It was with some mild amusement (and initially, dismissal) that I perused Think Magazine some months ago, it being handed to me by my living assistant. The “Rage of the Waiting Youth” piece was intriguing, however. You have hints of knowledge. But you have gaps in your vision.
It seems you need an historical perspective on that phenomenon of the wildly fluctuating markets, rightward-shifting policies and undermined economies of the various sovereignties throughout the world. These are the unavoidable products of my life’s work.
I am a man with a limited amount of time, despite my resources. Those resources, acquired by means both opaque and transparent, have not come without some weight in my heart. So, though I am not Catholic, allow me to unburden my conscience a bit.
I do not truly regret my role in the events playing out today, as until very recently I have had little but good to reflect on in the order my peers and I created. But the progression of man has seemingly now reached an impasse, and much of it due to the actions undertaken by myself and my forbearers.
My role in the world of finance and international was a simple one at first. My education provided me with French and the vocabulary of banking. I was the personal assistant to a minor Bretton Woods delegate, a Frenchman, by arrangement of my family, who had done business with his bank before the Second World War. He would provide my whole-immersion baptism in international finance, diplomacy, and trade.
I would like to think, in retrospect, that the days at Bretton Woods were simple, straightforward and friendly, vacation-like days, glowing at the end of war with hope and a newfound spirit of cooperation. At times, it even seemed to be so. But in truth, the meetings there were the first salvoes in the war on sovereignty and popular governance. It is a war that is nearly over, and we have quite nearly won.
We set the stage for financial institutions to decide the fate of billions, in defiance of their needs and wishes. That the nations came with their needs and wants, agendas and prerogatives foremost was irrelevant. The results would be molded around the wants and needs of the financiers and their great accomplices, the ever-more powerful central banks.
I was only a bit player on this stage of greats, whose work would stabilize economies or disrupt them at will. Translating for my mentor when he wished to be beyond the ears of his Gallic peers, I slowly came to realize the agenda was not directly written in most cases. “Stability, Rebuilding and Growth” were the watchwords.
However, the countersigns were always “Manipulate, Reshape & Monopolize.”
It was always the goal of the bankers to establish, in essence, the idea that stability was only possible with independent central banking. However, some bankers and politicians saw the potential in using this illusion to establish legitimacy, then capitalizing on the accrued, nearly unchecked power of finance.
But in 1946, that day was far off, and the mechanism for it was not yet palatable in the aftermath of the Depression and its subsequent war. The illusion was not quite so universal. My mentor told me, “I am doing work that will undo itself. When that day comes, our real work will begin.”
I was mystified as he spoke at length during informal sessions with other delegates on the need for fixed rates of exchange (which was part of the IMF’s articles in the end) and a system of incentives for the balancing of trade (the International Clearing Union and its bancor). DeGaulle was certainly against such restraints in the first case, and the second was directly against the wishes of the Americans, whose wishes would likely bear out. He smiled one night, asked by me how he could be so counter to both French and American interests. After a silence, he blew a cloud of smoke from his cigarette.
“Whatever a Frenchman wants from an American, he should argue against as strongly as possible,” he said. “Mr DeGaulle works for France. I work for her banks.”
Ever cool and quiet in demeanor while in public, my mentor became incensed at the American insistence on the folding of the Bank for International Settlements. The BIS had parlayed the onerous terms of Versailles into substantial fortunes for many connected French (and my family in the US). Never mind the number of Germans who first gorged on its failings, then used it to trade pilfered gold during the war (or the Americans feeding on that supply in secret).
A particular conversation between my mentor and a single man resulted in the assurance of a veto of the bank’s dissolution. My mentor said to me, after the man’s promise to defy his country’s interests, “He understands that finance is bound by morality and politics would not only be pathetic, but also intolerable.” The veto was, nonetheless, rejected.
The Bank did not survive on paper. But with the passing of FDR, its foremost opponent, and some small concessions over its war crimes in the eyes of politicians, its closure was permanently shelved later. The ICU, for which my mentor strenuously argued (which would have incentivized balanced trade via its bancor stateless currency), was blocked by the Americans.
Instead, the IMF emerged as a system for balancing and mitigating trade deficits via finance. The World Bank was instituted, overseeing various institutions operating in developing countries.
In essence, it under- wrote private investment in developing countries, often adding a layer of security to money loaned to business by governments.
The financial powers of the banking world had agreed to create a stage for the great drama of American power to play out over the 1950s and 1960s. America perhaps felt best treated in the end, and its preeminence would drive great wealth among the working class for decades. But my mentor was sanguine on the matter of the gold standard.
“The interests I represent have no care for where the basis lies,” he said. “Only that when the time is right, the basis itself can be removed and the flow of revenue may follow the path of least resistance to greatest reward.”
A second year had passed when Bretton Woods closed. The British and Americans reached some small agreement on the movement of the world financial center to the dollar, albeit with some concession to the former’s interests in the pound sterling. Most left with something they wanted, but not everything they demanded.
The American view, of its own need for growth unbound by rules and incentives for fair dealing, assured that currency would eventually unleash itself from commodity. The dollar would be the stand-in for the bancor, assuring stability and de facto development.
I pondered his view, aware of my own neophyte status, but with a notion of state sovereignty’s folly and finance’s wisdom. I asked him one last question. “Why, if it were the United Nations Monetary and Financial Conference, are they conceding to banks?”
He shrugged, then looked up at me, “The governments would rather risk some power they believe they can take back, but the instruments we demand to finance rebuilding are designed to ensure that banks dictate the course of governments, regardless.”
I believed him at that moment to be perhaps too cocksure, an aging, aristocratic accountant with delusions of arrogating the power of kings and presidents. But I did not forget his words, and soon found myself at the U.S. Treasury, learning how right he was.