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Q&A with Benn Steil, author of ‘The Battle of Bretton Woods’

March 28, 2013 by

The Globe and Mail interviewed Benn Steil, author of The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order, to find out what the 1944 Bretton Woods agreement to recognize the U.S dollar as the central means of exchange and to back the U.S dollar with gold can teach to policy makers today amidst the global financial turmoil.

Is the “currency war” metaphor useful in today’s context? You wrote of a time when countries were making a point of devaluing their currencies. That’s not technically happening now.

The situation in the 1930s was far more serious than what we are witnessing today. Remember, in the early 1930s the world was still on the fraying remnants of the gold-exchange standard. Fixed exchange rates were still considered to be the norm. So as one country after another dropped out of that system, it was never clear to anyone where the bottom was.

Since everyone was unmooring from gold and the dollar at the same time, nobody was ultimately able to use competitive devaluation as a tool for increasing net exports. So what did they do? They turned to the next step, which was systematic protectionism. And that’s what led to the collapse of global trade.

We’re not seeing anything of the sort, yet, going on around the world. We are just seeing concern, rightful concern, expressed about where these unusual forms of monetary accommodation will lead down the road. There are reasons to be concerned. If countries are determined to devalue their currencies and can’t because others are pursuing the same policies, then they may turn to trade measures as the next logical step. But we are quite a ways away from that.

How would describe what we’re witnessing in currency markets?

I would say we are in an age of improvisation. Before the crisis, we were in a period that Ben Bernanke coined as the `Great Moderation.’ It seemed that for all intents and purposes central bankers had discovered the Holy Grail. You just target a low and stable rate of inflation and if you stick with that course you will have accomplished all that a good central bank can do, at least in normal circumstances. Unfortunately, now that we are not in normal circumstances, the rule books have been ditched and nobody knows what the rule book is.

Can a broad commitment to flexible exchange rates work as an international monetary system?

In the 1930s, nobody really considered that to be a system. Flexible exchange rates were considered to be a failure of alternative systems, like the gold standard, like the gold-exchange standard, or like the dollar-based gold exchange standard that was agreed at Bretton Woods. In the early 1970s, when we moved to that system (of flexible exchange rates), although it did have some prominent supporters like Milton Freidman, this was not a policy decision as it were, that the world took to move from a system of fixed, but adjustable, exchange rates to a new system of flexible exchange rates. It was something that was forced on the world by the failure of the Bretton Woods monetary system…I really don’t believe the (Group of 20) as an institution has in any sense coalesced around what might be an appropriate mix of policies for the world’s major countries from the perspective of global stability and global growth. There really is no consensus.

Do you see a day when there might be a return to a stricter global monetary system?

I don’t.

In the 1940s, there was a deal to be struck between the U.S. and the world. The U.S. really was the world’s only credible international creditor. The only way you could trade internationally other than barter was with gold and dollars. Both were in very short supply in the 1940s, so the U.S. offered the world a deal: We will provide you with short-term balance of payments assistance through our new International Monetary Fund, in return for which you pledge not to devalue your currency without the acquiescence of this new fund, which of course would be American dominated. The world wasn’t wild about the deal, but it was the best on offer…

Compare that to the situation between China and the United States today. The U.S. now is the world’s largest international debtor; China is the world’s largest international creditor. Chinese holdings of dollar-denominated securities amounts to $1,000 (U.S.) per Chinese resident. If China were to provoke a dollar crisis by trying to nudge the world to an alternative monetary system in which the dollar was not central, China would risk a collapse of the purchasing power of its vast hoard of dollar-denominated assets. The U.S. for its part sees little motivation to change this system. It still raises debt in a currency that it mints…There isn’t the political basis for a deal to be struck between China and the United States right now. I don’t any new Bretton Woods emerging out this situation. I can see circumstances under which this system collapses.

Read the full interview here.

