Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950

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

This is an essay about a narrative not told. It concerns great moments in history that never happened. It forms a foil to such works as ‘Act of Creation’ by Stephen Schlesinger, whose title not-so-subtly hints at the god-like nature of the architects of our post-war world. But these architects were not gods, they were men. And as mortal beings they could fail. Some would see their 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 as states 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 short intellectual history is given, followed by an explanation of what became of each one, and a brief counterfactual suggestion as to what might have been. The second part will ask why these institutions were not realised. It suggests firstly that the fraternal moment in time created by the 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, and thirdly, 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 their failings provide us with lessons for future institutional creation. In an era where better global governance is urgently required, the experience of this post-war time should guide us in advance of the dawn of any new creative moment.

Part one: Global governance institutions that never were

The three institutions considered here are Keynes’ version of the Bretton Woods system of global economic governance, Boyd Orr’s World Food Board, and the International Trade Organisation, all of which were envisaged and unrealised within the period from 1942 to 1950.

1.1. Keynes’ Bretton Woods

Nestled in the New Hampshire woods, somewhere in the grounds of the Mount Washington Hotel stands a green sign, commemorating the ‘Bretton Woods Monetary Conference’. This title is technically incorrect, but perhaps better suits what happened. The United Nations Monetary and Financial Conference was in reality a show run by the United States from start to finish. The institutions created there in 1944 have become symbols of Western imperialism, are the focus of regular criticism from civil society organisations, and perhaps worse, are in danger of being left behind by regional replacements. However, the International Monetary Fund and the International Bank for Reconstruction and Development were not the only institutions to be proposed at this time. Two other proposals, one for an International Clearing Union and the second for an altered International Monetary Fund, may have led to a very different history of global monetary governance.

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The International Clearing Union was proposed to the House of Lords in the UK Parliament by Lord 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.”1

This 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 international currency to each member based upon their trade history over the previous five years. At the end of the trading year, those nations that had a negative balance of payments, i.e. who had imported more than they had exported, would be able to draw down on the credits in order to pay their creditors. Those nations who had a positive balance of payments would add to their credits. In both cases, repeated imbalances would be discouraged by a system of interest payments, transfers and ultimately currency adjustments.2

The union would have benefited the European nations whose economies were severely damaged by the war, essentially providing a large overdraft facility needed to cover the expected deficits in their balances of payments. It would have encouraged the American nations, both North and South, who were the main suppliers to post-war Europe not to hoard their surplus earnings, but to spend them. The union was also designed to encourage transparency, as it would need to keep a record of all members’ imports and exports and thus their creditor or debtor status. In turn, it was hoped that this information would prevent competitive currency devaluations and thus take a form of ‘financial disarmament’ in the same way that the Atlantic Charter had already proposed military disarmament.3

The union was never established, as outlined below, but Keynes had other proposals for the institution, the International Monetary Fund, that rose in its place. After he was appointed the United Kingdom’s representative at the fund’s first conference in Savannah, Georgia, he proposed to the assembly that the institution must be headquartered in New York. This would add 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-time leaders of national finance ministries, in order that its policy would be directed by national concerns. He envisaged the fund as the servant of nations, not the master.4

White’s victory

Keynes got his way on neither account. In the early 1940s, while Keynes worked on his plans for the union, Harry Dexter White was working on milder, more US-friendly proposals for the international monetary order. White, like his boss, US Treasury Secretary Henry Morgenthau, was not averse to Keynesian economics, but the importance of government spending and full employment was never held in the same regard in the United States as it was in Europe. More importantly, the US treasury officials were not prepared to provide the vast reserves that Keynes’ union would require. Instead, White envisaged an International Monetary Fund in which members would fix their exchange rates to the dollar, which was convertible to gold, in order to prevent nations from competitive currency devaluation. The risk that Keynes foresaw,

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of severe imbalances in the terms of trade, was not mitigated with a sufficient funding facility that 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’s suggested closer to 10%.5

It was White who carried the day at Bretton Woods. By virtue of organising the conference, the agenda was arranged to ensure that Keynes chaired the commission on the International Bank for Reconstruction and Development. It was thus difficult for him to negotiate on the fund at the same time. By the end of the conference, Keynes had not had the time to examine the decisions of 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 rates in the event of severe imbalances.6

