The Emergence of a Global Economic Order: From Scientific Internationalism to Infrastructural Globalism PDF

CHAPTER 6 The Emergence of a Global Economic Order: From Scientific Internationalism to Infrastructural Globalism Anat Leibler Introduction In 1952, 4 years after its establishment, Israel experienced a...

CHAPTER 6 The Emergence of a Global Economic Order: From Scientific Internationalism to Infrastructural Globalism Anat Leibler Introduction In 1952, 4 years after its establishment, Israel experienced a monetary crisis, followed by an economic recovery effort that included the develop- ment of a local economic system of statistical measurements based on the United Nations (UN) System of National Accounts (SNA). Adopting the system required a complete transition away from the input and output tables commonly used during the pre-state period by its governmental institution, the Jewish Agency, and its economists. Israel’s adoption of the UN system was partly driven by a push on the part of the U.S. administration to make the Israeli economy open to international monitoring. In return, Israel would receive a guarantee of financial support from the United States. Israel’s first Prime Minister David Ben-Gurion rejected these demands insisting on the country’s autonomy to manage its own affairs.1 The U.S. representative, Raymond Mikesell, who visited the country at that time, countered: 1 Israel State Archives. Gimel 5509/2948 August 7, 1952, 3. A. Leibler (*) Bar Ilan University, Ramat Gan, Israel © The Author(s) 2019 121 M. J. Prutsch (ed.), Science, Numbers and Politics, https://doi.org/10.1007/978-3-030-11208-0_6 122 A. LEIBLER The state of Knowledge of the foreign exchange commitments of the Israel economy, which prevails in the Israeli Treasury, does not meet the lowest standard tolerable for a people that can read and write and needs to make its way internationally, without abundant foreign exchange reserves, in the strenuous condition of the contemporary world.2 We can learn from this citation that the American position concerning the necessity to standardize Israel’s economy was neither advice nor a voluntary recommendation. Rather, it was derogatory, a prerequisite condition for financial help, and a practice of governance for creating the infrastructural globalism of international economic standardization. This condition was taken seriously by the Israeli government and a team of local economists and statisticians from the Central Bureau of Statistics (CBS), with experts who were brought from the United States, worked together toward the adaptation of the local economy to the UN system of a National Income Account (NIA). The Israeli case is only one example of a global process that hap- pened in other developing countries during the same period of early post–World War II, specifically in the field of NIA measurements. Israel’s adoption of the NIA occurred in the foreground of a general, worldwide trend toward the international standardization and globalization of eco- nomic measurements and accounting schemes. Many developing coun- tries during the same period, adopted these indices which became the standard for measuring a new state’s productivity and economic activity. According to Kendrick, the number of countries reporting estimates for national income spread rapidly, increasing dramatically from 39 in 1945 to 93 in 1955.3 Following an expansion of the SNA in 1968, the total number exceeded 139 by 1969. Indeed, the early postwar era with the Marshall Plan and the establishment of international institutions, was the beginning of a new economic order. The rapid change in the way states define and measure their economy is considered as the greatest standardization project of the twentieth cen- tury. The neo-institutionalism paradigm provides a convincing explanation for such global processes by arguing that the flow of knowledge between countries is one of the reasons for the creation of a world cultural polity 2 Mikesell (1994b). 3 Kendrick (1970, 284–315).  6 THE EMERGENCE OF A GLOBAL ECONOMIC ORDER … 123 and the expansion of globalization.4 DiMaggio and Powell offer a more forcible mechanism, “coercive isomorphism”, which explains the standard- ization of organizational practices and structures with the compliance of organizations to requirements posed by state regulations, or, in this case, by international organizations.5 Coercive isomorphism happens where there is inequality and dependency in resources between organizations or states.6 Moreover, argues McNeely, complying with UN regulations does not only create world cultural polity; these organizations also participate in the constitution of the modern nation-state by determining statisti- cal standards and guidelines for progress and development.7 This process is not examined as beneficial to the state but as a prescriptive force, as a regime. Statistics of national accounts, maintains McNeely, “… are them- selves normative prescriptions for state structure and practice … [They] represent regimes, bound in discursive practice and disciplinary ‘order- ing techniques’ for observing, documenting, classifying, comparing, and assessing development and progress;”8 they are based on images of “… what the state should know (and, as presented, what the state ‘needs’ to know) in the area of national account”.9 McNeely’s analysis is compelling, especially her notion of international standards as a prescription for state- hood. International organizations have had the power to shape the way new states measure their own economy during the post–World War II era. We may of course question if national accounts provide an adequate or consistent picture of a nation-state’s economic activity (and this may vary considerably from country to country for a variety of reasons) or if national accounts still play a significant role in macro-economic management in the neo-liberal era, but their establishment and dissemination was undoubtedly one of the major standardization projects of the post–World War II era. While this is clear, efforts to standardize economies were already common at the turn of the ninetieth century and during the interwar period. The order of “old” imperialism, at the turn of the ninetieth cen- tury, has taken on a new guise in the transnational space, integrating new 4 Boli and Thomas (1997, 171–190), Boli (1987), and Meyer (1987). 