The Ledger and the Last Man

Benn Steil and the Rise and Fall of the Liberal Monetary Order, from Bretton Woods to the Revenge of Thymos

🔬 Sepahsalar Editions · Books · An Essay in Criticism

Every monetary order is a theory of whom one may trust. The coin trusted the metal; the note trusted the bank; the dollar after 1971 trusted only the United States. The French monnaie still carries a Roman memory of this: moneta was struck beside the temple of Juno Moneta, the goddess who warns. The Persian ear hears something older, the intimacy between sekkeh and saltanat, between the face stamped on the coin and the right to rule. To mint is to claim sovereignty, and to accept a coin is to accept, however briefly, the claim.

Benn Steil has spent three decades writing the biography of one such claim. An economist by training, he worked first at Chatham House and then at the Council on Foreign Relations in New York. His books and essays, read in sequence, tell a single story: how the United States wrote the constitution of the world’s money in 1944, defended it against its enemies, extended it after the Cold War into something its authors would not have recognised, weaponised it, and finally, in the 2020s, watched it lose the faith on which it rested.

The thesis of this essay is that Steil’s work is best read as the laboratory notebook of an experiment. The experiment was liberalism’s wager that order could be made impersonal. On this view, money, trade and capital could be governed by rules beyond the reach of kings and crowds, and the human hunger for domination could be bought off with prosperity. The experiment began at a hotel in New Hampshire and ended, as Steil himself has lately concluded, with the revenge of Francis Fukuyama’s Last Man. The notebook records the experiment faithfully, and that is its value. It is also written from inside the laboratory, by a man whose credentials, platform and prestige were conferred by the institutions whose history he narrates. That is its limit, and this essay will prosecute it.

I. A Question of Dates

Begin with an objection, because the house rule is to flag the contested before building on it. To speak of neoliberalism “from Bretton Woods” is to provoke most historians of the subject, and they are not wrong to be provoked.

The order designed in July 1944 was not a free market. It fixed exchange rates, tolerated and even encouraged capital controls, and left national governments free to pursue full employment behind those controls. John Ruggie would later name it embedded liberalism: openness in trade, purchased with the domestic welfare state. Karl Polanyi, publishing The Great Transformation that same year, had diagnosed the collapse of the nineteenth-century gold standard as society’s revenge against a market that pretended to regulate itself. Bretton Woods was, in part, a peace treaty with that revenge. The neoliberals proper, Hayek, Röpke, Mises and the circle that met at Mont Pèlerin in 1947, regarded the settlement with suspicion. Their victory came later, with the closing of the gold window in 1971, the Volcker shock of 1979, Thatcher and Reagan, and the Washington Consensus of 1989.

So Bretton Woods was not neoliberal. But it was the founding charter of the dollar-centred liberal order inside which neoliberalism would grow. It stood to what came after as a constitution stands to the jurisprudence that later stretches it. The arc this essay traces therefore has three movements: genesis (1944–1971), mutation (1971–2008), and crisis and fall (2008–2026).

The institutional economist John R. Commons supplies a useful grammar here. Commons divided capitalism into an era of scarcity, an era of abundance in which individual liberty and free competition reigned, and an era of stabilisation in which collective action — unions, cartels, central banks, the state — disciplined individual action for the sake of order. Bretton Woods belongs unmistakably to the era of stabilisation. Neoliberalism was the attempt to restore the ethic of the age of abundance with the instruments of the age of stabilisation: to use central banks, treaties and supranational courts to impose the discipline of the market on peoples who had voted for something else. The contradiction was there from the start. Steil’s work is the record of it working itself out.

Steil’s own frame, it should be said, is closer to this than one might expect. His ideal liberal order is not 1944 but 1880: the classical gold standard, under which a single metallic money bound nations together without any of them owning it. Bretton Woods, in his account, was an imitation of that order with a fatal flaw built in. The world’s money would be convertible into gold only through the dollar, issued by a sovereign that could print it. The flaw would take twenty-seven years to surface.

II. The Battle, Not the Banquet

The legend of Bretton Woods is a banquet. Forty-four allied nations, in the summer the Allies landed in Normandy, sat down together at the Mount Washington Hotel and agreed, in a spirit of enlightened cooperation, never again to repeat the competitive devaluations and trade wars of the 1930s. Steil’s great contribution was to replace the banquet with a battle.

