Il governo del dollaro: Interdipendenza economica e potere statunitense negli anni di Richard Nixon (1969–1973) (review)

Recent years have brought a revival of scholarly interest in the foreign policy of Richard Nixon and Henry Kissinger. The renewed interest has been stimulated by the opening of a number of relevant sources, allowing historians to probe old theses and advance new interpretations. Because U.S. foreign policy decisions in the early 1970s shook the whole international system, a thorough understanding of these decisions illuminates the broader history of the Cold War.

Duccio Basosi’s Il governo del dollaro is a most welcome addition to this wealth of new works. A recent Ph.D. scholar from the University of Florence, Basosi moves at ease in the relatively unexplored field of the history of international monetary policy and the international economy, developing for the Nixon years the kind of approach that has been adopted by such scholars as Francis Gavin and Hubert Zimmermann for the study of the 1960s. The remarkable nature of this book was acknowledged in 2007 when Basosi was awarded the Italian Society of Contemporary History’s prize for the best first book by a young author.

Basosi’s goal is straightforward; namely, to analyze the crucial economic policy decisions adopted by the Nixon administration in August 1971 and to set them in their proper historical context. The Nixon administration not only ended the dollar’s convertibility into gold but also took a number of other steps that permanently undermined the Bretton Woods international monetary system.

The abandonment of Bretton Woods, Basosi notes, is often seen as a turning point in the evolution of the international system, but he believes that explanations of the decision have been contradictory and theoretically deficient. If Nixon was forced to act the way he did, how can he be held responsible for such a choice? If his decisions were the symptom of an inevitable U.S. decline in the world economy, how does one explain that the United States emerged from the crisis stronger than before and in a leadership position that was increasingly unassailable?

Basosi has rigorously analyzed a large number of sources at the U.S. National Archives, the Federal Records Centers, and the Gerald R. Ford Presidential Library, where he often was the first to explore the papers of such crucial figures for Nixon’s economic policy as David Kennedy, John Connally, George Shultz, Paul Volcker, and Arthur Burns. This research enabled him to develop a coherent interpretation that demonstrates how the 1971 decisions were the result of a long, complex, and meticulous foreign policy analysis that must be evaluated together with the other momentous decisions of the Nixon administration.

Faced with a deteriorating economic situation that seriously hampered the flexibility of U.S. foreign policy, Nixon was aware from the earliest days of his administration of the need to revise the Bretton Woods system. But, according to Basosi, this urge was combined with other pressures from a U.S. economic establishment, which hoped to inject a new dose of liberalism into a capitalist system that was enjoying the final benefits from the long cycle of Keynesian expansion launched in the early postwar years. Although Nixon was inclined to pay attention to the calls for a new wave of unbridled capitalist growth, he was also aware of the need to reconcile these aspirations with the economic and political exigencies of the West Europeans. This increasingly tense relationship with the European allies led directly to the decisions of August 1971. If no multilateral agreement on reform of the Bretton Woods system could be achieved with the European allies, then the United States would not only act unilaterally but would do so in a way most effective for the restoration of U.S. economic primacy. Basosi follows the evolution of this debate in different U.S. government channels and demonstrates its close relationship with the parallel efforts by the West European countries to improve their own economic position vis-à-vis...