Bretton woods

Summary

Ed Conway argues that Bretton Woods produced a unique set of rules and infrastructure for supporting the global economy. It was enabled by the experience of Keynes and White during and after the First World War, their dislike of the Gold Standard, the necessity of improving the situation between the wars and the opportunity created by the catastrophe of the Second World War.

He describes how it was planned and developed. How it emerged from the summit. And he shows how the opportunity inevitably allowed the US to replace the UK at the center of the global economy.

Like all plans there are mistakes and Conway takes us through them and how the US recovered the situation as best it could.

And then Conway describes the period after Bretton Woods collapsed. He explains what followed and also compares the relative performance of the various periods before during and after Bretton Woods.

Following our summary of his arguments RSS is Rob's Strategy Studio comments from the perspective of Complex Adaptive System (

CAS) theory. Conway's book illustrates the rule making and infrastructure that together build an evolved amplifier. He shows the strategies at play of agents that were for and against the development is a phase during the operation of a CAS agent. It allows for schematic strategies to be iteratively blended with environmental signals to solve the logistical issues of migrating newly built and transformed sub-agents. That is needed to achieve the adult configuration of the agent and optimize it for the proximate environment. Smiley includes examples of the developmental phase agents required in an emergent CAS. In situations where parents invest in the growth and memetic learning of their offspring the schematic grab bag can support optimizations to develop models, structures and actions to construct an adept adult. In humans, adolescence leverages neural plasticity, elder sibling advice and adult coaching to help prepare the deploying neuronal network and body to successfully compete.
and deployment of the system. And The Summit provides a key piece of the history of our global economic CAS.

The Summit Bretton Woods, 1944

In Ed Conway's book 'The Summit Bretton Woods, 1944' he argues that the decisions taken at the Bretton Woods Summit on financial infrastructure is of great significance:

Two weeks into operation Overlord on Saturday July 22 1944, after Japan had just lost Thailand, the best economic minds met at the Mount Washington to replace the previous iteratively evolved jumbled infrastructure that was failing to support global finance and economic cooperation, stability and growth. It was to include rules and agreements on:

Exchange rate mechanisms
Money flows between countries
Central bank interest rates;

It was to be driven via concrete plans developed in advance by technical experts.
It was a response to the problems seen between the wars:

The Peace of Versailles had failed:

Onerous reparations leading to resentment. The losers had no reason not to renege on the agreement as soon as possible. Debts or reparations must match ability to pay or inflation will be generated. The US is the United States of America. wanted its European allies to repay the war loans. Instead they felt Europe, and especially the UK is the United Kingdom of Great Britain and Northern Ireland.
, was trying to get more.
Collapse of the
Gold Standard
was a set of informal agreements between central banks:
- To support operation of the global trade between nation states
- To convert their local currency to gold at an agreed conversion rate when asked. It was
- Based on David Hume's price specie flow theory. But in practice it suffered from a mismatch between:
had not been addressed
US Congress ensured the League of Nations was irrelevant. This led to

Hyper-inflation in Austria and Germany
European economic collapse
Trade wars
The great depression and
Inducing a further world war. This unfortunate scenario had been predicted by Lord Keynes in his 1919 masterpiece 'The economic consequences of the peace.'

But there were also conflicting goals. And out of necessity the teams were led by technical experts rather than the political leaders.

The US is the United States of America. led team had the backing of Russia, China and Latin America to weaken the central position London still held in currency is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
exchange. Its leader was Harry Dexter White, deputizing for Treasury is the department of the treasury. it is a federal government executive department created by Act of Congress in 1789 to manage government revenue. The Secretary of the Treasury is a Cabinet officer. To support funding of high cost investments: Disaster recovery, Wars, Famines; the treasury can issue debt instruments and manage the national debt.
Secretary Morgenthau.
The UK is the United Kingdom of Great Britain and Northern Ireland.
led team was nominally allied with India and Greece but was keen to carve out a protected zone based on the British Empire where debts would be rescheduled to help the UK rebuild towards its earlier mercantile success. Its leader was Lord Keynes representing the UK Cabinet even though physically weakened by IE is infective (bacterial) endocarditis. The infection of the endocardium -- heart inner lining -- or the heart valves causes inflammation and can be fatal.
.
The French wanted to be treated as in the primary tier.
The Mexicans wanted a silver backed currency.
No one was sure of the Soviet goals.

Bretton Woods resulted in the development is a phase during the operation of a CAS agent. It allows for schematic strategies to be iteratively blended with environmental signals to solve the logistical issues of migrating newly built and transformed sub-agents. That is needed to achieve the adult configuration of the agent and optimize it for the proximate environment. Smiley includes examples of the developmental phase agents required in an emergent CAS. In situations where parents invest in the growth and memetic learning of their offspring the schematic grab bag can support optimizations to develop models, structures and actions to construct an adept adult. In humans, adolescence leverages neural plasticity, elder sibling advice and adult coaching to help prepare the deploying neuronal network and body to successfully compete.
of financial infrastructure and rules that worked: The
IMF
is the International Monetary Fund developed as part of the Bretton Woods agreements to provide liquidity to national gold denominated reserve banks at times of stress in the global financial network - a shortage of a particular currency which was inhibiting trade; in support of a broader Bretton Woods framework designed so as to ensure that currencies did not become misaligned with one another, and were a fair representation of what things were worth. The IMF removed the need for nations to depend on private loans from commercial banks, such as Britain's dependence on J. P. Morgan during the 1920s and 30s. The agreement required each Bretton Woods signatory to provide a capital investment or 'quota' into the fund which would subsequently correspond to the amount that the country could borrow from the fund in times of financial stress. The top four countries and their quotas were set by IMF architect, Harry Dexter White, to match FDR's priorities:
1. US - $2.9 billion, an amount the FDR administration could transfer from Exchange Stabilization Fund without any need to ask for Congress for funds.
2. UK - $1.45 billion
3. USSR - slightly less than UK quota
4. China - less than USSR.
, World Bank was setup as part of the Bretton Woods agreements, as the International Bank for Reconstruction and Development, to repair and reconstruct Europe after the Second World War and provide reconstruction and development resources for projects in developing economies.
; but the result functioned differently to the plan.
By 1971 the rules had been totally abandoned. The effects of the Vietnam War forced Richard Nixon to remove the peg between the US Dollar and Gold. This introduced a time of variable exchange rates and fiat money. The controls on money flows between countries were also removed. The result was to allow:

Increasing wealth gap between rich and poor
World dominated by the private finance industry
Huge imbalances between creditor and debtor nations

As of 2016 after the weakening of Bretton Woods's capital controls and the introduction of the euro currency:

A single currency managed by the ECB is the European Central Bank. It administers monetary policy for the euro area and supervises the euro area banks. Its chartered goal is to maintain price stability in the euro area. , a bank constrained to limit inflation and with little ability to backstop individual country's banks
Within a currency union with no central authority to tax; this is in effect a virtual
Gold Standard
was a set of informal agreements between central banks:
- To support operation of the global trade between nation states
- To convert their local currency to gold at an agreed conversion rate when asked. It was
- Based on David Hume's price specie flow theory. But in practice it suffered from a mismatch between:
.
The euro area, having been impacted by the 2008 financial crisis, is struggling with very similar problems to those post World War 1 financial issues:

Collapse of a major debtor - Greece
Deflation trapping Southern Europe
German exports supercharged by the relative weakness of the currency

The Mount Washington

FDR is President Franklin Delano Roosevelt. He is notable for his contributions to the US CAS:

New Deal strategies including:

SSA
FFDCA
IRC

Lend-lease which pushed the US and Japan into World War 2 and helped the US to become the world's predominant military power.
Bretton Woods's agreement which economically constrained any politically driven collapse of the world economy after the war and helped the US to become the world's predominant economic power.

wanted a deal by late July to discuss at the Democratic convention. His Treasury is the department of the treasury. it is a federal government executive department created by Act of Congress in 1789 to manage government revenue. The Secretary of the Treasury is a Cabinet officer. To support funding of high cost investments: Disaster recovery, Wars, Famines; the treasury can issue debt instruments and manage the national debt.
team selected New Hampshire for the economic summit to get away from Virginia's summer heat and to obtain New Hampshire Republican Charles Tobey's vote.

The Bitter Peace

Conway introduces John Maynard Keynes, as a Bloomsbury Group member, old Etonian and star lecturer at Kings College Cambridge. He worked at the UK Treasury during World War 1, becoming an advisor to the War Cabinet and part of High Society. He was subsequently selected to negotiate the economic settlement with Germany at the Paris conference. Keynes visited Ypres. He was disappointed that the conference missed the opportunity to build a new foundation of economic cooperation. Instead the British, French and Italian leaders pushed Germany to the point of collapse. President Wilson's 14 points approach was not a plan, scheme or other help in setting a path and making progress. The American delegates learned they would need a plan next time. Keynes left in disgust feeling:

The Peace of Versailles had failed:

Onerous reparations leading to resentment. The losers had no reason not to renege on the agreement as soon as possible. Debts or reparations must match ability to pay or inflation will be generated. The US is the United States of America. wanted its European allies to repay the war loans. Instead they felt Europe, and especially the UK is the United Kingdom of Great Britain and Northern Ireland.
, was trying to get more.
Collapse of the
Gold Standard
was a set of informal agreements between central banks:
- To support operation of the global trade between nation states
- To convert their local currency to gold at an agreed conversion rate when asked. It was
- Based on David Hume's price specie flow theory. But in practice it suffered from a mismatch between:
had not been addressed
US Congress ensured the League of Nations was irrelevant. This led to

Hyper-inflation in Austria and Germany
European economic collapse
Trade wars
The great depression and
Inducing a further world war. This unfortunate scenario had been predicted by Lord Keynes in his 1919 masterpiece 'The economic consequences of the peace.'

Before the war the UK had been at the center of a global value delivery system. The initiation of the war resulted in its collapse. London was the financial system's hub but foreigners found they could not depend on the banking system to help pay their bills. The situation affected stock brokers and banks. A stock collapse impacted Keynes's family finances. Conway explains that, while it was not yet understood, the Gold Standard was a set of informal agreements between central banks:

To support operation of the global trade between nation states
To convert their local currency to gold at an agreed conversion rate when asked. It was
Based on David Hume's price specie flow theory. But in practice it suffered from a mismatch between:

An economies changing situation
The rigid rules constraining central bankers and
The limited quantity of gold. When America's economy expanded during the 1920s and gold flowed into the country, struggling European economies deflated to maintain currency parity with gold. Economists such as Keynes argued it was more sensible to manage economies by responding to their situation within the global network.

was unravelling into a true credit crunch. London banks refused to exchange sterling for gold. It was assumed the war would be over quickly. Keynes and other economists pushed for the UK to return to the standard. But as the war dragged on for four years the effects were devastating on the European population and its infrastructure.

During 1917 President Wilson attempted to force the combatants to reconcile. Through the Federal Reserve of 1913 was a response to a series of banking panics with the goal of responding effectively to stresses. It setup:

At least 8 and not more than 12 private regional Federal Reserve banks. Twelve were setup
Federal Reserve Board with seven members to govern the system. The President appointed the seven, which must be confirmed by Congress. In 1935 the Board was renamed and restructured.
Federal Advisory Committee with twelve members
Single US currency - the Federal Reserve Note.

he encouraged US banks to cut back credit lines to foreign borrowers inducing a sterling crisis. Britain was close to bankruptcy is a legal status for an entity that cannot repay its creditor's loans. It holds creditor lawsuits in abeyance while the restructuring process proceeds to allow the entity to continue operations. It also has legal tools for forcing holdout creditors to accept repayments that are lower than the bond sale initially promised. when German U-boat attacks pushed the US into the war and US credit flows to Britain restarted. And a US Army was deployed to France.

Once America entered the war Keynes work at the Treasury shifted from staving off bankruptcy to ensuring the flow of US is the United States of America. loans. But while he was the sharpest of intellects he was ill-suited to diplomacy. During this period Keynes realized that policies have to be implemented which requires explaining them to others in terms they can understand. His exceptional ability as a writer and journalist helped here.

By the 1920s the US economy overtook the UK's with the dollar displacing sterling. And America's GDP is:

Gross domestic product which measures the total of goods and services produced in a given year within the borders of a given country according to Piketty. GDP has many problems:

GDP is a poor measure of:

Value
Who gets what

GDP excludes:

Services by house makers
Leisure

GDP includes items that should be excluded:

Cost of waste - cleaning up pollution, building prisons, commuting to work;

Guanine-di-phosphate is a nucleotide base.

was already larger than the UKs.