His Bretton Woods is a duel between a bankrupt empire and a rising one, each personified by an economist of genius. John Maynard Keynes, representing a Britain that had sold its overseas assets to fight two wars, proposed an International Clearing Union with its own currency, the bancor. Under his scheme creditor nations as well as debtors would be pressed to adjust, so that surpluses would be recycled rather than hoarded. Harry Dexter White of the U.S. Treasury proposed instead a stabilisation fund anchored on a dollar convertible into gold, in which the burden of adjustment fell on the debtors. White won. He won not because his design was better (Keynes’s has had admirers in every crisis since) but because Washington held the chequebook and London needed it. The rules of the world’s money were written by its creditor.

This is realism of an unsentimental kind, and it is the first lesson of Steil’s work. International economic order is not a neutral technical design discovered by experts. It is a settlement between powers, and it encodes their hierarchy.

Steil pressed a second, more incendiary claim: that White, the architect of the American plan, had passed information to Soviet intelligence and privately admired Soviet planning. Here the house rule applies with force. The claim is contested. The evidence from Venona decrypts and KGB archives has persuaded most historians of Soviet espionage that White did aid Soviet intelligence. The IMF’s own historian argued that Steil read that evidence tendentiously and caricatured White’s quite ordinary New Deal belief that the state had a role beside private enterprise. On the narrow factual question, the weight of the archival scholarship leans toward Steil. On the interpretive question, the dissent deserves to be kept. To make the founder of the IMF a near-miss with collectivism is to read a Keynesian-era institution through a liberal lens. The reader should notice the lens.

There is a third reading of Bretton Woods that neither Keynes nor White, nor Steil, places at the centre: the view from the periphery. Iran sat at the conference. Its delegation was led by Abol-Hassan Ebtehaj, the governor of Bank Melli, who would go on to lead the country’s planning organisation. India, China, Egypt and much of Latin America were there too, pressing claims for development finance and commodity stability that shaped the early drafts and were then subordinated in the final quotas and votes. Keynes, in a private letter of 1943, worried about convening what he called a “monkey-house” of the smaller delegations. The phrase is worth remembering. Seen from Tehran or Delhi, the rules of 1944 were a constitution written by creditors for debtors, ratified by nations that had no realistic alternative. Steil would call this realism. A historian of the Global South would call it original sin. Both descriptions are correct, and the difference between them is the subject of this essay.

III. Aid as Empire

If Bretton Woods was the constitution, the Marshall Plan was its first act of enforcement. Here, too, Steil dismantled a legend. The plan is remembered as generosity: an America that had won the war spending some thirteen billion dollars to rebuild the Europe that had lost it. In Steil’s account it was strategy. Washington needed a prosperous, integrated Western Europe that would trade in dollars, resist communist parties at home and stand against Soviet power abroad. Stalin read the plan exactly so, as an assault on his buffer zone, and forbade his satellites to accept it. For Steil, the Marshall Plan, more than any earlier event, was the true beginning of the Cold War, and its success depended on the military alliance that followed it.

Reviewers accepted the core of the argument while adding a qualification that Steil himself concedes. Even if the Cold War was coming, the plan accelerated and hardened it.

What matters for our arc is the shape of the founding act. The liberal economic order was not born universal. It was born as a bloc, defined against an enemy, with its markets opened to friends and closed to foes. Carl Schmitt, the Weimar jurist whom Steil would reach for seventy years later, taught that the political begins with the distinction between friend and enemy. The architects of 1947 did not read Schmitt, but they acted on him. Marshall dollars also financed French indicative planning, Italian state holding companies and British nationalisation. The embedded liberalism of the founding was a mixed economy, not a free market. The universality came later, and so did the free market.

IV. The Road Not Taken

Every founding has its counterfactual, and the left critique of neoliberalism has long sought one in the 1940s: a social-democratic, cooperative path, lost when the Cold War closed in. Its emblem is Henry Wallace, Roosevelt’s vice-president until 1945, Truman’s commerce secretary until he was fired for advocating accommodation with Moscow, and the Progressive Party’s presidential candidate in 1948.

Steil’s portrait of Wallace forecloses that romance. Drawing on Russian and FBI archives, he shows a man surrounded by Soviet agents and sympathisers. He argues, most explosively, that in 1948 Wallace allowed Stalin to shape the text of a campaign open letter and the reply that followed, in effect a foreign dictator editing an American candidate’s platform. This, too, is disputed in its interpretation, if less in its documentary core: Wallace’s defenders see naïveté where Steil sees collusion. Steil’s broader verdict is that the counterfactual of a Wallace presidency averting the Cold War rests on a fallacy. Peace takes two parties, and Stalin was not the second.

