ability to change the world. Did they allow themselves to pursue their ownideals too far beyond practicality – making the best the enemy of the good? Was there only somuch that the idealists in this non-story could achieve before they lost the support of thebureaucrats they led? One example comes from Keynes’ experience at Bretton Woods. TheBritish press officer who accompanied him to the conference suggested that Keynes ‘was toobrilliant, too crushing and towards the end, too exhausted’ to properly fulfil his negotiationduties for Britain. Although Keynes was a passionate advocate of his ideas and a superb orator,he constantly struggled with health problems related to the stresses of his work. A standingovation and reverent treatment at the end of the Bretton Woods conference would not make upfor losing the battle of ideas.25In Quebec, the hesitant method of Boyd Orr’s appointment might have been read as a desire fora steady hand on the tiller until delegates could agree more closely on FAO’s mission. This wasnot in Boyd Orr’s nature. He had announced to the Quebec conference that he wanted ‘nomillionaire to be able to buy an orange until all the children in the world have had food’. He had 8
  9. 9. Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950a task to fulfil and one he believed in passionately. But his passion may have aggravated theFAO’s relationship with the US and Britain, who ensured that Boyd Orr would only lead theorganisation for a non-renewable two year term, rather than the normal four years. Hismentions of taking steps towards world government probably exacerbated this. Though hisideals seemed far in advance of his peers, he himself did not regard this as a problem. He gave aspeech to the BBC in 1945, stating that ‘if a scheme which [opens new markets and brings abouta great expansion of trade], and at the same time banishes hunger and malnutrition from theworld and gets the nations to cooperate with each other instead of fighting each other – if this isidealism, then I say this crazy world will be all the better for a good stiff dose of idealism.’26Personal overreach does not only concern idealistic personalities. Boyd Orr’s preference forgrand, sweeping plans may have prevented him from taking a more strategic approach toinstitutional development. To abuse a food metaphor: by placing all his eggs in the World FoodBoard basket, he missed opportunities to work with other institutions. Both the InternationalTrade Organisation and the Bretton Woods institutions at times considered commodity pricestability in their evolution, but it does not appear that Boyd Orr put much effort, even allowingfor his limited time, into pursuing his food policy through these different routes.27The case of the International Trade Organisation also demonstrates personal overreach. Giventhe United States’ form regarding other institutions and its previous refusal to considerpossibilities of expropriation, it seems surprising that the US negotiator, Will Clayton, signed theCharter. His actions had surprised the rest of his delegation too. Clayton’s deputy, Clair Wilcox,was far less keen on making concessions to the extent that Clayton was, suggesting criticallythat Clayton had ‘identified himself with the Charter’. Thus Clayton may have allowed himself tobecome too distant from Washington, overreaching his capacity or authority to act. Thoughthere were intervening events between the signing and withdrawal of the Havana charter fromthe Senate, his actions may have made Senate approval less likely.28 2.3. Return to realpolitikIf the creative moment had died, and individuals could not recreate it without overreaching,then we might assume that realpolitik had returned to win the day. This is demonstrated by theBretton Woods institutions in particular, elements of the World Food Board, and in the slowdeath of the International Trade Organisation. The stirrings of the cold war also had affectedthese three institutions.Several aspects of Keynes’ plans had upset Washington. Firstly, the sheer quantity of moneyinvolved was unacceptable: the US would have the greatest liability in an institution thatrequired about $26bn to function. Secondly, perhaps more importantly, the Americans wantedto shape international economic policy according to their own ideals. As Keynes would bluntlywrite: ‘the Americans at the top seem to have absolutely no conception of internationalcooperation; since they are the biggest partners they think they have the right to call the tune onpractically every point. If they knew the music this would not matter so very much; butunfortunately they don’t.’ But Keynes’ own proposals were hardly unbiased. Though he claimedthat his ideas would promote the welfare of all, and he was not technically employed by the UKTreasury for much of his time, his plans always seemed to ensure that the UK would get a gooddeal. His view of the risks to the post-war UK economy led him to push the US negotiatorsthough he knew the decision was ultimately an American one.29 9
  10. 10. Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950The World Food Board suffered from similar national interest issues of power and funding. Atthe first session of the committee that was commissioned to expand upon Boyd Orr’s proposalsfor a World Food Board, the United States delegate Norris Dodd, who would become the nextDirector-General, was suspicious of the ‘effect that widespread government interventionthreatens to have on the agricultural supply and demand situation all over the world once thepresent emergency has come to an end’. He may have been right, but leftist media in the UKreported his real intent as to block multilateral food distribution discussions, in order that theUS could work bilaterally. Again, the US was expected to be the largest funder of the board.Dodd rejected this: ‘governments are not likely to place the large funds needed for financingsuch a plan in the hands of an international agency over whose operations and price policy theywould have little or no control.’ Similarly, Boyd Orr believed that Britain worked to prevent theboard for fear that it would affect Britain’s cheap food imports. As another FAO Director-Generalwould put it much later: as ‘a man far ahead of his times, [Boyd Orr] had fatallyunderestimated...the force of national sovereignty’. Food and agriculture have remainedsensitive political topics for national governments everywhere.30The ITO is perhaps the best example of where the power of an individual nation would set themultilateral agenda. If the US had ratified the Havana charter, the rest of the world would havecertainly followed suit. As the world’s biggest producer, trading partner and funding source, theUS had the absolute decision-making power over the institution. As discussed above, by the lateforties President Truman’s legislative agenda was busy: the enormously expensive MarshallPlan may have given senators the feeling that the US should have conceded less at Havana.Perhaps more importantly, US trade bodies had turned against the treaty. The two mostpowerful business lobby groups in post-war America, the National Association of Manufacturersand the Chamber of Commerce had previously supported the organisation, but given the turn ofthe tide against Keynesian full employment ideals, they switched positions and would haveapplied pressure on senators to reject the charter.31Finally, the cold war increased the importance of realpolitik, as political games would take overUS decision making, and ideology divided the world order. The Soviets attended both theBretton Woods conferences and the first meeting of the IMF at Savannah, but never ratified thearticles: Harold James suggests that this act began the cold war. In relation to world food policy,Boyd Orr actually tried to use the cold war as a lever, claiming in an article published in 1949,that ‘unless help be given to the undeveloped countries...there is the danger that communism,with its promises of...abundance for the masses, will continue to spread’. In reality, the SovietUnion made it harder for Boyd Orr. Their refusal to take part in the board’s preparatorycommission, despite being present in the full FAO conferences, led to the absence of anyideological leverage and more practically, a considerable grain producer. Both the US and SovietUnion would later use food aid to promote their ideologies – something a multilateral executiveagency would have mitigated against. Nor did the Soviet Union attend any of the UNConferences on Trade and Employment which led to the Havana charter, although countriesunder of its sphere of influence did.32In sum, there are commonalities threaded through the history of each of these unrealisedinstitutions. The next section asks what we can learn from them. 10