Harry Dexter White served as an army officer in France in World War 1 performing training but no active combat. His parents were tsarists from Lithuania. He adopted his best friend's name Dexter, to differentiate himself from the many other Harry Whites.

During the 1920s the wealth gap in the US widened. Many people were living in poverty. The US financial system was building a bubble. The political response was the progressive movement. White had already volunteered to help the poor as a school boy and in 1919 he was drawn back into social justice work along with New Deal architect Harry Hopkins and Morgenthau.

White supplemented his education studying government at Columbia and then economics at Stanford where he was recognized as exceptional.

A short history of Gold

The international economic system was based on gold was a set of informal agreements between central banks:

To support operation of the global trade between nation states
To convert their local currency to gold at an agreed conversion rate when asked. It was
Based on David Hume's price specie flow theory. But in practice it suffered from a mismatch between:

An economies changing situation
The rigid rules constraining central bankers and
The limited quantity of gold. When America's economy expanded during the 1920s and gold flowed into the country, struggling European economies deflated to maintain currency parity with gold. Economists such as Keynes argued it was more sensible to manage economies by responding to their situation within the global network.

. But after World War 1 it could not cope. The Great War had finished it off.

While a variety of metals had been used as currencies is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
historically the UK's use of gold and centrality in world trade propelled the adoption of a gold standard was a set of informal agreements between central banks:

To support operation of the global trade between nation states
To convert their local currency to gold at an agreed conversion rate when asked. It was
Based on David Hume's price specie flow theory. But in practice it suffered from a mismatch between:

An economies changing situation
The rigid rules constraining central bankers and
The limited quantity of gold. When America's economy expanded during the 1920s and gold flowed into the country, struggling European economies deflated to maintain currency parity with gold. Economists such as Keynes argued it was more sensible to manage economies by responding to their situation within the global network.

. But where the trading partners' economies were weak the deflationary pressures on pay and prices built resentment of the standard. And central bankers often: Adjusted local interest rates rather than moving gold from country to country, Allowed more money to circulate than they had agreed; as the rules required. It was difficult to match a country's situation to its stock of gold.

It was only serendipitous discoveries of more gold that allowed the metal to track the expansion of the world economy.

When gold was abandoned businesses found themselves in a position of great uncertainty is when a factor is hard to measure because it is dependent on many interconnected agents and may be affected by infrastructure and evolved amplifiers. This is different from Risk. from the new floating exchange rates. However, brokers and speculators including Keynes made lots of money on currencies, shares and commodities. Keynes was hit by the 1929 crash but recovered over the 1930s.

Economic consequences

The Peace of Versailles had disastrous consequences.

The UK had a terrible 1920s. There was 11% unemployment.
In the immediate aftermath of the Great War, with Britain still off the Gold Standard was a set of informal agreements between central banks:

To support operation of the global trade between nation states
To convert their local currency to gold at an agreed conversion rate when asked. It was
Based on David Hume's price specie flow theory. But in practice it suffered from a mismatch between:

An economies changing situation
The rigid rules constraining central bankers and
The limited quantity of gold. When America's economy expanded during the 1920s and gold flowed into the country, struggling European economies deflated to maintain currency parity with gold. Economists such as Keynes argued it was more sensible to manage economies by responding to their situation within the global network.

, the Bank of England and the Treasury engineered some inflation to support the returning soldiers. Keynes was teaching at Kings. His expertise was leveraged by the chancellor Neville Chamberlin. But soon the government reversed course raising interest rates to 7% to move the economy in line with the level of gold reserves so as to prepare for a return to gold. The effect was to suck cash out of the economy and generate terrible austerity. Keynes criticized the policy arguing "The problem with the Gold Standard is it forces central bankers to follow its rules instead of their economies." Keynes asserted if all the countries followed the Gold Standard there would be inflation in the US and deflation in the poorer European economies.
In 1925 then Chancellor Winston Churchill, with poor advice from the Bank of England and pressure from J.P.Morgan, put the UK back on Gold. Churchill later admitted it was the greatest mistake of his life.
Keynes wrote a tract on monetary reform in which he expressed some of the key aspects of Keynesianism:

Country should set economic policy for domestic reasons -- not the Gold Standard
Deflation must be avoided at all costs

The US had remained on the Gold Standard throughout the Great War. Consequently gold flowed into the country raising prices as Keynes had foretold. Ignoring the rules of the standard the New York Fed responded by constraining cash. Keynes noted that the New York Fed was setting up a dollar standard masquerading as gold.
Gold continued to flow into the US through the 1920s driving inflation and an economic bubble which burst in 1929.

During the war France and Germany had both printed money to help with funding. The result was both economies suffered from inflation. The Peace agreement ensured the economies of Germany and France were undermined:

The US demanded repayment from France and Britain for its war loans.
The UK agreed to pay back 80 cents on the dollar.
France and the UK sucked $2 billion out of Germany.
France clamped down on its money supply after the war ended stopping its economic inflation. It did not move back onto the Gold Standard and was attacked by speculators who took money out of France and overturned five governments. The French responded by invading the Ruhr in 1923 seeking reparations to strengthen their economy. US intervention in 1924 (Dawes Plan of 1924 was developed to resolve the crushing World War 1 reparations problem. It was proposed by the US Dawes Committee with UK negotiator Lord Stamp. It provided for an end to the Allied occupation of the Ruhr, and phased payments by Germany. The plan proved unworkable and was replaced in 1929 by the Young Plan.
) and 1929 (
Young Plan
of 1929 was developed by Owen Young, creator and chairman of Radio Corporation of America (RCA), J.P. Morgan and Thomas Lamont. Young had been a developer of the Dawes Plan. The Young Plan called for:
- Reduced further payments by Germany by 20%
- Divided the annual payment of $473 million into two parts - one unconditional for one third of the sum and the other two thirds postponable but incurring interest and financed by a consortium of American investment banks led by J.P. Morgan. The 1929 Wall Street crash removed this financing stream.
- Reparations transfers through the BIS.
) tried to reduce the reparations burden.
In contrast Germany kept printing money to inflate away its debts. Hyperinflation resulted and was only stopped in 1923 when Schacht cancelled the currency is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
and put Germany back on Gold.
By 1926 France settled with the US paying back 40 cents on the dollar.

White studied the French Economy for his PhD dissertation. He concluded that 'hot money' was a problem and should be constrained in both direction and volume of flow. This became a central focus of Breton Woods.

By 1932 The US boom had transformed into the Great Depression, impacted by the 1929 crash and the 1931 failure of the huge Austrian bank Credit Anstalt which was too big to fail and too big to bail out. The Gold Standard helped the effects flow around the world. Germany's economy had been expanding in the late 1920s due to the inflow of American cash. The 1929 crash pulled this capital out of Germany. Rather than print money Bruning allowed the economy to deflate. The austerity polarized the people and by 1932 the Nazi's were elected to power.

The UK was attacked by speculators. The treasury defended the pound with a further austerity drive that was so severe the British Navy went on strike. Having expanded the vote to all males and so increased the influence of labor Britain, and other European nations, had to abandon the Gold Standard which the US considered a default on its war debt.

In the US the Gold Standard then undermined bank rescues. Treasury is the department of the treasury. it is a federal government executive department created by Act of Congress in 1789 to manage government revenue. The Secretary of the Treasury is a Cabinet officer. To support funding of high cost investments: Disaster recovery, Wars, Famines; the treasury can issue debt instruments and manage the national debt.
Secretary Mellon made the situation worse recommending the US liquidate:

Labor
Stock
Stocks
Farms
Real estate

White disagreed and proposed some of Keynes's strategies should be used by the President:

Write off debts
Fund public works
Pump cash into the economy

Conway notes White was also interested in looking at how the Soviet economy was operating and expressed an interest in understanding Gosplan was the central economic planning agency of the USSR.
. White took a temporary position at the Treasury is the department of the treasury. it is a federal government executive department created by Act of Congress in 1789 to manage government revenue. The Secretary of the Treasury is a Cabinet officer. To support funding of high cost investments: Disaster recovery, Wars, Famines; the treasury can issue debt instruments and manage the national debt.
where he rose rapidly. FDR is President Franklin Delano Roosevelt. He is notable for his contributions to the US CAS:

New Deal strategies including:

SSA
FFDCA
IRC

Lend-lease which pushed the US and Japan into World War 2 and helped the US to become the world's predominant military power.
Bretton Woods's agreement which economically constrained any politically driven collapse of the world economy after the war and helped the US to become the world's predominant economic power.

's Treasury Secretary, Morgenthau liked is an emotion which initiates and maintains an altruistic partnership. It is a willingness to offer someone a favor. It is directed to those who appear likely to return the favor. White. Others thought him a self-serving snob and very stubborn and became his enemies, leaving him totally dependent on Morgenthau's backing.

FDR adopted Keynesian policies, but he found the man arrogant and patronizing. He took the US off the gold standard in 1933. He ridiculed the gold standard indicating the US would not go back onto it. Instead FDR set the value of the dollar each morning over breakfast aiming to keep it low relative to the pound. The result was a fiscal race to the bottom which catalyzed the raising of trade barriers via the: Smoot-Hawley act raised import duties on over 20,000 imported goods. It was signed into law by President Herbert Hoover in 1930.
in the US and Sterling zone in the UK.

Keynes thought deeply about the failure of classical economic theory to explain long lasting depressions. He replaced the accepted theory -- "Say's law" that the cost of labor was the key variable and that supply and demand otherwise operated an equilibrium -- with the proposal, in The General Theory of Employment, Interest and Money, that the key variable was how much money people were willing to spend at any particular time. He suggested in a depression people were hording their money. In the US Harry Hopkins and Marriner Eckles accepted Keynes ideas and lobbied FDR to abandon his balanced budget strategy but Morgenthau was unconvinced. France, following one of their own, Say, stuck with classical theory and gold for as long as they could. In 1936 they finally abandoned gold and came out of recession soon afterwards.

In 1937 Keynes was found to have IE is infective (bacterial) endocarditis. The infection of the endocardium -- heart inner lining -- or the heart valves causes inflammation and can be fatal.
and spent two years bed ridden. He struggled with it and the treatments for the rest of his life.

After Hitler invaded Czechoslovakia, he had the BIS is the Bank for International Settlements based in Basel, Switzerland. It was initially setup to manage Germany's war reparations payments.
transfer Czechoslovak gold to Germany, with an ok from the Bank of England, to help pay for the war effort. The US found out about the transfer. In frustration they concluded that finance must be used to subvert totalitarianism.

Lunatic Proposals

A Nazi international monetary system proposal, the financial 'new order', developed by economic minister Walter Funk was released in 1940. Conway jokes it resembles the architecture of the EU is European Union.
! It included:

A clearing house situated in Berlin.
Fixed conversion rates for currencies is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
.
Barter between internal and external networks ensuring balanced trade.

Harold Nicholson's UK Ministry of propaganda asked Keynes to lampoon the proposal but Keynes liked most of the ideas. It:

Removed gold
Placed controls on capital flows
Managed balances on current accounts

It was the impetus for Keynes to formulate his own plan for post war development is a phase during the operation of a CAS agent. It allows for schematic strategies to be iteratively blended with environmental signals to solve the logistical issues of migrating newly built and transformed sub-agents. That is needed to achieve the adult configuration of the agent and optimize it for the proximate environment. Smiley includes examples of the developmental phase agents required in an emergent CAS. In situations where parents invest in the growth and memetic learning of their offspring the schematic grab bag can support optimizations to develop models, structures and actions to construct an adept adult. In humans, adolescence leverages neural plasticity, elder sibling advice and adult coaching to help prepare the deploying neuronal network and body to successfully compete.
of the international monetary system. Ever since the shattering of the Gold Standard was a set of informal agreements between central banks:

To support operation of the global trade between nation states
To convert their local currency to gold at an agreed conversion rate when asked. It was
Based on David Hume's price specie flow theory. But in practice it suffered from a mismatch between:

An economies changing situation
The rigid rules constraining central bankers and
The limited quantity of gold. When America's economy expanded during the 1920s and gold flowed into the country, struggling European economies deflated to maintain currency parity with gold. Economists such as Keynes argued it was more sensible to manage economies by responding to their situation within the global network.

it was clear such a plan was needed to replace the pre-war rules and regulations. All recent frameworks had failed problematically. Keynes leveraged the 'new order' ideas but fixed the currencies to gold. His innovation was the proposal of a 'European reconstruction fund' to help rebuild the war ravaged economies. This would offset the starvation required by any armistice.

