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When Keynes went to America

The first Bretton Woods meeting was intended to establish a postwar money regime and secure funds fo

The night the Mount Washington Hotel opened in 1902, its builder, the New Hampshire coal and railroad magnate Joseph Stickney, raised a glass to “the damn fool who built this white elephant”. With its octagonal towers and 300 yards of wooden verandah, its 234 rooms each with its own bath, its telephone and mail system, and its interminable corridors, set in endless New Hampshire wilderness, this colossal monument to the Gilded Age somehow survived the Depression and wartime shortages to its appointment with financial history in July 1944.

As allied armies fought their way into Normandy, some 730 finance ministers, delegates and clerks from all 44 allied countries, including China and the Soviet Union, gathered for three weeks at the Mount Washington to plan the postwar monetary and trading order.

The United Nations Monetary and Financial Conference, better known from the hotel's railway stop and mail address as the Bretton Woods conference, established a currency regime and two powerful institutions, the International Monetary Fund and the World Bank. The role of Bretton Woods in the postwar recovery is, as always with economists, disputed but the name still evokes, for men such as Gordon Brown or Nicolas Sarkozy, an idea of order in a chaotic financial world.

The gestation of the Bretton Woods conference, as the long-serving US diplomat Dean Acheson put it, "about doubled that of elephants". It arose in the minds of two men of different temper and background but equal brilliance and arrogance: the British economist John Maynard Keynes and Harry Dexter White of the US Treasury. At their backs, like a ghost, was the German banker who served the Nazis till he fell out with Hitler in 1938: Hjalmar Schacht.

The Victorian system for settling international transactions, known as the international gold standard, had come to grief in the Depression of the 1930s. A succession of countries, led by Britain, detached their currencies from gold rather than be forced by a fixed exchange-rate to cut demand and add further to unemployment. Britain erected a trade tariff round the British empire, known as Imperial Preference, while other countries devalued their currencies to export at any price. By the summer of 1941, when Keynes retired to his country house in Sussex to think about a successor to the international gold standard, Britain was in a desperate plight, in debt not just to the US but to the countries playing host to her armies, such as India and Egypt. Without currency controls, Britain was bankrupt.

Keynes envisaged a sort of supernational bank in which trading accounts would be settled not in gold, but in a sort of artificial or bank money that would be available to members as an overdraft facility according to their share of world trade. Behind it would stand the greatest creditor nation, the United States.

As Keynes's biographer, Professor Robert Skidelsky, writes: "Provided all countries were guaranteed sufficient quantities of reserves, it might be possible to dismantle the trade barriers which had grown up in the 1930s and during the war and restore the single world which had vanished in 1914."

In devising this plan, Keynes admitted to drawing on Schacht's ingenious use of bilateral clearing arrangements to permit the Third Reich to continue importing raw materials for its military build-up in the 1930s.

Keynes, desperate to get away and rest, took the meetings at breakneck speed. On

19 July, he collapsed on the hotel stairs

In Washington, Dexter White, director of monetary research at the US Treasury, was also thinking about "future currency arrangements" but from a different viewpoint. From President Roosevelt down, the US could not care less about preserving the British empire. The US wanted currency convertibility and open markets for its exports as soon as possible. The compromise between the Keynes and White plans, which were published in 1943, became known as the Bretton Woods System.

The process began in an atmosphere of mistrust. At his first meeting with Henry Morgenthau, the US treasury secretary, Keynes tactlessly suggested that Britain would use US military aid to build up its cash balances. Keynes and his staff objected to the number of lawyers on the US side and made snide remarks about "rabbinics", by which they meant the precision and subtlety of the Jewish officials at the Treasury such as White and Edward Bernstein.

Eventually, Keynes and White devised a system in which only the US dollar would exchange at a fixed rate into gold. The allies had to make their currencies convertible into these gold dollars within 1 per cent of a fixed rate, but could draw on short-term assistance from a stabilisation fund to which all members subscribed and the US, naturally, subscribed most. In addition to this fund, now christened the International Monetary Fund, White and his staff had devised a bank to finance the rebuilding of war-damaged economies. This International Bank for Reconstruction and Development still forms the core of what is now known as the World Bank.

