Bretton Woods Conference Establishes Dollar Hegemony

Seven hundred thirty delegates from all 44 allied nations gather at the Mount Washington Hotel in Bretton Woods, New Hampshire from July 1-22, 1944 for the United Nations Monetary and Financial Conference. The conference designs the postwar international monetary and financial order, establishing institutions that will facilitate U.S. economic dominance and corporate globalization for generations.

Purpose and Context

The stated purpose was to agree on a system of economic order and international cooperation to help countries recover from war devastation and foster long-term global growth. A major point of common ground was avoiding a recurrence of the closed markets and economic warfare that characterized the 1930s.

The primary designers were John Maynard Keynes, adviser to the British Treasury, and Harry Dexter White, chief international economist at the U.S. Treasury Department. White’s vision largely prevailed, establishing American institutional dominance.

The Two Institutions Created

International Monetary Fund (IMF)

The IMF would monitor exchange rates and lend reserve currencies to nations with balance-of-payments deficits. Countries agreed to keep their currencies fixed but adjustable (within a 1% band) to the dollar, and the dollar was fixed to gold at $35 per ounce.

The IMF came into formal existence in December 1945 when its first 29 member countries signed its Articles of Agreement. This institutionalized the dollar as the world’s reserve currency, allowing the U.S. to finance deficits by printing money while other nations had to earn dollars through exports.

World Bank (IBRD)

The International Bank for Reconstruction and Development, now the World Bank Group, was responsible for providing financial assistance for postwar reconstruction and economic development of less developed countries. The IBRD Articles of Agreement were ratified on December 27, 1945.

Implications for Corporate Power

The Bretton Woods system created mechanisms that would:

• Institutionalize dollar hegemony, allowing the U.S. to export inflation and finance overseas military and corporate expansion
• Establish conditionality frameworks where debtor nations must accept “structural adjustment” policies favoring multinational corporations
• Provide multilateral lending that often benefited Western corporations more than recipient populations
• Create institutional frameworks for imposing market liberalization, privatization, and deregulation globally

Legacy

The system of currency convertibility lasted until 1971 when President Nixon ended dollar-gold convertibility. However, the IMF and World Bank remain powerful forces in the world economy as of the 2020s.

These institutions became vehicles for what critics call “debt imperialism” - using loan conditionality to force developing nations to adopt policies favoring foreign corporate investment, resource extraction, and market access. The structural adjustment policies of the 1980s-90s demonstrated how these Bretton Woods institutions could be used to advance corporate interests under the guise of economic development.