White had independently developed a similar proposal.

Germany's 1940 defeat of France and the UK is the United Kingdom of Great Britain and Northern Ireland.
resulted in Churchill becoming prime minister and shifting the war effort from financially limited to total deployment of resources, with the presumption that the US is the United States of America. would foot the bill. Given the political divisions in the US that would prove impossible in the short term.

While the UK spiraled towards financial collapse FDR is President Franklin Delano Roosevelt. He is notable for his contributions to the US CAS:

New Deal strategies including:

SSA
FFDCA
IRC

Lend-lease which pushed the US and Japan into World War 2 and helped the US to become the world's predominant military power.
Bretton Woods's agreement which economically constrained any politically driven collapse of the world economy after the war and helped the US to become the world's predominant economic power.

worked to:

But, to the UK leadership's dismay FDR then spent 1941 backing away from Lend-lease.

A German bomb killed Lord Josiah Stamp. Having already worked with the US on the Dawes plan of 1924 was developed to resolve the crushing World War 1 reparations problem. It was proposed by the US Dawes Committee with UK negotiator Lord Stamp. It provided for an end to the Allied occupation of the Ruhr, and phased payments by Germany. The plan proved unworkable and was replaced in 1929 by the Young Plan.
and being liked is an emotion which initiates and maintains an altruistic partnership. It is a willingness to offer someone a favor. It is directed to those who appear likely to return the favor. and respected there, he had been the UK's natural choice to be the financial envoy to the US. Keynes replaced him at the Bank of England and as the envoy. With the UK rapidly collapsing it was urgent to get Lend-lease operative.

While his reputation and ideas were admired Keynes alienated all the US leaders during his Lend-lease visit. Conway argues this was in part because Keynes was used to the UK's ministerial government, where a few private meetings can build agreement and action around his economic arguments. He was unaware of the constraints and strategies required to operate the US government. And then there was his personality differs in at least five key ways:

Extroversion-introversion - whether the person gains energy from socializing or retiring
Neuroticism-stability - does a person worry or are they calm and self-satisfied
Agreeableness-antagonism - is a person courteous & trusting or rude and suspicious
Conscientiousness-un-directedness - is a person careful or careless
Openness-non-openness - are they daring or conforming

! This mixture alienated Secretary Morgenthau who had already taken political risks for the UK.

Keynes discovered the Lend-lease agreement had a sting in its tail: The US was requiring a free trade agreement. This would undermine Imperial Preference, the trade barrier placed around the empire which was stopping the dominions from realizing their UK sterling debts. Keynes felt he must protect the post-war UK from speculators and a cash collapse and thus resist free trade. But FDR required it and it became agreed as article VII of Lend-lease.

FDR, Morgenthau and White then extended Lend-lease financial support to the Soviet Union. The Japanese responded with the attack on Pearl Harbor. The people of the US accepted they were at war with Japan and Germany.

Bedlam 1941-44

After Pearl Harbor in Dec 1941 Morgenthau made White 'unofficially' an assistant secretary. He asked White to consider the potential of an international currency is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
. White developed a post-war currency plan designed to secure the US economic rise and push the UK further from the center. He aimed to disband the Sterling zone, to replace London as the key financial hub.

White's plan had two economic goals:

Stabilize foreign exchange rates - via a stabilization fund which became White's main focus.
Setup an agency to rebuild the world economy after the war. A bank to support reconstruction and redevelopment.

White's plan had a clause allowing countries to levy tariffs on a country whose currency is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
became scarce. It became part of the IMF articles but, Conway notes, has never been used.

White proposed to Morgenthau a conference to agree on the implementation with all the allied governments.
But the US Treasury is the department of the treasury. it is a federal government executive department created by Act of Congress in 1789 to manage government revenue. The Secretary of the Treasury is a Cabinet officer. To support funding of high cost investments: Disaster recovery, Wars, Famines; the treasury can issue debt instruments and manage the national debt.
was struggling to limit the State departments competitive proposals to meet with the allies and formulate a politically driven 'peace conference'.

The UK ministers responded to Lend-lease included a preliminary agreement and the act.

Agreement included 8 articles:

The US agreed to supply defense articles services and information as the President authorizes.
The UK will contribute to the defense of the US providing such articles it is in a position to supply.

This resulted in the transfer of a cavity magnetron, the designs of the VT fuze and Whittle jet engine and the description of the feasibility of the A bomb. As well as designs of rockets, superchargers, gyroscopic gunsights, submarine detection devices, self-sealing fuel tanks and plastic explosives.

UK can not transfer title of the goods and services without permission of the President.
Patent protected articles and information will be paid by the UK government when requested to do so by the President.
At the end of the emergency the UK government will return articles and information that has not been destroyed or used as requested by the President.
In assessing the articles to be returned the US will take into account articles already transferred to the US and accepted/acknowledged by the President.
The final benefits provided by the UK to the US in return for the aid will include:

No burden to commerce between the two countries
Promotion of mutually advantageous economic relations
Betterment of world-wide economic relations
Elimination of all forms of discriminatory treatment in international commerce
Reduction of tariffs and other trade barriers.
Conversations to be held to determine in the light of governing economic conditions, the best means of attaining the objectives.

Agreement to take effect immediately.

Act to Promote the Defense of the United States, of March 1941 which superseded the neutrality acts.

article VII. So Keynes initiated work on a plan for a post-war international currency framework, but based on a debtor's perspective. The centralization of academic talent in the treasury during the war encouraged the development of a variety of ground breaking plans:

Mead and Robbins White Paper on Employment
Beveridge's plan for a Welfare State

Keynes's plan looked to fix the Gold Standard was a set of informal agreements between central banks:

To support operation of the global trade between nation states
To convert their local currency to gold at an agreed conversion rate when asked. It was
Based on David Hume's price specie flow theory. But in practice it suffered from a mismatch between:

An economies changing situation
The rigid rules constraining central bankers and
The limited quantity of gold. When America's economy expanded during the 1920s and gold flowed into the country, struggling European economies deflated to maintain currency parity with gold. Economists such as Keynes argued it was more sensible to manage economies by responding to their situation within the global network.

Compulsory adjustments for debtor nations
Voluntary adjustments for creditor nations

Keynes developed two proposals:

A decoy proposal which made adjustments compulsory for both creditor and debtor based on barter. Every country had to develop bilateral agreements with all trading partners ensuring compensating trade flows. The Bank of England liked this strategy since it protected the sterling zone.
The real proposal of a clearing union. This included:

Central bank with its own currency is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
(bancor) which is freely converted at a fixed rate to all other currencies.
All countries to have an account with the central bank
Debtors develop overdrafts. The central bank would charge fees to push the country back into balance. If the debt persisted the country would become a deficiency country and would be able to depreciate its currency by a limited amount.
Creditors would also be charged to encourage flows to become balanced. Gold would be retired since it would not be convertible from bancor.
No capital would be needed to fund the union since the charges would allow the infrastructure to operate at a profit. Keynes used the profits to fund a global police force and an organization to provide economic relief and development aid.

Feedback from the UK treasury team in the US was that Keynes real plan would not be attractive to the Americans. Congress does not like is an emotion which initiates and maintains an altruistic partnership. It is a willingness to offer someone a favor. It is directed to those who appear likely to return the favor. super national structures, creditor penalties or powerful central banks.

Conway notes that both the White and Keynes plans contained common goals of:

A lasting economic framework that would stop another Great Depression and third war.
Not being based on a
Gold Standard
was a set of informal agreements between central banks:
- To support operation of the global trade between nation states
- To convert their local currency to gold at an agreed conversion rate when asked. It was
- Based on David Hume's price specie flow theory. But in practice it suffered from a mismatch between:
due to its deflationary properties.
Avoiding floating exchange rates with their risks of hot money flows. Instead focusing on something in between.

It was imperative to the UK, as a major debtor coming out of the war, to ensure the existence of a framework that would pull the UK out of collapse. They assumed that agreeing a plan in private with the US would be the best way to achieve this goal. They hoped to leverage Keynes plan in joint discussions to achieve this goal.

Keynes and White reviewed each other's plans in the summer of 1942 and realized there was quite a lot in common:

Fixed exchange rates
Central coordination mechanism/organization to discipline economies that were out of step with exchange rates.
Constraints on hot money

Keynes was critical of White's using gold with an amplifier. He advocated for the clearing union. But he was relieved to see White move the UK's "blocked balances" over to the fund. Surprisingly the UK leadership rejected this offer and then subsequently struggled with repaying these debts to the dominions.

The US wanted limited liability on extending US credit and was frustrated that Keynes plan provided few constraints on any country except the US.
The meeting of White and Keynes identified the main differences:

Fund's size - which was too small according to Keynes. The US agreed to double its size.
Countries were required to invest upfront which would be difficult for the UK.
Exchange rate changes were controlled by the US which the UK feared.

When the two plans were leaked to the public the US position became "adopt White's plan or there will be no plan". The UK had little choice since the dominions liked White's plan as well. So the UK decided to push for:

More power to the members of the fund
Reducing the amount of gold that had to be given to the fund
An international currency. White could not see any viable currency but gold backed dollars.
A meeting between the UK and US in Washington in the autumn of 1943 to leverage the pragmatism of war time to gain agreement to an economically valid plan - with workable solutions to the initial goals.

Snake Bite Party

FDR is President Franklin Delano Roosevelt. He is notable for his contributions to the US CAS:

New Deal strategies including:

SSA
FFDCA
IRC

Lend-lease which pushed the US and Japan into World War 2 and helped the US to become the world's predominant military power.
Bretton Woods's agreement which economically constrained any politically driven collapse of the world economy after the war and helped the US to become the world's predominant economic power.

reelection planning resulted in two goals for White:

Deal must be sealed by the Democratic convention
Deal must not look like a fait-a-comp-lit to the participants or Congress.

White concluded he must get the economic essentials agreed prior to the main meeting. He would leave the question of IMF is the International Monetary Fund developed as part of the Bretton Woods agreements to provide liquidity to national gold denominated reserve banks at times of stress in the global financial network - a shortage of a particular currency which was inhibiting trade; in support of a broader Bretton Woods framework designed so as to ensure that currencies did not become misaligned with one another, and were a fair representation of what things were worth. The IMF removed the need for nations to depend on private loans from commercial banks, such as Britain's dependence on J. P. Morgan during the 1920s and 30s. The agreement required each Bretton Woods signatory to provide a capital investment or 'quota' into the fund which would subsequently correspond to the amount that the country could borrow from the fund in times of financial stress. The top four countries and their quotas were set by IMF architect, Harry Dexter White, to match FDR's priorities:

US - $2.9 billion, an amount the FDR administration could transfer from Exchange Stabilization Fund without any need to ask for Congress for funds.
UK - $1.45 billion
USSR - slightly less than UK quota
China - less than USSR.

quotas for the main Bretton Woods Summit.

White proposed to have a pre-summit to agree the economic essentials. In effect that:

The IMF be setup to lend in any currency is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
when needed.
And it was to have the authority to stop competitive devaluations. This would likely hurt the UK in its highly indebted state. Keynes also backed fixed exchange rates, but the UK was split on this with Robbins arguing for floating rates.
The US agreed to a scarce currency clause if the world was short of dollars.
Only the US dollar was tied to gold. This was practicable in the 1940s since the US had such large gold reserves.
Governments could control the flows of capital through bank regulators and limits on cash for travelers.
The IMF could prevent governments from devaluing their exchange rates. This was unacceptable to the UK after their experiences in the 1920s.
The headquarters of the institutions was to be in Washington D.C. The UK wanted at least one to be based in Europe.

On the trip over to Atlantic City for the Bretton Woods pre-meeting Keynes and his team developed an alternative 'boat draft' of White's plan for the Fund. And Keynes developed a proposal for the World Bank was setup as part of the Bretton Woods agreements, as the International Bank for Reconstruction and Development, to repair and reconstruct Europe after the Second World War and provide reconstruction and development resources for projects in developing economies.
to ensure recovery funding for Europe. The difficulty with building this proposal was that the team was all economists not bankers.

