Three Days at Camp David: How a Secret Meeting in 1971 Transformed the Global Economy
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- Author：Jeffrey E. Garten
- ISBN：1398112054
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Summary
The former dean of the Yale School of Management and Undersecretary of Commerce in the Clinton administration chronicles the 1971 August meeting at Camp David， where President Nixon unilaterally ended the last vestiges of the gold standard—breaking the link between gold and the dollar—transforming the entire global monetary system。
Over the course of three days—from August 13 to 15， 1971—at a secret meeting at Camp David， President Richard Nixon and his brain trust changed the course of history。 Before that weekend， all national currencies were valued to the U。S。 dollar， which was convertible to gold at a fixed rate。 That system， established by the Bretton Woods Agreement at the end of World War II， was the foundation of the international monetary system that helped fuel the greatest expansion of middle-class prosperity the world has ever seen。
In making his decision， Nixon shocked world leaders， bankers， investors， traders and everyone involved in global finance。 Jeffrey E。 Garten argues that many of the roots of America’s dramatic retrenchment in world affairs began with that momentous event that was an admission that America could no longer afford to uphold the global monetary system。 It opened the way for massive market instability and speculation that has plagued the world economy ever since， but at the same time it made possible the gigantic expansion of trade and investment across borders which created our modern era of once unimaginable progress。
Based on extensive historical research and interviews with several participants at Camp David， and informed by Garten’s own insights from positions in four presidential administrations and on Wall Street， Three Days at Camp David chronicles this critical turning point， analyzes its impact on the American economy and world markets， and explores its ramifications now and for the future。
Over the course of three days—from August 13 to 15， 1971—at a secret meeting at Camp David， President Richard Nixon and his brain trust changed the course of history。 Before that weekend， all national currencies were valued to the U。S。 dollar， which was convertible to gold at a fixed rate。 That system， established by the Bretton Woods Agreement at the end of World War II， was the foundation of the international monetary system that helped fuel the greatest expansion of middle-class prosperity the world has ever seen。
In making his decision， Nixon shocked world leaders， bankers， investors， traders and everyone involved in global finance。 Jeffrey E。 Garten argues that many of the roots of America’s dramatic retrenchment in world affairs began with that momentous event that was an admission that America could no longer afford to uphold the global monetary system。 It opened the way for massive market instability and speculation that has plagued the world economy ever since， but at the same time it made possible the gigantic expansion of trade and investment across borders which created our modern era of once unimaginable progress。
Based on extensive historical research and interviews with several participants at Camp David， and informed by Garten’s own insights from positions in four presidential administrations and on Wall Street， Three Days at Camp David chronicles this critical turning point， analyzes its impact on the American economy and world markets， and explores its ramifications now and for the future。
Reviews
Frank Stein
，
Although the book doesn't exactly set off fireworks， it is a workmanlike recapitulation of one of the most momentous periods of American economic history， culminating when President Richard Nixon， on August 15， 1971， took the US off the gold standard， imposed a 90-day wage and price freeze， and added a 10% surcharge to all imports。 That late Sunday television announcement was proceeded by three hectic days at Camp David， where， as Garten shows， Nixon worked with his OMB chief George Schultz， his Although the book doesn't exactly set off fireworks， it is a workmanlike recapitulation of one of the most momentous periods of American economic history， culminating when President Richard Nixon， on August 15， 1971， took the US off the gold standard， imposed a 90-day wage and price freeze， and added a 10% surcharge to all imports。 That late Sunday television announcement was proceeded by three hectic days at Camp David， where， as Garten shows， Nixon worked with his OMB chief George Schultz， his Treasury Secretary John Connally， his Fed Chair Arthur Burns， and others to craft a plan， but mainly to craft a suitable announcement。The book shows that the plan had two， somewhat incongruous， drivers。 The first was Paul Volcker， who as Undersecretary of the Treasury had long worked to improve the US balance of payments problems and who worked with the assistant to the President for Economic Affairs， former Bell & Howell CEO Pete Peterson， to help save the gold standard; Volcker through fiscal discipline， Peterson through industrial policy。 Volcker's plans were grabbed， at one point physically out of his hands， by the charming and domineering Connally， the second main instigator of the announcement， who cared not a whit for international economic problems， but who had a masterly grasp of politics and negotiation。 It was his idea to combine the sudden closing of the gold window with the import surcharge （to scare trading partners into negotiation） and the wage and price freeze （to enlist business support）。 