5 DiMaggio and Powell (1983, 147–160). 6 Babb (1998). 7 McNeely (1995). 8 McNeely, 74 9 Ibid., 79. 124 A. LEIBLER international scientific standards into the old world. Striving to create international standardization was part of the additional processes pro- moted by the young League of Nations after World War I, such as the unification of scientific indices and a series of conferences of physicians, scientists, statisticians, meteorologists, engineers, and architects. The conferences were intended to provide science’s contribution to increased cooperation between countries and to prevent polarization which even- tually had led to war. During that period, we see a clear picture of numerous activities of standardization toward improving scientific coor- dination and generating scientific internationalism. The objective of this chapter is to trace the chronological process of establishing a global infrastructure of economic order, beginning with the foundation of scientific organizations at the turn of the cen- tury and the years following World War I, through the Bretton Woods Conference of 1944 to the construction of economic statistics commis- sions at the League of Nations, and later, the UN. More specifically, the chapter examines the transition from local voluntary initiatives of scien- tific societies to better the world with science and to improve coordi- nation between countries, to the establishment of coercive international institutions that reinforced global economic order during the postwar era. The chronology of global development is bound by two main pro- cesses of standardization, separated by time and location, and consti- tuted by different principles for international governance. The first trend is titled “scientific internationalism”, while the second is “infrastructural globalism”.10 It should be noted that use of the term “infrastructure” refers to the immediate material and beyond. It is the construction of a system of standards and classifications that are: (1) embedded into social and economic arrangements and technologies, like the UN SNA; (2) transparent to use—it is impossible to do anything without it, but, at the same time, its presence, when it is working well, is invisible; and (3) have a reach and scope beyond a single event or one-site practice.11 Miller defines scientific internationalism in the context of the stand- ardization and international cooperation of meteorologists, mainly in the early postwar period in which existed a worldwide network of 10 Miller (2001, 167–218), Miller and Edwards (2001, 1–29), Miller (2004, 81–102), and Edwards (2006, 229–250). 11 Bowker and Star (2000) and Star and Ruhleder (1996, 111–134).  6 THE EMERGENCE OF A GLOBAL ECONOMIC ORDER … 125 coordinated research stations operating with standardized practices pro- viding real-time information on the state of the atmosphere.12 This was part of the emergence of a new global order, stabilizing international governance based on the linkage of science, technology, and politics “in a liberal vision of postwar order”.13 The type of scientific internationalism Miller describes in relation to the World Meteorological Organization (WMO) is slightly different from the type of organization I wish to refer to in this chapter. Miller’s account is on U.S. foreign policy in the postwar period, a period in which a new institutional setting emerged in order to reconstruct world order. The United States was a strong player in leading and regulating the international arena. If we examine the interwar period and earlier, countries were in a process of defining their autonomy through institutional and economic activity. Some of them were still part of the British Empire. As in the case of International Meteorological Organization (IMO), scientific internationalism appears as a voluntary mode of managing relations in the late imperial/colonial era.14 Members of these scientific societies were bypassing their govern- ments or, in some cases, working from within to improve their govern- ments’ international position. They saw themselves primarily as scientists, and their meetings as apolitical spaces for scientific discussion. The magnitude of this phenomenon was not marginal. Prévost and Beaud count hundreds of scientific international encounters, such as con- ferences, congresses and meetings, held in many countries “… seeking to harmonize the use of telegraph, weights and measures, or postal ser- vices, the holding of conferences on the meridian, on chronometry, … all reflect a burgeoning production of international norms …”.15 A list of international congresses from 1843 to 1910, counts no less than 2000 international conferences; the number of international organizations that year (1910) amounted to more than 250.16 12 Miller (2001). 13 Miller classifies three modes of interaction between scientific and political cooperation as was articulated in the cooperation of American policymakers and organizations, like the WMO: (1) intergovernmental harmonization; (2) technical assistance; and (3) interna- tional coordination of scientific research. These modes were integrated into the activities of international institutions. 14 Edwards (2006). 15 Prévost and Beaud (2012, 111). 16 See also Gerould and Gerould (1938). 126 A. LEIBLER Based on this picture, I distinguish between the earlier institutional setting of numerous societies and associations attempting to coordinate between governments and organizations in their scientific and tech- nological activities, and the creation of world institutions reinforcing governance through regulations and infrastructures of standards and measures. Under these circumstances, infrastructural globalism is seen as an external method, imposed on processes of nation-state building more adapted to the later period, where globalization is more or less synon- ymous with the imposition of a new global order under U.S. hegem- ony. In chronological terms, I use scientific internationalism to refer to a series of initiatives, most of which occurred in the context of the interwar years, while infrastructural globalism is basically concerned with projects that have been put forward after the Second World War, under the aus- pices of the UN. To illustrate the argument, the chapter