Filed Under: American History, Author Q&A, Economics, Twitter

Pope Francis and Through the Eye of a Needle

March 25, 2013 by

Since the ascension of Pope Francis, there has been much debate over the new pontiff’s concern for the poor, social justice, and his desire for a simple life. Executive Editor Rob Tempio sees this discussion as at the very heart of the debate within the Church over wealth between Augustine and the followers of Pelagius detailed in Peter Brown’s award-winning magnum opus, Through the Eye of a Needle: Wealth, the Fall of Rome, and the Making of Christianity in the West, 350-550AD:

In his Palm Sunday homily to mark the start of Holy week, Pope Francis enjoined the faithful throngs to lead “simple lives” and reminded them that Christian joy isn’t to be found in “possessing lots of things.” He also relayed something his grandmother used to tell him in Argentina “burial shrouds don’t have pockets” or as he put “you can’t take it with you.” The sentiment in these admonitions echoes Jesus’s claim that no sooner could a rich man enter the gates of heaven, than a camel fit through the eye of a needle.

This teaching of Jesus’s was the centerpiece of a millennia-old internecine struggle within the early Christian Church over the renunciation of wealth. This struggle came to a head in the battle between Bishop of Hippo, St. Augustine, and the followers of the British monk Pelagius who preached radical ideas about wealth and advocated its total renunciation as inimical to the Church’s true mission of ministering to the poor. Augustine eventually won this intellectual battle and the Church went on, following the fall of the Roman Empire, to become among the wealthiest institutions in all of Western Europe. This was thanks to, in no small part, the vast amount of alms and charitable donations it received from those seeking expiation for their sins and entry through the proverbial needle. However, the battle was won, or so it was argued, by accepting the wealth in order to better help the poor and those in need.

This struggle for the soul of Christianity and the role of wealth in the formation of the Catholic Church lies at the center of Peter Brown’s “magnificent” and “magisterial” panorama, Through the Eye of a Needle. With the installation of Pope Francis and his calls for people to reject the “consumer culture” of the modern world and to instead lead simple, austere lives–like that of his namesake–so as to refocus the church’s efforts on social justice for the downtrodden and the poverty-stricken, the time is ripe for a clearer understanding of the Church’s historically vexed relationship with wealth.

–Rob Tempio, Executive Editor and Group Publisher in the Humanities, @robtempio

Filed Under: Classics, History, In the News, Twitter

Ayesha Jalal author of ‘The Pity of Partition’ Speaks at Lahore Literary Festival

March 25, 2013 by


Ayesha Jalal discusses the influential literary figure Saadat Hasan Manto and her upcoming book about him at the Lahore Literary Festival. Her book, The Pity of Partition: Manto’s Life, Times, and Work across the India-Pakistan Divide, presents an in-depth history of Manto and is available soon.

 

Filed Under: Comparative History, Literature, Twitter

‘The Battle of Bretton Woods’ Review in the Wall Street Journal

March 19, 2013 by

The Wall Street Journal recently reviewed The Battle of Bretton Woods by Benn Steil. James Grant for the Wall Street Journal called it “A superb history.  Mr. Steil…is a talented storyteller.” The review not only commended the book and Steil, but also provided a background of what Bretton Woods was in case you are still unsure of what the book is about.

A Fateful Meeting That Shaped the World

In 1944, John Maynard Keynes and a Treasury official who was later unmasked as a spy hashed out an economic system for the post-war era.

One of the many merits of “The Battle of Bretton Woods,” a superb history of mid-20th-century monetary affairs, is the timing of its publication. Today, as never before, central banks are printing money, suppressing interest rates and manipulating markets. You wonder where it will all end.

Where it began is easier to reckon. The Federal Reserve, which its founders wouldn’t recognize if they were brought back to life to inspect their handiwork, came into the world to mobilize credit and forestall financial panics. In 1913, the year of the Fed’s founding, the dollar was defined as slightly less than 1/20th of an ounce of gold.

