THE BRETTONWOODS INSTITUTION AND THE WORLD ECONOMY SINCE 1945.
The institutions are multilateral international institutions and not multinational.
In history, the date referred to as the beginning of modern civilization in 1500. In this period, the economic system of merchanttelism have started: Nations were the sole organization of politics and economy. Mercantilism is synonymous with Bullonism and it symbolizes the competition among states for the control of raw material and market precious metals and in system, the wealth of a nation is based on the volume of precious metals in her possession which the volume of the precious metals is referred to as Bullionism.
For every country to be strong in this era, it must possess a strong Navy because mercantilism is based on competition and conquest and consistently this era placed Britain as the strongest hegemony.
In economic literature hegemony, we have maligmer hegemony or a constructive, e.g South Africa, while Nigeria is constructive because the economy of West Africa is tied to the economy of Nigeria.
And because of the possession of Naval power, Britain was able to dominate every European competitor during this period. It was only the nation that was allowed to possess Bullion and individual which was a serious offense and there was a strong state controlled economy. This feature rather generally global welfare. It was generally or accentuating aggression and discord.
Economic thinkers emerge to formulate thought on how to fundamentally change mercantilism. Several revolutionary studies, economic thinkers came up with theories to change the prevailing system and in 1776, Adam Smith produced the classical book ‘’The nature and the causes of the wealth of nations’’.
And he propose liberal market and free market economy., he also theories that the government should withdraw economy control and concentrate its attention on the making of laws on social and political interaction and allows the natural laws of economics to be practiced. Under it, Adam Smith stated that it is only when individuals interact in economic and commercial competition, that is when it will produce global welfare and global welfare will be promoted and this was the origin of individualism and it is a core value of free market economy.
The motive of Capitalism is profiteering, every investors fundamental aim is to make profit. Rather than nations competing, the desire of every investors is to generate profit and the tendency will make the individual to be innovative.
Before Adam Smith said a capitalist economy, there is an invisible hand that generate global welfare which is the spirit behind innovations. In every Capitalist system, there is bound to be bum and burst, and the economy became recessed.
THE INTERNATIONAL MONETARY FUND (IMF) REPORT ON NIGERIA ECONOMY IN 2012.
Right from 1929, (The great depression) contributed to causing the second world war. The system was based on galling from first quarters,second and third and when the first and second cannot solve the recession, it became depression. The depression made influencetional economy to adopt what is referred to as Begganthy- neighbor and it is strictly protectionist and it was the United States that introduced new deal which introduced what is referred to as tempered Capitalism and it was the beginning of the introduction of welfare system in the United States and all the European economics has collapsed and they were going to the U.S to collect loan from them.
One international effect of the great depression was regime change. By 1930, Germany and Hitler became the leader of Maxism and in Italy, Mussuilism introduced fascism and in Japan, totalitarianism was lead by Mataesoa and this was what led to the second world war. And the U.S entered the war 1934-1939. There was Anglo American pact based on American granting Britain a loan to prosecute the war and the nwgociation on the American side was headed by Harry Dexter Whyte and on Britain, John Mayer was the head.
In July 1944, 44 countries met in a town called Brettonwoos in new Hampshire and decided to establish a multi- lateral institutions that will help to manage international economy. It was John Mechanism proposal that led to their development and between 1946- 1970, it led to the Basian World Order. The management of the international economy by multilateral institution and it means that capitalism by its poorest sense has been watered down because capitalism became regulated by international regulatory groups.
At Brettonwood, three institutions were to be established, such as: International monetary fund (IMF), and International Trade Organisation. Ho-were, in1940 the protocols established the first two institutions were rectified. The third one (International trade) was not rectified by yje U.S and it added a still- birth because the conditions were not favorable to the trade of the U.S across the Atlantic. As an alternative, in1947 the U.S moved for a general agreement on trade and tariff (GATT).
These two were the institution that were established before the decolmisation of the colony in the third world countries. Before IBRD was established to make long term loan for European countries for development purpose while IMF was established for short time loan for the purpose of setting pay of deficit and its primary responsibility was the stabilization of the exchange rate system.
Beginning from 1946, the dollar was adopted as international denominator from 1500 to 1945 what was obtained was the gold standard international system. The world economy became dependent on the U.S economy. Between 1946 and 1968, European economy and Japan were competing with the American economy and 1959, the American economy was already experiencing stagflation (i.e stahnant growth). By 1970, Nixon was the U.S President and he introduced certain measure that will revamp the U.S economy and the measures led to the collapse of the Brettonwood agreement and the Brettonwood agreement unilateral manage the Brittonwood institutions and the collapse of the Brettonwood led to the development of neo- liberalism which is more stringent by its predecessor because it came at the time of globalization and states actors has gradually taken site back and non states actors are emerging such as corporation trans- national and terronrest organization.
By 1982, the international system was fraud by depth and Brazil was the highest debtors and Nigeria was second. Brazil and Mexico agreed not to pay there depth.
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