The world economy, from belle époque to Bretton Woods, by Paulo Roberto de Almeida

This historical essay follows previous researches by the author related to Brazil’s international economic relations in historical perspective, of which a first volume was already published, dealing with Brazilian economic diplomacy during the 19th century, from 1808 up to 1889: Formação da Diplomacia Econômica no Brasil: as relações econômicas internacionais no Império; or The Making of Economic Diplomacy in Brazil: international economic relations during the Empire (2001, 2005).

This time the time span goes from the beginning of the Old Republic (1889) up to the conference of Bretton Woods, in 1944, from which an entirely new world economic order emerged, radically different from the previous one, which was not exactly an order, and was not geographically global, since the disruption of the former laissez-faire economy, based on gold standard, disappeared at the start of the Great War only to be tentatively redrafted during the inter-war period, and again disrupted by the 1929 crisis and the economic depression of the 1930s, and totally transformed both by the Second World War and the Bretton Woods arrangements. The new economic order, starting in 1945, will be the subject of a third volume, from Bretton Woods up to our days.

This essay deals with the relevant changes in the world economy, from the belle époque to Bretton Woods, emphasizing elements of continuity and its ruptures and discontinuities, or structural changes, during the inter-war period and as a result of the two global wars, in international trade, in world finance as well as in institutional aspects. Among the continuities, appears the resilience of a core group of advanced economies, which is able to draft and define the international policy agenda, and the importance of the industrial and technological capabilities to support any exercise of strategic and military projection by those big powers. Among the discontinuities is the failure of some emerging powers, namely Germany and Japan, in their challenging of this world order by means of an imperial-like power projection outside of the core group of market economies aiming to create a global interdependence based on democratic and liberal principles. Another emerging power during that period, the Soviet Union, was economically irrelevant and was not able to project its own power before the end of the World War II; but Czarist Russia was, before 1914, a promising force in international politics and a huge experiment in economic transformation, in terms of industrialization, foreign direct investments and international borrowing.

The essay draws from the already huge literature in economic history dealing with that period, including some contemporary analysts and observers, such as the economist Ludwig von Mises and the novelist Stefan Zweig, but rely on interpretive modern works by some well known economic historians like Rondo Cameron, Herman Van Der Wee, and others. It constitutes a synthesis of this kind of research and offers a broad framework for the more detailed analysis which is being conducted by the author in connection with each one of the main economic leverages of the world economy during that period: international trade, global finance, immigration, early regionalism and first essays at economic multilateralism (within the League of Nations, for instance).

World economy, during the half century going from the last decade of the 19th century to mid 20th century, is a confuse patchwork of national economies, and their respective colonial territories and semi-colonial dependent exporting economies, linked diffusedly through voluntary or compulsory strings, made of trade in commodities (from the periphery) and manufactured goods (from the industrial core), services, capital, work-force (before the immigration restraining of the 1920s and 1930s) and technology. A main feature of this world economy was its asymmetries and the growing disparities in income and industrial capabilities between the advanced industrial countries and the dependent periphery. Economic divergence is the main analytical phenomenon at that period, but at the geopolitical level elements of continuity are also relevant.

After the demise of the liberal order of the late 19th century and the beginning of the 20th, world economy enters in the turbulent period of high inflation, external debts insolvencies, currency devaluations and capital controls, and a high tide of intervention and protectionism of the 1920s and 30s, just to converge – with the exception of the soviet socialist economy – at Bretton Woods to a new order, characterized by economic multilateralism and market principles, which are a formidable progress compared to the era of the unequal treaties of the 19th century.


Paulo Roberto de Almeida, Ministério das Relações Exteriores, Brasília, DF, Brasil (

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ALMEIDA, Paulo Roberto de. Transformações da ordem econômica mundial, do final do século 19 à Segunda Guerra Mundial. Rev. bras. polít. int. [online]. 2015, vol.58, n.1 [cited  2015-10-02], pp. 127-141 . Available from: <>. ISSN 1983-3121.

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