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New Hampshire's historic Mount Washington Hotel in Bretton Woods, N.H. (Jim Cole/AP)
New Hampshire's historic Mount Washington Hotel in Bretton Woods, N.H. (Jim Cole/AP)

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Big ideas, but are politicians listening? Add to ...

As the crow flies, New Hampshire's Bretton Woods isn't so far from Canada.

But Bretton Woods is more than a resort in the White Mountains. As the sight of the greatest achievement in the history of international economic organization, Bretton Woods is also a metaphor for understanding that national welfare is tied to global co-operation.

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Measured this way, the distance between Canada and Bretton Woods is far greater than the six-hour car ride from Ottawa.

In July, 1944, more than 700 delegates from 44 countries spent three weeks in negotiations at the palatial Mount Washington Hotel, which sits in the shadow of the highest peak in the northeastern United States. The talks resulted in an international monetary system centred by the price of gold, the International Monetary Fund and the World Bank.

Many smart people think it's time for a second Bretton Woods conference. The politicians aren't among them. At the end of the week, finance ministers from the Group of 20 will meet in Washington under the chairmanship of French Finance Minister Christine Lagarde. They will attempt to agree to "indicative guidelines" that would show if a member's economic policies risked hurting the global economy. This will do nothing to calm the volatility in foreign-exchange markets. G20 members won't consent to anything that would actually penalize them for drifting outside whatever parameters they agree to.

On the weekend, some of the world's top economists gathered in Bretton Woods at a conference organized by the Institute for New Economic Thinking, which is backed by billionaire financier George Soros, and the Centre for International Governance Innovation, the Waterloo, Ont.-based think tank created by another billionaire, Research In Motion's co-leader Jim Balsillie.

The choice of location shows Mr. Balsillie and Mr. Soros - probably the only two participants who took advantage of the Bretton Woods airstrip - believe the world's policy makers could use some illuminating thinking beyond merely parochial concerns. Their decision to effectively rent the exclusive mountain resort had the desired effect on many of the participants. "This room and this location is an inspiration," said Harold James, a professor of history and international affairs at Princeton University, during the conference's initial session on the emerging world economic and political order.

Unfortunately, there were few policy makers in attendance to soak up the ambience of the ballroom at the Mount Washington Hotel, where the delegates at the original Bretton Woods conference assembled in a horseshoe pattern, or to imagine what it would be like to reprise the roles of Britain's John Maynard Keynes and the U.S.'s Harry Dexter White, the two finance officials credited with setting out the bulk of the 1944 agreement.

Adair Turner, chairman of Britain's financial services regulator, stirred participants with a rousing speech that challenged the economic establishment's attachment to per capita growth of gross domestic product as the chief aim of policy. Zhu Min, a special adviser to IMF managing director Dominique Strauss-Kahn attended.

Bank of Canada Governor Mark Carney's biography was published in the conference agenda, but Mr. Carney pulled out. Former British prime minister Gordon Brown; Lawrence Summers, the former head of U.S. President Barack Obama's National Economic Council; and former Chilean finance minister Andrés Velasco all made remarks over the weekend.

Most of the people who made their way to Bretton Woods remain deeply concerned about the global economy. Mr. Soros told a group of reporters on Friday that he is more "baffled" over the state of things than he was at the height of the financial crisis in 2008.

Mr. Summers, who is now president emeritus at Harvard University, is worried about the embrace of austerity fiscal programs with global economic growth still fragile. "I find the idea of an expansionary fiscal contraction to be as oxymoronic as it sounds," he said

Underlying their anxiety is a sense that politicians, who united to turn back the Great Recession, are reverting to form as champions of national self-interest rather than making the link between local well being and the global good. "Politics have returned to being national, but the problems are still global," said Mr. Brown.

Prof. James compared the contemporary attitude about international co-operation with the summer of 1944, when the tide was turning in favour of the Allies in the Second World War. Today, "we have neither the optimism nor the urgency" that existed almost 67 years ago, he said.

Canada is no exception. Conservative Leader Stephen Harper, who promoted "enlightened self-interest" as co-chair of the G20 last year, and Liberal Leader Michael Ignatieff, who taught at universities in the U.S. and Britain, are doing little to make the global economy part of their campaigns, despite a demonstrated interest by both men in international affairs.

The biggest risk facing the Canadian economy is not the size of the deficit, which is what voters would reasonably gather from the tenor of the first two weeks of the campaign. In fact, the biggest risk facing the Canadian economy is the global economy.

"Their role is to lead the markets. That is what makes them statesmen," Mr. Soros said of politicians. "If they lead well, markets will follow."

Follow on Twitter: @CarmichaelKevin

 

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