Cold, Dollars, and Power: The Politics of International Monetary Relations, 1958-1971

Abstract

How are we to understand the politics of international monetary relations since the end of World War II? Exploiting declassified documents from both the United States and Europe and employing economic analysis and international relations theory, Francis Gavin offers a reassessment of the Bretton Woods system of fixed exchange rates and dollar-gold convertibility. Gavin demonstrates that, contrary to the conventional wisdom, Bretton Woods was a highly politicized system that was prone to crisis and required constant intervention and controls to continue functioning. More importantly, post-war monetary relations were not a salve to political tensions, as is often contended. In fact, the politicization of the global payments system allowed nations to use monetary coercion to achieve political and security ends, causing deep conflicts within the Western Alliance. Gavin reveals how these rifts dramatically affected US political and military strategy during a dangerous period of the Cold War.