White Lies about Bretton Woods                 

A Brief Review of Ben Steil’s The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of the New World Order (Princeton University Press, 2013) 

Writers tackling biographies of spies are forever searching for that illusive “smoking gun” document — that crinkled paper, buried in some dusty archive, that proves beyond any doubt that the author's research subject was indeed a spy.  Occasionally, such discoveries actually have earthshaking impact and change the way that scholars view the past, but the discovery of eureka documents are few and far between. 

More often than not, an author who purports to have discovered an “ahh-ha” document later learns that their discovery is nothing remarkable; that the doc-ument they asserted was so profound and illumi-nating is actually old hat and has little, if anything, to contribute to the advancement of scholarly knowl-edge.  Such is the case of the front and center document highlighted by Ben Steil in his new book, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of the New World Order (Princeton University Press, 2013).

Steil, a senior fellow and director of International Economics at the Council of Foreign Relations, may be a fine economist, but he is no historian of espionage.  Drawing on the standard secondary sources and a smattering of archival sources, he has done a plausible job rehashing the well-known story of the founding of the the International Monetary Fund and World Bank.  In doing so he pays particular attention to the role of the key players: famed British economist John Maynard Keynes and his American rival Harry Dexter White.  Steils’s narrative traces the origins of the Bretton Woods institutions and focuses on how this “little-known U.S. Treasury technocrat…an unrelenting nationalist” (at 5) manages to outmaneuver his witty and brilliant British counterpart in the founding of the post-war economic order.  In recounting this tale, Steil notes (as many others have previously done) that this outspoken senior aide to Treasury Secretary Henry Morgenthau was also a Soviet spy.

What purportedly makes Steil’s book new and remarkable, however, is that in the course of his research, the author claims to have discovered “the missing link” (at 39) that explains White’s motive for spying for the Soviets.  His purported discovery is an undated, unpublished, and handwritten essay that he (or a researcher) found in a large folder of White’s miscellaneous writings in his papers at Princeton University (Box 9, folder 18).  In this unfinished draft essay titled, “Political-Economic Int of Future” White unabashedly expresses his admiration of the Soviet-styled planned and controlled economy.  He postulates that that because of the “increased [governmental] control over industry….and restrictions of competition and free enterprise” in the post-war world, the Soviet economy will be in an ascendant position in future years.  White urges the American government to draw the Soviets closer to the West into a tight military alliance to deter German and Japanese aggression, and he then lauds the effectiveness of the Russian controlled economy.  In the last line of the essay White boldly and succinctly states his deeply felt belief: “Russia is the first instance of a socialist economy in action. And it works!”  In a promotional book piece placed in Foreign Affairs magazine, Steil asserts that this document presents a “clear motive” for White’s espionage activities on behalf of the Soviets. Poppycock!

The fact is this document is no “missing link,” and it reveals nothing new about White or his motivations to assist the Soviet underground.  White’s exuberance for the Soviet-styled planned economy was well known to his contemporaries, including Edward Bernstein, Raymond Mikesell, and scores of others who worked on White’s Treasury staff.  White’s views were equally well known to his contemporaries in the State and War departments and even to several in the White House.  And his passion for Soviet-styled economic planning comes as no revelation to his biographers either: David Ree’s pathbreaking biography of White—Harry Dexter White: A Study in Paradox—written back in the early 1970s brought to the attention of readers that White was so interested in centralized control of foreign exchanges and trade that as early as 1933 he expressed a desire to go to Moscow and study the technique of centralized planning at the Institute of Economic Investigation of Gosplan. (Rees, XX)  And in my own book Treasonable Doubt: The Harry Dexter White Spy Case (which documents White’s activities on behalf of the Soviet underground, with special emphasis on allegations of policy subversion), I point out in no uncertain terms that White’s writings and activities demonstrated that he and his wife were enamoured with all things Soviet; White was a dedicated economic internationalist who viewed Soviet-American cooperation in the postwar era as the correct, indeed the only path toward peaceful coexistence in the post-war world. In this respect White is not a particularly remarkable New Dealer. (Craig, 276-77).

Another serious flaw in Steil’s work is that he fails to discriminate between fact and fiction when assessing the writings and often contradictory statements and sworn testimony of Whittaker Chambers. Steil also misreads the evidence relating to several controversies surrounding White’s alleged policy subversion activities.  He devotes the latter part of chapter 10 (324-329) to summarizing the evidence in the VENONA cables relating to Harry Dexter White while ignoring (or at least failing to explain) the contradictory evidence found in the Vassiliev Papers. Because of Steil’s failure to address the evidence in the Vassiliev notebooks, his book, in fact, adds little new information to the continuing discussion of White's espionage activities. 

Henry Dexter White before HUAC.

Bottom line: Based on the evidence available today, White probably was a Soviet spy, but even so, one must conclude that he was a pretty inept one, since the Bretton Woods institutions that he and Keynes designed gave nearly hegemonic power to the United States in the ensuing decades, which resulted in the creation of one of the most capitalistic institutions ever to flow from the minds of men.

I’ve been invited to participate in a forth-coming H-DIPLO ROUNDTABLE on Steil’s book, so look for more on this topic in the future.  From what I’ve seen (including an incredibly one-sided forum on White, hosted last April at the Heritage Foundation titled “A Soviet Spy at the Center of Bretton Woods”) and read in the reviews of Steils's book, the H-DIPLO forum will be the first balanced forum to seriously consider the relative value of Steil’s  work.

© R.Bruce Craig 2013