The End of Bretton Woods: Cognitive Maps and the Interests of Capital in Economic Policymaking

• In Event: 282 - Regular Session. Economic Sociology. Financial Globalization

Abstract

The United States’ unilateral decision to “close the gold window” in 1971 decisively ended the Bretton Woods era of international economics, and set the groundwork for the “neoliberal” institutional arrangement that succeeded it. Detailed historical analysis using extensive archival material traces the development of this critical policy decision, which is presented as a natural experiment through which to observe the interaction between ideational and material influences on economic policy outcomes. Analysis of this case demonstrates that the perceived interests of domestic capitalist firms constitute a set of goals that feature prominently in the cognitive map with which policymakers operate. These goals, in turn, are constructed through the lens of institutionalized normative and cognitive frameworks familiar to policymakers. Process-tracing shows that, over time, policymakers gained experience that presented a contradiction between familiar frameworks and their material goals. Facing a choice, the ultimate outcome represented a self-consciously radical departure from both the normative and logical concerns that had bounded the policy discussion, highlighting the key role of material interest in the policy process. These findings are used to present a useful framework that integrates neo-institutional analysis with a consideration of the state’s role in furthering domestic capitalist interests in the global economy.

Author

• Christoffer Zoeller, University of California-Irvine