The Rules of the Game: Reform and Evolution in the International Monetary System (review)

244 SAIS REVIEW ments, accompanied by only sketchy discussion of the particular issue in question, the reader is forced to conclude that military ideas are simply the tails wagged by bureaucratic dogs, formulated only after sniffing the scents of Party policy shifts. This conclusion is reinforced by Katz's surprising and unsupported assertion that a leadership transition in the Soviet Union "could completely change Soviet military thinking about conflict in the Third World." But, were this true, then Katz's own material would hardly merit independent study. Katz might do well to explore the influence of the military during such a transition period. Further, Katz alludes to varied objectives and priorities within the military complex itself, which in turn can create divergences among Soviet writers—but he fails to discuss the institutional variables which may underlie them. The inconsistency ofwriting a book about Soviet policy analysis without drawing the explicit links to policymaking is apparent in Katz's concluding remarks. He pleads, for example, for an American policy aimed at helping "those involved achieve a peaceful solution by means ofplebiscites or other elections." This policy prescription, and others at the close of the book, although provocative and instructive, hardly utilize his findings on Soviet military writings. The Third World in Soviet Military Thought represents an important advance in the study of Soviet affairs. Katz's discovery that Soviet military thinking is relevant to the realities of conflict in the Third World should spark further research of Soviet academic literature. These writings can approximate the Soviet leaders' perceptions of Third World conflict, which might, in turn, provide insights into future Soviet actions in the developing world. Moreover, given that Soviet military thinking is gaining an increasingly sophisticated understanding of the dynamics ofThird World conflicts, Soviet writers might even be able to introduce concepts and explore new approaches because of their limited influence in shaping policy objectives. Such new formulations could ultimately lead to changes in Soviet policy in the Third World. In the meanwhile, solid research such as Katz's can only be welcomed. The Rules of the Game: Reform and Evolution in the International Monetary System. By Kenneth Dam. Chicago: The University of Chicago Press, 1982. Reviewed by Grant D. Aldonas. In his latest book, The Rules of the Game, Kenneth Dam provides a well-written and thoroughly researched review of the international monetary system. Dam's perspective will be of interest principally to those working directly in the field with an understanding of the economic principles that underlie the system and with an acquaintance with the principal organizations involved. The purpose of Dam's study is to offer a "perspective against which contemporary events can be understood and the likely consequences of particular policy initiatives assessed." The reader will not find any hint of what direction the author (who has since become the deputy secretary of state) would have the system move. The Rules ofthe Game is neither a polemic nor a prescription for reform of the system. If anything, the weight of Dam's evidence argues against the type of thoroughgoing BOOK REVIEWS 245 reform and planning represented by Bretton Woods, because the "rules ofthe game" may inhibit rather than promote the functioning of the system when they conflict with basic economic and political realities. Dam's perspective is singularly marked by a lawyerly concern for process. Dam accurately points out that economists and bankers have concentrated "almost exclusively on substantive rules and indeed on only a few key rules concerning the exchange rate regime (fixed versus floating exchange rates) and reserve assets (the relative role of gold and reserve currencies)." The implicit effect of legal procedures on those substantive issues has been largely ignored. Dam illuminates the effects of both domestic laws and international agreements on the function of the international monetary system and its evolution from the gold standard with fixed exchange rates to the present system's efforts to demonetarize gold and to allow currencies to float. That evolution is notable for the recurring themes ofwhat constitutes a "proper" exchange rate system and what determines the "correct" mix of reserve assets. Dam usefully points out that much of the debate over which system or mix...