Chapter2_Postwar Development Theory(bis2)

Chapter2_Postwar Development Theory(bis2) - 20:23 Chapter 2...

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20:23 Chapter 2 – Development Theory in the Postwar Period 1944: End of WWII Split became clear between capitalist West and socialist East Bretton Woods system is put in place IMF (dealt with balance of payments deficits) and World Bank (dealt with the reconstruction of war-ravaged Europe, and later on the development of the 3 rd world) were created along with GATT (an agreement that reduced protectionism to allow more free-trade) These were designed to create as stable and freely flowing an international trading environment as possible. Gold standard was set up - the economic system was backed up by US gold reserves held at Fort Knox. John Maynard Keynes: Huge influence on the Bretton Woods conference He suggested the following, but his advice was not taken: An international trade organization with more power than the GATT Would have been good to deal with nontariff barriers (which were used to block trade), would also have been able to stabilize commodity prices. That the IMF be able to pressure balance-of-payments surplus countries into opening up trade (not just those with deficits), this would have benefited the world economy by expanding trade. Classical Political Economy: Thomas Malthus, David Ricardo, Adam Smith Stressed the role of the free market, ‘laissez-faire capitalism’ Division and specialization of labor would allow resources to be used efficiently and productively. If all individuals pursued their own self-interest all of society would
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This note was uploaded on 08/26/2010 for the course IDS 200 taught by Professor Pushkar during the Fall '10 term at McGill.

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Chapter2_Postwar Development Theory(bis2) - 20:23 Chapter 2...

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