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The Bretton Woods Institutions Essay

3953 words - 16 pages

Assignment Cover Sheet
Department: MDS
Intake: 10
Part A: Student Details
Student I.D No: W150180
Code: MDS 113
Assignment Number: One
Question: ‘The establishment of the IMF and the World Bank at the Bretton Woods Conference in July 1944 was mainly aimed at expanding and consolidating the Capitalist Mode of Production throughout the world.’ Discuss
Due Date: 25th March 2015
Part B: Marker’s comments: ...view middle of the document...

Under surveillance, IMF monitors the economies and exchange rates of countries. Its lending role involves lending reserve currencies to nations with trade difficulties. Technical assistance and training is provided in the areas of monetary and financial policies, fiscal policy and management, and economic and financial legislation. The World Bank (2008) defines itself as a United Nations international financial institution that as Stephey (2008) explains provides underdeveloped nations with needed capital. Karl Max (1867) states that the capitalist mode of production refers to the systems of organizing production and distribution within the capitalist societies. In the view of Foley and Dumenil (2008) capitalist mode of production is based on industrial technology, wage-labour and private ownership of the means of production while capitalism is production for exchange. It is driven by the desire for personal accumulation of wealth mediated by free markets. Robinson (2004) states that capitalism is by nature expansionary and needs constant access to new sources of cheap labour, land, raw materials and markets in order to survive.
Taking place towards the end of the Second World War in 1944 in the United States (US), the Bretton Woods Conference was attended by 44 nations with the aim of helping rebuild the shattered post-war economy and to promote international economic cooperation. Earlier on the world had been devastated by the Great Depression and World War One which resulted in the destruction of infrastructure and economies to countries mostly affected by these catastrophes. Evrensel (2013) states that the delegates at the conference agreed to avoid the past mistakes they had made when in an attempt to punish Germany; they had imposed large reparation payments to cover the debt accumulated by Allied forces during the war and help them pay to rebuild their countries. Due to the heavy burden of the payments Germany never recovered from the World War One and ended up printing money thereby creating hyperinflation where a pound of bread cost DM3 billion. In attempting to respond to the Great Depression countries had agreed to implement trade restrictions in the 1920s to improve their current account deficits and stop the reserve loss. However retaliation against these trade restrictions instead pushed the level of restrictions to international trade higher and further supressed output and employment. It is at the 1944 conference that the participants declared their ideological views so that they would rely on capitalism to solve the economic problems of the post-World War II era. Evrensel (ibid) further explains that despite their different views regarding the desired extent of government interventions in the market, the countries represented in the conference were dedicated to capitalism.
Goldman (2005) states that during the Bretton Woods conference the US and Britain dominated in the deliberations. John Maynard Keynes a British economist...

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