The Council on Foreign Relations has a response to my critique of Benn Steil’s Bretton Woods book, in a post by Steil and Dinah Walker. The tenor of the response is conspicuous; Ed Conway notes I “seem to have touched a raw nerve.” Steil himself writes that my criticism is “like being savaged by a dead sheep.”
I’ll set that issue aside for now and just address the substantial areas of dispute here; that is, the gold standard and Pearl Harbor.
The Gold Standard
Of the gold standard, Steil and Walker write,
Rauchway takes specific issue with Benn’s claim that under the classical gold standard “when gold flowed in [the authorities] loosened credit, and when it flowed out they tightened credit,” arguing that this is “at odds with historical evidence.”
Oh?
And then they insert a graphic showing “that long interest rates did indeed tend to rise when gold was flowing out of the United States and fall when gold was flowing in”, adding, “Economics lesson finished.”
I would extend the economics lesson, or anyway the economic history lesson, further. The US was not the only gold standard country. And under the gold standard, violations of the so-called “rules of the game” were commonplace. See for example, Michael Bordo’s summary here:
Most other countries on the gold standard—notably France and Belgium—did not follow the rules of the game. They never allowed interest rates to rise enough to decrease the domestic price level. Also, many countries frequently broke the rules by “sterilization”—shielding the domestic money supply from external disequilibrium by buying or selling domestic securities. If, for example, France’s central bank wished to prevent an inflow of gold from increasing the nation’s money supply, it would sell securities for gold, thus reducing the amount of gold circulating.
This is practically the first thing one learns when studying the gold standard. Keynes noticed in 1913 “how rare a thing in Europe a perfect and automatic gold standard is.” Subsequent research has verified his observation.
Pearl Harbor
Steil and Walker take issue with my discussion of White’s role with respect to Pearl Harbor.
The Battle of Bretton Woods, according to Rauchway, claims that “[Harry Dexter] White caused the attack on Pearl Harbor.”
Uh, no.
Here is what Steil says on page 55 of The Battle of Bretton Woods.
That White was the author of the key ultimatum demands is beyond dispute. That the Japanese government made the decision to move forward with the Pearl Harbor strike after receiving the ultimatum is also beyond dispute.
As I pointed out in both the TLS review and on CT, both of these statements are very much not beyond dispute, which is to say, both propositions are disputed by expert historians.
Do they add up to saying that White caused the attack on Pearl Harbor? It certainly sounds like it to me.
Finally Steil and Walker conclude by noting that I cite Haynes and Klehr’s work to dispute Steil’s use of the Schecters’ scholarship, and then say
Oh boy . . .
After reading Rauchway’s TLS review, Haynes and Klehr wrote the following to the journal’s editors, which was published on April 26:
We are flattered that Eric Rauchway mentioned our article in Intelligence and National Security (October 2011) in his review of Benn Steil’s The Battle of Bretton Woods. In that article we noted the use of what evidence indicated were faked documents in Gerald and Leona Schecter’s Sacred Secrets. (We assume the faked documents were foisted on the Schecters by unscrupulous Russian sources.) We are also flattered that Steil relies heavily on our work on White’s espionage. But, our account does not, as Rauchway suggests, undermine Steil’s story of White’s treachery or imply that he was bamboozled by fake documents. In fact, Steil cites the Schecters only once in his whole book.
Ouch.
I’ll wait to see whether this week’s TLS letter column has anything to say on this point.
{ 24 comments }
ari 04.29.13 at 6:34 pm
I think you should include in this post your letter to the TLS. It’s a good letter, and you’re noting going to be stealing the TLS’s thunder, I don’t think.
Vance Maverick 04.29.13 at 6:42 pm
I was going to comment that Eric’s last line was coy enough not to do more than suggest he had written. But Ari’s not coy.
Anderson 04.29.13 at 6:46 pm
Alas, can’t (won’t pay to) read the TLS review, but based on past experience of Prof. Rauchway, I think a B-movie line to the effect of “they don’t know who they’re messing with” is probably in order.
ari 04.29.13 at 6:55 pm
A link to the original review can be found in this post. And no, I’m not trying to drum up traffic at my crappy little blog. But I do think that if Steil and Walker are going to resort to being so obnoxious, Eric has a right at least to be heard.
With that said, the management should of course feel free to delete this comment if I’ve crossed any ethical or legal lines.
Anderson 04.29.13 at 6:59 pm
4: yes, he links in the OP too, but non-academic non-subscribers are not blessed with the privilege of reading the TLS online.
ari 04.29.13 at 7:03 pm
If you actually click my link, Anderson, there’s a pdf there. (Please read that in an earnest, rather than an obnoxious, voice, as that’s how it was written.)
Anderson 04.29.13 at 7:04 pm
6: Doh, was that there before? Because I truly did look. Sorry!
Eric 04.29.13 at 7:07 pm
Try clearing your cache. I’m pretty sure the original review is not paywalled.
ari 04.29.13 at 7:09 pm
No worries, Anderson. And Eric, I find the TLS’s paywall to be remarkably inconsistent: sometimes it’s there, sometimes it isn’t. My cache — how rude of you even to bring up such a thing! — doesn’t seem to be the key variable.
Anderson 04.29.13 at 7:14 pm
Okay, to me the telling part of the sad CFR attempt at blogging is that they *don’t* address *this* contention:
Gold transfixes Steil. In other writings he has described gold as “real wealth” and “the natural alternative to the dollar as a global currency” because it is “the world’s most enduring form of money”.