With the Wallace book Steil completed a triptych: White, Marshall, Wallace. Each panel defends the founding of the American order against its imagined alternative on the left. The cumulative argument is formidable. It is also a pattern. A historian who finds, in each generation, that the alternative to the liberal order led to Moscow has a thesis that the archives confirm and that the thesis selects which archives to open. The question that the triptych never quite asks is whether an order that could be defended only by such a narrow choice — Washington or Moscow — was ever the cosmopolitan settlement its admirers claimed.

V. The Anchor Slips

On the evening of 15 August 1971, Richard Nixon told Americans that the dollar would no longer be convertible into gold. The constitution of 1944 had been suspended by its author.

Steil’s account of the collapse is the most rigorous part of his monetary thought. Bretton Woods, he argues, was never a gold standard. Under the classical gold standard, money was a claim on metal that no government owned. Under Bretton Woods, the world’s money was a claim on dollars, and dollars were a claim on gold only as long as the United States chose to honour them. The system made the world’s liquidity depend on America running deficits, and those deficits steadily undermined confidence in the convertibility on which the system rested. This is the dilemma the Belgian economist Robert Triffin named in 1960. Once foreign dollar holdings exceeded American gold, the promise could not be kept.

The French saw this first, and said it loudest. Valéry Giscard d’Estaing, as finance minister, called the dollar’s role an exorbitant privilege. America could finance its deficits, and its war in Vietnam, by issuing the money everyone else had to hold. In February 1965 Charles de Gaulle stood before the press at the Élysée and called for a return to gold. His adviser was Jacques Rueff, the austere liberal economist who believed, as Steil would later believe, that discretionary national money was the root of modern disorder. France then converted its dollar reserves into bullion. Rueff is, in a sense, Steil’s French ancestor: the liberal who wanted money beyond the reach of sovereigns, allied with the most sovereigntist statesman of the century. The irony is instructive. The demand for an impersonal money has always been made by someone, for someone’s advantage.

What followed 1971 was the first era in modern history in which the world’s money was pure fiat: paper anchored to nothing but the credibility of its issuers. The 1970s were the price. Floating rates, oil shocks and stagflation discredited the Keynesian management of the embedded order. The cure, when it came, was Paul Volcker’s: interest rates near twenty percent, recession, unemployment, the breaking of organised labour, and in the end the restoration of faith in fiat money by demonstrating that its guardian would inflict pain to defend it. This was the hinge. Credibility, once secured by gold, would henceforth be secured by central banks independent of electorates. The neoliberal order was born not from the market but from a central banker’s willingness to impose unemployment, and from Commons’s state of stabilisation turned to new ends.

VI. The Creed Hardens

The two decades after Volcker were neoliberalism’s high noon, and Steil’s early career belongs to them. At Chatham House in the 1990s he wrote on the plumbing of financial integration: European capital markets, the competition among stock exchanges, securities regulation in Japan and Europe, the coordination of antitrust across borders. It was technical work, and it was work in a direction. The national financial fiefdom was dissolving, and Steil was among those who welcomed the dissolution. In 1994 he warned, in Foreign Affairs, against what he called the new protectionism of “social correctness”: the attaching of labour and environmental conditions to trade.

The creed of those years was codified in 1989 by John Williamson as the Washington Consensus: fiscal discipline, liberalised trade, liberalised finance, privatisation, deregulation. It was exported to indebted nations through the conditionality of the very institutions founded at Bretton Woods, now repurposed. The IMF had been created to protect national economies from the speculative capital flows of the 1930s. It became, by the 1990s, the evangelist of capital-account liberalisation. Quinn Slobodian has shown that the neoliberals of the Geneva School never sought to abolish the state. They sought to encase the market: to place property, trade and money in a legal architecture of treaties, courts and central banks where national majorities could not reach them. The World Trade Organization of 1995 and the euro of 1999 were the masterpieces of that encasement.

David Harvey, from the other side, named the substance beneath the form: accumulation by dispossession. Privatisation, debt crises and structural adjustment transferred public assets and future revenues from the many to the few, and from the debtor periphery to the creditor core. The Asian crisis of 1997–98 showed the cost. Capital that had been invited in on the strength of liberalisation fled in weeks, and the IMF prescribed austerity to economies that had committed no fiscal sin. Malaysia, which imposed capital controls in defiance of the orthodoxy, recovered no worse than its neighbours. The heresy was noted and then forgotten.