The 1944 conference at Bretton Woods, N.H., Benn Steil’s subject, was another government initiative to regulate money and banking. Representatives of 44 nations trekked to the Mount Washington Hotel to design a framework for the world’s currencies, not least the dollar, which was by then defined as only 1/35th of an ounce of gold. America’s Harry Dexter White and Britain’s John Maynard Keynes talked and tussled and produced the set of arrangements that lasted, in one form or another, until 1971.

Nowadays the dollar is undefined and unanchored. It commands such value as the not-quite-free market sees fit to endow it with, at this writing slightly more than 1/1,600th of an ounce of gold. With respect to its gold value, the greenback has become nearly invisible, like the interest you earn on your savings.

Mr. Steil, a senior fellow at the Council on Foreign Relations, is a talented storyteller. If, perhaps, he lingers too long over just how White’s bad thinking differed from Keynes’s bad thinking, or why the State Department was mad at the Treasury Department, and vice versa, he more than compensates with the nontechnical fluency of his economic narrative and the engrossing portraits of his two principal characters.

Who was the more disagreeable, it’s hard to say. White, a senior American Treasury official, freelanced as a Soviet spy. His personal style was incivility. Keynes, among the first of the modern celebrity economists, devoted himself to promoting schemes to aggrandize state power and wangle dollars for the broke British exchequer. His personal style was condescension.

Read the full review here.

 

Filed Under: American History, History, Twitter

Book Fact Friday: The Latino Catholic Experience in America

March 15, 2013 by

InMatovina_LatinoCatholicism light of the recent election of Pope Francis, a native Spanish speaker and the first of his position to hail from the Americas, we thought an excerpt on Catholicism among those in the United States with origins in Latin America would pique your interest.

FACT: “Catholics comprise the largest religious group in the United States, encompassing nearly a fourth of all U.S. residents. Hispanics constitute more than a third of U.S. Catholics. They are the reason why Catholicism is holding its own relative to other religions in the United States. According to researchers of the American Religious Identification Survey, without the ever-growing number of Latinos in this country, the U.S. Catholic population would be declining at a rate similar to mainline Protestant groups. And given the relative youthfulness of the Latino community, Hispanic Catholics will continue to represent an increasing percentage of U.S. Catholics over time. They already comprise more than half of U.S. Catholics under the age of twenty-five and more than three-fourths of Catholics under eighteen in Texas, New Mexico, Arizona, and California. Robert Putnam and David Campbell succinctly sum up these demographics in their much-discussed 2010 study about the state of American religion, avowing that the Catholic Church in the United States ‘is on its way to becoming a majority-Latino institution.’”
—Timothy Matovina in Latino Catholicism: Transformation in America’s Largest Church

Read chapter one here: http://press.princeton.edu/chapters/s9545.pdf

Most histories of Catholicism in the United States focus on the experience of Euro-American Catholics, whose views on such concerns as church reform, social issues, and sexual ethics have dominated public debates. Latino Catholicism provides a comprehensive overview of the Latino Catholic experience in America from the sixteenth century to today, and offers the most in-depth examination to date of the important ways the U.S. Catholic Church, its evolving Latino majority, and American culture are mutually transforming one another.

Timothy Matovina assesses how Latinos’ attempts to celebrate their faith and bring it to bear on the everyday realities of their lives have shaped parishes, apostolic movements, leadership, ministries, worship, voting patterns, social activism, and much more. At the same time, the lives and faith of Latino Catholics are being dramatically refashioned through the multiple pressures of assimilation, the upsurge of Pentecostal and evangelical religion, other types of religious pluralism, growing secularization, and ongoing controversies over immigration and clergy sexual abuse. Going beyond the widely noted divide between progressive and conservative Catholics, Matovina shows how U.S. Catholicism is being shaped by the rise of a largely working-class Latino population in a church whose leadership at all levels is still predominantly Euro-American and middle class.

Latino Catholicism highlights the vital contributions of Latinos to American religious and social life, demonstrating in particular how their engagement with the U.S. cultural milieu is the most significant factor behind their ecclesial and societal impact.

Filed Under: Book Fact Friday, History, Latin American Studies, Religion, Twitter Tagged With: , , , , ,

Beware the Ides of March!