starts with an evocation of Israel’s adoption of the UN SNA and, after a short review of the liter- ature, is divided into two sections. The first section is concerned with scientific internationalism and contains a significant development on Canada, especially on the 1920 Imperial Conference of British Statisticians presented as a paradigm of scientific internationalism. The second section, dealing with infrastructural globalism, describes the con- struction of the SNA and its dissemination as a direct consequence of the Bretton Woods Conference and the economic world order it established. A significant dimension of my argument deals with the interaction between “periphery” and “center” in the context of the interwar period. First, in general, statistical activities during the nineteenth century were widespread in the colonies no less than in the home countries. For exam- ple, Hacking’s opening argument in his book Taming of Chance, states that the demographic statistics of the nineteenth century were devel- oped for the most part in the imperialist context of colonies but this has been insufficiently studied.17 Except for a few studies, the history of sta- tistics as a scientific discipline does not give a sufficient account of the colonial context in which important centers of statistical data produc- tion were established.18 In this sense, the history of statistics errs in its 17 Hacking (1990, 16–17). 18 For an example of studies that take a different perspective on the history of science in general and statistics in particular see Curtis (2002), Harrison (2005, 56–63), Prakash (1999), and Schaffer (1999, 457).  6 THE EMERGENCE OF A GLOBAL ECONOMIC ORDER … 127 Eurocentrism, leaving untreated the assumption that modern scientific knowledge was created in Western Europe and then gradually filtered outward to the empire’s periphery. The case of Canada strengthens this argument. In the transition from colonies of an empire to independent nation-states, the British dominions, like Canada, represent a point in time for examining the possibilities for new relations between center and periphery by reinforc- ing international scientific standardization. The international confer- ences were the high point of the periphery becoming more powerful, using new scientific and professional tools to provide an alternative form of governance for a political center. This problematizes the hier- archical distinction between “center” and “periphery”, especially in the “periphery’s” role in the production of knowledge. Colonies of white overseas settlers, such as those in Australia, New Zealand, Canada, and Palestine, had high political agency and were part of processes throughout the British Empire which balanced the power of England in controlling its empire. Thus, viewing the colonial encounter through nonlinear lanes will enable us to identify the conditions required for the development of new fields of knowledge as a result of the colo- nial encounter, with more attention to historical specificities in all their complexities. Connecting Historical Ties My case study centers on Canada and its role in leading the standard- ization of statistics around the British Empire. A pivotal moment in this initiative was a conference held in 1920 in London, titled “First Conference of Government Officers Engaged in Dealing with Statistics in the British Empire”. The conference dealt with the establishment of imperial statistical bureaus in the British colonies.19 The purpose of the meeting was to develop standards for statistical economic indices for all the British colonies, as part of founding a centralized statistical institu- tion named the “central thinking office”.20 Headed by a few statisticians from Canada, New Zealand, and Australia, statisticians and economists 19 Worton (1998, 169–171). 20 Beaud and Prévost (2005, 369–391). 128 A. LEIBLER throughout the British Empire convened for approximately one month. The gathering included representatives of 23 departments of the United Kingdom, the chiefs of the central statistical department self-governing Dominions, namely, Canada, Australia, South Africa the director of sta- tistics of India, and a representative from each group of Crown colonies and protectorates, that is, the Eastern Colonies, East and West African Colonies, and the West Indian Colonies. In addition to the 24 confer- ence sessions delegates held a meeting with the general secretary of the League of Nations to discuss the relations of the contemplated Empire organization of statistics as part of the plans for preparing international statistics.21 The statistical conference was part of a wider historical development in which scientific societies in Europe, at the turn of the ninetieth cen- tury, established independent organizations for the advancement of standardization in scientific practices. As was already described at the beginning of the chapter, their goal was to create better science as well as to improve scientific cooperation and exchange through interna- tional standardization.22 Such organizations included the International Meteorological Organization (IMO), the International Organization for Standardization (ISO) in its incarnations prior to World War II, and the International Statistical Institution (ISI). Some of these organiza- tions operated as international bodies that worked beyond national bor- ders and saw their roles as collectives of scientists that wished to pursue “scientific internationalism” by surpassing the particularistic powers and interest groups of different countries. Others, as in the Canadian case, which will be described shortly, saw themselves as representatives of their governments and viewed the initiative for standardization as an endeavor that would advance the ability of their country to exchange knowledge with other countries and therefore advance their own national inter- ests. The standards that these organizations created were considered to be recommendations, and countries had the freedom to apply or ignore them. The next section will shed light on the context in which Canada became chief actor in centralizing and standardizing international official statistics. 21 Coats (1920, 226–228). 22 Edwards (2006, 229–250) and Miller (2001, 167–218).  