Nixon had long decried price freezes from his time as a price controller in World War II， but he loved bold plans and quickly adopted this one， despite the anger of the free market Schultz， who wanted floating currencies but hated price controls too。 Nixon also used the Camp David meeting to sell Burns， who loved price controls but who hated free floating currencies， which he， like Volcker， had struggled to save for most of his adult life。 In a word， most of Nixon's advisors got something， that is， except for his international advisors， Secretary of State William Rogers and National Security Advisor Henry Kissinger were almost completely excluded from the discussions。The irony of the plan was that none of it worked。 The US had hoped to temporarily devalue gold and then stay on new and fixed parities， but after the Smithsonian agreement of December 1971， no country made a real effort to do so， which they finally confirmed at the Jamaica agreement in 1976， which instituted free floating currencies once and for all。 The wage and price controls last far beyond the 90 days， and into 1974， but were a complete fiasco that failed to staunch inflation。 The import surcharge was removed without any change in foreign countries' trade barriers at the Smithsonian agreement。 Despite all the hullabaloo， then， the "Nixon Shock，" as it was known， failed， but it marked the end of the reign of gold in international economics， and the beginning of a system of floating exchange rates and pure fiat currencies。 That moment deserves such a dedicated journalistic account as is given here。 。。。more
Trevor Pownell
，
In "Three Days at Camp David"， Garten sets out to collect the body of evidence previously unaggregated to recount the events of one of the most important economic decisions in the last 100 years: Nixon disconnecting the US Dollar from the Gold standard - a decision which had global implications and was made over the course of a weekend。 He succeeds in multiple seemingly impossible tasks: bringing humanity and narrative to a historical event （i。e。 doesn't feel like a textbook）， articulating excee In "Three Days at Camp David"， Garten sets out to collect the body of evidence previously unaggregated to recount the events of one of the most important economic decisions in the last 100 years: Nixon disconnecting the US Dollar from the Gold standard - a decision which had global implications and was made over the course of a weekend。 He succeeds in multiple seemingly impossible tasks: bringing humanity and narrative to a historical event （i。e。 doesn't feel like a textbook）， articulating exceedingly complicated monetary and macroeconomic principles in a digestible way， and potentially singlehandedly formalizing a major historical event。 Phenomenal read， admittedly for a specific curiosity niche。 If you're deep in the woods on history， finance， and economic policy then this is worth your time。Jeffrey Garten is the real deal。 I've had the pleasure of taking multiple classes with Garten at Yale， and I can attest he is equally as credible， thoughtful， and captivating on paper as in person。 。。。more
Mark Peacock
，
Solid， in-depth recounting of events 50 years ago that completely reshaped international financial markets but today doesn't get much notice。 The book goes as deep into the economic issues that forced the ditching of Bretton Woods as it does the people involved in the decision。 It's gives a balanced view， giving equal time to all the differing opinions and straight treatment to the all the players （especially Nixon）。 The writing style is not the most fluid， but it gets the job done。 Solid， in-depth recounting of events 50 years ago that completely reshaped international financial markets but today doesn't get much notice。 The book goes as deep into the economic issues that forced the ditching of Bretton Woods as it does the people involved in the decision。 It's gives a balanced view， giving equal time to all the differing opinions and straight treatment to the all the players （especially Nixon）。 The writing style is not the most fluid， but it gets the job done。 。。。more
Jim Blessing
，
This was a mildly interesting book。
Jim Thomas
，
Well written， well written and well balanced。
Jim Milway
，
The was a really interesting book for an economist which I claim to be。 It might be interesting for the non-economists as it is as much about people as it is economic policy。 President Nixon knew the current global economic arrangements could not hold - the US had promised to pay $35/oz of gold since the Bretton Woods agreement in 1944。 The problem was that its gold reserves were getting low and a potential run in the dollar was not out of the question。 In addition the US dollar was valued more The was a really interesting book for an economist which I claim to be。 It might be interesting for the non-economists as it is as much about people as it is economic policy。 President Nixon knew the current global economic arrangements could not hold - the US had promised to pay $35/oz of gold since the Bretton Woods agreement in 1944。 The problem was that its gold reserves were getting low and a potential run in the dollar was not out of the question。 In addition the US dollar was valued more than it should have been against foreign currencies。 As a result its exports were deemed too expensive by foreigners and imports were a bargain to Americans。 This was causing balance of trade deficits which were politically toxic。 Unemployment was getting high and inflation was getting out of control。 The 1972 election wasn't far away。 What to do？Nixon's brain trust of his respected economists policy makers led by Treasury Secretary John Connally tried to forge a consensus。 