Gold, Dollars, and Power: The Politics of International Monetary Relations 1958-1971 (review)

In Gold, Dollars, and Power: The Politics of International Monetary Relations, 1958–1971, Francis J. Gavin offers an insightful, multidisciplinary analysis of international monetary relations and their connection with Cold War alliance politics at the peak of the Bretton Woods era. This work is particularly important as a corrective to the frequent disjuncture between scholars of international political economy (IPE) and those who focus on international relations (IR) and security studies. Drawing on impressively comprehensive archival research, Gavin shows how crises of the dollar and Cold War alliances were linked, as states used periodic shifts in monetary and geopolitical advantages to press for gains on different issues.

Gavin weaves together three narratives regarding the effects of an eroding dollar on U.S.–West European tensions over burden-sharing, the stability of the Bretton Woods system, and a U.S. policy of containment aimed not at the Soviet Union but at West Germany. These narratives cast doubt on several notions that are widely accepted by scholars of IR and IPE. First, Gavin calls into question the realist assumption that the "high politics" of security necessarily trumps the "low politics" of monetary affairs, noting that no less a figure than U.S. Secretary of Defense Robert McNamara favored withdrawing U.S. forces from Europe in order to relieve pressure on the dollar. Gavin's account reinforces the arguments of IPE scholars like John Gerard Ruggie, Eric Helleiner, and Mark Blyth, who maintain that Keynesian interventionism, rather than laissez-faire, underpinned the postwar Bretton Woods system. Although Gold, Dollars, and Power does not address the domestic and ideological trends highlighted by Ruggie, Helleiner, and Blyth, Gavin emphasizes the essentially political nature of the Bretton Woods regime, which was based not on an ideal of letting market forces work unimpeded but on a recognition of the need for political guidance of those forces. Finally, perhaps most interesting is Gavin's thoroughly substantiated analysis of tensions within the Western alliance. His account of shifts in the monetary balance of power between the United States, France, and West Germany over the 1965–1967 period is fascinating. It is all the more striking in light of developments in the early twenty-first century, lending this historical account a particular relevance to those who might wish to understand U.S.-European tensions in the context of the "war on terrorism."

Beyond these insights, Gavin's book should be of wider interest to IR and IPE scholars insofar as it demonstrates the benefits to be realized—and the new questions to be addressed—in the context of a more integrated research agenda. For example, his account spurs reflection on the possible reasons for the variation among policymakers in the emphasis they give to monetary or security affairs. In the fall of 1971, security trumped monetary concerns as Secretary of State Henry Kissinger grew increasingly concerned about Treasury Secretary John Connally's tough negotiating tactics with allies. But in the late 1990s, monetary concerns trumped security issues, as Clinton administration officials like Secretary of State Madeline Albright unsuccessfully pushed the Treasury Department to provide assistance more readily to Russia and Asian states suffering monetary crises. More recently, security has again trumped monetary concerns, as the administration of George W. Bush has sought to bolster the stability of its Turkish ally and has therefore set aside its professed antipathy toward Clinton-style monetary "bailouts." Perhaps Democratic and Republican administrations interpret the security/monetary trade-off in different ways? Gavin's account demonstrates the need for a more sustained focus on the material or intersubjective dynamics at the root of such variation, questions that are of relevance to the ongoing materialist-constructivist debates in the IR and IPE subfields.

To be sure, some might question Gavin's claim that the "creation [in 1968] of an intergovernmental gold market. . . . protected from the forces of the private market . . . began the process that ended the...