White had a fuller, swifter victory at the first International Monetary Fund (IMF) conference in Savannah. 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’ pleas for 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 this would result in the positions becoming retirement postings for international bureaucrats. The IMF was established ‘a five minute walk’ from the centres of US government power: the White House and the State and Treasury departments. As Kemal Dervis wrote, fifty years later: ‘there is little doubt...that the involvement of the US government...in week-to-week operations of the Bretton Woods institutions goes much beyond what the seventeen per cent voting power of the US would suggest’.7

An alternate post-war economic order

Counterfactual history is a difficult thing. It risks becoming unsupported conjecture. But for each institution, some brief suggestions are helpful in driving home the importance of considering 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 bank would have been established, acting as a lender of last resort - a kind of central bank for the world. Further, by creating a system that strongly encouraged all states to move towards equilibrium in their balance of payments, the clearing union may have lessened the dollar shortage that quickly arose after the war due to vastly positive balance of payments that the US ran post-war. The IMF in reality had little concern for what creditors got up to, prioritising currency stability over full employment.

Keynes recognised something that US officials have only recently awoken to in their critique of contemporary Chinese monetary policy: there are two sides to every trade imbalance. It is not only the behaviour of debtors that matters, but creditors too. The dollar shortage would have been avoided by Keynes’ system, which did not rely on gold. This would have allowed for greater liquidity in the monetary system, and avoidance of the real Bretton Woods system’s collapse 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’s enormous dollar surpluses led to asset bubbles in US sub-prime mortgage markets.8

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In sum, on the post-war international monetary order, Keynes was defeated by White, which led to the creation of new Washington-centric institutions. The second part of essay will examine why White triumphed over Keynes.

1.2. Boyd Orr’s World Food Board

The second institution considered here is the World Food Board, an intellectual product of the second world war and the Roosevelts’ idealism. In 1941, the President gave the State of the Union address, which became known as the ‘four freedoms’ speech. The third of those freedoms was ‘freedom from want’. Due in part to the efforts of two Australian food scientists - one of whom had proposed a ‘marriage of health and agriculture’ at the League of Nations and corresponded with the First Lady on the subject – Roosevelt decided that the first UN conference would concern food and agriculture. At Hot Springs in 1943, allied nations agreed that that ‘the world has not had enough food to eat’ and that this was due to lack of incomes and productivity rather than any Malthusian view of population growth. They agreed to meet in Quebec in 1945 to establish the UN Food and Agriculture Organisation (FAO).9

One of attendees at Quebec was the nutritional scientist Sir John Boyd Orr who had helped establish 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 British children, he was appointed as Director-General for a shortened term. He was the eighteenth choice of the delegates present. His election is described as a reaction to his remarkable oratorical ability. Invited to address the assembly, he told delegates that ‘'if the nations cannot agree on a food program affecting the welfare of people everywhere, there is little hope of their reaching agreement on anything.”10

Boyd Orr saw hunger as the world’s greatest problem. Hunger jeopardised any chance of peace as it was a precursor to social unrest. Everywhere he looked he would find it. In the immediate aftermath of the war, Europe faced severe food shortages: much of Italy and Germany was surviving on food aid provided by the UN’s Relief and Rehabilitation Agency. Three years earlier the Bengal famine had taken an estimated 2-4m lives in British colonial India. In FAO’s first World Food Survey in 1946, he found that one third of the world’s population were not consuming a sufficient daily calorie intake. He stated that people would look to FAO for food, but they would find only statistics. Boyd Orr was first a scientist, never a politician. He viewed problems empirically and could prove that a solution to hunger existed. Thus he determined that the organisation would require a permanent executive agency to urgently improve world nutrition. He was invited to suggest such a body at the first formal FAO conference in Copenhagen in 1946.11

His answer was the World Food Board, for which he suggested three roles. Firstly, it would establish buffer stocks in order to stabilise prices. This would mean that the board would set maximum and minimum prices for commodities, and release or buy up stocks for storage as appropriate. This was aimed at ending the pre-war commodity price volatility, which would allow 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 increase in the developing world. The board would provide large capital funds to developing countries on affordable, long-term rates. Boyd Orr argued that estimates of a nation’s current capacity to repay the loans should not be seen as crucial, because only properly-nourished people could