  11. 11. Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950 3. The intellectual remainsThe three examples show that groups of impassioned idealists can be not only be heard, butgiven positions of considerable power. They show that there are moments when realpolitik isnot the ultimate determiner of institutional creation. The negotiators that states send toconferences are merely human, as are their heads of state. A powerful leader can support anidea and draw on political capital to ensure its realisation. Yet the examples also show that thesemoments are fleeting and that where institutional creation occurs, if power is shared unevenly,biased bargains are likely to result.Though these three institutions never existed, the ideas upon which they were proposed neverdied. They exist, almost in an intellectual ether, awaiting either another moment in which theyfind relevance, or another actor who will take up their charge. In a historical review of the FAO,it was argued that ‘despite its failure, Boyd Orr’s World Food Board exercises a continuingfascination. It proposes the ultimate vision of a world food policy based on universal equity,formulated by technicians and centering on a body that has the authority to take decisions andnot only to circulate recommendations.’ Boyd Orr’s spirited attack on world hunger hasinfluenced a range of subsequent FAO directors-general (his bust greets visitors at the mainentrance of the FAO’s headquarters in Rome) and the entire poverty discourse. Likewise, asRobert Skidelsky wrote in the moving final paragraphs to his three volume opus on Keynes:‘ideas do not die so quickly; and Keynes’ will live so long as the world has need of them.’ In2009, the governor of China’s central bank called for something similar to Keynes’ Bancor as areaction to the ongoing trade imbalances that were a cause of the financial crisis.33Today, the balance of power in the world is shifting. Arguably, economic power has alreadymoved Eastwards, and political and military power is likely to follow. There will come a point atwhich it is not clear to whom hegemonic power belongs; a point where global power appears toexist at several centres. This point may enable space for ideas newly proposed or alreadyexisting to find themselves in another creative ‘moment’ – it is what this essay teaches us abouthow to prepare or deal with this moment with which it concludes. 4. Concluding thoughtsThis essay described three unrealised institutions in terms of ideas, reality and what might havebeen. It sought to identify commonalities in their non-existence, finding three elements: theshort-lived nature of the creative ‘moment’ driven by the impact of war, the limits of individualability, and ultimately, the great power of realpolitik and self-interest.This discussion has by no means provided a full picture. A great deal of further research couldbe done into these institutions. What other effects might their creation have had? Can the goalsof these institutions be realised in our current patchwork of governance, or have we found otherroutes towards realising them? The essay demands an answer to the impossible question ofcounterfactual history: should we take a deterministic world-view that our path always leads tothe same state, or would the smallest change have altered our world story? Further, this essay isentirely Anglo-centric, failing to account for the actors, ideas and experiences of Russian, Frenchor colonised peoples in relation to these institutions; another possibility for further research. 11
  12. 12. Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950It is hoped that, despite these shortcomings, the essay is still significant. It is nearly seventyyears since these ideas were proposed; the seventy year ‘non-anniversary’ that nobody willcelebrate. Yet perhaps we should commemorate these unrealised institutions. What a loss ifthey could not teach us something about how to deal with the great global challenges faced byhumanity today; about how to reform our contemporary institutions, which fail to dealefficiently or equitably with climate change, financial crises and preventable poverty anddisease. As the economic power of the United States wanes, it is possible to imagine that theconditions for a new creative moment are on the horizon. The lessons from history suggest thatthe way to meet it is to build truly global coalitions; to limit or push back against hegemonicpower; to prevent stronger parties from cherry-picking in negotiations; and to avoid over-reliance on great individuals, but to support them to dream, to inspire, and to create. 12
