The Politics of International Money

The Politics of International Money
Howard Wachtel
TransNational Issues 2, TNI June 1987

This second paper in the Transnational Issues Series gives a well-written lively analysis of the current predicament facing governments in the world economy. It examines the issues of exchange rate fluctuations, third world debt, Eurodollar regulation - their importance in the global money system and their intersection with the politics of economic policy.

As opposition parties challenge neo-conservative governments in most of the industrial democracies in the late 1980s, economic issues are of supreme importance. Yet the credibility of the opposition's economic goals is threatened by a global economy which refuses to succumb to a growth and employment strategy. How the international context of economics affects national politics is a question which has not been taken up by the opposition parties in an effective way.

It is crucial to develop a strategy for re-regulating the international financial system for both the credibility of opposition claims and their ability to govern national economies. The Politics of International Money provides both an historical context and an analytical framework for understanding the dilemma of social democracy today and it concludes with a set of proposals for accomplishing growth and employment objectives.

The issue paper is based on a larger study presented in the book The Money Mandarins. The Making of a New Supranational Economic Order.