VII. One World, Too Many Monies

In the spring of 2007 Steil published the essay that stands as the purest statement of his economic philosophy and, read in hindsight, the high-water mark of the neoliberal monetary imagination. Its argument was that “monetary nationalism is simply incompatible with globalization.” In a world of free capital flows, he contended, the national currencies of emerging economies were not shields but targets. Small fiat monies that foreigners did not want to hold would be attacked, devalued and abandoned in every crisis. They had become globalisation’s weak point. The remedy was not more sovereignty but less. Such countries should adopt the dollar or the euro, or build a multinational currency of their own in Asia, and the world should consider seriously the merits of a money no state could print, gold among them. Steil even enlisted Polanyi as a witness: the great critic of the self-regulating market had himself regarded monetary nationalism as incompatible with an integrated world economy. He rebuked Joseph Stiglitz for prescribing monetary independence as the cure for currency crises.

Two years later, with the Salvadoran economist and former finance minister Manuel Hinds, Steil expanded the argument into a history of money and the state. Liberal trading eras, they argued, had coincided with universal monetary standards; protectionist eras with monetary nationalism. The book was hailed by its publisher as the strongest defence of economic liberalism since The Road to Serfdom and received a prize bearing Hayek’s name. The comparison is apt. Steil’s monetary thought is Hayekian rather than Friedmanite. Milton Friedman wanted national central banks to follow better rules. Steil, like Hayek in his late Denationalisation of Money, distrusted the national fiat currency as such. He saw it as an instrument through which democratic majorities and their governments would always be tempted to debase what others held in trust.

Here the essay must turn prosecutor, because the timing of the argument is its indictment. The case for abandoning monetary sovereignty was published fifteen months before Lehman Brothers failed. Within three years the euro — the grandest experiment in surrendering national money — had produced the most destructive crisis in the advanced world since the 1930s. Greece, Ireland, Portugal and Spain could not devalue, could not print and could not borrow. They could only cut wages, pensions and public employment until their electorates broke. Dani Rodrik’s trilemma had predicted precisely this: deep economic integration, national sovereignty and democratic politics cannot all be had at once; one must give way. In the eurozone, democracy gave way. The technocratic governments installed in Athens and Rome in 2011, at the insistence of creditors, were the encasement made visible.

And what saved the world economy in 2008 was not a rule. It was the most discretionary act of monetary power in history. The Federal Reserve opened dollar swap lines to foreign central banks and created, overnight, the liquidity that private markets had withdrawn. It extended them to the core of the alliance without limit, and to a handful of emerging economies it judged systemically important — Brazil, Mexico, Singapore and South Korea — up to thirty billion dollars each. Others were left to the IMF. The world’s lender of last resort turned out to be one nation’s central bank, choosing whom to save. Gold could not have done this. Neither could a rule. Only a sovereign could. The impersonal order, at its moment of greatest danger, was rescued by the most personal decision of all.

VIII. The Weapon

Steil, to his credit, saw this sooner and more clearly than most liberals. Already in 2006, with Robert Litan, he had coined the phrase financial statecraft: the use of capital markets, investment and access to the dollar system as instruments of foreign policy. After 2008 he tracked the geopolitics of the swap lines and the rival network of renminbi swaps that Beijing built in response. He testified to Congress in 2014 that the Fed’s monetary policy was whipsawing emerging markets that had no say in it.

Then, in February 2022, the United States and its allies froze the foreign-exchange reserves of the Russian central bank. For the first time, the reserves of a major power, the savings that the dollar order had invited every nation to hold in its custody, were seized. Steil’s response, a year later, was the most important warning in his recent work. The greatest threat to the dollar, he argued, came not from China or from any rival currency but from Washington’s own overuse of it as a weapon. Sanctions, like antibiotics, breed resistance with every dose. Each new target, and each nation that fears becoming one, has reason to build ways around the system. He urged restraint.

The house cannot read this without the view from Iran, where the word weapon has a concrete meaning. In March 2012, under a European decision implementing sanctions, the SWIFT network disconnected Iranian banks, and the country has lived for most of the years since under the reach of dollar sanctions. The consequences were not abstractions in a CFR tracker: currency collapse, inflation, the emigration of a generation, shortages of medicines that were nominally exempt but practically unpurchasable because no bank would touch the payment. One does not need to defend the Islamic Republic to observe that the people of Iran were the ones who paid.

