Born 1910, the son of a prosperous New York lawyer, Charles P. Kindleberger grew up in the Roaring Twenties, eventually finding his way to economics at Columbia University starting in 1933. Curiosity about the world, not so much desire to make it better, was his driving motivation.

Bretton Woods had envisaged a world without capital flows, neither short-term nor long-term, but market practitioners had other ideas, rebuilding markets first domestically and then internationally in a process Kindleberger understood as a kind of natural Darwinian evolution. Policymakers viewed these developments with increasing alarm, and economists such as Robert Triffin built careers stoking those fears. The result was economic policy first attempting to hold back natural evolution, and then ultimately abdicating responsibility in Nixon’s 1971 devaluation of the dollar, a decision Kindleberger would call the Crime of 1971.

Because of continuing capital controls in the core countries during the immediate postwar period, the action in international monetary economics was initially mainly in the periphery, where the new IMF played a leading role. As the market system recovered, academic economics began to take an interest, with Robert Mundell (among others) working to extend the economists’ preferred macroeconomic modelling framework (the so-called IS–LM), to include the balance of payments. In time, the logical endpoint of these academic efforts was revival of the empirically discredited specie-flow model by Harry Johnson and others. Kindleberger’s practitioner wisdom resisted all these academic developments as distraction from real world financial developments.

As the end of his MIT career approached, Kindleberger took on the challenge of explaining the catastrophic world depression that had been the context of his own intellectual formation. As against current Keynesian and monetarist orthodoxy, he wrote in defense of the conventional wisdom of his youth which, in his view, provided not only a viable explanation of events but even more a viable methodology for doing economics more generally. Comparative economic history would henceforth be his evangelical mission, explicitly so in his first postretirement book Manias, Panics, and Crashes, which became a best-seller.

Kindleberger’s intellectual formation was in American institutionalism. At Columbia University, the two biggest influences on him were H. Parker Willis and James W. Angell. He learned banking from the former and international economics from the latter, even as he turned away from the policy conservatism of the former and the doomed multilateralism of the latter.

War service completed Kindleberger’s intellectual formation, establishing him as fundamentally an intelligence analyst. First in London as Chief of the Enemy Objectives Unit, then on the Continent as advisor to General Bradley, and then after the war at the State Department working first under William Clayton on the reconstruction of Germany and then under George Marshall on the reconstruction of Europe, Kindleberger’s government service career provides a staffer’s eye view of the dramatic events of war and reconstruction.

A Financial History of Western Europe is Kindleberger’s self-identified masterwork, an attempt to derive robust theories from centuries of accumulated fact, and then to use those theories as a framework for making sense of the momentous events of Kindleberger’s own life. It is a story of financial development in support of economic development at a global scale, both development processes advancing together in Darwinian evolutionary fashion by means of boom and bust.

From 1948 to mandatory retirement in 1976, Kindleberger taught international economics at MIT, which over that same time grew to become the leading economics department in the world. His original plan was to keep one foot in the world of policy, the better to push for Hansen’s postwar vision of economic development in the Global South. Security clearance trouble, however, put that plan on hold, and forced him instead to embrace a more purely scholarly career. Over time, the increasingly technical character of modern economics pushed him to the fringes of academia, where he reinvented himself as an economic historian.

The collapse of the sterling system after WWI left a vacuum into which the dollar system would eventually expand, but only after world depression and another world war. The life of Charles P. Kindleberger, whose intellectual formation spanned the critical years of dollar system formation, parallels the subsequent vicissitudes of that system, of which he was perhaps the keenest observer.

Kindleberger’s 1985 presidential address to the American Economic Association launched the final stage in his career, even as the 1985 Plaza Accord launched the next stage in the development of the dollar system. Kindleberger’s high hopes after Plaza were ultimately disappointed but, learning from the period after Nixon’s 1971 abdication of US leadership, he shifted his hopes instead to the prospect of “muddling through.”

After his formal PhD, from 1936-1942 Kindleberger continued his education as a central bank staffer, absorbing the key currency approach of John H. Williams at the New York Fed, critically engaging the monetarist approach of Per Jacobsson at the BIS, and then enthusiastically signing on for the globalist vision of Alvin Hansen at the Board of Governors.