ABSTRACT
The men who established the international financial institutions shared a fundamental belief. Put simply, it was that mankind has the capacity through his own actions to be master of his economic fate. He need not be subject to the dictates of either random or deterministic economic forces. Economic policy, properly formulated and implemented, so goes the belief, can improve the economic lot of mankind
This belief contrasts with the belief that iron laws of economics predetermine human progress. Marxism is one form of this belief and Marxist thought was dominant in a large part of the world when the Bretton Woods institutions, the International Monetary Fund (IMF) and the World Bank, were establishing themselves in the late 1940s. Paradoxically, the fall of the Marxist states East of the Iron Curtain has provided the Bretton Woods institutions, from 1989 onwards, with a substantial increase in its membership. Another form of ‘the iron laws of economics’ belief is the belief in the reliance on laissez faire market capitalism. This belief leads to a denial of the need for the international financial institutions. Indeed, the institutions could frustrate market forces. Modem day proponents of this belief provide the ideological capital for an influential school of opponents in the United States of the Bretton Woods institutions.