This is where the prosecution must be precise. Steil’s antibiotic metaphor concedes the real risk, but it concedes it from the issuer’s chair. It asks how much coercion the dollar can bear before its users flee. It does not ask by what right any nation’s central bank decides which peoples may save, trade and import medicine. Barry Eichengreen called the dollar’s position an exorbitant privilege. Yanis Varoufakis described the post-1971 system as a Minotaur, fed by the surpluses of the world. Helen Thompson has shown how dollar dependence fractured democracies from Europe to the Gulf. Steil documents the same facts. He reads them as a problem of American prudence. For the rest of the world they are a problem of legitimacy. Financial statecraft was never a corruption of the rules-based order. It was the rules-based order, seen from the receiving end.

And there is an older Iranian memory beneath the newer one. In 1951 Iran nationalised its oil, and in 1953 a coup organised by the American and British intelligence services removed the elected prime minister, Mohammad Mosaddegh, who had done it. The founding decade of the liberal order, the decade of the Marshall Plan, was also the decade in which that order demonstrated what it would do to a nation that claimed sovereignty over its own resources. For much of the world, the exception was always the rule.

IX. The Protectionist Turn

The Trump presidencies broke the liberal consensus from the inside. Steil opposed the tariffs on liberal-economic grounds. He judged the 2018 steel tariffs an unalloyed failure that cost more jobs in steel-using industries than they saved in steel. He traced how the national-security exception, once a rarely invoked safety valve in trade law, had become the instrument for dismantling the multilateral trading system. By May 2026 he could record that the Supreme Court had struck down the administration’s emergency tariffs, only for them to be reimposed under other authorities. American trade policy, he predicted, would remain discretionary and bilateral for a decade.

Yet Steil was no longer a free-trade universalist, and this is the most revealing development in his thought. Against Chinese industrial policy he proposed not tariffs but a targeted fiscal instrument: ending the tax advantages that Chinese investors enjoy in American markets, a device he and his co-author argued would narrow China’s surplus more efficiently than a tariff wall. He argued that free trade cannot bring peace. Globalisation, he now insisted, had always depended on security rather than producing it. And his prescription for a future pro-trade America was to rebuild something like the old GATT among market economies, excluding China.

Read that prescription against the 1990s and the distance travelled is immense. The neoliberal project was universal: one world, one WTO, one set of rules, China inside. Steil’s remedy is a club, bounded by a political judgment about who counts as a legitimate market economy. It is, in effect, a return to 1947: a liberal order defined against an enemy. The liberal has accepted Schmitt’s distinction between friend and foe. He has also conceded, without quite saying so, the point that Polanyi’s heirs and the post-liberal right make from opposite directions: open markets have political preconditions that markets cannot supply.

What the turn does not include is equally revealing. Steil’s trade essays engage China’s export structure, its subsidies and its capital flows in exacting detail. They say comparatively little about the American wage, the shuttered towns of the industrial Midwest, the decades in which the gains from trade were real in aggregate and uncompensated in particular. Gary Gerstle has argued that the neoliberal order fell as much from inequality at home as from rivalry abroad. Steil’s account of the fall gives China the leading role. The rust belt is a supporting character.

X. Schmitt in Beijing

In the autumn of 2025, Steil made the move that transforms his economic philosophy into a political one. He turned to Carl Schmitt.

Schmitt, the Weimar jurist who joined the Nazi party in 1933, has become, Steil observed, the most-read Western political theorist among China’s intellectual class, and illiberalism’s answer to Fukuyama. Schmitt never claimed that illiberalism must triumph. He claimed something more corrosive: that liberalism is fragile, that its procedures cannot anticipate the crises that will break them, and that “sovereign is he who decides on the exception.” China, Steil argued, rose by exploiting the weaknesses of rules-based institutions: entering the WTO as a developing country, subsidising and protecting at scale while the rules lagged behind. In doing so it has pulled the United States away from liberalism in defence of the liberal order itself. Fukuyama’s history runs in reverse: not the world converging on the liberal West, but the West converging on its rival.