Babel on Wheels June 1944

White's aim was to keep the US government leaders away from the Atlantic City pre-meeting so that he could guarantee to achieve FDR is President Franklin Delano Roosevelt. He is notable for his contributions to the US CAS:

New Deal strategies including:

SSA
FFDCA
IRC

Lend-lease which pushed the US and Japan into World War 2 and helped the US to become the world's predominant military power.
Bretton Woods's agreement which economically constrained any politically driven collapse of the world economy after the war and helped the US to become the world's predominant economic power.

's goal 1 by agreeing a sound economic framework with the British. As the pre-summit progressed this strategy backfired when Morgenthau becoming panicked that he did not know what he was going to be asked to sign.
At Atlantic City White kept his overall plan to his closest confidants such as Edward Bernstein, but his full team were allocated discrete aspects and trained how to manage them since White would be preoccupied in chairing the summit:

White had his lawyers alter the economic wording so that its goals and constraints were obtuse. His aim was to ensure that there was wiggle room for the fund managers to cope with any circumstance. Keynes called the language "Cherokee" but White ensured it stayed in the plan for the fund.

The US rejected the UK's "boat draft" IMF is the International Monetary Fund developed as part of the Bretton Woods agreements to provide liquidity to national gold denominated reserve banks at times of stress in the global financial network - a shortage of a particular currency which was inhibiting trade; in support of a broader Bretton Woods framework designed so as to ensure that currencies did not become misaligned with one another, and were a fair representation of what things were worth. The IMF removed the need for nations to depend on private loans from commercial banks, such as Britain's dependence on J. P. Morgan during the 1920s and 30s. The agreement required each Bretton Woods signatory to provide a capital investment or 'quota' into the fund which would subsequently correspond to the amount that the country could borrow from the fund in times of financial stress. The top four countries and their quotas were set by IMF architect, Harry Dexter White, to match FDR's priorities:

US - $2.9 billion, an amount the FDR administration could transfer from Exchange Stabilization Fund without any need to ask for Congress for funds.
UK - $1.45 billion
USSR - slightly less than UK quota
China - less than USSR.

changes. The UK was hamstrung by the dominions acceptance of the US positions. The US allowed some leeway with the World Bank was setup as part of the Bretton Woods agreements, as the International Bank for Reconstruction and Development, to repair and reconstruct Europe after the Second World War and provide reconstruction and development resources for projects in developing economies.
where Keynes wanted to allow delayed payments for capital and which the US appeared to be using to trade its potential for redevelopment of debtor and undeveloped nations to gain votes for the US IMF is the International Monetary Fund developed as part of the Bretton Woods agreements to provide liquidity to national gold denominated reserve banks at times of stress in the global financial network - a shortage of a particular currency which was inhibiting trade; in support of a broader Bretton Woods framework designed so as to ensure that currencies did not become misaligned with one another, and were a fair representation of what things were worth. The IMF removed the need for nations to depend on private loans from commercial banks, such as Britain's dependence on J. P. Morgan during the 1920s and 30s. The agreement required each Bretton Woods signatory to provide a capital investment or 'quota' into the fund which would subsequently correspond to the amount that the country could borrow from the fund in times of financial stress. The top four countries and their quotas were set by IMF architect, Harry Dexter White, to match FDR's priorities:

US - $2.9 billion, an amount the FDR administration could transfer from Exchange Stabilization Fund without any need to ask for Congress for funds.
UK - $1.45 billion
USSR - slightly less than UK quota
China - less than USSR.

proposals.

The Summit: week one

White's goal for the Bretton Woods's summit was to agree a plan that all attendee's would sign-up to. He ran his team through a

The page describes the SWOT process. That includes:

The classification of each event into strength weakness opportunity and threat.
The clustering process for grouping the classified events into goals.
How the clusters can support planning and execution.

Operational SWOT matrices and clusters from the Adaptive Web Framework (AWF) are included as examples.

SWOT of each of their opponents regarding the fund is the International Monetary Fund developed as part of the Bretton Woods agreements to provide liquidity to national gold denominated reserve banks at times of stress in the global financial network - a shortage of a particular currency which was inhibiting trade; in support of a broader Bretton Woods framework designed so as to ensure that currencies did not become misaligned with one another, and were a fair representation of what things were worth. The IMF removed the need for nations to depend on private loans from commercial banks, such as Britain's dependence on J. P. Morgan during the 1920s and 30s. The agreement required each Bretton Woods signatory to provide a capital investment or 'quota' into the fund which would subsequently correspond to the amount that the country could borrow from the fund in times of financial stress. The top four countries and their quotas were set by IMF architect, Harry Dexter White, to match FDR's priorities:

US - $2.9 billion, an amount the FDR administration could transfer from Exchange Stabilization Fund without any need to ask for Congress for funds.
UK - $1.45 billion
USSR - slightly less than UK quota
China - less than USSR.

's quotas:

China would demand to be fourth
France will require 5th place but so will India
Latin American countries were important to the US is the United States of America. since they could backstop any contested US vote at Bretton Woods.

White had organized the summit around three commissions. The two main commissions were meant to run for a week each. However it soon became clear that to meet FDR is President Franklin Delano Roosevelt. He is notable for his contributions to the US CAS:

New Deal strategies including:

SSA
FFDCA
IRC

Lend-lease which pushed the US and Japan into World War 2 and helped the US to become the world's predominant military power.
Bretton Woods's agreement which economically constrained any politically driven collapse of the world economy after the war and helped the US to become the world's predominant economic power.

's deadlines the three would have to run in parallel:

The
IMF
is the International Monetary Fund developed as part of the Bretton Woods agreements to provide liquidity to national gold denominated reserve banks at times of stress in the global financial network - a shortage of a particular currency which was inhibiting trade; in support of a broader Bretton Woods framework designed so as to ensure that currencies did not become misaligned with one another, and were a fair representation of what things were worth. The IMF removed the need for nations to depend on private loans from commercial banks, such as Britain's dependence on J. P. Morgan during the 1920s and 30s. The agreement required each Bretton Woods signatory to provide a capital investment or 'quota' into the fund which would subsequently correspond to the amount that the country could borrow from the fund in times of financial stress. The top four countries and their quotas were set by IMF architect, Harry Dexter White, to match FDR's priorities:
1. US - $2.9 billion, an amount the FDR administration could transfer from Exchange Stabilization Fund without any need to ask for Congress for funds.
2. UK - $1.45 billion
3. USSR - slightly less than UK quota
4. China - less than USSR.
commission. White chaired this commission. It had four main committees:

Quotas. The French were livid with their allocation. White had an additional $800 million for sweetening the disappointed but it took a promise from Morgenthau, that the French would become one of the five directors of the IMF to calm Mendes France. The USSR is the Union of Soviet Socialist Republics.
was given a larger quota than their economy currently justified. This was in-line with FDR's view of their future importance and his desire to partner with both them and the Chinese. But whatever the US is the United States of America. offered, the USSR demanded more! Was the USSR being secretly coached by White?
How the fund would operate
How it would be managed
Legal status is a publically accepted, signal that one possesses assets: wealth, beauty, talent, expertise, access & trust of powerful people; to be able to help others.
and form. There was also a standing committee that would sweep up loose ends later on each day.

The World Bank was setup as part of the Bretton Woods agreements, as the International Bank for Reconstruction and Development, to repair and reconstruct Europe after the Second World War and provide reconstruction and development resources for projects in developing economies.
commission. Keynes chaired this commission. The pressure soon undermined his already weakened heart is infective (bacterial) endocarditis. The infection of the endocardium -- heart inner lining -- or the heart valves causes inflammation and can be fatal.
.
Other means of international financial cooperation. This was used to catch problems that White and Keynes wished to avoid: Silver, Future of the BIS is the Bank for International Settlements based in Basel, Switzerland. It was initially setup to manage Germany's war reparations payments.
.

The Latin Americans being useful to the US position were able to obtain an IMF clause from White allowing "coconuts, or silver" to be used as collatoral by the IMF. But the clause has never been executed.

The 'blocked Sterling balances' were soon raised during the meetings of 'week one' by the Indians and Egyptians. Robbins responded that the blocked balances were a private matter between His Majesty's government and the dominions and should not be raised at the summit. Conway notes that a summit on the future world financial system would seem the perfect place to raise this issue but the dominions were cowed into submission. Conway continues that it was never-the-less a clear indicator of the shift in power between the US, the UK and the UK's dominions.

The Summit: week two

The discussions on the World Bank was setup as part of the Bretton Woods agreements, as the International Bank for Reconstruction and Development, to repair and reconstruct Europe after the Second World War and provide reconstruction and development resources for projects in developing economies.
helped support White's plan by providing attractive facilities to keep countries interested and offset the unattractive discipline the IMF is the International Monetary Fund developed as part of the Bretton Woods agreements to provide liquidity to national gold denominated reserve banks at times of stress in the global financial network - a shortage of a particular currency which was inhibiting trade; in support of a broader Bretton Woods framework designed so as to ensure that currencies did not become misaligned with one another, and were a fair representation of what things were worth. The IMF removed the need for nations to depend on private loans from commercial banks, such as Britain's dependence on J. P. Morgan during the 1920s and 30s. The agreement required each Bretton Woods signatory to provide a capital investment or 'quota' into the fund which would subsequently correspond to the amount that the country could borrow from the fund in times of financial stress. The top four countries and their quotas were set by IMF architect, Harry Dexter White, to match FDR's priorities:

US - $2.9 billion, an amount the FDR administration could transfer from Exchange Stabilization Fund without any need to ask for Congress for funds.
UK - $1.45 billion
USSR - slightly less than UK quota
China - less than USSR.

would clearly impose. White provided the World Bank with $10 billion to help with redevelopment.

Through his writing of the draft and chairing of the commission Keynes was able to transform the World Bank from this one time pot of money to an amplifier of private investment through making the World Bank function as a guarantor of the private funds. Keynes was perplexed that the US continued to refer to this infrastructure as a bank.

With Keynes busy chairing commission 2, his economist colleague, Dennis Robertson was left to participate on commission 1. For political reasons the US had avoided associating the global currency is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
with the dollar in the Bretton Woods's drafts. Robertson proposed explicitly stating that the dollar be tied to gold. Keynes did not discover this update to the IMF plans until after the conference. He never forgave Robertson. The IMF eventually added SDR is Special Drawing Right, a global reserve asset used by the IMF. SDRs can be freely exchanged for usable currencies. The SDR is associated with the current value of a basket of currencies. In 1969 this basket included: US dollars, euros, Japanese yen and pound sterling. In Oct 2016 the renminbi will be added to the basket.
s in line with Keynes's thinking. Robertson's initial tie of the dollar to gold pushed the pound from the center of global currency is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
trades. Eventually in the 1970s it destroyed the Bretton Woods agreement when President Nixon could not defend the dollar against the inflationary impact of the Arab oil embargo.

The UK did manage to weaken the IMF constraints to protect the pound from the 'blocked balances' for a few years:

A five year transition was added to IMF membership.
Countries were allowed some leeway to devalue without IMF constraints. But these changes undermined the goals of the Bretton Woods agreement.

Latin America used its leverage with the US to extend the charter of the World Bank and their position:

The Summit: week three

White proposed IMF is the International Monetary Fund developed as part of the Bretton Woods agreements to provide liquidity to national gold denominated reserve banks at times of stress in the global financial network - a shortage of a particular currency which was inhibiting trade; in support of a broader Bretton Woods framework designed so as to ensure that currencies did not become misaligned with one another, and were a fair representation of what things were worth. The IMF removed the need for nations to depend on private loans from commercial banks, such as Britain's dependence on J. P. Morgan during the 1920s and 30s. The agreement required each Bretton Woods signatory to provide a capital investment or 'quota' into the fund which would subsequently correspond to the amount that the country could borrow from the fund in times of financial stress. The top four countries and their quotas were set by IMF architect, Harry Dexter White, to match FDR's priorities:

US - $2.9 billion, an amount the FDR administration could transfer from Exchange Stabilization Fund without any need to ask for Congress for funds.
UK - $1.45 billion
USSR - slightly less than UK quota
China - less than USSR.

wording that would guarantee to destroy the BIS is the Bank for International Settlements based in Basel, Switzerland. It was initially setup to manage Germany's war reparations payments.
'IMF membership is incompatible with BIS membership'. Conway comments:

The BIS was associated with New York and London bankers who were enemies of the IMF.