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develop 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 the recipients 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-down

The idea of the World Food Board met with muted approval at Copenhagen and was then killed in 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 the other delegates stated that they agreed with the ideas ‘in principle’. The result was agreement only that they would found a committee to develop the proposals further. As soon as the committee began its hearings in Washington, the US made it clear she would not support it, and was joined by the United Kingdom. The committee looking into the proposals reported back that while food markets were global in character, and while there were deficits in developing world and something should be done about these, they favoured bilateral agreements over any kind of world plan. The FAO was confined to exactly what Boyd Orr had argued against: a production house for leaflets and statistics, lacking any binding authority.13

Opportunities lost

The absence of a World Food Board had three effects: lost decades in poverty reduction, an increased 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 supplier of emergency food aid. As Boyd Orr might have considered it, those were fifteen years of lost development opportunities, further worsening poverty. Secondly, the proliferation of food bodies, such as the US’s Food for Peace programme, led to a bilateral approach, allowing institutions 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’, which risks ruining farmers more local to the famine, who may be able to produce supplies more cheaply. The World Food Board, and buffer stocks, stabilised prices and a multilateral aid approach from the start, may have prevented this. Thirdly, Boyd Orr’s long-term credits plan was farsighted: similar length World Bank loans were only available years later, were smaller than Boyd Orr envisaged and were conditional. Only very recently has the future economic value of a more healthy generation been accepted as a reason to ‘front-up’ additional development spending, as in the work of the High Level Taskforce on Innovative Financing for Health.14

Global 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, the benefits to developed suppliers and the effects on developing markets. It cannot be assured that the board would have avoided these controversies, but critically, it would have had a head start on today.

1.3. The people’s International Trade Organisation

The International Trade Organisation has perhaps the longest intellectual evolution of the three unrealised institutions considered here. President Woodrow Wilson’s programme for world peace, given in his ‘fourteen points’ speech at the end of the first World War, had featured a

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clause suggesting the ‘removal, so far as possible, of all economic barriers and the establishment of equality of trade conditions among all the nations...’. With these words, Wilson helped create the American view that free trade would build up strong relations between nations, making peace more likely. Cordell Hull, US Secretary of State from 1933 to 1944, took up Wilson’s suggestion, and had, in 1925, proposed the idea of an International Trade Organisation. In the course of the second World War, it was considered that it was time for Hull’s idea to be fulfilled.15

The US considered that the trade organisation would form the third part of the new economic order alongside the International Monetary Fund and the International Bank. A charter was drafted and shared with the UK in 1944 and conferences were arranged in London and Geneva for international negotiation. At this time, Keynesian economics was still held in high regard; it suggested that there should be limits to the laissez-faire attitude to trade. For example, nations should 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 Conferences on Trade and Employment.16

The remarkable story of the International Trade Organisation (ITO) negotiations was that over the course of two years, the assembled nations managed to balance the aspects of free trade and full employment; the international and the national interest. Even more remarkably, partly due to the work of the delegation for the newly-independent India, the demands of the developing world for a chapter on development in the Charter were met. This allowed for infant industry support 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 the International Trade Organisation. Despite being the closest of the three institutions to be fulfilled, it too was never realised.17

Two-speed negotiations

The 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 on the treaty, partly because tariff negotiations had to be kept secret from the markets and partly because the US Reciprocal Trade Agreements Act, passed during the depression by a Congress desperate to boost the US economy, gave the US president powers to arrange tariff reductions without the Senate’s approval. The rest of the charter, however, required two-thirds support for ratification by the Senate under normal treaty rules. As a result, when the charter was signed in Havana, the chapter forming the General Agreement on Tariffs and Trade could immediately come into effect, which removed the incentive for the Truman administration to press the Senate to approve the rest of the treaty. Although Truman did submit the full treaty to the Senate, this only happened in April 1950, partly due to competing legislative pressures, such as the Marshall Plan. Two months later, the UN and US went to war in Korea, and the Havana Charter was permanently withdrawn. The General Agreement on Tariffs and Trade morphed into the de facto body for world trade negotiations, replaced by the World Trade Organisation in 1995.18