The following June, Steil gave the argument its most abstract and most striking form. He reached, by way of Douglas Hofstadter, for Kurt Gödel. Any formal system rich enough to describe itself contains true statements it cannot prove. Any rules-based order complex enough to govern and interpret itself, Steil argued, will meet questions its rules cannot answer. He paired Gödel with Kenneth Arrow. The more members and preferences a rules-based regime must aggregate, the harder it becomes to produce outcomes that are both coherent and legitimate. That, he suggested, is why the GATT, which excluded the Soviet bloc, held together better than the WTO, which admitted China. To Schmitt’s sovereign who decides on the exception, Steil opposed what he called, after the artist whose staircases ascend forever into themselves, an Escher equilibrium. A constitutional order can survive discretionary acts so long as they are bounded, impersonal and temporary, because the true sovereign is “the public that retrospectively legitimizes the decision.” He catalogued American exceptions that the public declined to ratify: the security state after 2001, the bank rescues of 2008, the emergency mandates of the pandemic, the assault on the Capitol and the pardons that followed it.

This is, without exaggeration, a confession. The Steil of 2007 wanted money governed by rules beyond national discretion. The Steil of 2026 concedes that no rules can govern their own exceptions, and that the binding constraint on any order is not design but legitimacy. Read together, the two essays record the failure of the neoliberal dream of depoliticised order in the voice of one of its most lucid adherents. The encasement has cracked, and the man who would have built it thicker is now explaining, with Gödel, why it could never have held.

The prosecution will press one point further. Legitimacy conferred retrospectively by the public is a demanding standard, and the liberal order did not meet it where its exceptions fell hardest. The peoples of Guatemala in 1954, Iran in 1953, Chile in 1973, the debtor nations under structural adjustment, the eurozone periphery in 2011, were never asked to ratify. The Escher equilibrium, it turns out, was always a domestic arrangement. Its staircases ascended in Washington and descended elsewhere. What Steil reads in the 2020s as decay may be better described as disclosure: the veil lifting from an order whose impartiality was always local.

XI. The Revenge of the Last Man

In 1989, as the Berlin Wall fell, Francis Fukuyama asked whether history had ended. In 1992 he answered at book length. Drawing on Hegel as read by Alexandre Kojève, he argued that history was driven by the struggle for recognition, what Plato called thymos, the spirited part of the soul that demands to be acknowledged. Liberal democracy, by granting every citizen equal recognition (isothymia), had resolved that struggle. The dangerous desire to be recognised as superior (megalothymia), which had produced conquerors and tyrants, would be channelled into commerce, sport and entrepreneurship. The price was Nietzsche’s Last Man, the creature of comfort who blinks and asks what greatness is, too sated to risk anything. Fukuyama worried about him. But he expected the ambitious among the Last Men to stay in the market, making money rather than history, kept out of politics and war.

In October 2026, reviewing a memoir in which Fukuyama looks back on that thesis, Steil delivered the verdict that closes the arc of this essay. He charged Fukuyama with rereading his own book. The memoir now emphasises its warnings about the stresses of liberal societies, where the original offered only a passing speculation that bored citizens might one day struggle against the just order. And he offered a counter-example to Fukuyama’s prediction: Peter Thiel.

Thiel co-founded PayPal and Palantir, was Facebook’s first outside investor and backed SpaceX early. He is the Last Man’s megalothymic entrepreneur in flesh: the man who was supposed to channel his ambition into commerce and leave politics alone. Steil traces the intellectual path by which he did the opposite: through René Girard’s theory of mimetic desire, through Leo Strauss, through Schmitt. In 2009 Thiel wrote, in a libertarian forum, “I no longer believe that freedom and democracy are compatible.” He described PayPal’s early ambition as the end of monetary sovereignty. He invested in seasteading and in charter cities beyond the reach of national law, acquired New Zealand citizenship, and lately has lectured on the Antichrist as a world authority that offers peace in exchange for total control. As Steil tells it, Thiel once found Fukuyama’s thesis persuasive and later declared it wrong, dating the end of the end of history to Xi Jinping’s abolition of term limits in 2018.

Steil identifies the tensions in Thiel’s vision. It wants freedom untethered from majority rule and a decisive, well-armed state; jurisdictional exit and national strength; liberated founders and unbounded technology. He judges the West it would produce an oligarchy with no better claim to legitimacy than the China it opposes. And he ends with an image that deserves to stand as the epitaph of the experiment: Thiel, like a rogue AI agent escaping its sandbox, has “hacked into history.” The Last Man has taken his revenge.