6 THE EMERGENCE OF A GLOBAL ECONOMIC ORDER … 129 The Endeavor to Create “A Central Thinking Office” Following several years of general dissatisfaction with the state of national statistics, unifying Canadian statistics under one federal roof was finally achieved in 1918, with the establishment of a centralized bureau, headed by Dr. Robert Hamilton Coats.23 Coats was concerned about political pressures on the production of national statistics and directed his steps to structure a bureau that would be protected from any partisan pressures. Moreover, the fact that Canada was a young confederation of different provinces required a federal bureau that would prevent the provinces from developing their own statistical sys- tem and subordinate them to a federal agency.24 Thus, Coats strove to give the bureau an independent status through legislation, to have a complete separation from governmental offices, and to be account- able only to the Minister of the Crown.25 The bureau was able to monopolize the aggregation, production, and publication of national statistics.26 Claims for a centralized organization were based on the idea of constituting a single and harmonious statistical system that would cre- ate a feeling of kinship on the one hand and reliable numbers on the other.27 With the end of World War I and the destruction it left behind, Coats saw a greater need than at any previous time for a reorganization of the statistical system.28 He quoted Canada’s Minister of Trade and Commerce asserting that World War I was: …[T]he most destructive and wasteful war of history, the world will plunge into economic and trade contest … when a competition will be keener and stronger than ever, and when science and organization will play a leading part in any successful role. For this struggle Canada must gird her loins and make ready her full equipment of preparedness.29 23 Urquhart (1987, 414–430). 24 Goldberg (1955). 25 Worton (2000, 91–92). 26 Beaud and Prévost (1993, 1998). 27 CSA: RG 31 Acc. 89–90/133, box 8, file 834, pt 2, 3, 4, 1915. 28 A national System of Statistics for Canada. RG 31 Accession 89–90/133, box 8, file 834, pt 2, 3, 4, August 25, 1916; Goldberg (1955). 29 Ibid. 130 A. LEIBLER Contest and competition rather than cooperation was Coat’s concern. Canadian statisticians perceived standardization of economic statis- tics “indispensable to the national progress of Canada”.30 The lack of a standardized infrastructure of official statistics in Canada, however, lim- ited their ability to communicate with other statisticians in other coun- tries and to make any international comparisons. The solution was the establishment of the central statistical bureau, “central thinking office”, which would gain similar success as the Australian and German central- ized systems. What exactly is a “central thinking office” and who conceived the idea? Sir Arthur Lyon Bowley, a British political scientist of the late ninetieth century published extensively in British journals about mak- ing statistics public, official, and centralized. In his famous article on the improvement of official statistics, he focused his attention on how to make statistics comparable between places, countries, and different points in time. In his publications, he made practical suggestions for improvements within each country. The first aspect he discussed was the accuracy of statistics made possible by compulsory powers of c­ ollecting statistics: “If the method of samples were employed with compulsory powers, we could … by a rapid and abridged investigation get a great deal of unbiased information.”31 Bowley was concerned about s­cientific autonomy in collecting and preparing statistical data. In his recom- mendations about “compulsory powers” he intended to ensure that all residents were obliged to respond to statistical data collection. What is interesting here is that in his eyes, as well as Coats’, this would yield higher objectivity and unbiased results. The level of expertise of statis- ticians in each country was also part of this autonomy—he pointed to the need for professionalizing people who deal with statistics in order to achieve maximum accuracy as well as to impede politicians and civil servants from being involved in the preparation of official statistics. According to Bowley, British Parliament members interrupted the work of statisticians which made statistics vulnerable to political pressure and thus produced and introduced biased information. Bowley’s recommen- dations were taken well in Canada and Coats main task was to establish a central statistical bureau. 30 Bowley (1908, 459–495). 31 Bowley, 477.  6 THE EMERGENCE OF A GLOBAL ECONOMIC ORDER … 131 Claims for centralization reflected the ways in which Canadian statis- ticians positioned statistics in relation to the state. Coats divided statis- tics into two types, that is, static and dynamic. Static statistics referred to the state’s need for information based on a snapshot of one moment that would be carried by “a general stock sheet” of the condition of society, in cross section, at a particular moment. At the same time, the state needed dynamic statistics to represent a continuous movement of different social and economic phenomena. However, these two types of records needed to be coordinated as a unit. A centralized bureau could achieve this goal. What was interesting about Coats’ analysis was his organist metaphor of the state (and not society): In fine – a true national statistics is not a mere aggregation of the statistics of different activities, but involves also a purview of the totality of phe- nomena, the state being, as already remarked, an entity … Like the human body, the state requires a series of special investigations covering particular functions and organs, but these must grow out of and relate to a general science which covers the organism as a whole. A synthesis of this descrip- tion must rest on a wide and sound foundation of general intelligence.32 According to Coats, a central bureau of statistics (CBS) “… establishes a national laboratory for the prosecution of civil research, conceived from the widest angle and alive to the lines which such research should follow in indicating and assisting the evolution of the nation’s progress”.33 For Canadian statisticians, the nation was being reflected through national statistics. Yet, in 1920 the statistics of Canada was not only part of the nationalist project but was equally seen as a fraction of the British Commonwealth. Being part of the Empire strengthens domestic unity. Having a strong conviction for the notion of centralizing national statistics under one bureau, Canada became a main player in conceiv- ing the “First Conference of Government Officers Engaged in Dealing with Statistics of the British Empire”. This conference, which was held in London, represented the duality in Canadian statistics—being national but also with an orientation toward the international.34 The idea of an imperial conference was the outcome of more than a decade of official 32 Coats(1929). 