A marriage of trade, employment and development

Daniel Drache has argued that the unrealised Havana Charter was a unique opportunity for the marriage of three fields: trade, employment and development, often contemporaneously seen as

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competing goals. He argues that the ITO represented a global trade system in which untrammelled free trade was not understood as a good in itself, but as something to support employment and development, each of the three elements working in each other’s favour. It was an international work of careful compromise, granting national leaders the power, within limits, to do what they thought best for their economy.19

Another example of the charter’s unifying nature can be found in chapter eight, which provides that ultimate jurisdiction of trade settlements lies with the International Court of Justice, the new court created by the Charter of the United Nations. This could have dramatically altered the divide between private and public international law that exists today. It provided for multilateral, rather than bilateral solutions, which have become so important in contemporary trade. Furthermore, the charter also contained a chapter on restrictive business conditions and an article on fair labour standards. It was a counter-hegemonic charter.20

It is not unreasonable to suggest that a fairer, more equitable trade treaty, which had in significant part been led by all parties of the world, including developing states, would have avoided the North South conflict that was later to manifest itself in the demands for the New International Economic Order. Although the Soviet Union never signed the Charter, they may have had little choice should the US and the rest of the world have done so. Instead, GATT was created, under which developing nations have felt excluded, and whose situation has not improved under the World Trade Organisation (WTO). Unlike the ITO, the WTO made no provision for labour rights, nor for the significant involvement of non-governmental organisations.21

2. Part two: Why did these institutions go unrealised?

Part one has described the historical actors, ideas and processes behind the institutions, as well as some elements that left them stalled. This section considers institutional non-realisation in greater detail. Part two will also briefly ask if there are lessons for modern reform, innovation or institutional creation. Given the severity of today’s challenges, particularly on climate change and financial governance, this question is timely and vital.

The truth is that the institutions were never realised for a universe of different reasons. It is possible, however, to identify some commonalities between each of the unrealised institutions. This part describes three commonalities: ideas in relation to time, the danger of individual overreach, and the context of realpolitik and the sovereign state.

2.1. The passing of the creative moment

The first commonality concerns the post-war ‘moment’. This is the idea that in the aftermath of the ‘scourge of war’, greater political space for ideas was created. The war united the world, or certainly the great powers, who, for a moment, partially relaxed their pursuit of national interest to allow for the creation of the United Nations and other world institutions. The new space gave room for leaders like President Roosevelt to rally their nations around institutions that may have been otherwise difficult to justify. Likewise, Sir John Orr’s speech at Quebec may not have been received so well in more normal times, indeed he may not have been appointed director-general at all. But the moment was brief. As time passed, particularly after Roosevelt’s death and the exit of New Dealers from the White House towards the end of the war, this

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idealism began to fade. Right began to lose to might, and he who paid the piper realised he could call the tune.22

The opening and closing of political space is perhaps best demonstrated by the case of the World Food Board. The idea had arisen during the war, promulgated by both Franklin Delano and Eleanor Roosevelt, that food policy would change on a world-scale, that freedom from want could be realised, that this, in part, was what the war was being fought for. But Boyd Orr recognised that this was merely a moment. As he wrote later, the ‘promise of the Atlantic Charter...the ‘fuller life, the true and great inheritance of the common man’ that Churchill envisaged, ‘the relegation of poverty to the limbo of the past’ that Ernest Bevin, a member of Churchill’s UK war cabinet foresaw... ‘would be quickly forgotten’’. He worked with urgency to try 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 to the UN organisation. 23

Moments and spaces for institutional creation vary in space and time. Although the Bretton Woods conferences were held in 1944 when war in Europe was still raging, albeit with a predictable outcome, it was already clear that the United States would emerge as the unequalled economic world power. Keynes, the advocate for the International Clearing Union, could do little to appeal to the American sense of humanity: for them the union was just too expensive. Yet something of the moment still existed in Havana in 1948, where the US negotiator Will Clayton signed the Charter of the International Trade Organization. This was ‘a singular moment when ideas, institutions and actors shared a common interest and...created a common ground where none existed previously.’ That somehow the negotiators had, by the time of the signing of the charter in Havana, amalgamated the values of free trade, full employment and development must be understood as a remarkable alignment of ideals: a true post-war moment. Yet this moment may have only existed in the bubble of negotiations in Havana: back in Clayton’s capital, inflation, strikes, negotiations over both the Marshall Plan and the new North Atlantic Treaty Organisation, meant that the will to expend political capital on the ITO had passed.24