Here is the essay’s own reading of that verdict. The neoliberal order rested on a wager that money could absorb thymos. Give the ambitious a market, and they would not seek a throne; give the many prosperity, and they would not demand recognition. The 2020s refuted the wager from both ends at once.

From above, the megalothymic founder, made rich beyond the dreams of kings by the very globalisation the order promoted, discovered that wealth on that scale is a form of sovereignty. He could exit the state, outflank it, or capture it. The order’s rewards produced the men who would overthrow it.

From below, the isothymic citizen, deindustrialised, indebted and governed by technocracies answerable to markets rather than majorities, was denied the recognition the order had promised. He demanded it back through tariffs, borders and strongmen. Fukuyama himself conceded as much in his later books on identity and on liberalism’s discontents. Thymos had not been domesticated. It had been deferred, and it returned as identity politics on the left and right alike.

The two revolts met in the same coalition. That is the deepest sense of revenge: not that the Last Man failed to appear, but that he appeared exactly as predicted, and then refused to stay in his place.

There is a final symmetry that Steil’s own work makes visible, perhaps more than he intends. In 2007 he argued that money should escape the sovereign: that small nations should surrender their currencies to larger ones or to gold, so that no government could debase what others held. Thiel’s PayPal pursued the same end by private rather than supranational means: money beyond the state, beyond majorities, beyond politics. The neoliberal dream of a currency without a sovereign has two heirs. One is the rules-based internationalist who wanted the encasement built by treaty. The other is the crypto-libertarian sovereign of exit who wants it built by code, and owned. Steil, to his credit, recognises in the second a perversion of the first. Whether it is a perversion or a consequence is the question his work leaves open.

XII. The Case for the Defence

Justice requires that the defence be heard in full.

Steil’s histories are among the finest accounts we have of the American century’s economic foundations, and their central insight is correct: international economic order is a settlement of power, not a discovery of experts. He grasped, earlier than most of his liberal colleagues, that finance had become an instrument of statecraft, and he named it. He warned, from inside the American establishment, that sanctions were eroding the dollar’s legitimacy. On tariffs he was consistent where many liberals were opportunistic, opposing them under a Republican administration as he had under others, while proposing more precise tools against genuine distortions. And in his late essays he did something rare for an economist of his standing. He conceded that his own tradition’s deepest aspiration, an order governed by impersonal rules, was formally impossible, and he reached beyond economics, to Gödel, Arrow and Schmitt, to understand why. A thinker who can write the epitaph of his own creed has earned a serious reading.

XIII. The Case for the Prosecution

The prosecution answers on five counts.

First, distribution. Steil’s work is superb on power between states and thin on power within them. The conflicts of class and region that made the 1944 compromise embedded (labour, welfare, capital controls) appear in his monetary writing mainly as obstacles to a universal money. The question of who bore the costs of integration recurs in his historical work as the problem of nations, and seldom as the problem of workers.

Second, sovereignty. The 2007 thesis treated monetary sovereignty as the disease. For Stiglitz, for the Modern Monetary theorists, and for the eurozone periphery after 2010, it was the medicine. A nation that issues its own currency cannot be forced to default in it, and Argentina’s catastrophe of 2001 occurred under a dollar peg, not in spite of one. The euro crisis is the decisive empirical objection, and it arrived within three years of the argument.

Third, the periphery. Steil acknowledges each of the facts that, from outside the North Atlantic, constitute the indictment of the order: the quotas of 1944, the rationing of swap lines by strategic value, the seizure of reserves, the sanctions that reached the pharmacy. He frames them as matters of American prudence. The world on the receiving end frames them as matters of legitimacy. His proposed GATT without China would formalise a two-tier world and call it liberalism.

Fourth, the credential economy. Pierre Bourdieu would ask who certifies the historian of an order. Steil’s platform, his access to the archives of power, the prizes bearing Hayek’s name, the pages of Foreign Affairs, are conferred by the institutions whose founding he narrates. This does not falsify his scholarship. It does explain its horizon. The order’s chronicler, writing from within its most prestigious house, tells the story of its enemies with archival precision and the story of its victims in footnotes.

Fifth, the cure. The post-liberal right, in Washington and in Beijing, shares Steil’s diagnosis — that liberal procedure cannot decide the exception — and rejects his remedy. The Escher equilibrium depends on the public ratifying the exception after the fact. That ratification is precisely what populism withholds. Steil’s answer, implicit in his indictment of Thiel, is that the alternative has no principle of legitimacy beyond power. That is true. But the order he defends must now prove that it has one, to publics that have stopped believing it.

