ABSTRACT
From the ashes of the Second World War rose a new world order designed by representatives of only two states, the United States and Great Britain. The outcomes of subsequent multilateral negotiations were also shaped by Stalin’s Soviet Union. The United Nations Charter was more democratic than anything seen in international relations ever, yet the UN system was soon paralysed by the cold war. Liberal democracy prospered in the better-off parts of the Western world, particularly in Japan and Western Europe, as well as in a handful of neutral countries. Moreover, the Bretton Woods system was created to replace the nineteenth-century institutions of free trade, globalising finance and gold standard with the system of capital controls and the collective management of exchange rates that were tied indirectly, via the dollar, to gold. The Anglo-American politico-economic agreements reached during the dark days of the Second World War were different from anything that the industrial and capitalist world had seen before. They established rules for a relatively open and multilateral system of trade and payments, but they did so in a way that would reconcile openness and trade expansion with flexibly fixed exchange rates, capital controls and commitments of national governments to full employment and economic and political stabilisation.