Lord Keynes was by now ailing and could not bear the thought of working through the Washington summer. With great courtesy, the Americans agreed to hold the drafting meetings in Atlantic City on the New Jersey shore and the main conference in the cool of New Hampshire. Arriving with Keynes by train on 30 June, Lydia Lopokova, the Russian ballerina whom Keynes had married in 1925, found chaos: "The taps run all day, the windows do not close or open, the pipes mend and unmend and no one can get anywhere."

They were lodged in the room above Morgenthau, and for three weeks the US treasury secretary was disturbed by Lady Keynes's dancing exercises.

With much of the main work done, the conference itself consisted mostly of a British rearguard action to delay the convertibility of its debts and much detail of a mind-numbing complexity. Desperate to get away and rest, Keynes took the meetings on the bank at a breakneck pace. As Acheson reported: "Keynes . . . knows this thing inside out so that when anybody says Section 15-C he knows what that is, but before you have an opportunity to turn to Section 15-C and see what he is talking about, he says, 'I hear no objection to that', and it is passed."

On 19 July, Keynes collapsed on the hotel stairs, and word spread that he had had a heart attack. According to Skidelsky, the German newspapers ran adulatory obituaries. On 22 July, Keynes had recovered enough to propose acceptance of the conference's final act. As he left the room, many of the delegates stood and sang "For He's a Jolly Good Fellow". Within two years, Keynes was dead and White survived only two years longer, bedevilled in his last years by allegations of disloyalty in his dealings with the Soviet Union.

Some economists, such as Milton Friedman, have questioned whether Keynes and White were correct in their analysis and, even if they were, whether Bretton Woods was the solution. Others argue that such measures as the $3.75bn American loan to Britain in 1945, the $13bn Marshall Plan of 1948 and the 30 per cent devaluation of sterling in 1949 did more to revive Europe. The system of semi-fixed exchange rates just about survived the 1960s but the US, under pressure from financing the war in Vietnam, abandoned gold convertibility in 1971. The two Bretton Woods institutions, the IMF and the World Bank, have been criticised for imposing quasi-colonial conditions on third world borrowers. The IMF is also undercapitalised in the face of the current financial crisis.

When Gordon Brown calls for a new Bretton Woods, he is evidently not calling for a currency peg or an infrastructure bank but for a halcyon age of idealism and Anglo-American amity - above all for that ideal or hero of modern times embodied in John Maynard Keynes, the economist as saviour.

James Buchan's latest novel is "The Gate of Air", published by the MacLehose Press

Thirteen things you may not know about John Maynard Keynes

  • He was born the year Karl Marx died, 1883.
  • He was 6ft 6ins tall.
  • When he took civil service exams in 1906, his lowest scores were in economics and maths because, he used to say, he knew more than his examiners.
  • Duncan Grant, with whom Keynes had a long affair, painted him writing a letter asking the US for a loan to continue the 1914-18 war.
  • At the age of 42, he married the Russian ballerina Lydia Lopokova.
  • A regular investor, he lost, then recovered, a fortune in the 1929 crashing stock market.
  • A close friend of Kingsley Martin, he joined the board of the New Statesman in 1931.
  • He bred pigs at his Sussex home.
  • He amassed one of the largest private collections of 20th-century art, with works by Braque, Cezanne, Degas, Modigliani, Picasso, and Seurat.
  • A director of the British Eugenics Society, he described it in 1945 as the most important branch of sociology.
  • During the Bretton Woods conference in 1944. he suffered a heart attack and German newspapers published his obituary.
  • At the conclusion of Bretton Woods, delegates acknowledged Keynes's achievement by singing "For He's a Jolly Good Fellow".
  • In 1946, he suffered a second heart attack and died. It was attributed by some to the effort of securing a $3.75bn loan from the US, a negotiation that Keynes himself described as "absolute hell" .

This article first appeared in the 10 November 2008 issue of the New Statesman, Change has come

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“The guards WANT you to mess up”: meet the prison wives of Instagram

How memes featuring Disney Princesses, Spongebob Squarepants, and saggy jeans have empowered women with incarcerated partners.

During a recent trip to visit her boyfriend in federal prison, 27-year-old Makenzie wore a floor-length black skirt and a grey shirt that completely covered the top half of her body. After a brief inspection, the guard on duty deemed her outfit appropriate and waved her through, and she was able to spend a happy eight hours with her incarcerated boyfriend and her six-year-old daughter. The next day, she came back to visit again.