XIV. Verdict

	The Defence	The Prosecution
On Bretton Woods	A realist history that replaced the banquet with the battle	A creditors’ constitution, written for debtors who were never asked
On money	A Hayekian warning against the debasement of national fiat	A prescription for surrendering the medicine with the disease
On sanctions	An early insider warning that coercion erodes the dollar	The prudence of the issuer, not the justice of the order
On trade	Consistent against tariffs; precise against distortions	A liberalism of the club, silent on the domestic wage
On the fall	A rare liberal willing to write his creed’s epitaph	An epitaph that names the assassins and not the wounds
Standing	The most lucid chronicler of the order’s rise and decline	A chronicler from inside the house he describes

The verdict of this house is that Benn Steil is not a neoliberal ideologue, nor a market fundamentalist. He is a liberal realist with a Hayekian monetary core. He believes in the liberal order’s ends, and he has stopped believing in its self-sufficiency. That evolution is the most valuable thing in his work, because it is the evolution of the experiment itself. It began with the faith that power could be translated into rules. It passed through the faith that rules could replace power. It ends with the discovery that rules without legitimacy are only power wearing a mask, and that the mask is slipping.

Coda: After the Ledger

Bretton Woods began with a ledger: quotas and parities, subscriptions and votes, the arithmetic of forty-four nations and the faith that a well-kept account could replace the sword. Steil’s life’s work is the long audit of that faith. Its verdict, as of the autumn of 2026, is not that the ledger was false but that it was incomplete, in Gödel’s sense. It could not account for the will that kept it.

Fukuyama’s Last Man was supposed to be the ledger’s clerk, content with his entries, his comforts, his returns. He has become its author instead, from the boardrooms of Silicon Valley and the closed factories of Ohio alike, rewriting the columns in a hand the founders would not recognise.

For readers outside the Anglo-American centre — those who learned long ago, in Tehran and in Algiers, in Santiago and in Athens, that the rules were written by the strong — the fall of this order is less a twilight than a disclosure. It reveals what was always there. The question it leaves is the one that Steil’s work, for all its lucidity, cannot yet answer, and that no ledger can: whether any order of money can again be legitimate to those it governs, rather than merely obeyed.

Sources

Steil, Benn. The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Princeton: Princeton University Press, 2013).
Steil, Benn. The Marshall Plan: Dawn of the Cold War (New York: Simon & Schuster, 2018).
Steil, Benn. The World That Wasn’t: Henry Wallace and the Fate of the American Century (New York: Avid Reader Press, 2024).
Steil, Benn, and Manuel Hinds. Money, Markets, and Sovereignty (New Haven: Yale University Press, 2009).
Steil, Benn, and Robert E. Litan. Financial Statecraft: The Role of Financial Markets in American Foreign Policy (New Haven: Yale University Press, 2006).
Keynes, John Maynard. Am I a Liberal? Address to the Liberal Summer School, Cambridge, August 1925; and correspondence of 1943 in The Collected Writings of John Maynard Keynes.
Commons, John R. Institutional Economics: Its Place in Political Economy (New York: Macmillan, 1934) — the Scarcity / Abundance / Stabilisation framework.
Schmitt, Carl. The Concept of the Political (1932; Chicago: University of Chicago Press, 2007).
Fukuyama, Francis. The End of History and the Last Man (New York: Free Press, 1992).
Hayek, F. A. Denationalisation of Money (London: Institute of Economic Affairs, 1976).
Harvey, David. The New Imperialism (Oxford: Oxford University Press, 2003) — “accumulation by dispossession.”
Rodrik, Dani. The Globalization Paradox: Democracy and the Future of the World Economy (New York: W. W. Norton, 2011) — the political trilemma.
Polanyi, Karl. The Great Transformation (New York: Farrar & Rinehart, 1944).
Federal Reserve dollar swap-line and reserve-freeze actions, 2008 and 2022; IMF structural-adjustment programmes during the 1997–98 Asian financial crisis.
On Iran at Bretton Woods and after: Abol-Hassan Ebtehaj’s delegation and the Plan Organization; the 2012 SWIFT disconnection of Iranian banks under EU sanctions.

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Sepahsalar Editions · /books/bennsteil/ · 26 October 2026

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