33 Ibid., 98. 34 Beaud and Prévost (2005). 132 A. LEIBLER and unofficial discussions about the need to increase the uniformity and comparability of statistics originating from various parts of the Empire, a problem comparable to that which had plagued nation-states in the mak- ing, and which now mobilized energy at the international level. Finally, a report of the Dominions Royal Commission of 1917, officially recom- mended to confer all statisticians of the British Empire to consider ways of establishing a central imperial bureau of statistics. It was approved by several bodies within the Empire and eventually 43 delegates and scien- tists from England, the dominions, and protectorates, convened for one month to discuss the coordination of statistics, in a meeting that had no a priori restrictions on the conference’s mandate.35 The British ambition to establish a central statistical office failed once it was clear to the dominions delegations that the purpose of the impe- rial office was to create a mechanism of surveillance rather than scien- tific coordination.36 The conference’s discussions and dynamics deserve a more detailed account but, for the purpose of the general argument in this chapter, a few points should be emphasized as indicators of suc- cess upon failure. First, seeing centralization as a means of surveillance is interesting since it is precisely the opposite of how Coats and Bowley connected centralization of official statistics with scientific autonomy. Second, in spite of bureaucratic failure, the scientific goal was achieved, relatively that is. In those years, the newly established League of Nations organized an international conference in London to discuss the same subject. The new organization acknowledged the role of other inter- national organizations, such as the ISI, the International Institute of Agriculture (IIA), and the International Labour Organization (ILO), in perusing the same goal—to coordinate statistics internationally.37 Moreover, Canada, and its main representative, Hamilton Coats, was acknowledged as being the leading statistical figure capable of accom- plishing the larger international project of standardizing economic statis- tics. One of the conference’s final resolutions accepted Coats’ suggestion of a “uniform classification of imports and exports” and recommended that this be adopted by all parts of the British Empire.38 35 Worton (1998, 168). 36 Beaud and Prévost (2005). 37 Worton (1998, 169). 38 Ibid.  6 THE EMERGENCE OF A GLOBAL ECONOMIC ORDER … 133 Last, for the purpose of aggregation and international comparisons and in order to avoid any overlap between bodies, one of the confer- ence’s resolutions was the establishment of a CBS. However, since the British statistical system was decentralized, as it was developed less by the state and more by organizations of the British civil society, the Quetelenian concept of a CBS was not a common practice that could be carried out by English statisticians. British statistics also lacked the organizational ability to cooperate with the centralized systems of the dominions, as well as lacking the knowledge and manpower to lead such a project.39 After a decade and a half of discussions, disagree- ments, and negotiations between the dominions and the U.K., in a time of economic recession and problems, like American pressure for the adoption of the gold standard, Canada hosted 16 delegates at the Conference of British Commonwealth Statisticians in Ottawa in 1935. Coats was nominated unanimously as the conference chair. Due to his strong and influential performance at the 1920 conference, his advo- cacy in centralizing state statistics, and acting as the chair of the 1935 conference, he was asked to serve as the head of a statistical bureau in Palestine.40 Eventually, instead of traveling on his own, Coats nomi- nated a Canadian economist named Sedley Anthony Cudmore to estab- lish a CBS in Palestine, where he remained for 4 years, without having success. Indeed, attempts to unify and standardize different social practices, like the adoption of the metric system of weights and measures, which all took place in revolutionary France, were part of a burgeoning pro- duction of international norms, to which statisticians significantly contributed. Yet, the 1920 conference was one of the first organized attempts to globalize economic statistics through international coop- eration and standardization, a phenomenon that later became wide- spread and well institutionalized from the 1950s to present day. In that sense, we can say the conference was an attempt to create “infra- structural globalism” which was rejected by the British dominions and colonies due to a lack of authority akin to that attributed to “scientific internationalism”. 39 Ibid., 170–171. 40 Worton (1998, 174). 