Keynes responded in anger is an emotion which protects a person who has been cheated by a supposed friend. When the exploitation of the altruism is discovered, Steven Pinker explains, the result is a drive for moralistic aggression to hurt the cheater.
to the BIS wording. He rushed to Morgenthau and expressed his concerns but became seriously ill. White responded by changing the wording to 'the liquidation of the [BIS] at the earliest possible moment.' Keynes joked that this would be 'not very early.'

White included IMF language that placed its headquarters in New York. Conway explains the US is the United States of America. was intent on resting away financial leadership from London to New York. Keynes was powerless to stop this with the presence of Latin American votes to push through any US position.

USSR is the Union of Soviet Socialist Republics.
continued to demand more concessions: especially from the World Bank was setup as part of the Bretton Woods agreements, as the International Bank for Reconstruction and Development, to repair and reconstruct Europe after the Second World War and provide reconstruction and development resources for projects in developing economies.
. They were allowed control over their exchange rate for example. And their request for a 0.5% concession when a country was partly occupied was granted. In the main the US paid for the cost of these shifts.

All participants signed off on the Bretton Woods agreement at the end of week three.

Unmitigated Evil

There was an immediate campaign in the US is the United States of America. to destroy the Bretton Woods agreement. It was the focus of the ABA is the:

American Bankers Association.
American Board of Anesthesiology.

, supported by the New York Federal Reserve of 1913 was a response to a series of banking panics with the goal of responding effectively to stresses. It setup:

At least 8 and not more than 12 private regional Federal Reserve banks. Twelve were setup
Federal Reserve Board with seven members to govern the system. The President appointed the seven, which must be confirmed by Congress. In 1935 the Board was renamed and restructured.
Federal Advisory Committee with twelve members
Single US currency - the Federal Reserve Note.

. Prior to the summit they offered the UK $3 billion if it would not back Bretton Woods. Keynes said no to the gambit. Having expected the summit to collapse, the ABA scrambled to warn Congress of the dangers of the agreement. The administration went on a defensive publicity tour. However, the public was disinterested and the House and Senate passed the agreement into law.

After Bretton Woods was signed Keynes knew he must get more finances to stave off UK collapse:

He got $655 million extra from the Canadians.
He got $2.8 billion of military aid from the US.
He got $2.6 billion of civilian aid from the US. But the war in Europe continued for another year using up these resources and Keynes had not succeeded in extending
Lend-lease
included a preliminary agreement and the act.
- Agreement included 8 articles:
- Act to Promote the Defense of the United States, of March 1941 which superseded the neutrality acts.
. Once the Japanese surrendered the funding collapsed.

Even before that occurred Keynes was asked by the UK to go back to the US and beg for more financing but the situation became suddenly more difficult:

FDR
is President Franklin Delano Roosevelt. He is notable for his contributions to the US CAS:
- New Deal strategies including:
- Lend-lease which pushed the US and Japan into World War 2 and helped the US to become the world's predominant military power.
- Bretton Woods's agreement which economically constrained any politically driven collapse of the world economy after the war and helped the US to become the world's predominant economic power.
wished to punish Germany. Morgenthau and White became fixated on a plan to stop Germany from ever re-industrializing. Keynes could not accept this logic but needed the backing of the US Treasury is the department of the treasury. it is a federal government executive department created by Act of Congress in 1789 to manage government revenue. The Secretary of the Treasury is a Cabinet officer. To support funding of high cost investments: Disaster recovery, Wars, Famines; the treasury can issue debt instruments and manage the national debt.
. Then
FDR died and the Truman administration was much less friendly to the UK is the United Kingdom of Great Britain and Northern Ireland.
.

Starvation Corner

Execution of the allied war plan destroyed infrastructure across Europe. And the US is the United States of America. was still blocking exports. By the end of the war all this ensured:

Shortages for the disconnected groups of:

Information
Food

Stress
is a multi-faceted condition reflecting high cortisol levels. Dr. Robert Sapolsky's studies of baboons indicate that stress helps build readiness for fight or flight. As these actions occur the levels of cortisol return to the baseline rate. A stressor is anything that disrupts the regular homeostatic balance. The stress response is the array of neural and endocrine changes that occur to respond effectively to the crisis and reestablish homeostasis.
- The short term response to the stressor
- long term: loneliness, debt; and no action is necessary, or possible, long term damage ensues. Damage from such stress may only occur in specific situations: Nuclear families coping with parents moving in. Sustained stress provides an evolved amplifier of a position of dominance and status. It is a strategy in female aggression used to limit reproductive competition. Sustained stress:
- During depression, stress inhibits dopamine signalling.
- Strategies for stress reduction include: Mindfulness.
for the survivors of the 36 million European dead which included:

1 in 5 Poles
1 in 11 Russians
1 in 12 Greeks
1 in 15 Germans
1 in 77 French
1 in 125 British

The UK is the United Kingdom of Great Britain and Northern Ireland.
had only 3 or 4 years to solve its economic problems or it would collapse. But the newly elected Labour government was not trusted and distrust are evolved responses to sham emotions. During a friendship where no sham emotions have been detected trust will build up.
by the US leadership and most US citizens did not wish to give more loans to the UK.

FDR is President Franklin Delano Roosevelt. He is notable for his contributions to the US CAS:

New Deal strategies including:

SSA
FFDCA
IRC

Lend-lease which pushed the US and Japan into World War 2 and helped the US to become the world's predominant military power.
Bretton Woods's agreement which economically constrained any politically driven collapse of the world economy after the war and helped the US to become the world's predominant economic power.

's death shifted policy to President Truman who replaced Morgenthau, as Treasury is the department of the treasury. it is a federal government executive department created by Act of Congress in 1789 to manage government revenue. The Secretary of the Treasury is a Cabinet officer. To support funding of high cost investments: Disaster recovery, Wars, Famines; the treasury can issue debt instruments and manage the national debt.
Secretary, with Vinson. Vinson did not value White or Keynes. Truman proposed terminating Lend-lease included a preliminary agreement and the act.

Agreement included 8 articles:

The US agreed to supply defense articles services and information as the President authorizes.
The UK will contribute to the defense of the US providing such articles it is in a position to supply.

This resulted in the transfer of a cavity magnetron, the designs of the VT fuze and Whittle jet engine and the description of the feasibility of the A bomb. As well as designs of rockets, superchargers, gyroscopic gunsights, submarine detection devices, self-sealing fuel tanks and plastic explosives.

UK can not transfer title of the goods and services without permission of the President.
Patent protected articles and information will be paid by the UK government when requested to do so by the President.
At the end of the emergency the UK government will return articles and information that has not been destroyed or used as requested by the President.
In assessing the articles to be returned the US will take into account articles already transferred to the US and accepted/acknowledged by the President.
The final benefits provided by the UK to the US in return for the aid will include:

No burden to commerce between the two countries
Promotion of mutually advantageous economic relations
Betterment of world-wide economic relations
Elimination of all forms of discriminatory treatment in international commerce
Reduction of tariffs and other trade barriers.
Conversations to be held to determine in the light of governing economic conditions, the best means of attaining the objectives.

Agreement to take effect immediately.

Act to Promote the Defense of the United States, of March 1941 which superseded the neutrality acts.

and while Vinson was happy to stage this process the administrator - Crowley cut the financing off abruptly which was an immediate issue to UK and USSR and had long term catastrophic effects on Bretton Woods and the United Nations operations.

The UK quickly became the most indebted country in the world. Still Keynes noted that this huge debt was an advantage in negotiations. And the UK decided to hold the Bretton Woods ratification hostage to obtain an American loan. Keynes argued there could be three paths taken by the UK leadership:

Austerity - retreat into a Sterling area which Keynes dismissed as isolation from the World economy and dependent on the cooperation of the dominions which was highly unlikely.
Temptation - Accepting a large costly loan from the US.
Justice - Keynes preferred option of demanding a gift of $3 billion from the US and then leveraging a very low interest loan of $5 billion justified by the heavy impact of war on the UK and a promise to accelerate the implementation of free trade within a year. Once again this illustrated Keynes misunderstanding of the US political process. And the politically savvy Chancellor Dalton was happy to leave the responsibility for failure with Keynes.

In the subsequent meeting with the US Treasury is the department of the treasury. it is a federal government executive department created by Act of Congress in 1789 to manage government revenue. The Secretary of the Treasury is a Cabinet officer. To support funding of high cost investments: Disaster recovery, Wars, Famines; the treasury can issue debt instruments and manage the national debt.
Secretary Vinson the initial US offer equated to the 'temptation' path that the Cabinet had already rejected. And after White's input Vinson reduced the loan from $5 billion to $3.5 billion.

Eventually the US fixed on an offer of $3.75 billion with 2% interest to be paid off by 2006 and full pound inter-convertibility one year after the start of the loan! Prime Minister Attlee accepted the offer, abandoned the policing of the Empire and used the loan to:

Implement social security
Implement the National Health Service
Nationalize much of the infrastructure and industry of the UK.

Onward Christian Soldiers

While the Soviet economists were positive about joining Bretton Woods, Molotov and Stalin were dubious. Similarly to the UK, with the abrupt termination of Lend-lease included a preliminary agreement and the act.

Agreement included 8 articles:

The US agreed to supply defense articles services and information as the President authorizes.
The UK will contribute to the defense of the US providing such articles it is in a position to supply.

This resulted in the transfer of a cavity magnetron, the designs of the VT fuze and Whittle jet engine and the description of the feasibility of the A bomb. As well as designs of rockets, superchargers, gyroscopic gunsights, submarine detection devices, self-sealing fuel tanks and plastic explosives.

UK can not transfer title of the goods and services without permission of the President.
Patent protected articles and information will be paid by the UK government when requested to do so by the President.
At the end of the emergency the UK government will return articles and information that has not been destroyed or used as requested by the President.
In assessing the articles to be returned the US will take into account articles already transferred to the US and accepted/acknowledged by the President.
The final benefits provided by the UK to the US in return for the aid will include:

No burden to commerce between the two countries
Promotion of mutually advantageous economic relations
Betterment of world-wide economic relations
Elimination of all forms of discriminatory treatment in international commerce
Reduction of tariffs and other trade barriers.
Conversations to be held to determine in the light of governing economic conditions, the best means of attaining the objectives.

Agreement to take effect immediately.

Act to Promote the Defense of the United States, of March 1941 which superseded the neutrality acts.

the USSR is the Union of Soviet Socialist Republics.
needed a $10 billion US is the United States of America. loan and watched in frustration as the UK is the United Kingdom of Great Britain and Northern Ireland.
and France were given loans. Stalin shifted the Soviet Bretton Woods operations to Gosplan was the central economic planning agency of the USSR.
which had always opposed the agreement.

US charge d'affaires George Keenan's conclusions cemented the rupture with the USSR, recommending the US use containment and threat with the USSR instead of FDR is President Franklin Delano Roosevelt. He is notable for his contributions to the US CAS:

New Deal strategies including:

SSA
FFDCA
IRC

Lend-lease which pushed the US and Japan into World War 2 and helped the US to become the world's predominant military power.
Bretton Woods's agreement which economically constrained any politically driven collapse of the world economy after the war and helped the US to become the world's predominant economic power.

's policy of collaboration and alliance.

Treasury is the department of the treasury. it is a federal government executive department created by Act of Congress in 1789 to manage government revenue. The Secretary of the Treasury is a Cabinet officer. To support funding of high cost investments: Disaster recovery, Wars, Famines; the treasury can issue debt instruments and manage the national debt.
Secretary Vinson hosted the Atlanta Georgia based Bretton Woods signing celebration but the USSR didn't attend. The meeting reflected a transformed situation:

The US did indeed use the IMF and World Bank to advance its policy agenda. And the infrastructure was not working effectively. White was shocked when:

A prospective loan from the World Bank to Poland was vetoed by the US.
The institutions were running out of money. Vinson's high salaries consumed 65% of the budget. White left the Truman administration.

The Bretton Woods infrastructure did not perform as expected by Keynes and White. White watched in dismay. In his personal notes he developed proposed fixes for the problems he identified:

He noted the $35 peg between the dollar and gold was too high. He wrote that it should be $20 to stop the global economy from starving from a shortage of dollars.
He felt the design of Bretton Woods infrastructure was out of line with the split between the US and USSR. He felt this demanded the introduction of an 'international medium of exchange' similar to Keynes's bancor plan.