“I wore the exact same outfit the second day of visitation because I didn’t want to fight with the guards about any other clothing,” says Makenzie, who had to drive five hours out of her home state, Texas, in order to visit her partner. “I was sent away by a guard who had seen me the day before.”

Makenzie felt “belittled and humiliated” by the guard, who forced her to go to the nearest shop to buy a new shirt. “I wore the exact same outfit down to my shoes and earrings,” she explains. When she confronted the guard, Makenzie says he said: “I honestly don’t care.

“All I’m telling you today is you’re not going in there dressed like that.”

Being a “prison wife” can be isolating and confusing. When wives and girlfriends first go to visit their newly-incarcerated partners, the rules and regulations can be overwhelming. When visiting her boyfriend, Makenzie has to place her money in a clear plastic bag, go through a metal detector before a smaller metal detector is used on her feet, and be patted down by guards. If her clothing is too loose or too tight, she is sent home.

“The guards WANT you to mess up,” Makenzie tells me over email, emphasis hers. “They want to make you mad, make you get in trouble.” For wives and girlfriends isolated by these experiences, the internet has become a haven.

***

Makenzie’s Instagram account has 1,123 followers. Under the handle “Texas Prison Wives”, she has been posting memes, photographs, and advice posts for five years. After incidents like the one above, Makenzie can use her account to vent or warn other wives about changes in clothing rules. Followers can also submit text posts to her that she screenshots, overlays on scenic pictures, and publishes anonymously.

One, imposed on a city skyline, asks if anyone wants to carpool to a prison. Another, overlaying a picture of a nude woman, reads: “I’m wondering if I can get some ideas on sexy pics I can take for my man. I’m about 85lbs heavier than I was the last time he saw me naked.”

The prison wives of Instagram recently went viral – but not on their own posts. A Twitter user discovered the community and tweeted out screenshots of prison wife memes – which are formatted with an image and caption like all relatable memes, with the crucial difference being that not many of us can actually relate.

“The life that we live is not widely accepted by families, friends, and the general outside world because people hear ‘inmate’ and automatically assume the worst,” says Makenzie, whose boyfriend was sentenced to two fifteen year sentences for drug possession.

“This account has given women a safe space and anonymity to seek personal advice, ask questions, and seek other women within their area if they want to reach out.” Her account, Makenzie says, also allows prison wives to laugh during tough times. She both makes her own memes and shares those from similar accounts. One, from May 2016, features a collage of four celebrities rolling their eyes. The caption reads: “When you hear ‘Babe, we are going on lock down again…’”

To outside eyes, some prison wife memes can seem flippant or – to those who retweeted the viral tweet – laughable. “My Life As A Prison Wife” is an account with over 12,000 followers that posts a wide array of memes, often using stills from Disney movies to portray emotions. A post featuring an image of a crying Belle – from Beauty and the Beast –  is captioned “that feeling when… when your visits get suspended”. Yet though many online criticise what they see as the glorification or normalisation of a life choice they don’t agree with, Makenzie emphasises that memes – especially funny ones – are important.

“I think it’s fun to have so many people relate to funny memes even though the direct meaning behind it is about being lonely or the hard things we go through to make this relationship work,” she explains. “It’s a reminder we aren’t alone in our struggle and we can laugh through the pain.”

Jemma, a 22-year-old from London who runs an account called “Doing time too”, concurs. Her profile – which has 1,369 followers – showcases memes featuring puppies, Disney princesses, and stills from Spongebob Squarepants.“I'm sure ordinary members of the public would disagree with our light-hearted way of looking at our loved ones being in prison and I would totally understand that,” she says – also over email.

 

HAPPY VALENTINE'S DAY LADIES  #prisonwife #prisonwifelife #doingtimetoo #inmatelove

A post shared by doing time too (@doingtimetoo) on

“Before I was in the situation myself, I would have probably reacted in the same way to an account like the one I now own. But sometimes you end up in situations you never expected to and you deal with things in a way that others won’t understand.”

***

Prison wives don’t use Instagram just for memes. Makenzie’s account helps women in need in an array of ways: they can find out if there have been riots in their partner’s prison; get advice on gifts to send a loved one; and even find out how to appeal sentences. Alongside her Instagram, Jemma also runs a website called www.doingtimetoo.co.uk

Via @TexasPrisonWives

“I started the website because I was in a relationship with someone a couple of years ago who ended up going to prison. It was totally out of the blue for me and something neither of us saw coming,” she says. “I had no idea how to deal with it.” Her site provides information about individual prisons, what to expect from a prison visit, and what to do after release. She also provides tips on how to send creative gifts made out of paper to incarcerated loved ones.