134 A. LEIBLER The Construction of Infrastructural Globalism The tension between scientific aspirations toward standardization and the internal affairs of individual countries—a tension that affected countries accepting the recommendations of international organizations—frustrated the organizations behind these international initiatives and motivated them to push their agenda for a global infrastructure through a variety of chan- nels. In the early 1940s, major international conferences were held, includ- ing the UN Conference on Food and Agriculture in 1943, the Conference for the establishment of the United Nations Educational, Scientific, and Cultural Organization in 1945, and the International Health Conference in 1946.41 However, the most significant conference was named after the place it was held—the sleepy New England town of Bretton Woods. Preparatory meetings were held in Washington, DC in 1943 and 1944, attended by rep- resentatives of the United States, Britain, Canada, and France.42 The Bretton Woods Conference marked a shift toward a grow- ing involvement of experts in the demeanor and organization of world affairs. The purpose of the conference was to discuss statistical concepts and modes of representation that might enable international compara- bility of income and other economic measurements, while helping gov- ernments to deal with the young field of economic statistics. It was a historical turning point in founding global governance and represented the creation of an agreement for a global monetary exchange system based on one system of convertible currency between nations. The con- ference also helped lay the groundwork for the development of the UN SNA a decade later. The agreement reached at the end of the confer- ence established two non-voluntary institutions of economic governance: the World Bank and the International Monetary Fund. A new economic order emerged from a scene of uproar and confusion, as vividly described by one of the attendees: Viewed from this wicker chair on the curving porch of the Mt. Washington Hotel the Presidential range of New Hampshire etches zigzag indentations into the azure sky. A dark line against a twisting path of earthy green – that of the merging tracks of the world-famous cog railroad – climbs to the summit of New England’s highest peak, Mt. Washington. On its crest, 41 Edwards (2006) and Miller (2001, 2005, 2006). 42 Mikesell (1994a).  6 THE EMERGENCE OF A GLOBAL ECONOMIC ORDER … 135 Tip-Top House and the radio tower stand out like a village in a mirage. In the foreground the darker greens of pine and hemlock vie with the lighter shades of oaks and birch. Set in the midst of these the brilliant green of one of the golf fairways forms a grassy floor. A sand trap glistens in the morning sun. Directly below, the wild Ammonoosuc plunges unseen but noisily on its way to join the sea. The majestic beauty of the surroundings was in striking contrast to the temporary bedlam created by the arrival of about 700 people from more than forty countries.43 The saga of the conference was directly related to two economic leaders who determined the conference agenda: the head of the U.S. delegation, Harry Dexter White and the British delegate John Maynard Keynes, the most famous economist of that period.44 In their efforts to create a new monetary order, the two disagreed about whether the gold standard, which collapsed in the previous world war and had not yet been success- fully revived, was an appropriate measure. White already arrived at the summit with a firm decision to create a “new deal for the new world”.45 While Keynes had a record of publications that expressed very little trust in the gold standard. Eventually, White was able to create the conditions for the U.S. dollar to become the standard currency for other countries and the basis for an international monetary exchange system. Keynes continued to criticize the agreement, concerned that it would put Great Britain’s power and the centrality of the Global North into decline. After World War II, largely as a result of the Bretton Woods Agreement—signed by 44 countries—and the adoption of the Marshall Plan, major international institutions were established in order to pro- mote global standardization: the ISO, the WMO, the International Monetary Fund, the World Bank, the Organisation for European Economic Co-operation (OEEC—today known as the Organisation for Economic Co-operation and Development [OECD]) and, of course, the many UN institutions such as the World Health Organization (WHO). Some of these institutions were earlier attributed to the “scientific inter- nationalism” period. The purposes of these economic institutions were to integrate the activities of developing countries, to create transparency in their internal markets, and to make sure they acted in a uniform manner 43 Van Dormael (1978). 44 Steil(2013). 45 Steger (2017). 136 A. LEIBLER in line with economic rules of conduct. The “Rules of Conduct” were part of the Breton Woods Agreement and expressed a new spirit of inter- national regulation and control: “The Rules of Conduct tell members [countries that signed the BW agreement] how they should behave in the field of foreign exchange or gold, if their nationals deal with abroad …”46 These institutions of international governance began operating in 1947 and had the authority to enforce regulations and procedures on developing countries, primarily those of the periphery. At the same time period, the United States pursued similar activities between 1938 and 1945 when it developed its initiative to deploy President Harry Truman’s technical assistance program in Latin America (Miller 2005, 2006).47 The goal of the American program was to promote interna- tional cooperation between North and South America in science and technology and later extend it to cooperation with UN agencies. From that point onward the United States became actively involved in the establishment of international institutions of world governance. The Bretton Woods Conference ascertained its status as the economic super- power of the Western world. Different accounts of actual meetings at the Bretton Woods Conference are rich with descriptions of passionate and powerful inter- actions between Keynes and White. One of them, a memoir of the con- ference debates was surprisingly written by Raymond Mikesell, the same American advisor who wrote his derogatory evaluation of Israel’s econ- omy. He was the last surviving U.S. economist at the Bretton Woods Conference whose job was “to provide the data for White to use against Keynes’s attempts to preserve British interests”.48 In spite of the conference’s importance and influence on the world’s economic order it was not acknowledged by the attend- ees. A number of years passed until it started to be viewed as the event that marked the starting point of globalization: “In operation for almost three decades, the Bretton Woods regime contributed greatly to the establishment of what some observers have called the 46 Stern(1944, 165–179). 47 Miller(2005, 174–186). 48 In memory of Raymond F. Mikesell. Annual newsletter, Department of Economics, University of Oregon, fall 2006.  