I am well aware of the shortcomings of the then Bretton Woods System, but there was still no excuse for not updating its workability at that time. Many people, myself included, are offering much updated Keynesian systems, or actually the full Keynes' system that never was instituted in 1946, yet updated to today's financial realities. These systems are listed a couple posts below. Please, let us all consider Keynes' seminal work to solve the world's massive problems.
It’s economics versus politics. The free-trade theory of globalization embraces the cross-border transfer of jobs. Political systems do not — especially as election cycles heat up. That heat is now being turned up in Washington, as incumbent politicians in both parties come face to face with the angst of America’s jobless recovery. Jobs could well be the “hot button” in Campaign 2004. And offshoring — the transfer of high-wage US jobs to the low-wage developing world — could quite conceivably be the most contentious aspect of this debate and one of greatest risk factors for ever-complacent financial markets.
Like most economists, I worship at the high altar of free-market competition and the trade liberalization that drives it. But that doesn’t mean putting a positive spin on the painful dislocations that trade competition can spawn. Unfortunately, that was the mistake made recently by the Bush administration’s chief economist, Gregory Mankiw, in his dismissive assessment of white-collar job losses due to offshoring. Like most economic theories, the optimal outcomes cited by Mankiw pertain to that ever-elusive long run. Over that timeframe, the basic conclusion of the theory of free trade is inarguable: International competition lowers costs and prices, thereby boosting the purchasing power and standard of living of consumers around the world. The practical problem in this case — as it is with most theories — is the concept of the long run. Sure, over a long enough timeframe, things will eventually work out according to this theoretical script. But the key word here is “eventually” — the stumbling block in presuming that academic theories map neatly into the shorter time horizons of financial markets and politics. Lord Keynes put it best in his 1923 Tract on Monetary Reform, cautioning, “In the long run, we’re all dead.” ...Link