Plausibility, imaginative geographies and a global foreign currency exchange: Comments on Mendez

Abstract

Ruben Mendez has set several cats among the pigeons with his short artide on the global foreign currency market. In the course of just twelve pages Mendez manages to: (1) effectively critique some aspects of the proposed Tobin tax on foreign exchange transactions; (2) outline a case for establishing a computer-based global foreign currency exchange (FXE) that would lower the cost to final consumers of changing currencies and bring order and efficiency to the world's foreign currency markets; (3) suggest how revenues generated from the FXE might be used to finance public goods that would improve global governance; and (4) propose an increased flow of north-south funds from a small levy on the profits of the FXE. We applaud the ambition of Mendez's article, even though we have some reservations about his conceptions of order, markets and governance in an age of transnational liberalism. Mendez is addressing some crucial issues in international political economy as indeed is Tobin and his intervention is richly suggestive of the proper functions and duties of an intellectual. As we read him, Mendez is trying to provide a plausible solution to the pressing practical problem of foreign exchange regulation, even as he seeks to provide an imaginative language that allows us to rethink our obligations to distant strangers. It is these issues of plausibility and imagination that we focus on here.