March 15, 2013 by

Marcus Tullius Cicero, Rome’s greatest statesman and orator, was elected to the Roman Republic’s highest office at a time when his beloved country was threatened by power-hungry politicians, dire economic troubles, foreign turmoil, and political parties that refused to work together. What did he have to say of the death of Caesar on the Ides of March, 44 B.C.? Here’s an excerpt from Cicero’s How to Run a Country on Tyranny:

People submit themselves to the authority and power of another person for a variety of reasons. Sometimes they do it because of goodwill or gratitude for favor shown to them. Sometimes they do it because of the dignity of a person or because they hope to profit from the act. Some people subordinate themselves fearing that if they don’t, the other person will make them submit anyway. Sometimes people surrender their freedom because of gifts or promises. Finally, as has so often been the case in our own country, people submit to the power of another because of outright bribes.

The best way for a man to gain authority over others and maintain it is through genuine affection. The worst way, however, is through fear. Wise Ennius once said: “People hate the man they fear—and whomever they hate, they want to see dead.” Just recently we’ve learned, as if we didn’t know it already, that no amount of power can stand up to the hatred of the people. The death of Caesar, who ruled the state through armed force (and whose legacy still rules us) shows better than anything the terrible price paid by all tyrants. You will have a difficult time finding any despot who doesn’t end up like him. I say it again, using fear to maintain power simply doesn’t work. But the leader who keeps the goodwill of his people is secure.

Those rulers who wish to keep their subjects under control by force will have to use brutal methods, just as a master must when dealing with rebellious slaves. Whoever tries to govern a country through fear is quite mad. For no matter how much a tyrant might try to overturn the law and crush the spirit of freedom, sooner or later it will rise up again either through public outrage or the ballot box. Freedom suppressed and risen again bites with sharper teeth than if it had never been lost. Therefore remember what is true always and everywhere and what is the strongest support of prosperity and power, namely that kindness is stronger than fear. That is the best rule for governing a country and for leading one’s own life.

Eager to read more? Check out Philip Freeman’s Introduction to How to Run a Country. You might also want to have a look at How to Win an Election, Quintus Tullius Cicero’s no-nonsense advice on running a successful campaign for his brother Marcus. Here’s the Introduction.

Filed Under: Archaeology and Ancient History, Classics, Princeton University Press

The Great Rebalancing Review in The Wall Street Journal

February 28, 2013 by

The Wall Street Journal published a book review of The Great Rebalancing: Trade, Conflict, and the Perilous Road Ahead for the World Economy by Michael Pettis. The reviewer calls Pettis a “brilliant economic thinker” and gives a good background of the financial situation in China and why it needs to be rebalanced. If you are not quite sure what the book is about or what exactly is going on with the Chinese economy and why it is important at all, this book review is a great place to start.

A Banking Paper Tiger

China Development Bank underwrote a massive stadium in Loudi, Hunan Province—a city that lacks a professional sports team.

China’s econoPettis_GreatRebalancing_S13my sometimes seems the work of miracles: three decades of economic growth, with GDP compounding at an annual rate of around 10%; the world’s highest levels of savings and investment; vast trade surpluses, which feed the largest foreign-exchange reserves in history. The financial system has played a key role in delivering these economic feats, and no single institution within it has been more important than China Development Bank. “Understand CDB,” Henry Sanderson and Michael Forsythe write in “China’s Superbank,” “and you understand the core of China’s state capitalism.”

This so-called policy bank, founded less than two decades ago, boasts a larger loan book than J.P. Morgan ChaseJPM +3.41% . Over the past 15 years, CDB has lent trillions of dollars to finance China’s urbanization policy. More recently, it has dished out vast sums across the globe to secure China’s long-term energy supplies. Hugo Chávez, whose country has been the largest single foreign recipient of CDB’s loans, proclaims his financial benefactor as the bank “with the most money in the world.”

Read the FULL review at The Wall Street Journal online.