The global situation became increasingly desperate with:

Europe falling towards another depression
Civil wars in China, Greece and Palestine. The IMF had few resources to help.

The Truman administration responded by following the Truman Doctrine of active intervention to inhibit the spread of communism. Secretary of State George Marshall announced a plan to finance the collapsing economies that were at risk of adopting communism. Finally this Keynesian response started to turn the situation around.

White was called to testify before a Congressional committee. While he defended his position he was stressed is a multi-faceted condition reflecting high cortisol levels. Dr. Robert Sapolsky's studies of baboons indicate that stress helps build readiness for fight or flight. As these actions occur the levels of cortisol return to the baseline rate. A stressor is anything that disrupts the regular homeostatic balance. The stress response is the array of neural and endocrine changes that occur to respond effectively to the crisis and reestablish homeostasis.

The short term response to the stressor

activates the amygdala which: Stimulates the brain stem resulting in inhibition of the parasympathetic nervous system and activation of the sympathetic nervous system with the hormones epinephrine and norepinephrine deployed around the body, Activates the PVN which generates a cascade resulting in glucocorticoid secretion to: get energy to the muscles with increased blood pressure for a powerful response. The brain's acuity and cognition are stimulated. The immune system is stimulated with beta-endorphin and repair activities curtail. But when the stressor is

long term: loneliness, debt; and no action is necessary, or possible, long term damage ensues. Damage from such stress may only occur in specific situations: Nuclear families coping with parents moving in. Sustained stress provides an evolved amplifier of a position of dominance and status. It is a strategy in female aggression used to limit reproductive competition. Sustained stress:

Stops the frontal cortex from ensuring we do the harder thing, instead substituting amplification of the individual's propensity for risk-taking and impairing risk assessment!
Activates the integration between the thalamus and amygdala.

Acts differently on the amygdala in comparison to the frontal cortex and hippocampus: Stress strengthens the integration between the Amygdala and the hippocampus, making the hippocampus fearful.
BLA & BNST respond with increased BDNF levels and expanded dendrites persistently increasing anxiety and fear conditioning.

Makes it easier to learn a fear association and to consolidate it into long-term memory. Sustained stress makes it harder to unlearn fear by making the prefrontal cortex inhibit the BLA from learning to break the fear association and weakening the prefrontal cortex's hold over the amygdala. And glucocorticoids decrease activation of the medial prefrontal cortex during processing of emotional faces. Accuracy of assessing emotions from faces suffers. A terrified rat generating lots of glucocorticoids will cause dendrites in the hippocampus to atrophy but when it generates the same amount from excitement of running on a wheel the dendrites expand. The activation of the amygdala seems to determine how the hippocampus responds.
Depletes the nucleus accumbens of dopamine biasing rats toward social subordination and biasing humans toward depression.
Disrupts working memory by amplifying norepinephrine signalling in the prefrontal cortex and amygdala to prefrontal cortex signalling until they become destructive. It also desynchronizes activation in different frontal lobe regions impacting shifting of attention.

During depression, stress inhibits dopamine signalling.
Strategies for stress reduction include: Mindfulness.

at the hounding he received from Congressman Richard Nixon and subsequently suffered a series of heart attacks resulting in his death in 1948.

The Bretton Woods System

A UK is the United Kingdom of Great Britain and Northern Ireland.
capital reserve crisis in 1947 was stimulated by the enacting of sterling convertibility. $6 billion per year of currency is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
gushed out of the UK. The US loan was rapidly exhausted. Bretton Woods had to be transformed. UK Chancellor Dalton cancelled convertibility and followed up with a special budget full of austerity measures and then resigned. The Labour Party became stuck with a reputation for economic mismanagement.

Investors escalated the problem pulling money from: France, Italy and Germany. By 1948 France devalued.

Even with the Marshall Plan loans Europe had to devalue against the dollar. The UK devalued by one third. And the process had been totally disorganized.

Then in 1950 the Suez crisis encouraged the UK to overspend on its military response. The US is the United States of America. eventually stepped in to bail the UK out again.

The UK devalued once again in 1967.

The 1947 collapse showed Keynes and White to be very optimistic in their thinking:

White's quotas were far too small. And none of the European economies could afford to invoke the
IMF
is the International Monetary Fund developed as part of the Bretton Woods agreements to provide liquidity to national gold denominated reserve banks at times of stress in the global financial network - a shortage of a particular currency which was inhibiting trade; in support of a broader Bretton Woods framework designed so as to ensure that currencies did not become misaligned with one another, and were a fair representation of what things were worth. The IMF removed the need for nations to depend on private loans from commercial banks, such as Britain's dependence on J. P. Morgan during the 1920s and 30s. The agreement required each Bretton Woods signatory to provide a capital investment or 'quota' into the fund which would subsequently correspond to the amount that the country could borrow from the fund in times of financial stress. The top four countries and their quotas were set by IMF architect, Harry Dexter White, to match FDR's priorities:
1. US - $2.9 billion, an amount the FDR administration could transfer from Exchange Stabilization Fund without any need to ask for Congress for funds.
2. UK - $1.45 billion
3. USSR - slightly less than UK quota
4. China - less than USSR.
. And having seen the effect on the UK none wanted to either.
The US was inflating but the quota agreements were for fixed amounts so these were getting smaller in terms of purchasing power.
Eventually in 1950 the IMF tried to expand quotas 50%. But World trade had doubled and countries resisted paying in the extra quota.
By 1961 the IMF introduced GAB is general agreements to borrow. These allowed the rich nations, the G7, to lend their currencies to a struggling nation through the IMF, rather than use quotas.
contracts to ensure availability of extra capital.

The impression left on Europe's leaders of the 1947 UK devaluation inhibited further use of the IMF facilities.

Western Europe setup the European Payments Union which instituted barriers to capital movements in and out of Europe. The US oriented by the Truman Doctrine backed the move. Indeed it used the Marshall Plan infrastructure (ECA is economic cooperation administration which was a US government agency set up in 1948 to administer the Marshall Plan.
and OEEC is the organisation for European economic co-operation. It emerged from the Marshall Plan, being setup to supervise the distribution of aid based on the following principles:

Promote co-operation between participating countries and their national production programmes for the reconstruction of Europe.
Develop intra-European trade by reducing tariffs and other barriers to the expansion of trade.
Study the feasibility of creating a customes union or free trade area.
Study multi-lateralisation of payments, and
Achieve conditions for better utilization of labor. It was superceded in 1961 by the OECD.

) to encourage the development is a phase during the operation of a CAS agent. It allows for schematic strategies to be iteratively blended with environmental signals to solve the logistical issues of migrating newly built and transformed sub-agents. That is needed to achieve the adult configuration of the agent and optimize it for the proximate environment. Smiley includes examples of the developmental phase agents required in an emergent CAS. In situations where parents invest in the growth and memetic learning of their offspring the schematic grab bag can support optimizations to develop models, structures and actions to construct an adept adult. In humans, adolescence leverages neural plasticity, elder sibling advice and adult coaching to help prepare the deploying neuronal network and body to successfully compete.
of welfare states. It was not until 1961 that the countries were in compliance with the IMF agreements.

FDR is President Franklin Delano Roosevelt. He is notable for his contributions to the US CAS:

New Deal strategies including:

SSA
FFDCA
IRC

Lend-lease which pushed the US and Japan into World War 2 and helped the US to become the world's predominant military power.
Bretton Woods's agreement which economically constrained any politically driven collapse of the world economy after the war and helped the US to become the world's predominant economic power.

's broad vision of global infrastructure had included the United Nations and a global trade infrastructure. But the trade infrastructure withered until 1995 with the emergence of the WTO is the World Trade Organization.
.

After the unexpected sudden ending of the Marshall Plan the IMF and World Bank started to be used as initially envisioned. The European Payments Union was wound up and the European Community was initiated at the treaty of Rome in 1957.

As the European and Japanese economies started to flourish the dollar shortage ended. Prior devaluations had made the expanding and low cost Europe an attractive target for American investors. Germany and Japan's high value export strategies initiated a long period of trade surplus with the US. By 1969 the US share of economic output had dropped from 35 to 27%.

The dollar gold equivalence written in to Bretton Woods now became a terminal problem for the US led system:

Countries purchased dollars to bolster their foreign exchange reserves. This encouraged the printing of more dollars than there was gold at the Bretton Woods peg of $35.
Kennedy and LBJ is President Lyndon Baines Johnson.
social programs and Vietnam War spending encouraged printing of ever more dollars.
The
IMF
is the International Monetary Fund developed as part of the Bretton Woods agreements to provide liquidity to national gold denominated reserve banks at times of stress in the global financial network - a shortage of a particular currency which was inhibiting trade; in support of a broader Bretton Woods framework designed so as to ensure that currencies did not become misaligned with one another, and were a fair representation of what things were worth. The IMF removed the need for nations to depend on private loans from commercial banks, such as Britain's dependence on J. P. Morgan during the 1920s and 30s. The agreement required each Bretton Woods signatory to provide a capital investment or 'quota' into the fund which would subsequently correspond to the amount that the country could borrow from the fund in times of financial stress. The top four countries and their quotas were set by IMF architect, Harry Dexter White, to match FDR's priorities:
1. US - $2.9 billion, an amount the FDR administration could transfer from Exchange Stabilization Fund without any need to ask for Congress for funds.
2. UK - $1.45 billion
3. USSR - slightly less than UK quota
4. China - less than USSR.
acted to offset the risk of over dependence on the dollar with the 1964 agreement to allow SDR is Special Drawing Right, a global reserve asset used by the IMF. SDRs can be freely exchanged for usable currencies. The SDR is associated with the current value of a basket of currencies. In 1969 this basket included: US dollars, euros, Japanese yen and pound sterling. In Oct 2016 the renminbi will be added to the basket.
s. But the deployment was too slow to save the dollar from trouble.
The US was experiencing 7% inflation as Nixon became president. Volcker warned him he had two years to save the dollar.
Capital controls had been undermined with countries obtaining dollars from London's Eurodollar market. This allowed investor's money to flow away from the US.
Nixon, Treasury is the department of the treasury. it is a federal government executive department created by Act of Congress in 1789 to manage government revenue. The Secretary of the Treasury is a Cabinet officer. To support funding of high cost investments: Disaster recovery, Wars, Famines; the treasury can issue debt instruments and manage the national debt.
Secretary Connally and Volcker aimed to strike back at what they saw as an attack on America.

Volcker led a working group to assess an effective dollar gold peg. But Volcker concluded there was an imminent dollar crisis. He suggested:

Devaluing the dollar 15%
Suspending convertibility with gold.

Germany allowed the deutschmark to float. The Swiss, Dutch, Belgians and Austrians followed. The UK and France were planning to convert dollars to gold.
Nixon moved:

Used existing laws to avoid Congress while suspending convertibility to gold removing finance ministers and central banks main mechanism to maintain stable exchange rates.
Added import taxes and surcharges to force other countries to revalue their currencies is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
.
Then the IMF was told. The
Federal Reserve
of 1913 was a response to a series of banking panics with the goal of responding effectively to stresses. It setup:
- At least 8 and not more than 12 private regional Federal Reserve banks. Twelve were setup
- Federal Reserve Board with seven members to govern the system. The President appointed the seven, which must be confirmed by Congress. In 1935 the Board was renamed and restructured.
- Federal Advisory Committee with twelve members
- Single US currency - the Federal Reserve Note.
chairman Arthur Burns was sidelined when he resisted the strategy.
The US then devalued but it did not fix the problem.

The Europeans announced they would remove their dollar pegs. Bretton Woods was over.

Epilogue

The end of Bretton Woods allowed a resurgence of the international finance industry which leveraged the effects of floating currencies is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
to capture huge profits. The foreign exchange market is still growing. The US responded to the resurgence of London's financial center by repealing Glass-Steagall Act of 1933 prohibits commercial banks from engaging in the investment business. , giving the industry a further boost to become 8% of American economic output as the US financial infrastructure re-integrated.