  13. 13. Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950BibliographyInternational documents Atlantic Charter, 1941. Available at http://usinfo.org/docs/democracy/53.htm, accessed 4 December 2011. Havana Charter For An International Trade Organization, 1948, available at www.worldtradelaw.net/misc/havana.pdf, accessed 4 December 2011.Books / book chapters Blokker, N., International Regulation of World Trade in Textiles, Dordrecht: Martinus Nijhoff Publishers, 1989. Boyd Orr, J., and Lubbock, D., The White Man’s Dilemma, 2nd ed., London: George Allen and Unwin, 1964. van den Bossche, P., The Law and Policy of the World Trade Organization, Cambridge: Cambridge University Press, 2005. van Brabant, J., The Planned Economies and International Economic Organizations, Cambridge: Cambridge University Press, 1991. Buterbaugh, K., and Fulton, R., The WTO Primer, New York: Palgrave, 2008. Casey, K.M., Saving international capitalism during the early Truman presidency, New York: Routledge, 2001. Dervis, K. and Ozer, C., A Better Globalization: Legitimacy, Governance, and Reform, Washington: Center for Global Development: 2005. Odell, J., and Eichengreen, B., ‘The United States, the ITO and the WTO: Exit Options, Agent Slack and Presidential Leadership’, in The World Trade Organisation as an International Organisation, edited by Anne Krueger, Chicago: University of Chicago Press, 1998. Phillips, R.W., FAO: its origins, formation and evolution 1945–1981, Rome: FAO, 1981. Roessler, F., ‘Domestic Policy Objectives and the Multilateral Trade Order: Lessons from the Past’ in The World Trade Organisation as an International Organisation, edited by Anne Krueger, Chicago: University of Chicago Press, 1998. Schlesinger, S., Act of Creation: The Founding of the United Nations, Cambridge: Westview, 2003. Skidelsky, R., John Maynard Keynes, Vol. 3: Fighting for Freedom, 1937-1946, New York: Penguin, 2001. Shaw, D.J., World Food Security: A History Since 1945, London: Palgrave, 2005. Talbot, R., The four world food agencies in Rome, Ames: Iowa State University Press, 1990. Toye, R., and Toye, G., The UN and Global Political Economy, Indiana: Indiana University Press, 2004.Journal articles / working papers / newspaper articles Boerma, A.H., ‘Sir John Boyd Orr Inaugural Memorial Lecture’, Proceedings of the Nutrition Society, Vol. 34 (1975), 145-157. Boughton, J., ‘Why White, not Keynes? Inventing the Postwar International Monetary System’, IMF Working Paper, IMF Policy Development and Review Department, (WP/02/52: 2002). Buttonwood, ‘Voters vs. Creditors’, The Economist, 19 November 2011. Boyd Orr, J., ‘Enough food for everyone?’, The Rotarian, July, 1949. Crawford, J.G., ‘Proposals for a World Food Board’, The Australian Quarterly, 18:4, (Dec., 1946), 5- 18. 13
  14. 14. Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950 Drache, D., The Short but Significant Life of the International Trade Organization: Lessons for Our Time, CSGR Working Paper No. 62/00, University of Warwick, November 2000. Jacertz, R., and Nutzenadel, A., ‘Coping with hunger? Visions of a global food system, 1930–1960’, Journal of Global History, 6:1, (2011), 99-119. Newton, S., ‘A ‘visionary hope’ frustrated: J.M. Keynes and the origins of the postwar international monetary order’, Diplomacy & Statecraft, 11:1, (2000), pp. 196-200. Unaccredited, ‘Beyond Bretton Woods 2’, The Economist, November 4, 2010 Unaccredited, ‘Set Back to World Food Board’, Tribune Magazine, 1 November 1946.Organisational documents Oxfam International, Food aid or hidden dumping? Separating wheat from chaff, 2005. World Health Organisation, Task Force On Innovative International Financing For Health Systems Receives Two Working Group Reports, Press Release, 13 March 2009. Food and Agriculture Organisation, Report of the Conference of FAO, Second Session, Copenhagen, Denmark, 2-13 September 1946, Chapter XII: Report of Commission C to the Conference. Available online at http://www.fao.org/docrep/x5583E/x5583e0e.htm, accessed 4 December 2011. Food and Agriculture Organisation, Report