2.2. Too brilliant, too exhausted

A second commonality looks to the individual actors involved and asks whether they overreached their ability to change the world. Did they allow themselves to pursue their own ideals too far beyond practicality – making the best the enemy of the good? Was there only so much that the idealists in this non-story could achieve before they lost the support of the bureaucrats they led? One example comes from Keynes’ experience at Bretton Woods. The British press officer who accompanied him to the conference suggested that Keynes ‘was too brilliant, too crushing and towards the end, too exhausted’ to properly fulfil his negotiation duties 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 standing ovation and reverent treatment at the end of the Bretton Woods conference would not make up for losing the battle of ideas.25

In Quebec, the hesitant method of Boyd Orr’s appointment might have been read as a desire for a steady hand on the tiller until delegates could agree more closely on FAO’s mission. This was not in Boyd Orr’s nature. He had announced to the Quebec conference that he wanted ‘no millionaire to be able to buy an orange until all the children in the world have had food’. He had

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a task to fulfil and one he believed in passionately. But his passion may have aggravated the FAO’s relationship with the US and Britain, who ensured that Boyd Orr would only lead the organisation for a non-renewable two year term, rather than the normal four years. His mentions of taking steps towards world government probably exacerbated this. Though his ideals seemed far in advance of his peers, he himself did not regard this as a problem. He gave a speech to the BBC in 1945, stating that ‘if a scheme which [opens new markets and brings about a great expansion of trade], and at the same time banishes hunger and malnutrition from the world and gets the nations to cooperate with each other instead of fighting each other – if this is idealism, then I say this crazy world will be all the better for a good stiff dose of idealism.’26

Personal overreach does not only concern idealistic personalities. Boyd Orr’s preference for grand, sweeping plans may have prevented him from taking a more strategic approach to institutional development. To abuse a food metaphor: by placing all his eggs in the World Food Board basket, he missed opportunities to work with other institutions. Both the International Trade Organisation and the Bretton Woods institutions at times considered commodity price stability in their evolution, but it does not appear that Boyd Orr put much effort, even allowing for his limited time, into pursuing his food policy through these different routes.27

The case of the International Trade Organisation also demonstrates personal overreach. Given the United States’ form regarding other institutions and its previous refusal to consider possibilities of expropriation, it seems surprising that the US negotiator, Will Clayton, signed the Charter. 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 critically that Clayton had ‘identified himself with the Charter’. Thus Clayton may have allowed himself to become too distant from Washington, overreaching his capacity or authority to act. Though there were intervening events between the signing and withdrawal of the Havana charter from the Senate, his actions may have made Senate approval less likely.28

2.3. Return to realpolitik

If 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 the Bretton Woods institutions in particular, elements of the World Food Board, and in the slow death of the International Trade Organisation. The stirrings of the cold war also had affected these three institutions.

Several aspects of Keynes’ plans had upset Washington. Firstly, the sheer quantity of money involved was unacceptable: the US would have the greatest liability in an institution that required about $26bn to function. Secondly, perhaps more importantly, the Americans wanted to shape international economic policy according to their own ideals. As Keynes would bluntly write: ‘the Americans at the top seem to have absolutely no conception of international cooperation; since they are the biggest partners they think they have the right to call the tune on practically every point. If they knew the music this would not matter so very much; but unfortunately they don’t.’ But Keynes’ own proposals were hardly unbiased. Though he claimed that his ideas would promote the welfare of all, and he was not technically employed by the UK Treasury for much of his time, his plans always seemed to ensure that the UK would get a good deal. His view of the risks to the post-war UK economy led him to push the US negotiators though he knew the decision was ultimately an American one.29