But Conway notes that the Bretton Woods period from 1948 to the early 1970s reflected a period of unusual strength in the world economy. He frames the point via a Bank of England study:

World economic growth never rivalled
Global
GDP
is:
- Gross domestic product which measures the total of goods and services produced in a given year within the borders of a given country according to Piketty. GDP has many problems:
- Guanine-di-phosphate is a nucleotide base.
> 2.8%
No global down turn
Imbalances of current accounts were 3* smaller than during gold standard and smaller than more recent period.

And social gains occurred too:

Bretton Woods was a success in spite of the limitations designed into it:

Collapsed economies were restarted by the Marshall Plan.
Devaluation was still dramatic and crisis driven
Capital controls were undermined but provided stability to the central banks

London helped countries get around the Bretton Woods capital constraints that aimed to stop flows of hot money.

Between 1800 and 1970 the combined London bank balance sheets represented less than half the UK total economic output with a return of less than 7%; by 2006 London banks' balance sheets were five times the value of UK economic output with a return of 20%

Discredited central bankers managed the system informally. They agreed swap lines are agreements between central banks to swap currencies so that they can provide required currencies to a partner bank needing additional currency. For example a swap line provides access to additional currency when the partner is suffering a liquidity crisis.
for support of weak economies.
The system was dollar dependent which worked well until the US is the United States of America. economy became stressed.

The US funded any area that became distressed or collapsed.
As the US faltered Bretton Woods failed.

The demise of Bretton Woods allowed floating exchange rates to occur. Currencies is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
became worth what people thought they were worth! Free market economists including Milton Freedman had been advocating this move for some time. The economics changed:

Economies that used Keynesian spending no longer had the anti-inflation anchor of gold. The spending resulted in both troubling inflation and stagnant output.
A variety of alternative models were tried to help manage the international money flows:

Monetarism - by the US and UK; the UK still had more failures and requested IMF bailouts in 1970s.
Currency boards
Exchange rate mechanisms - Europe locked their currencies together in a 'snake' that was called EMS , ERM and eventually developed into the single euro currency union. By the 1990s the UK had moved to join the ERM, in effect locking its economy with the German. But the two economies differ in strategy and operation and with no hot money capital flow controls George Soros and other investors pulled money from the UK. Under massive attack the UK along with Italy crashed out of the ERM and floated their currencies.
Inflation targeting - was subsequently adopted by the central banks. The UK also freed its central bank from political control. However, in the 2008 crisis inflation targeting provided no help.

Countries across the globe opened up their economies to trade and capital flows in a way not seen since the early 20th century:

The
IMF
is the International Monetary Fund developed as part of the Bretton Woods agreements to provide liquidity to national gold denominated reserve banks at times of stress in the global financial network - a shortage of a particular currency which was inhibiting trade; in support of a broader Bretton Woods framework designed so as to ensure that currencies did not become misaligned with one another, and were a fair representation of what things were worth. The IMF removed the need for nations to depend on private loans from commercial banks, such as Britain's dependence on J. P. Morgan during the 1920s and 30s. The agreement required each Bretton Woods signatory to provide a capital investment or 'quota' into the fund which would subsequently correspond to the amount that the country could borrow from the fund in times of financial stress. The top four countries and their quotas were set by IMF architect, Harry Dexter White, to match FDR's priorities:
1. US - $2.9 billion, an amount the FDR administration could transfer from Exchange Stabilization Fund without any need to ask for Congress for funds.
2. UK - $1.45 billion
3. USSR - slightly less than UK quota
4. China - less than USSR.
was catalytic in this extension of the US centered financial network. Without its role as regulator of the Bretton Woods agreements the IMF transformed itself into an economic consultant and adviser with the power to bailout struggling countries.

And the collapse of communism made capitalism appear worth trying.
The IMF advocated the Washington Consensus:

Liberalize the economy
Open borders to trade
Cut public spending

Through the 1990s developing countries took the advice. But then
Asian countries suffered financial crises and needed
IMF
is the International Monetary Fund developed as part of the Bretton Woods agreements to provide liquidity to national gold denominated reserve banks at times of stress in the global financial network - a shortage of a particular currency which was inhibiting trade; in support of a broader Bretton Woods framework designed so as to ensure that currencies did not become misaligned with one another, and were a fair representation of what things were worth. The IMF removed the need for nations to depend on private loans from commercial banks, such as Britain's dependence on J. P. Morgan during the 1920s and 30s. The agreement required each Bretton Woods signatory to provide a capital investment or 'quota' into the fund which would subsequently correspond to the amount that the country could borrow from the fund in times of financial stress. The top four countries and their quotas were set by IMF architect, Harry Dexter White, to match FDR's priorities:
1. US - $2.9 billion, an amount the FDR administration could transfer from Exchange Stabilization Fund without any need to ask for Congress for funds.
2. UK - $1.45 billion
3. USSR - slightly less than UK quota
4. China - less than USSR.
bailouts including harsh conditions and increased levels of poverty. Conway argues that this led the neighbors of these countries to avoid the IMF prescriptions and build local protections.
The Chinese banked the dollars they earned. The volumes involved eventually affected the operation of the global system.

The US is the United States of America. could issue lots of debt at low rates certain that the Chinese would buy.
The Chinese could sell cheap goods keeping inflation low across its customer base in the developed and developing world.
But without the Bretton Woods constraints the trade imbalances grew to enormous proportions. In the US and UK liabilities grew. US debt quadrupled from 1998 to 2008. China, Japan and Germany's savings increased massively.

The result was lots of hot money searching for the highest rates of return. A monetary bubble was induced. Eventually in 2007 the interbank lending markets froze and by 2008 Lehman Brothers collapsed.
By 2009 the currency is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
crisis had undermined the Euro zone.

Conway argues that one single cause for the 2008 recession is unlikely. He notes:

Economists made intellectual mistakes
Financial regulators made misjudgments
Investors took missteps
But he suggests the world's monetary system was mangled! Governments were struggling with the same issues that were discussed at Bretton Woods:

Without an anchor or mechanism to coordinate, some countries borrow too much and others lend too much.
That enabled the crisis as surpluses and deficits ballooned - demand collapsed and bond buyers stopped.
Today the US is the United States of America. takes the place the UK is the United Kingdom of Great Britain and Northern Ireland.
occupied at Bretton Woods. Otherwise it's the same problem.

Bretton Woods allowed politicians to constrain member countries. But there has been little in the way of an equivalent control framework since. Conway notes the:

Plaza accord of 1985 when the Group of 5: France, West Germany, Japan, US is the United States of America. and UK is the United Kingdom of Great Britain and Northern Ireland.
; intervened in the currency is legal tender which provides no interest payments to the holder. It is a central aspect of money and in CAS is an analog of a short term potential energy token such as the high energy phosphate bond of the base ATP. But the interaction of the geometric breeding and deaths of agents that perform actions and the linear increase in real resources, described by Turchin, results in the correspondence between energy and currency being complex and adaptive.
markets.
2008
IMF
is the International Monetary Fund developed as part of the Bretton Woods agreements to provide liquidity to national gold denominated reserve banks at times of stress in the global financial network - a shortage of a particular currency which was inhibiting trade; in support of a broader Bretton Woods framework designed so as to ensure that currencies did not become misaligned with one another, and were a fair representation of what things were worth. The IMF removed the need for nations to depend on private loans from commercial banks, such as Britain's dependence on J. P. Morgan during the 1920s and 30s. The agreement required each Bretton Woods signatory to provide a capital investment or 'quota' into the fund which would subsequently correspond to the amount that the country could borrow from the fund in times of financial stress. The top four countries and their quotas were set by IMF architect, Harry Dexter White, to match FDR's priorities:
1. US - $2.9 billion, an amount the FDR administration could transfer from Exchange Stabilization Fund without any need to ask for Congress for funds.
2. UK - $1.45 billion
3. USSR - slightly less than UK quota
4. China - less than USSR.
meeting - agreed to rescue the banking system
2009 Group of 20 (G20) advanced economies Summit - committed to pump money into their economies. But he suggests these summits are typically too late and the response is misplaced.

Conway asks why this problem has not been dealt with. It has been suggested that today:

There is no vision of the form Keynes supplied.
No one wants to suffer the potential turmoil that could be unleashed.

He sees the US and China as key because: China is still building up surplus dollars - now $17 trillion; so China does not want the US to default, devalue or inflate. The US budget deficit is still growing and there are huge household debts. This is why Paul Volcker says the US is no longer viewed as all powerful.

Conway reviews the present contributions of the IMF and World Bank. He notes the IMF made its largest loans ever during the Euro crisis to Greece, Portugal and Ireland. Still it seems odd that the world's richest nations were obtaining loans from the developing world!

Previously the IMF had helped developing countries establish their central banks. But later in the 1980s and 1990s both the IMF and World Bank were seen pushing US policy. Leaving the broader global community wondering why they should back the World Bank or the IMF. Instead they are likely to build defenses closer to home.

Volcker argues that any new equivalent to Bretton Woods must be more distributed and built from the bottom up by each country making its domestic economy robust and then cooperating with each other.
Oliver Blanchard argues that there must be some entity that backstops the liquidity of central banks. But Conway notes that in the 2008 crisis the central banks worked in cooperation using their network of swap lines are agreements between central banks to swap currencies so that they can provide required currencies to a partner bank needing additional currency. For example a swap line provides access to additional currency when the partner is suffering a liquidity crisis.
. Blanchard argues for more capital controls since he felt much of the investor activity prior to 2008 was counterproductive. Still Blanchard believes the global infrastructure is too complicated for there to be a big vision. Instead he says to advance step-by-step.

Conway argues that history has shown fixed exchange rates are problematic. As such the euro is anathema:

It equates to the
Gold Standard
was a set of informal agreements between central banks:
- To support operation of the global trade between nation states
- To convert their local currency to gold at an agreed conversion rate when asked. It was
- Based on David Hume's price specie flow theory. But in practice it suffered from a mismatch between:
No devaluations are possible by a Eurozone country
No interest rate changes are possible
The countries can't control capital flows across their borders
They are forced to suffer deflation and recession to reach competitive parity with the other euro members.
The zone looked at freeing Greece but found it would have caused havoc.

Conway accepts that Bretton Woods was a failed concept but it performed better than any equivalent before or after it. And he says it was limited in scope, imperfect and short lived. It would be very difficult to setup without another catastrophe. And its designers have lost some credibility:

White for the FBI investigations
Keynes for problems with public spending during the 1970s and 1980s.

CAS theory models an economy as a network of

Plans are interpreted and implemented by agents. This page discusses the properties of agents in a complex adaptive system (CAS).
It then presents examples of agents in different CAS. The examples include a computer program where modeling and actions are performed by software agents. These software agents are aggregates.
The participation of agents in flows is introduced and some implications of this are outlined.

agents. Framing Bretton Woods with CAS models:

Conway's list of key rules and agreements obscures a key requirement. A necessary aspect of Bretton Woods was to recirculate surpluses to the supplier countries as debt or capital when necessary (Marshall Plan). This ratchet like mechanism is analogous to Deacon's autogenesis sustaining the far from equilibrium reduced local entropy of the CAS. The process provides power to the creditors and allows the value system to continue operating. It can be performed with the
IMF
is the International Monetary Fund developed as part of the Bretton Woods agreements to provide liquidity to national gold denominated reserve banks at times of stress in the global financial network - a shortage of a particular currency which was inhibiting trade; in support of a broader Bretton Woods framework designed so as to ensure that currencies did not become misaligned with one another, and were a fair representation of what things were worth. The IMF removed the need for nations to depend on private loans from commercial banks, such as Britain's dependence on J. P. Morgan during the 1920s and 30s. The agreement required each Bretton Woods signatory to provide a capital investment or 'quota' into the fund which would subsequently correspond to the amount that the country could borrow from the fund in times of financial stress. The top four countries and their quotas were set by IMF architect, Harry Dexter White, to match FDR's priorities:
1. US - $2.9 billion, an amount the FDR administration could transfer from Exchange Stabilization Fund without any need to ask for Congress for funds.
2. UK - $1.45 billion
3. USSR - slightly less than UK quota
4. China - less than USSR.
and the World Bank was setup as part of the Bretton Woods agreements, as the International Bank for Reconstruction and Development, to repair and reconstruct Europe after the Second World War and provide reconstruction and development resources for projects in developing economies.
but the point is that the requirement is essential to escape collapse (May 2016, June 2016).
The 20th century UK economy had emerged from the generalization of the
Sven Beckert describes the historic transformation of the growing, spinning, weaving, manufacture of cotton goods and their trade over time. He describes the rise of a first global commodity, its dependence on increasing: military power, returns for the control points in the value delivery system(VDS), availability of land and labor to work it including slaves.