Filed Under: Comparative History, Economics, Finance, World History

The Inner Life of Empires Comprehensive Web Resource Now Available

February 20, 2013 by

Inner Life of EmpiresEmma Rothschild, author of The Inner Life of Empires:An Eighteenth-Century History, has created a website featuring resources and additional information that complement her 2011 book. The Inner Life of Empires, which is newly available in paperback, features a unique look at the political, economical, and social landscape of the 18th century world through the Johnstone family’s rich history. The family’s widespread reach across the globe and relationships to the people and institutions that structured the time period create a comprehensive look at both the microcosm that is their family history and the macrocosm of the history of the 18th century. The website delves further into the content covered in Rothschild’s book by including interactive maps of the Johnstone family’s social and geographical networks, profiles of members of the Johnstone family, and some of the resources that Rothschild used while writing the book.

Used in conjunction with The Inner Life of Empires, the website serves as a helpful guide to illustrate a tremendous time in history all through the lives of the people who lived through it.

Visit the website: http://www.innerlifeofempires.org/

The Inner Life of Empires is the winner of the 2011 Scottish History Book of the Year Award, Saltire Society, one of The New Yorker‘s “Reviewer’s Favorites” of 2011, and was shortlisted for the 2012 Scottish Mortgage Investment Trust Book Awards (Non-Fiction category). It has been hailed by critics and consumers alike for its unique perspective on a pivotal time period in history.

Filed Under: Comparative History, European History, World History

Why Americans Hate the Media and How It Matters- Winner of Goldsmith Book Prize

February 13, 2013 by

2-13 whyAmericanshateCongratulations to Jonathan M. Ladd whose book, Why Americans Hate the Media and How it Matters, was recently selected as the winner of the 2013 Goldsmith Book Prize in the Academic Category!

“The Goldsmith Book Prize is awarded to the trade and academic book published in the United States in the last 24 months that best fulfills the objective of improving democratic governance through an examination of the intersection between the media, politics and public policy.

The Goldsmith Book Prizes honor the best academic and trade books of the year in the field of media, politics and public policy. The Prizes are underwritten by an annual gift from the Goldsmith Fund of the Greenfield Foundation. The authors will be honored at the Goldsmith Awards Ceremony at Harvard’s Kennedy School on March 5, 2013.”

For more information about the award, and the full list of finalists and winners, click here.

Filed Under: American History, International Relations, Political Science, Twitter

Daniel Stedman Jones on Masters of the Universe

January 18, 2013 by

Stedman-Jones-at-LSE-3[3]Princeton author Daniel Stedman Jones had a busy day on 16th January promoting his recently published ‘Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics’. In the afternoon he appeared on BBC Radio 4′s ‘Thinking Allowed’ and that evening he was the lead speaker at a public lecture based around the book at the London School of Economics where his respondents were Professor Lord Skidelsky and Professor Mark Pennington. Please follow the links to catch up with both events.

Filed Under: American History, Comparative History, Economic History, Economics, European History, Events, History, International Studies, Political Science, Political Theory, Twitter

New History Catalog!

January 2, 2013 by

We invite you to be among the first to check out our new history catalog!
http://press.princeton.edu/catalogs/history13.pdf

Of particular interest is the forthcoming Worldly Philosopher: The Odyssey of Albert O. Hirschman by Jeremy Adelman, the first major chronicle of the renowned intellectual’s life. Also be sure to note Jill Lepore’s The Story of America, which demonstrates the American relationship with print through narratives from John Smith’s account of the founding of Jamestown in 1607 to Barack Obama’s 2009 inaugural address. Anyone teaching American history should have a copy.

If you’re interested in hearing more about our history titles, sign up with ease here: http://press.princeton.edu/subscribe/ Your email address will remain confidential!

We’ll see everyone at the meeting of the American Historical Association January 3-6 in New Orleans, LA. Come visit us at booth 221!