of the Conference of FAO Special Session, Rome, 16 November 1970, Chapter X. Annex D - Commemorative address by professor M. Cépède, Independent Chairman of the FAO Council. Available online at http://www.fao.org/docrep/x5591E/x5591e0a.htm, accessed 4 December 2011.Broadcasts / speeches Boyd Orr, J., Broadcast over BBC, November 5, 1945, transcript at http://www.fao.org/about/27903-07465fc702d46be5bacb9fcfc9517071b.pdf, accessed 4 December 2011. Boyd Orr, J., Nobel Lecture, 12 December 1949, transcript at http://www.nobelprize.org/nobel_prizes/peace/laureates/1949/orr-lecture.html accessed 4 December 2011. Shaw, D.J., ‘World Food Security: A History Since 1945: a book launch and discussion, London: Overseas Development Institute, 16 October 2007, transcript at http://www.odi.org.uk/events/details.asp?id=220&title=world-food-security-history-since- 1945-book-launch-discussion accessed 4 December 2011.1 Hansard, HL Deb 18 May 1943 vol 127 cc521-64. Accessed athttp://hansard.millbanksystems.com/lords/1943/may/18/international-clearing-union on 26November 2011.2 Robert Skidelsky, John Maynard Keynes, Vol. 3: Fighting for Freedom, 1937-1946, (New York: Penguin,2001) (hereafter ‘Skidelsky’), pp. 202-225; Scott Newton (2000): A ‘visionary hope’ frustrated: J.M.Keynes and the origins of the postwar international monetary order, Diplomacy & Statecraft, 11:1,(hereafter ‘Newton’) pp. 196-200.3 Atlantic Charter 1941, clause 8. In no legal sense was the document actually a charter.4 Skidelsky, op. cit., pp. 462-468; Newton, op. cit., p.202.5 James Boughton, ‘Why White, not Keynes? Inventing the Postwar International Monetary System’, IMFWorking Paper, IMF Policy Development and Review Department, (WP/02/52: 2002), p. 16.6 Skidelsky, op. cit., pp. 349. 14
  15. 15. Joseph Mitchell Unrealised ideals: global governance from 1942 to 19507‘A pathetic procession of stooges’ was the phrase Keynes used. He wrote that ‘he had come to Savannahexpecting to meet the world, and all I met was a tyrant’. Newton, op. cit., pp. 202-203. For more on theimportance of location, see Kemal Dervis and Ceren Ozer., A Better Globalization: Legitimacy, Governance,and Reform, (Washington, Center for Global Development: 2005) p. 84.8 On the US-China currency dispute, see, e.g., Arthur Kroeber, ‘The Renminbi: The Political Economy of aCurrency’, Working Paper No. 3, Shaping the Global Order, Brookings Institution, Sept. 7, 2011. TheEurozone crisis represents a similar problem: see Buttonwood, ‘Voters vs. Creditors’, The Economist, 19November 2011.9 Addeke Boerma, ‘Sir John Boyd Orr Inaugural Memorial Lecture’, Proceedings of the Nutrition Society(1975), Vol. 34, (hereafter ‘Boerma’), p. 146; Ralph W. Phillips, FAO: its origins, formation and evolution1945–1981 (Rome: FAO, 1981), available online athttp://www.fao.org/docrep/009/p4228e/P4228E02.htm accessed 26 November 2011.10 J. G. Crawford, ‘Proposals for a World Food Board’, The Australian Quarterly, Vol. 18, No. 4 (Dec., 1946),(hereafter ‘Crawford’) p. 12.11 John Boyd Orr and David Lubbock, The White Man’s Dilemma, 2nd ed. (London: George Allen and Unwin,1964), hereafter ‘Boyd Orr and Lubbock’. For more on the world food situation in the post-war years, see,e.g. Food and Agriculture Organisation, Report of the Conference of FAO, Second Session, Copenhagen,Denmark, 2-13 September 1946, Chapter XII: Report of Commission C to the Conference. Available onlineat http://www.fao.org/docrep/x5583E/x5583e0e.htm (accessed 4 December 2011).12 Crawford, op. cit., p.16.13 Boyd Orr and Lubbock, op. cit., pp. 59 – 71; D. John Shaw, World Food Security: A History Since 1945,(London: Palgrave, 2005), hereafter ‘Shaw’, pp. 27-30; Ruth Jacertz and Alexander Nutzenadel, Copingwith hunger? Visions of a global food system, 1930–1960, Journal of Global History (2011) 6, (hereafterJacertz and Nutzenadel) p. 110.14 World Health Organisation, Task Force On Innovative International Financing For Health SystemsReceives Two Working Group Reports, Press Release, 13 March 2009, accessed athttp://www.who.int/pmnch/media/membernews/2009/20090313_hltfmeeting/en/index.html onNovember 27, 2011; Oxfam International, Food aid or hidden dumping? Separating wheat from chaff, 2005.Available at www.oxfam.org/files/bp71_food_aid.pdf accessed 4 December 2011.15 Richard Toye and Geoffrey Toye, The UN and Global Political Economy, (Indiana: Indiana UniversityPress, 2004), (hereafter Toye and Toye) p. 24. Cordell Hull won the Nobel Peace Prize four years beforeSir John Boyd Orr.16 Frieder Roessler, ‘Domestic Policy Objectives and the Multilateral Trade Order: Lessons from the Past’in The World Trade Organisation as an International Organisation, edited by Anne Krueger (Chicago:University of Chicago Press, 1998).17 John Odell and Barry Eichengreen, ‘The United States, the ITO and the WTO: Exit Options, Agent Slackand Presidential Leadership’, in The World Trade Organisation as an International Organisation, edited byAnne Krueger (Chicago: University of Chicago Press, 1998) pp. 185-186. Hereafter, ‘Odell andEichengreen’.18 Peter Van den Bossche, The Law and Policy of the World Trade Organization, (Cambridge: CambridgeUniversity Press, 2005), pp. 79.19 Daniel Drache, The Short but Significant Life of the International Trade Organization: Lessons for OurTime, CSGR Working Paper No. 62/00, November 2000. Hereafter, ‘Drache’.20 Havana Charter For An International Trade Organization, available atwww.wto.org/english/docs_e/legal_e/havana_e.pdf, accessed 4 December 2011.21 Drache, op. cit., p. 25.22 This is to paraphrase Keynes’ complaint about the American delegation at Bretton-Woods: Newton, op.cit., p. 202.23 Shaw, op. cit., p. 27.24 Drache, op. cit., p. 5.25 Skidelsky, op. cit., p. 449. Jason Tomes, “Bareau, Paul Louis Jean (1901–2000),” in Oxford Dictionary ofNational Biography, online ed., ed. Lawrence Goldman, available athttp://www.oxforddnb.com.proxy.lib.uwaterloo.ca/view/article/73848, accessed November 25, 2011.26 FAO, Report of the Conference of FAO Special Session, Rome, 16 November 1970, Chapter X. Annex D -Commemorative address by professor M. Cépède, Independent Chairman of the FAO Council athttp://www.fao.org/docrep/x5591E/x5591e0a.htm accessed 4 December 2011; John Boyd Orr,Broadcast over BBC, November 5, 1945, transcript at http://www.fao.org/about/27903- 15
  16. 16. Joseph Mitchell Unrealised ideals: global governance from 1942 to 195007465fc702d46be5bacb9fcfc9517071b.pdf, accessed 4 December 2011. The full speech is typical of hisremarkable oratorical ability.27 See evidence from, e.g., Shaw, op. cit., p. 29.28 Odell and Eichengreen, op. cit., p. 186.29 Newton, op. cit., pp. 202-204. Skidelksy’s third volume on John Maynard Keynes was published in theUK as ‘Keynes: Fighting for Britain’, but the name was changed to ‘Keynes: Fighting for Freedom’ for theNorth American edition. Keynes’ vast personal wealth was amassed from sales of his books, and histrading of shares on the London Stock Exchange. As Skidelsky’s work illustrates, he was not only apolitical economist, but an intellectual in many areas, a patron of the arts and a celebrity who moved inthe top elite circles in London.30 Boerma, op. cit., p. 151; ‘Set Back to World Food Board’, Tribune Magazine, 1 November 1946, accessedhttp://archive.tribunemagazine.co.uk/article/1st-november-1946-new/4/set-back-to-world-food-board-on-two-issues-this, accessed 4 December 2011; Jacertz, op. cit., p. 111 ; Shaw, op. cit., p. 27. For theongoing political sensitivity of agricultural policy consider, e.g., the longevity of European CommonAgricultural Policy, developed partly to ensure food security in Europe, and even when grosslyoverproducing to the point that security could no longer be considered a rational argument, it was stillconsidered untouchable by politicians, particularly in France. Or, similarly, the ‘big corn’ lobby in theUnited States.31 Kevin Buterbaugh and Richard Fulton, The WTO Primer, (New York: Palgrave, 2008), p. 21; Odell andEichengreen, op. cit., pp. 186, 18932 Skidelsky, op. cit., p. 451; John Boyd Orr, ‘Enough food for everyone?’, The Rotarian, July, 1949, p. 16;Jacertz and Nutzenadel, op. cit., p. 110; Joseph van Brabant, The planned economies and internationaleconomic organizations, (Cambridge: Cambridge University Press, 1991), p.43; Niels Blokker,International Regulation of World Trade in Textiles, (Dordrecht: Martinus Nijhoff Publishers, 1989), p. 50.33 Ross Talbot, The four world food agencies in Rome, (Ames: Iowa State University Press, 1990), p. 19;Skidelsky, op. cit., p. 508; ‘Beyond Bretton Woods 2’, The Economist, November 4, 2010 athttp://www.economist.com/node/17414511 accessed 4 December 2011. 16

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