“As early as 1944, economists imagined another international financial system”

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Ihe Summit for a new global financial pact had little chance of leading… to a new global financial pact. But it has at least had the merit of highlighting the…

“As early as 1944, economists imagined another international financial system”

“As early as 1944, economists imagined another international financial system”

Ihe Summit for a new global financial pact had little chance of leading… to a new global financial pact. But it has at least had the merit of highlighting the obsolescence of an international system developed after the Second World War to avoid a repetition of the financial crises of the 1930s, to rebuild countries ravaged by war and to help the development of new nations resulting from decolonization.

Today, the priorities are quite different: finance the transformation and adaptation of economies, of all economies, to counter the effects of the climate and biosphere crisis; better distribute the burden between the “countries of the North” (which are mainly responsible) and the “countries of the South” (which are mainly victims).

However, the so-called “Bretton Woods” system, born of the conference between allied countries held in this small town in New Hampshire (United States) from 1er July 22, 1944, was, at the time, the subject of criticism, as Hélène de Largentaye recalls in a book retracing the career of her father, Jean de Largentaye, maverick economist (Garnier, 836 pages, 42 euros).

Engineer, finance inspector, senior official in the Ministry of Finance under the Popular Front, first French translator of the General theory of employment, interest and moneyby John Maynard Keynes (1939), of which he became the promoter, Jean de Largentaye (1903-1970) wrote a report in 1945 for René Pleven, finance minister of General de Gaulle’s provisional government, in which he criticized the use of the gold standard as the basis of the foreign exchange market, or even the dominant place of the United States in the governance of the Stabilization Fund, which would become, in 1946, the International Monetary Fund (IMF).

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Appointed administrator for France at the IMF in 1946 by Pierre Mendès France, with whom he had worked in Algiers in 1943 when the latter was finance commissioner, he persevered during his eighteen years in office in his criticism of the weight of the American dollar. , which quickly replaced the gold standard. Not so much out of nationalist or political conviction as out of macroeconomic reasoning.

A standard “basket”

Indeed, he explains, basing trade on a monetary standard, be it gold or a fiduciary currency, is tantamount to giving the country that holds the most of it a disproportionate weight in the global economy and divides the world between creditor countries and debtor countries, depriving the latter of the means to carry out an autonomous policy – ​​for example by supporting demand or by favoring certain types of investment. In addition, creditor countries have the opportunity to acquire long-term ets from debtor countries (he takes as an example the Bordeaux vineyards bought by American investors, etc.). This is the “exorbitant privilege of the dollar”.

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