So we have arrived at a point where our economies, the Chinese and the U.S. economies, are... entwined in thousands of different ways, how is that a bad thing or how is that a good thing? I know you answered that there on the steel question, but I'm not quite sure that the idea that democratic capitalism would engender some form of capitalism in China, and lo and behold it did, and lo and behold our market and their market, etc., Why did that not work? Didn't it

work? Well, if we compare the development of the institutional framework for globalization from the end of World War II up until the fall of the Berlin Wall, basically the Cold War period, what we find is rapid liberalization, rapid growth in trade and international investment, fundamentally driven by systemic compatibility.

That is, it was very easy to divide the world into two, what the Truman administration called the two worlds model, because we were never economically integrated with the Soviet Union.

So we never had the problem of disentangling ourselves.

We simply said our systems are incompatible.

That's unfortunate.

We hope it won't be that way in the future.

Walk us through that one, if you would.

Yeah.

Well, the United States, unfortunately, doesn't really have a fiscal policy.

It just has fiscal outcomes.

Right.

We spend money.

We raise money in the form of taxes.

And at the end of each year, we tabulate up how far short we fell in terms of raising the revenue we need to cover our spending.

Anyway, go ahead.

... that's the solution here, right? Fiscal policy?

Yeah.

Well, w- w- the United States unfortunately doesn't really have a fiscal policy.

It just has fiscal outcomes.

We, um, spend money.

We raise money in the form of taxes, and at the end of each year, we tabulate up how far short we fell in terms of raising the revenue we need to cover our spending.

And so we just mechanically issue debt, that is, um, uh, treasury bonds, to fund the growing federal debt.

Right

That's Ben Steel, author of The Battle of Bretton Woods.

White scripted the conference like a kabuki play.

It was really remarkable how he did this.

So it appeared on the surface, if you were walking around, to be a very intensive conference with lots of commissions and committees under commissions where there was a lot of debate and discussion, but behind the scenes, White and his own technicians were writing the script.

They'd turned this vague phrase, gold convertible currency, into the thing they really wanted, which was the dollar as the currency of choice, and they only revealed this wording to the delegates at the conference at the very last possible moment.

As they were being kicked out of the hotel at the very end, and Keynes later claimed that he hadn't had time to read the final act before he was kicked out.

So, you know, the, the British remarkably wound up signing on for something they had resisted fiercely for the two-year run-up to the conference.

So give me a sense of what Truman was thinking about in March and how that leads to the Marshall Plan.

So, um, February of nineteen forty-seven is really a critical month in world history.

Um, the British Empire is imploding.

Um, Britain is losing control of, uh, India, of Palestine, uh, of Burma, of Greece, uh, and they're rapidly going bankrupt.Um, and so in, in essence, in February of 1947, the British hand us the keys to the kingdom, um, and say that it's going to have to be our responsibility to maintain security in, for example, Greece and Turkey.

Um, Greece was in the midst of a, a brutal, um, uh, civil war.

Um, Yugoslavia in particular was, uh, backing the, uh, communist rebels in Greece.

So the State Department was forced to, to scramble very quickly and decide on the fly what the United States was going to do about this.

Tell me about it