6 THE EMERGENCE OF A GLOBAL ECONOMIC ORDER … 137 ‘golden age of controlled capitalism’.”49 Comprehending the Bretton Woods Agreement and the dynamics that led to it are therefore crucial to the understanding of the relatively fast spread of the SNA to coun- tries around the world—especially Israel—and the amount of pressure that the United States put on young countries to comply with interna- tional “Rules of Conduct”. The Birth of the United Nations System of National Accounts As already argued, the rapid spread of the UN SNA during the post– World War II era occurred in the foreground of a growing international trend toward economic standardization and universalization, led by global bodies like the League of Nations and later the UN. In 1920, fol- lowing the recommendations of government and academic statisticians around the world, the League of Nations convened the “International Statistical Commission” which created a global assembly of statisticians based on principles of professionalism and universal participation. By 1928, the Commission began working on the establishment of interna- tional standard classifications for merchandise, trade, agriculture, for- estry, mining, and other industries and commodities. Between 1931 and 1939, the League of Nations Committee of Statistical Experts worked on methodologically perfecting the system for its implementation in countries around the world. Due in part to the work of the League of Nations on NIAs during the post–World War I years, the number of countries that estimated national income increased from 13 in 1919 to 33 in 1939, and in that same year the League of Nations for the first time published estimates of the national accounts of 26 countries. This period also marked the first time that the problem of international comparability was raised. During the 1930s several American economists, like Simon Kuznets, who was to be become one of the American consultants in the recovery of the Israeli economy, took part in the conceptual development of NIAs. In fact, the first estimates were conducted during World War II by British statisticians Richard Stone, a student of John Maynard Keynes, and James Meade.50 49 Steger (2017, 37–38). 50 Comim (2001, 213–234). 138 A. LEIBLER Based on Keynes’ macroeconomics theory, Stone and Meade completed estimates of national income and expenditure and published them in the United States in 1941. Stone applied Keynesian macroeconomics to his work on the development of a report titled “Measurement of National Income and the Construction of Social Accounts”, in cooperation with the League of Nations Committee of Statistical Experts after the war.51 This publication was meant to provide a unified framework for the computation of national income and related accounts in as many countries as possible. It later laid the groundwork for the development of the UN SNA.52 What is important in this brief description of the development of SNA is that Keynes brought these concepts to the Bretton Woods Conference of 1944, greatly influencing the development of the UN SNA a decade later. After World War II, work on the standardization of economic statis- tics entered a new phase and was conducted under the auspices of the newly established UN. The League of Nations’ International Statistics Commission was transferred to the UN, under the new title of the “United Nations Statistical Commission”. At the new Commission’s first meeting in 1947, its members reiterated their general functions—stand- ardizing statistical methodologies, compiling statistics on an interna- tional scale, coordinating international statistical services, and developing cooperation across countries—in order to satisfy policy needs around the world. Emphasizing professionalism and integrity, the Commission was also keen on developing international statistical standards as quickly as possible, and recommended that the UN Statistical Office, in conjunc- tion with other agencies, develop guidelines for national accounts sta- tistics of national income and expenditure for the purposes of creating unified methodologies and the possibility of international comparability. In 1953, the Commission supervised the publication of the SNA, a framework comprised of concepts, classifications, definitions, and tabu- lations related to national income, production, and consumption, and measurements, like gross domestic product (GDP). Part of this effort was driven by the Marshall Plan, which forced recipient countries in Europe to adopt standardized accounting principles. Consisting of 6 standard accounts and 12 standard tables to describe and classify economic flows, the concepts and definitions it presented were intended to be applicable to, and ensure comparability between, 51 Ibid. 52 Kendrick (1970).  6 THE EMERGENCE OF A GLOBAL ECONOMIC ORDER … 139 most countries, including countries in the developing world. This system originated in the work that J. M. Keynes conducted throughout World War II, as well as Stone’s 1947 publication of recommendations for an outline of a system of accounts, the “Measurement of National Income and the Construction of Social Accounts”, for the League of Nations Committee of Statistical Experts. Outside of its work on NIAs, the UN Statistical Commission also endorsed standards and guidelines for popu- lation censuses, household sample surveys, income distribution, vital sta- tistics, and environmental economic account, among others. Through the development of the SNA, the number of countries reporting estimates for national income increased dramatically from 1945 to 1968. It continued to be extensively used by constituent countries. Since World War II, the United States has operated training programs for statisticians and economists from different countries for advancing this system as a common practice. Additionally, the OEEC promoted this standardized system, requiring countries to submit their national income and product estimates accordingly. Since the U.S. accounting system was so like the SNA, American higher education in economics became highly preferred and was perceived as the new role model for the study of understanding and constructing economies. Students from all over the world were sent by their governments to American graduate schools to foster new local leadership.53 Don Patinkin, a renowned economist who studied and trained at the Chicago School of Economics, became a local leader of Israel’s economy and his approach was part what shaped the country’s economic direction. Through its dominance in these interna- tional agencies and through its own Foreign Aid Program, the United States was able to export its beliefs in the virtue of free competition, along with a set of tools for designing and planning economic policy. Morgan (2003) argues in this respect that: The economies of the ‘free world’ seemed to require an arsenal of eco- nomic tools of intervention to make sure that it worked ‘properly’… They also exported these ideas directly, by training other nationals and by spec- ifying in their operational and technical manuals how to elevate policy regimes, design programs, and asses project proposals.54 53 Morgan (2003, 275–305). 