Crisis as Opportunity: Nixon’s Announcement to Close the Gold Window

Abstract

The authors reexamine the announcement of the August 1971 decision to suspend convertibility of U.S. dollars to gold, or closing of the gold window, which ended the Bretton Woods system and ushered in the neoliberal era. Existing accounts identify critical pressure on the U.S. gold supply after May 1971 international currency disruptions as a tipping point for this policy. In contrast, using new archival evidence, the authors reveal that Nixon strategically framed May 1971 events as an urgent economic “crisis,” deploying “crisis” as a justification for closing the gold window. Nixon seized crisis opportunism to announce a policy decided upon significantly before May 1971, to privilege U.S. interests in the international arena and to assuage his reelection concerns, before potential backlash by the International Monetary Fund members and the U.S. Congress. The authors draw lessons from this historical case for contemporary events and for examining economic crises as objects of inquiry in their own right.