Filed Under: History, New Catalog Tagged With: , , , , ,

Looking Back at 2012 “Through the Eye of a Needle”

December 28, 2012 by

As we come to the end of the holiday season and are almost to the New Year, we take the time to reflect on the magnum opus of the historian of late antiquity Peter Brown: Through the Eye of a Needle: Wealth, the Fall of Rome, and the Making of Christianity in the West, 350-550 AD.

2012 has seen reviews of Brown’s important book in the New Republic, the New York Review of Books, and in the UK in BBC History Magazine, The Guardian, The Literary Review, and The Times Literary Supplement, to list just a few.

Why the interest in how Christianity and conceptions of wealth changed over a period of a two hundred years a few millenia ago? With ongoing discussions about how much each of us owes society (whether we’re talking holiday gifts or taxes and the so-called fiscal cliff), the issues around giving and our beliefs couldn’t be more timely–and it certainly can’t hurt that Brown is the top scholar to draw connections between the ancient past and today. As Glen W. Bowersock writes in the New Republic:

It is exciting to watch a historian who has already written so extensively on Late Antiquity absorb so much new scholarship, revise his old reviews, and re-imagine the world we thought we knew from him. . . . Through the Eye of a Needle is a tremendous achievement, even for a scholar who has already achieved so much. Its range is as vast as its originality, and readers will find everywhere the kinds of memorable aperçus and turns of phrase for which its author is deservedly famous. . . . There can be no doubt that we are in the presence of a historian and teacher of genius.

In his piece “A Masterpiece on the Rise of Christianity” in the New York Review of Books, Garry Wills (who also selected the title as his book of the year in the Chicago Tribune) says:

To compare it with earlier surveys of this period is to move from the X-ray to the cinema….Every page is full of information and argument, and savoring one’s way through the book is an education. It is a privilege to live in an age that could produce such a masterpiece of the historical literature.

Writing in his five-star online review at Christianity Today, Peter Leithart affectionately calls the book “deliriously complicated,” and goes on to write:

As usual, Brown leaves no stone unturned in his search for insight and evidence. … He paints a colorful social setting for early church debates about theology and ethics without becoming reductively sociological, and often overturns accepted mytho-history in the process. He quietly draws on contemporary theory but typically lets ancients speak for themselves because his aim is to introduce us to an exotic world. Through it all, he focuses on the masses of details by treating attitudes, beliefs, and practices about wealth as a ‘stethoscope’ to hear the heartbeat of late Roman and early Christian civilization. … Brown has captured the rough texture of real history. It is testimony to the success of Brown’s subtle, provocative, and beautifully written book.

Across the pond, Tom Holland champions Peter Brown and the book in History Today, BBC History Magazine, and Twitter. In History Today, Holland calls Brown the “greatest living historian of late antiquity.” He goes on in BBC History Magazine:

Through the Eye of a Needle is the crowning masterpiece of Peter Brown, the great historian who virtually invented late antiquity as a periodisation. The book’s theme might seem specialised: the evolution of attitudes towards wealth in the last century and a half of the Roman empire in the west, and the century that followed its collapse. In reality, like so many of Brown’s books, it gives us a world vivid with colour and alive with a symphony of voices. It is not only the most compassionate study of late antiquity in the west ever written, but also a profoundly subtle meditation on our own tempestuous relationship with money.

Meanwhile, Peter Thornemann of the Times Literary Supplement calls it “[O]utstanding. . . . Brown lays before us a vast panorama of the entire culture and society of the late Roman west.” And at The Guardian, Tim Whitmarsh writes,”His sparkling prose, laced with humour and humanity, brings his subjects to life with an uncommon sympathy and feeling for their situation.”

Through the Eye of the Needle has also been selected as a best book of the year at the Institute of Public Affairs blog, among others. Doubtless, the interest in the origins of how society balances faith and finances will continue well into 2013 and we would do well to heed the fascinating lessons of Brown’s much-lauded work.

To learn more about the author and his latest book:

bookjacket

Through the Eye of a Needle
Wealth, the Fall of Rome, and the Making of Christianity in the West, 350-550 AD
By Peter Brown
Filed Under: Archaeology and Ancient History, Classics, Religion, Twitter
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