54 Ibid., 302–303. 140 A. LEIBLER System of National Accounts Standards—A Coercive or Voluntary Form of Knowledge? Evidently, various factors convened, such as regulations, training pro- grams in higher education, exportation of UN and American advisors, such as in the case of Israel and Latin America, to reconstitute national economies, which meant that the SNA was far from being a voluntary form of knowledge that traveled to countries around the world, rather it was a coercive prescription for statehood from the outside. In other words, the new institutional setting created an inevitable global infra- structure, an obligatory passage point for countries that strove to be part of the international capitalist system. One of the first and primary goals of the UN, initiated and influenced by the United States, was to support the decolonization of the world in the post–World War II era, especially in developing countries. In the course of making new nation-states independent and sovereign, the colo- nial system was displaced by a new geopolitical setting in which develop- ing countries became units of global politics. The infrastructural regime of the new international institutions supported and enhanced the United States’ hegemony. Does this mean that the U.S. or the UN department of national accounts forced developing countries to implement SNA indices? And if the answer to this question is negative then why would a young state like Israel agree to make a fundamental change by adopting a highly institutionalized set of international rules regarding the collec- tion, categorization, and processing of all economic data? Viewing the SNA solely as a powerful force from the outside would leave no agency to a single country that adopted the SNA or any international system of standards, for the sake of argument. This viewpoint is strengthened when we bear in mind that the British dominions and colonies rejected England’s attempts at a similar institutional mechanism of surveillance and international regulation. The popularity of the SNA could also be related to the Keynesian paradigm. Keynes’ theory, which was developed after the global crisis of the 1930s, put new emphasis on the centralized regulation of economic equilibrium between supply and demand, goods and services.55 This was formulated in practice as well as in theory through national accounting 55 Desrosières (2003, 553–564) and Morgan (2003).  6 THE EMERGENCE OF A GLOBAL ECONOMIC ORDER … 141 tables based on statistics. The ability to describe the market as a whole and to measure its flows enhanced an analysis of economic behavior that was applied to the whole population rather than to units of single house- holds. Moreover, the new paradigm enabled emphasis on the national aspect of economic behavior and could be used to prove its economic conduct. Complying with indicators, like gross national product allowed economic comparison across countries which served nationalist projects better.56 Finally, Keynes’ theory also made room for young economists to formulate old problems in new terms and to gain academic positions and to become technocrats of the state in managing economies.57 Coercive factors of international organizations functioned as strong mechanisms for “statistical conformity”, but the explanation of this success also involves many other contingencies, generated from inside economies as well as from outside. These institutional pressures by world organizations cannot be easily pulled apart from local factors as historical, political, and ideological circumstances within which economies thrive, but they need to have a space of their own.58 Moreover, the specific institutional struc- ture of a particular state along with its configuration determines whether new economic ideas are accepted as well as being one of the major factors driving economic knowledge production.59 As I argue elsewhere, in the case of Israel, three conditions helped set up the necessary political and social climate for reconstituting the “Israeli economy” based on inter- national standards: (1) a professional conflict between statisticians and economists over the authority to produce national economic statistics; (2) general processes for establishing the new state’s administration that involved creating boundaries between politicians and technocrats; and (3) international and global pressures for standardization. The story of the transition from voluntary initiatives to better the world with science, to coercive institutions that reinforce global order is fascinating in its own right, and its importance goes far beyond the immediate circumstances it describes. The spread of the sort of statisti- cal analysis described has played an incalculable role in the establishment 56 Desrosieres (1994). 57 Hall(1989, 9). 58 Morgan (2003, 305). 59 Fourcade-Gourinchas (2001, 397–447) and Weir and Skocpol (1985). 142 A. LEIBLER of the international political–economic order that many of us take for granted today. Without it, the work of such organizations as the World Trade Organization, the International Fund for Agricultural Development, the International Monetary Fund, the World Bank, the WHO, and many others would not be possible. It is commonly assumed that the infrastructure for an international statistics regime was set in place in the capitols of Europe and the United States. 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