He explains how cotton offered the opportunity for industrialization further amplifying the productive capacity of the VDS and the power of the control points. This VDS was quickly copied. The increased capacity of the industrialized cotton complex adaptive system (CAS) required more labor to operate the machines. Beckert describes the innovative introduction of wages and the ways found to mobilize industrial labor.

Beckert describes the characteristics of the industrial cotton CAS which made it flexible enough to become globally interconnected. Slavery made the production system so cost effective that all prior structures collapsed as they interconnected. So when the US civil war blocked access to the major production nodes in the American Deep South the CAS began adapting.

Beckert describes the global reconstruction that occurred and the resulting destruction of the traditional ways of life in the global countryside. This colonial expansion further enriched and empowered the 'western' nation states. Beckert explains how other countries responded by copying the colonial strategies and creating the opportunities for future armed conflict among the original colonialists and the new upstarts.

Completing the adaptive shifts Beckert describes the advocates for industrialization in the colonized global south and how over time they joined the global cotton CAS disrupting the early western manufacturing nodes and creating the current global CAS dominated by merchants like Walmart pulling goods through a network of clothing manufacturers, spinning and weaving factories, and growers competing with each other on cost.

Following our summary of Beckert's book, RSS comments from the perspective of CAS theory. The transformation of disconnected peasant farmers, pastoral warriors and their lands into a supply chain for a highly profitable industrial CAS required the development over time: of military force, global transportation and communication networks, perception and representation control networks, capital stores and flows, models, rules, standards and markets; along with the support at key points of: barriers, disruption, and infrastructure and evolved amplifiers. The emergent system demonstrates the powerful constraining influence of extended phenotypic alignment.

global cotton
This page reviews the strategy of setting up an arms race. At its core this strategy depends on being able to alter, or take advantage of an alteration in, the genome or equivalent. The situation is illustrated with examples from biology, high tech and politics.

evolved amplifier to other goods. The reorganization of the UK population into factory labor induced the legislators to extend the vote to these workers. Empowered the workers expanded their pay and allowed other nations to compete.
Keynes idea of people hording money in depressions can be seen as symptomatic of inducing a CAS collapse. The system and the network of agents, from which it emerges, must be maintained far from equilibrium to keep entropy's local effects minimized and the agents operating. The depression places a barrier - feedback to every agent that they will spend less if they wait for prices to reduce further - starving the system of available energy.
The UK parliamentary system assumed by Keynes to apply in the US is the United States of America. is an
This page discusses the mechanisms and effects of emergence underpinning any complex adaptive system (CAS). Key research is reviewed.

emergent
This page discusses the interdependence of perception and representation in a complex adaptive system (CAS). Hofstadter and Mitchell's research with Copycat is reviewed.

perception, representation and control structure which requires ministers to be selected from the elected members of the house of commons and the members of the house of lords. The ministers make law and policy and execute it through the civil service. The constraints come from the: Electorate, Party, Members of parliament. The
Jonathan Powell describes how the government of, the former UK Prime Minister, Tony Blair, actually operated. Powell was Blair's only chief of staff.

process is described by Jonathan Powell. In contrast the US government separates the development of laws, the execution of policy and the constitutional and legal framework in which they operate and requires
Barton Gellman details the strategies used by Vice President Cheney to align the global system with his economics, defense, and energy goals.

strategies influencing each branch to make things happen as described by Barton Gellman.
The penetration of the Imperial Preference
Barriers are particular types of constraints on flows. They can enforce separation of a network of agents allowing evolution to build diversity. Examples of different types of barriers and their effects are described.

barriers and subsequent
This page reviews Christensen's disruption of a complex adaptive system (CAS). The mechanism is discussed with examples from biology and business.

disruption of the UK is the United Kingdom of Great Britain and Northern Ireland.
economic network by the US is the United States of America. while obvious to Keynes was inevitable once the UK's military lead was lost and the UK economy had collapsed during the first world war. The slew of technologies and centralized governmental organizations required by that war provided the US, Germany and Japan with superior weapons including carrier based aircraft, and battle tanks around which they developed transformational military strategies leveraged in the Second World War. The UK's historic legacy and inter-war, self-inflicted economic bind left it unable or unwilling to leverage even its own strategic ideas.
Keynes transformation of the World Bank plan created an
This page reviews the strategy of setting up an arms race. At its core this strategy depends on being able to alter, or take advantage of an alteration in, the genome or equivalent. The situation is illustrated with examples from biology, high tech and politics.

evolved amplifier with the Bretton Woods agreement providing the
Plans emerge in complex adaptive systems (CAS) to provide the instructions that agents use to perform actions. The component architecture and structure of the plans is reviewed.

schematic plan, and the offer of leveraged investment generating the reinforcing benefits to the private lender and hopefully the recipient.
CAS
Plans are interpreted and implemented by agents. This page discusses the properties of agents in a complex adaptive system (CAS).
It then presents examples of agents in different CAS. The examples include a computer program where modeling and actions are performed by software agents. These software agents are aggregates.
The participation of agents in flows is introduced and some implications of this are outlined.

agents leverage
The agents in complex adaptive systems (CAS) must model their environment to respond effectively to it. Samuel modeling is described as an approach.

models selected by
This page reviews the implications of selection, variation and heredity in a complex adaptive system (CAS). The mechanism and its emergence are discussed.

evolution or associated with local experience by learning. Hence expertise in economics will not translate into other fields that need different
This page discusses the interdependence of perception and representation in a complex adaptive system (CAS). Hofstadter and Mitchell's research with Copycat is reviewed.

perceptions and representations. Keynes repeated political naivety should have been assumed and managed by the UK leadership.
The initiation of US
This page reviews Christensen's disruption of a complex adaptive system (CAS). The mechanism is discussed with examples from biology and business.

network disruption by the strategically 'differentiated' economies of Japan and Germany exacerbated the
This page reviews the inhibiting effect of the value delivery system on the expression of new phenotypic effects within an agent.

strategically miss-aligned spending on War and low investment regions of the US economy. As a
E. O. Wilson & Bert Holldobler illustrate how bundled cooperative strategies can take hold. Various social insects have developed strategies which have allowed them to capture the most valuable available niches. Like humans they invest in specialization and cooperate to subdue larger, well equipped competitors.

superorganism the US

Must capture outsize profits from the most productive regions of its global network to sustain its relatively low strategic efficiency. Without this reinvestment the middle class market within the US will shrink, analogously to what occurred in the UK throughout the 20th century.
Still can't ignore the constraints of its states intertwined economic strategies. Hence the importance to the US of the
TPP
is the Trans Pacific Partnership, a twelve country, Pacific regional, trade deal between: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, Vietnam; The U.S. aims to use the agreement to constrain competition from China. The initial 12 countries account for more than a quarter of global seafood trade and a quarter of the World's timber and pulp production. Five of the nations are among the World's most biologically diverse. The TPP includes:
- Patents and copyrights chapters.
- State-owned businesses chapter.
- Investor-state dispute settlement chapter which enforces extrajudicial tribunals for arbitrating disputes. The tribunals give investors legal recourse if a government changes policies in ways that hurt the value of their investments.
- An environmental chapter that covers illegal wildlife trafficking, forestry management, overfishing and marine protection. Environmentally destructive subsidies, such as cheap fuel for illegal fishing boats and subsidies for boat building in overfished waters are banned. The chapter enforces Cites with economic sanctions and disallows trade in wildlife taken illegally from a country.
- Requirements that member countries strengthen port inspections and document checks.
- Requirements that a country in the agreement take action if they discover contraband that has been harvested illegally, even if the product is not illegal in that country.
.

The US response to London's financial success was described by Matt Taibbi and RSS provides a CAS analysis.
Social gains have been
Deaton describes the wellbeing of people around the world today. He explains the powerful benefit of public health strategies and the effect of growth in material wellbeing but also the corrosive effects of aid.

Following our summary of Deaton's arguments RSS comments from the perspective of complex adaptive system (CAS) theory. The situation he describes is complex including powerful amplifiers, alignment and incentives that overlap broadly with other RSS summaries of adaptations of: The biosphere, Politics, Economics, Philosophy and Health care.

discussed in depth by Deaton. The CAS framing and assessment of his arguments views the global network as
This page reviews the inhibiting effect of the value delivery system on the expression of new phenotypic effects within an agent.

phenotypically aligned and
This page reviews Christensen's disruption of a complex adaptive system (CAS). The mechanism is discussed with examples from biology and business.

disrupted and suggests an escalating Machiavellian struggle complicates Deaton's conclusion of social progress.
The Asian financial crises were engineered by western financial architects
Satyajit Das uses an Indonesian company's derivative trades to introduce us to the workings of the international derivatives system. Das describes the components of the value delivery system and the key transactions. He demonstrates how the system interacted with emerging economies expanding them, extracting profits and then moving on as the induced bubbles burst. Following Das's key points the complex adaptive system (CAS) aspects are highlighted.

as described by Satyajit Das.
The US sub-prime housing crisis enabled by the low cost debt provided by the Chinese transformed into high rate debt targeted by hot money
A key agent in the 1990 - 2008 housing expansion Countrywide is linked into the residential mortgage value delivery system (VDS) by Paul Muolo and Mathew Padilla. But they show the VDS was full of amplifiers and control points. With no one incented to apply the brakes the bubble grew and burst. Following the summary of Muolo and Padilla's key points the complex adaptive system (CAS) aspects are highlighted.

is described by Muolo & Padilla.
For RSS the Plaza accord was where the US first demonstrated the use of global
Charles Ferguson argues that the US power structure has become highly corrupt.

Ferguson identifies key events which contributed to the transformation:
- Junk bonds,
- Derivative deregulation,
- CMOs, ABS and analyst fraud,
- Financial network deregulation,
- Financial network consolidation,
- Short term incentives
Subsequently the George W. Bush administration used the situation to build a global bubble, which Wall Street leveraged. The bursting of the bubble: managed by the Bush Administration and Bernanke Federal Reserve; was advantageous to some.

Ferguson concludes that the restructured and deregulated financial services industry is damaging to the American economy. And it is supported by powerful, incentive aligned academics. He sees the result being a rigged system.

Ferguson offers his proposals for change and offers hope that a charismatic young FDR will appear.

Following our summary of his arguments, RSS comments on them framed by complex adaptive system (CAS) theory. Once the constraints are removed from CAS amplifiers, it becomes advantageous to leverage the increased flows. And it is often relatively damaging not to participate. Corruption and parasitism can become entrenched.
financial WMD
; to push the Japanese economy into a depression it has yet to escape from.

Conway's revealing book shows how global fiscal power transferred from Great Britain to the US is the United States of America. after the First World War. The shape of the financial infrastructure designed and built in response to the aftermath of the 1914 to 1918 war still influences today's global economic

CAS.

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Market Centric Workshops

Politics, Economics & Evolutionary Psychology

Business Physics
Nature and nurture drive the business eco-system
Human nature
Emerging structure and dynamic forces of adaptation

integrating quality appropriate for each market

This page looks at schematic structures and their uses. It discusses a number of examples:

Schematic ideas are recombined in creativity.
Similarly designers take ideas and rules about materials and components and combine them.
Schematic Recipes help to standardize operations.
Modular components are combined into strategies for use in business plans and business models.

As a working example it presents part of the contents and schematic details from the Adaptive Web Framework (AWF)'s operational plan.

Finally it includes a section presenting our formal representation of schematic goals.
Each goal has a series of associated complex adaptive system (CAS) strategy strings.
These goals plus strings are detailed for various chess and business examples.

Strategy | Design |

This page uses an example to illustrate how:

A business can gain focus from targeting key customers,
Business planning activities performed by the whole organization can build awareness, empowerment and coherence.
A program approach can ensure strategic alignment.

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Primary Navigation

Bretton Woods

Summary

The Summit Bretton Woods, 1944

The Mount Washington

The Bitter Peace

A short history of Gold

Economic consequences

Lunatic Proposals

Bedlam 1941-44

Snake Bite Party

Babel on Wheels June 1944

The Summit: week one

The Summit: week two

The Summit: week three

Unmitigated Evil

Starvation Corner

Onward Christian Soldiers

The Bretton Woods System

Epilogue