Some wanted to get off the gold standard and let exchange rates float; others want to get off the gold standard but set new fixed exchange rates; others did not want the US to break its word by abandoning the gold standard。 Along the way many thought the US dollar needed to be devalued and some foreign currencies revalued。 On the inflation front， some argued for price and wage controls; to others these were anathema。 To fix the balance 0f trade an import tax was considered。 To push productivity an investment tax credit was on the table。For some， like Connally and Nixon， the political perspective was very important; for others like George Schultz and Arthur Burns， economic perspectives ruled - even though they didn't agree on the solutions。 The book documents the agreements and arguments and compromises that culminated in a secret meeting of the major advisors at Camp David in August 1971。 The changes were announced the Sunday evening of that weekend。 It also relates the anger created among the US's foreign allies who were kept in the dark about the changes and who had to work with the US and each other to changes in the world economic system。Many of the changes developed at Camp David didn't last。 But they started the process towards freer trade and floating exchange rates。A great read。 Not too technical。 。。。more
Dryan1066
，
Terrific read！ Great review of how those 3 days changed the world。
Jim
，
I don’t have much more than a cursory understanding of monetary policy， but Garten writes about it in a way that makes it understandable and even interesting。 But this is not really about monetary policy as much as it’s about how political ambition drives behavior and as a result starts a chain reaction that modifies the entire world economic structure。I really enjoy books like this that provide insight into the behind the scenes activities of major events。 This book shows that political ambitio I don’t have much more than a cursory understanding of monetary policy， but Garten writes about it in a way that makes it understandable and even interesting。 But this is not really about monetary policy as much as it’s about how political ambition drives behavior and as a result starts a chain reaction that modifies the entire world economic structure。I really enjoy books like this that provide insight into the behind the scenes activities of major events。 This book shows that political ambition can drive behavior even more so than political or policy-based beliefs。 。。。more
Luc
，
This is a fascinating account of the August 13-15 Camp David conference where it was decided to end the official convertibility of the dollar to gold at $35 per ounce。 The United States， under the Nixon administration， decided to force their main trading partners （Western Europe and Japan） to negotiate new monetary and trading arrangements that will end up with more flexibility in the floating of the main currencies against each other （U。S。 dollar， Japanese yen， Deutsche mark， French francs， and This is a fascinating account of the August 13-15 Camp David conference where it was decided to end the official convertibility of the dollar to gold at $35 per ounce。 The United States， under the Nixon administration， decided to force their main trading partners （Western Europe and Japan） to negotiate new monetary and trading arrangements that will end up with more flexibility in the floating of the main currencies against each other （U。S。 dollar， Japanese yen， Deutsche mark， French francs， and British pounds）。 After Camp David， fixed parities between currencies against the dollar/gold will be a thing of the past。 The international monetary system will evolve towards a managed floating system that is more flexible than the fixed parities agreed upon at Bretton Woods in 1944。Page 324 - "In essence， the August 13-15 weekend used what we would today call 'America First' tactics not to bring down the existing structures of international cooperation， but to rebalance power between them。" 。。。more
Phil
，
Jeffrey Garten writes a great book。 As a student of Economics I have always wondered why there was not more attention paid to the day Nixon took the US off the Gold Standard and deconstructed the Bretton Wood agreement。 3 days in August traces all the pressures on the dollar， the economy and trade starting much earlier than 1971 but inherited by the Nixon administration。 This book gives a thorough and yet just enough background to what should be famous day in history （unfortunately not many Amer Jeffrey Garten writes a great book。 As a student of Economics I have always wondered why there was not more attention paid to the day Nixon took the US off the Gold Standard and deconstructed the Bretton Wood agreement。 3 days in August traces all the pressures on the dollar， the economy and trade starting much earlier than 1971 but inherited by the Nixon administration。 This book gives a thorough and yet just enough background to what should be famous day in history （unfortunately not many Americans seem to understand how important this day was and how it has influenced everything since）。In this book he has a chapter called Cast where he introduces the reader to each of the figures in this history， their backgrounds， often their futures after 1971 and their points of view and role in the dynamics of the days leading up August 15 1971。Garten is an excellent writer， I intend to read another one of his book soon。 。。。more
I。 David
，
