The Money Mandarins
Economics professor (American Univ.) Wachtel believes that the chief source of instability in the world economy is unregulated international banking. He discusses the Bretton Woods Agree ment, which regulated the post World War II economy, its abandonment in the 1970s, and the resultant vast sums of currency unregulated by any govern ment. Far from seeing free market eco nomics as providing a solution to the effects of the destabilizing flows of "Eurodollars," Wachtel believes that regulation is necessary. He proposes some interesting solutions of his own which should stimulate debate by all but the most rigidly ideological. For both public and academic libraries. Stuart Gudowitz, George Washington Univ. Lib., Washington, D.C.
Professor Wachtel of American University writes clearly and well about the breakdown of the system of semirigid exchange rates and the emergence of immense, largely uncontrolled money markets. He links both developments to almost every evil that has beset the American and international economies for the past decade on the grounds that "private supranationalism . . . has overwhelmed public institutions." To put things back in order he proposes shrinking the Eurocurrency markets through reserve requirements, creating a public agency to take over international debts, instituting tax laws that penalize wasteful takeovers, and continuing to pursue the ever elusive international coordination of national economic policies. One may quarrel with the program while agreeing that some major rethinking of the political economy of public and private issues is in order. - William Diebold, Jr., Foreign Affairs, Winter 1986/87