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The World Food Board suffered from similar national interest issues of power and funding. At the first session of the committee that was commissioned to expand upon Boyd Orr’s proposals for a World Food Board, the United States delegate Norris Dodd, who would become the next Director-General, was suspicious of the ‘effect that widespread government intervention threatens to have on the agricultural supply and demand situation all over the world once the present emergency has come to an end’. He may have been right, but leftist media in the UK reported his real intent as to block multilateral food distribution discussions, in order that the US 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 financing such a plan in the hands of an international agency over whose operations and price policy they would have little or no control.’ Similarly, Boyd Orr believed that Britain worked to prevent the board for fear that it would affect Britain’s cheap food imports. As another FAO Director-General would put it much later: as ‘a man far ahead of his times, [Boyd Orr] had fatally underestimated...the force of national sovereignty’. Food and agriculture have remained sensitive political topics for national governments everywhere.30

The ITO is perhaps the best example of where the power of an individual nation would set the multilateral agenda. If the US had ratified the Havana charter, the rest of the world would have certainly followed suit. As the world’s biggest producer, trading partner and funding source, the US had the absolute decision-making power over the institution. As discussed above, by the late forties President Truman’s legislative agenda was busy: the enormously expensive Marshall Plan 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 most powerful business lobby groups in post-war America, the National Association of Manufacturers and the Chamber of Commerce had previously supported the organisation, but given the turn of the tide against Keynesian full employment ideals, they switched positions and would have applied pressure on senators to reject the charter.31

Finally, the cold war increased the importance of realpolitik, as political games would take over US decision making, and ideology divided the world order. The Soviets attended both the Bretton Woods conferences and the first meeting of the IMF at Savannah, but never ratified the articles: 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 Soviet Union made it harder for Boyd Orr. Their refusal to take part in the board’s preparatory commission, despite being present in the full FAO conferences, led to the absence of any ideological leverage and more practically, a considerable grain producer. Both the US and Soviet Union would later use food aid to promote their ideologies – something a multilateral executive agency would have mitigated against. Nor did the Soviet Union attend any of the UN Conferences on Trade and Employment which led to the Havana charter, although countries under of its sphere of influence did.32

In sum, there are commonalities threaded through the history of each of these unrealised institutions. The next section asks what we can learn from them.

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3. The intellectual remains

The three examples show that groups of impassioned idealists can be not only be heard, but given positions of considerable power. They show that there are moments when realpolitik is not the ultimate determiner of institutional creation. The negotiators that states send to conferences are merely human, as are their heads of state. A powerful leader can support an idea and draw on political capital to ensure its realisation. Yet the examples also show that these moments 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 never died. They exist, almost in an intellectual ether, awaiting either another moment in which they find 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 continuing fascination. 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 and not only to circulate recommendations.’ Boyd Orr’s spirited attack on world hunger has influenced a range of subsequent FAO directors-general (his bust greets visitors at the main entrance of the FAO’s headquarters in Rome) and the entire poverty discourse. Likewise, as Robert 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.’ In 2009, the governor of China’s central bank called for something similar to Keynes’ Bancor as a reaction to the ongoing trade imbalances that were a cause of the financial crisis.33

Today, the balance of power in the world is shifting. Arguably, economic power has already moved Eastwards, and political and military power is likely to follow. There will come a point at which it is not clear to whom hegemonic power belongs; a point where global power appears to exist at several centres. This point may enable space for ideas newly proposed or already existing to find themselves in another creative ‘moment’ – it is what this essay teaches us about how to prepare or deal with this moment with which it concludes.

4. Concluding thoughts

This essay described three unrealised institutions in terms of ideas, reality and what might have been. It sought to identify commonalities in their non-existence, finding three elements: the short-lived nature of the creative ‘moment’ driven by the impact of war, the limits of individual ability, 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 could be done into these institutions. What other effects might their creation have had? Can the goals of these institutions be realised in our current patchwork of governance, or have we found other routes towards realising them? The essay demands an answer to the impossible question of counterfactual history: should we take a deterministic world-view that our path always leads to the same state, or would the smallest change have altered our world story? Further, this essay is entirely Anglo-centric, failing to account for the actors, ideas and experiences of Russian, French or colonised peoples in relation to these institutions; another possibility for further research.