A Revealing Description of the Decision Making Process in the Nixon White HousePlease visit I。 David’s blog at https://www。goodreads。com/author/show。。。 In Three Days at Camp David: How a Secret Meeting in 1971 Transformed the Global Economy， by Jeffrey E。 Garten， tells the story of how President Richard Nixon and his top advisors developed a plan to abandon the post-World War II international monetary system （known as the Bretton Woods system） under which exchange rates were fixed and the United A Revealing Description of the Decision Making Process in the Nixon White HousePlease visit I。 David’s blog at https://www。goodreads。com/author/show。。。 In Three Days at Camp David: How a Secret Meeting in 1971 Transformed the Global Economy， by Jeffrey E。 Garten， tells the story of how President Richard Nixon and his top advisors developed a plan to abandon the post-World War II international monetary system （known as the Bretton Woods system） under which exchange rates were fixed and the United States guaranteed that it would exchange gold at a rate of $35 per ounce。 This book is a stark reminder that Nixon’s time in office consisted of much more than the Watergate scandal。 He was the President that opened relations with Communist China， he dealt with an economy in stagflation， and he wound down the War in Viet Nam。In 1971 the United States was experiencing both high inflation and high unemployment。 There were a number of reasons for these problems。 One of those reasons was the international trade imbalances caused， in part， by the United States’ commitments under the Bretton Woods system。 The policies adopted by Nixon and his team at the meeting at the Camp David were an effort to get out from under those commitments。 International monetary policy is a very complex subject。 While Garten tries to provide necessary background so that the reader can fully understand the issues described in his book， many readers may not be able to keep up。 However， this book is about far more than the policy decisions made at Camp David。 Readers who do not fully comprehend the technical concepts presented in this book should appreciate Garten’s detailed descriptions of Nixon’s decision making process and his interactions with his advisors。 Garten explains that Nixon fully understood that something had to be done to change the United States’ commitments under Bretton Woods。 However， he makes it perfectly clear that Nixon was primarily concerned that any such changes be explained in a way that did not impair his chances for re-election in 1972。 And while Nixon consulted his top advisors for their opinions he was quick to bully them into agreeing with his position if he thought his position would be more favorable with the public。Richard Nixon was an extremely complicated person who made highly important decisions at a critical time in our country’s history。 Three Days at Camp David successfully describes his thoughts and his decision making process。 It is a revealing and informative read and I give it 4 stars。 I recommend it both for those who have an interest in international monetary policy and for those that have an interest in Richard Nixon and his decision making process。 。。。more
Marcus Tay
，
After reading this book:- one can feel less bad things are not as well planned at work， even at this level of government， they want out with a bang， but they didn’t have a concrete plan what to do after that 。- it was literal lesson on the fact that money is really whatever we put faith that there is value in it 。 Once you see this point， you can kind of believe that there is a future in crypto currency。
Susan
，
I remembered when the news reported on the gold standard no longer being used but really didn't understand nor try to as to what it meant。 Garten's book helped me to put it all in perspective。 I remembered when the news reported on the gold standard no longer being used but really didn't understand nor try to as to what it meant。 Garten's book helped me to put it all in perspective。 。。。more
Gaby Chapman
，
A good illustration of how important it is to have the best and the brightest with the common good as their north star working for us at the top echelons of government。
Scott Williford
，
This book was more than I expected。 I thought that the ideas were well stated and matter of fact。 The insight and research was well done。 It gave a sense of personality and the energy behind these events。 I would recommend to anyone in the financial world or interested in U。S。 History-particularly during such a tumultuous Presidency。
Trey Shipp
，
Garten tells a great story。 Richard Nixon is focused on winning re-election in 1972。 John Connally， Nixon’s secretary of the treasury， is willing to upend the global economy to make it happen。 And technocrats like Under Secretary Paul Volcker， Fed chair Arthur Burns， and OMB director George Shultz are each developing options for the president while trying to influence what will replace the Bretton Woods framework established after World War II。 The drama slows in the book after the meeting， as i Garten tells a great story。 Richard Nixon is focused on winning re-election in 1972。 John Connally， Nixon’s secretary of the treasury， is willing to upend the global economy to make it happen。 And technocrats like Under Secretary Paul Volcker， Fed chair Arthur Burns， and OMB director George Shultz are each developing options for the president while trying to influence what will replace the Bretton Woods framework established after World War II。 The drama slows in the book after the meeting， as it describes the many meetings of global leaders as they develop a new monetary system。 That may be partly because we now know how it would end up: in two years the world would move to floating currencies。 But overall， the scene-by-scene details Garten gives on the three days at Camp David remind us how big decisions are made by people with human emotions and ambition。 。。。more
Patrick
，
Making monetary policy accessible and easy to read is not easy， but this author accomplished it。
William T
，