I.e., Steil is a goofball whose views on economic matters may be shelved next to the box of Ron Paul remainders. As the saying has it, “ouch.”
(Perhaps HDW was comparable to a biologist who favored Communist ideals but not to the extent of embracing Lysenkoism, because he was Communist but not crazy.)
Eric 04.29.13 at 7:28 pm
Absent some major documentary discovery, I think we’re always going to have trouble piecing together just what was in HD White’s head.
What I do think, though, is his own policy/theory wasn’t as important as perhaps we’ve thought. By 1934, when the FDR administration brought him in as a consultant, the dollar was already what it needed to be for Bretton Woods – i.e., pegged to gold subject to adjustment for domestic policy reasons, backed by a stabilization fund, and open to stabilization agreements once the domestic price level had settled. And HD White’s 1934 report said basically, hey, do what you’re doing.
Bloix 04.29.13 at 9:28 pm
“imply that he was bamboozled by fake documents”
I’m confused about the role of the documents that Haynes and Klehr adjudged to be fake. Are they documents that White himself relied on or documents that were later relied on by historians?
Eric 04.29.13 at 9:38 pm
Steil relies, for his account of White and Pearl Harbor, on some decades-after-the-fact recollections by Soviet officers, and on the scholarship of Jerrold and Leona Schecter. The Schecters, in 2002, published Sacred Secrets in which they presented the case that White helped cause Pearl Harbor. They deposited (some of, if not all of) the documents they relied on at the Hoover Institution Archives, to be closed for a decade. As soon as they were available, Haynes and Klehr looked at the documents and determined them (apparently, according to their article, pretty easily and by internal inconsistencies, not by forensics) to be fake. They published an article in 2011, where they also characterized the book as otherwise flawed, describing it as a lesson in how “sloppy citations, misplaced trust in documents provided by unidentified sources under unexplained circumstances, and egregious lapses in logic and judgment can lead to conclusions unsupported by evidence.”
Steil treats the book not as a discredited source, though, but as a scholarly work with which he might have an interpretive disagreement or two and, as I say, uses it to buttress his story about White and Pearl Harbor.
The thing is, the story about White and Pearl Harbor simply shouldn’t be in the book. It has the flimsiest of evidentiary bases.* I don’t know why Steil put it there.
*Compare, for example, the evidence that White worked for Chambers in the 1930s. Chambers attests this very soon after the fact (not decades later) and can produce a memorandum in White’s handwriting.
Kevin 04.30.13 at 1:34 am
“Ouch”? “Uh, no”?
Later on in their rebuttal, do Steil and Walker drop in a “you go, girl!” or maybe a “talk to the hand”?
At least their childish logic is matched by a childish writing style. “SUX IT HATERZ!”
Terence 04.30.13 at 4:23 am
He says “like being savaged by a dead sheep†as if that’s *not* something to be frightened by?
I’d run a million miles if a dead sheep were ever to shamble, zombie style, in my direction intent on savaging…
But then again I never thought the case for the gold standard was that strong anyhow.
Mitchell Freedman 04.30.13 at 12:33 pm
Is the Rauchway letter to the editor at the TLS online outside a subscriber’s wall?
Also, I find it amusing that Klehr and Haynes obscure the point Rauchway is making, i.e. that the evidence for HDW causing Pearl Harbor is flimsy (and frankly ridiculous), for their desire to ensure that everyone continues thinking HDW was a Soviet spy with no qualifiers or comparisons with others at the time.
The whole enterprise from Steil wants to make HDW the puppetmaster over Morgantheau, FDR, Hopkins and the Joint Chiefs of Staff, among others. He has more to fear than zombie sheep…:-)
Ken 05.01.13 at 2:37 am
But then again I never thought the case for the gold standard was that strong anyhow.
Certainly not now that we have bitcoin.
Palindrome 05.01.13 at 8:15 am
Are there any good biographies of HDW? I’m interested in reading more, but the subject seems to attract a lot of crackpots with axes to grind …
Mitchell Freedman 05.01.13 at 12:04 pm
Palindrome: Check out R. Bruce Craig’s bio. It’s on Amazon, B&N or Powells. It is judicious and well researched.
Mitchell Freedman 05.01.13 at 12:20 pm
And this Working Paper from the IMF itself is a solid article about HDW, who, when given the benefit of the doubt, makes clear this was a public policy dispute between internationalists who wanted the Soviets to join the IMF and World Bank (White was a leading exponent of this) and those who saw the Soviets purely in terms of being the next enemy (the Cold Warriors). As I said in the first thread from Eric, my view is that if we run through the activities of the Dulles Brothers, William Bullitt and even George Kennan, among others, with Nazis, Fascists and Japanese war lords in the 1930s and 1940s, and use the same nomenclature of fellow traveler, dupe, agent of influence, stooge, etc. and do not give them the benefit of genuine policy positions, we can make a case against these men for their conduct with the enemy.
Here is the link:
http://www.imf.org/external/pubs/ft/wp/2000/wp00149.pdf
Brad DeLong 05.02.13 at 2:53 pm
So is the TLS letter out?
Harold 05.03.13 at 4:40 pm
Here is an excerpt from Eric Rauchway’s brief TLS letter responding to John Earl Haynes and Harvey Klehr, which I did not quote in full because of copyright. :
I did not quote in full because of copyright.
Harold 05.03.13 at 4:40 pm
Oops, meant to delete last sentence.
Kyle 05.04.13 at 3:23 am
Steil wrote that “White was the author of the key ultimatum demands†in the Ten-Point Note to Japan. Are you denying this? Haynes and Klehr certainly don’t deny it.
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