Monetary Origins of the Great Acceleration. Tracing the Extractive, Racial, and Environmental Legacies of Bretton Woods

Monetary Origins of the Great Acceleration. Tracing the Extractive, Racial, and Environmental Legacies of Bretton Woods - Seminar Recap

The OHPA was pleased to host a lecture given by Dr. Jeremy Green on his research entailing the economic history of the Great Acceleration, which traces the competing philosophies at play during the Bretton Woods conference, the implementation of the gold standard internationally and its relationship to the Anthropocene in the second half of the twentieth century. Dr. Green began by explaining the competing ideologies within the conference; Harry Dexter White posited a plan which backed currency via gold which represented a continuation of a common historical practice and was inherently tied to the limitation of natural resources, as only a finite amount of gold could be purchased and held in reserves. John Maynard Keynes’s proposal instead posited an early form of a dematerialized credit system unencumbered by the limitations of a hard currency backing, instead favoring a system of entangled international debt. Dr. Green’s research in the U.S. national archives revealed several elucidating factors, tying the history of the conference to the development of the International monetary system in the 20th century and its implications on the Anthropocene.

Dr. Green explained that the system which required the backing of gold created a paradoxical impact. The Triffin dilemma expressed at the conference highlighted the issue that in order to create global economic growth in such a system, an increase in liquidity (and the amount of gold in reserves) must occur in order to cover the surpluses and deficits created for global trade. Triffin was skeptical of the limitations of a gold backing, insisting it would become the Bretton Wood’s Achilles heel, citing the system’s limited capacity for both liquidity and Soviet influence on gold mining. In spite of its liquidity limitations, the original gold-backed system represented an apparatus which was poised for resource conservation and preservation as the hard currency which backed it was inherently finite.

However due to both Soviet influence and the limitations of gold mining, South Africa benefited disproportionally as it rose to international prominence as it was the primary (non-Soviet) producer of gold in the world. Dr. Green explained how the demand for South African perpetrated a horrific cycle of exploitation and extractivism, which oversaw a racist Apartheid industry which almost exclusively forced black South Africans to work in gold mines under horrendously dangerous conditions. Dr. Green elucidated how the system of “Native Recruiting” created a monopolistic system in which white mine owners were able to depress workers’ wages to create artificial profits, which extended the South African domestic color divide up to an international scale as the international money system was fundamentally reliant upon South African gold. Thus the entire international monetary system was inherently tied to exploitative practices of South African gold mining.

However by the 1960s, multiple cracks began to show in the system. The disparity between gold and the U.S. dollar continued to grow as predicted by Triffin, and increasingly the international community became wary of supporting the Apartheid system via its purchase of South African gold, as it became apparent that South Africa could only mine profitably by relying on the depressed wages and exploitation of black miners. The U.S. and U.K. however continued to work against sanctions directed at the Apartheid regime as its gold was vital to reserve growth, and not until an international boycott of the resource created legitimate change. Thus negotiations began in 1968 to determine whether an update was necessitated; the U.S. backed an I.M.F. monopoly which would not result in future gold production. South Africa instead sought the ability to sell its gold directly to international monetary authorities. In 1971 gold was removed as the hard currency backing for the dollar, creating a contemporary system not beholden to a finite resource but instead more in line with Keynes’s original vision.

Dr. Green explained that the evolution of the international money system ushered in an era of “limitless” potential growth, displayed via the “Great acceleration” which refers to the later decades of the 20th century which heralded impressive economic development at the expense of environmental decline. Keynes’s philosophy encouraged economic growth but neglected the simple reality of the earth’s finite resources, which has helped deliver us the exploitative contemporary reality we find ourselves in today. The very concept of “petrodollars” can directly attribute its rise to the decline of the gold standard, and ironically after it faced sanctions in 2022 for its invasion of Ukraine, Russian has begun to stockpile gold to decrease its dependence on the international financial system. Dr. Green explained that his research is ongoing, and that he aims to publish a book on this history and its implications for the present within coming years. Ultimately Dr. Green’s argument that contemporary extractives practices can be traced back to the decoupling of the dollar and gold backing provides a fascinating and informative history of how the Great Acceleration has instrumentally impacted the Anthropocene of the late twentieth and twenty-first centuries.

The full talk as well as the subsequent discussion is available to view on YouTube here: https://youtu.be/D4d5Z3yno2U