International Monetary Power

Introduction

This volume illuminates the power dimension of international monetary relations: its meaning, its sources, and its practice. Simply put, international monetary power exists when one state’s behavior changes because of its monetary relationship with another state. Monetary statecraft, in turn, refers to the conscious manipulation of monetary relations in order to influence the policies of other states. Both concepts are central to understanding the changing nature of international relations in an increasingly globalized economy. These definitions are self-consciously state-centric. Other approaches to the study of monetary power are possible, addressing different aspects of money’s social and political consequences.1 But in elucidating monetary power with an emphasis on interstate relations, the contributors to this volume have carved out an important aspect of human experience whose general contours remain underexplored .True, the concept of monetary power has been bandied about by some scholars —including Susan Strange2 and many of the contributors to this collection3 — Introduction 1. For example, recent work on the political economy of credit includes Andrew Leyshon and Nigel Thrift, Money/Space: Geographies of Monetary Transformation (New York: Routledge, 1997); Marieke de Goede, Virtue, Fortune, and Faith: A Genealogy of Finance (Minneapolis: University of Minnesota Press, 2005);Timothy J. Sinclair, The New Masters of Capital: American Bond Rating Agencies and the Politics of Creditworthiness (Ithaca: Cornell University Press, 2005). For a feminist analysis of these issues, see Linda McDowell, Capital Culture: Gender at Work in the City (Malden, Mass.: Blackwell Publishers, 1997). 2. Susan Strange was prolific on the subject, beginning with her “political theory of international currencies” in Sterling and British Policy: A Political Study of an International Currency in Decline (London : Oxford University Press, 1971), 2–40. Eric Helleiner (chap. 4 in this volume) discusses Strange’s contributions and especially her notion of structural power as applied to monetary affairs. 3. Examples of related work by the contributors include David M. Andrews, “Capital Mobility and StateAutonomy:Towards a StructuralTheory of International Monetary Relations,” International Studies Quarterly 38, no. 2 (1994): 193–218; Benjamin J. Cohen, Organizing the World’s Money: The Political Economy of International Monetary Relations (NewYork: Basic Books, 1977); Eric Helleiner, The Making 1 for some time now. But the concept, and its relationship to the study of international relations more generally, has never been satisfactorily explained. This volume takes up that task. To do so, we adopt a social power theory approach to the study of international monetary relations, treating power as a relational property.4 Social power exists when one actor’s behavior changes as a result of its relationship with another actor. International power exists when one state’s behavior changes as a result of its relationship with another state. International monetary power exists when one state’s behavior changes because of its monetary relationship with another state. The resulting framework is supple enough to permit examination of claims from a number of contending perspectives yet sufficiently demanding to create a common vocabulary and basis of analysis. This is essential because the concept of international monetary power resides at the nexus of mainstream international relations theory, where questions of power figure prominently, and more specialized literatures in which the power dimension is largely ignored.5 The subject is general neglected by the two dominant academic schools currently studying international 2 International Monetary Power of National Money: Territorial Currencies in Historical Perspective (Ithaca: Cornell University Press, 2003); C. Randall Henning, “Systemic Conflict and Regional Monetary Integration: The Case of Europe,” International Organization 52, no. 3 (summer 1998): 537–73; Jonathan Kirshner, Currency and Coercion (Princeton: Princeton University Press, 1995); Louis W. Pauly, Who Elected the Bankers? Surveillance and Control in the World Economy (Ithaca: Cornell University Press, 1997); Andrew Walter, World Power and World Money: The Role Of Hegemony and International Monetary Order (NewYork/London: HarvesterWheatsheaf /St. Martin’s Press, 1991). 4. Social power analysis originated in the work Harold D. Lasswell and Abraham Kaplan, especially their Power and Society: A Framework for Political Inquiry (New Haven: Yale University Press, 1950). Herbert A. Simon, in “Notes on the Observation and Measurement of Political Power,” Journal of Politics 15, no. 4 (November 1953): 500–516, describes his own contributions as “a series of footnotes on the analysis of influence and power by Lasswell and Kaplan” (501). For other early work, see also Herbert Simon, Models of Man (NewYork: John Wiley, 1957); Robert A. Dahl, Modern Political Analysis (Englewood Cliffs: Prentice-Hall, 1963); Jack H...