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It is hoped that, despite these shortcomings, the essay is still significant. It is nearly seventy years since these ideas were proposed; the seventy year ‘non-anniversary’ that nobody will celebrate. Yet perhaps we should commemorate these unrealised institutions. What a loss if they could not teach us something about how to deal with the great global challenges faced by humanity today; about how to reform our contemporary institutions, which fail to deal efficiently or equitably with climate change, financial crises and preventable poverty and disease. As the economic power of the United States wanes, it is possible to imagine that the conditions for a new creative moment are on the horizon. The lessons from history suggest that the way to meet it is to build truly global coalitions; to limit or push back against hegemonic power; 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.

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Joseph Mitchell Unrealised ideals: global governance from 1942 to 1950

Bibliography

International 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.

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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.

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1 Hansard, HL Deb 18 May 1943 vol 127 cc521-64. Accessed at http://hansard.millbanksystems.com/lords/1943/may/18/international-clearing-union on 26 November 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’, IMF Working Paper, IMF Policy Development and Review Department, (WP/02/52: 2002), p. 16.6 Skidelsky, op. cit., pp. 349.7‘A pathetic procession of stooges’ was the phrase Keynes used. He wrote that ‘he had come to Savannah expecting to meet the world, and all I met was a tyrant’. Newton, op. cit., pp. 202-203. For more on the importance 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 a Currency’, Working Paper No. 3, Shaping the Global Order, Brookings Institution, Sept. 7, 2011. The Eurozone crisis represents a similar problem: see Buttonwood, ‘Voters vs. Creditors’, The Economist, 19 November 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 evolution 1945–1981 (Rome: FAO, 1981), available online at http://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 online at 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, Coping with hunger? Visions of a global food system, 1930–1960, Journal of Global History (2011) 6, (hereafter Jacertz and Nutzenadel) p. 110.14 World Health Organisation, Task Force On Innovative International Financing For Health Systems Receives Two Working Group Reports, Press Release, 13 March 2009, accessed at http://www.who.int/pmnch/media/membernews/2009/20090313_hltfmeeting/en/index.html on November 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 University Press, 2004), (hereafter Toye and Toye) p. 24. Cordell Hull won the Nobel Peace Prize four years before Sir 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 Slack and Presidential Leadership’, in The World Trade Organisation as an International Organisation, edited by Anne Krueger (Chicago: University of Chicago Press, 1998) pp. 185-186. Hereafter, ‘Odell and Eichengreen’.18 Peter Van den Bossche, The Law and Policy of the World Trade Organization, (Cambridge: Cambridge University Press, 2005), pp. 79.19 Daniel Drache, The Short but Significant Life of the International Trade Organization: Lessons for Our Time, CSGR Working Paper No. 62/00, November 2000. Hereafter, ‘Drache’.20 Havana Charter For An International Trade Organization, available at www.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 of National Biography, online ed., ed. Lawrence Goldman, available at http://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 at http://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/27903-07465fc702d46be5bacb9fcfc9517071b.pdf, accessed 4 December 2011. The full speech is typical of his remarkable 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 the UK as ‘Keynes: Fighting for Britain’, but the name was changed to ‘Keynes: Fighting for Freedom’ for the North American edition. Keynes’ vast personal wealth was amassed from sales of his books, and his trading of shares on the London Stock Exchange. As Skidelsky’s work illustrates, he was not only a political economist, but an intellectual in many areas, a patron of the arts and a celebrity who moved in the top elite circles in London.30 Boerma, op. cit., p. 151; ‘Set Back to World Food Board’, Tribune Magazine, 1 November 1946, accessed http://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 the ongoing political sensitivity of agricultural policy consider, e.g., the longevity of European Common Agricultural Policy, developed partly to ensure food security in Europe, and even when grossly overproducing to the point that security could no longer be considered a rational argument, it was still considered untouchable by politicians, particularly in France. Or, similarly, the ‘big corn’ lobby in the United States.31 Kevin Buterbaugh and Richard Fulton, The WTO Primer, (New York: Palgrave, 2008), p. 21; Odell and Eichengreen, 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 international economic 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 at http://www.economist.com/node/17414511 accessed 4 December 2011.