“I believe the internet has been a massive help in supporting prison wives,” says Jemma, who finds most people don’t understand or relate to her situation. Her boyfriend was charged with GBH (grievous bodily harm) and sentenced to two years in prison, after getting into a fight.

Jemma also feels that Instagram can provide prison wives with information that the prisons themselves withhold. “I can't speak for everyone but in my experience, prisons and the visit centres are far from helpful in providing any information, support or advice,” she says. “Sometimes people won’t hear from their husband when they expect to but through interacting with other ‘prison wives’ they may find out that that particular prison is currently on lock down, providing an explanation and reassurance as to why they hadn’t heard from their husband. Without the internet, this wouldn't happen.”

 

Advice! @mothafukn.irvin

A post shared by OFFICIAL N. CALI SUPPORT (@north_cali_prisonwives) on

When Jemma reached out to prison visitor centres in the UK to promote her website to those in need, she never heard back. When she emailed her boyfriend’s visitor centre prior to her first visit to ask what to do, what to wear, and what to expect, she also never received a reply. “There is no communication with family and no support offered… It’s important to remember that the families themselves did nothing wrong or illegal and so don’t deserved to be punished or treated like criminals themselves.” In such circumstances, information shared online is crucial.

Makenzie also believes that the US prison system has it faults when it comes to visitors. “While I know and understand that inmates are being punished for a crime they committed, the guards treat their families disrespectfully and unfairly almost as if we are being punished as well,” she says. “Being a larger woman, I have gotten in trouble for my clothes being too tight AND for my clothes being too loose. It’s a lose-lose situation.”

Makenzie explains that sometimes visitors are forced to wear gowns similar to those worn in hospitals if their clothes are deemed unsuitable. In the past, she has even been sent away to buy a new bra after she wore one without underwire in order to get through the metal detector. In one prison her boyfriend was incarcerated in, visitors had to wait outside to be signed in, one-by-one, regardless of the weather. “We had to wait two hours several times, sweating, drenched in rain, they don’t care…

“The guards degrade your loved ones right in front of your face, they are mean, hateful, and over the top rude, even to the inmates who are the most well behaved and respectful.”

For these women, Instagram has become an invaluable network of support.

***

There are hundreds of Instagram accounts just like Jemma and Makenzie’s. Many often take memes from each other, but Jemma explains there is no competition. In fact, she says, the network is incredibly supportive. “I spoke to one lady regularly about her situation and I remember counting down to her boyfriend’s release date with her,” she says. Jemma and Makenzie also use their accounts to help lonely prisoners find pen pals.

Instagram allows prison wives to find likeminded people, free from judgement. Yet the accounts can also be incredibly informative to outsiders. By using the “When…” format, memes provide a detailed insight into the lives of prison wives. “When you’re kissing baby towards the beginning/end of the visit and the CO yells ‘enough’,” reads one. “When you check your phone and see… not only did you miss 1 call, you missed two,” is the caption on an image of a crying child.

 

A post shared by doing time too (@doingtimetoo) on

“Nobody understands this long distance, no physical intimacy, and then the added stresses of dealing with prison politics, corrupt guards, and the worry of riots, lock downs, and retaliation like women who are living through the same thing,” says Makenzie. Yet thanks to these Instagram accounts, outsiders do have an opportunity to understand.

For prison wives, memes are an easy and fast way to talk about a topic that many deem taboo. The fact that Jemma and Makenzie wished to communicate with me over email, and the fact many more prison wives didn’t want to speak to me at all, shows how difficult it can be to talk about these issues. For many, memes are just a bit of fun. For prison wives, they can be a lifeline.

 

A post shared by doing time too (@doingtimetoo) on

 “None of us enjoy prison visits or being treated like we are criminals ourselves. We don't enjoy waiting for phone calls that never arrive or having to deal with situations all on our own but if we can laugh about it, that’s something,” explains Jemma.

“Memes allow us all to laugh at the situations we are in, rather than cry.”

Amelia Tait is a technology and digital culture writer at the New Statesman.

This article first appeared in the 10 November 2008 issue of the New Statesman, Change has come