The recent headline-grabbing attention to European currency turmoil has tended to push transatlantic monetary relations into the background. The Bundesbank was placed centre stage and the dollar barely noticed. Yet, the dollar is still the world's most important currency. For much of the twentieth century its exchange value has exerted a potent, sometimes a decisive, influence on the economic choices open to European governments. In explaining the collapse of international monetary order in the 1970s and the retreats from liberal trade policies, some American writers have stressed the relative decline of American hegemonic power. It was this power, they argue, that created and upheld the Bretton Woods international monetary system and the liberal trade thrust of the General Agreement on Tariffs and Trade (GATT). The rise of other major economic powers, like Germany and Japan, inevitably diffused and weakened the central leadership role of the United States. History, they add, shows that without hegemonic leadership international economic relations degenerate into a beggar-my-neighbour striving for national selfadvancement, as in the 1930s. Some uncanny parallels with the inter-war period are clearly discernible in the current disorders of the world economy. But before turning to them, I would like to make two points about the American hegemony thesis. Firstly, the argument looks outside, not inside, the United States for an explanation of the relative decline of American economic leadership. It overlooks or downplays the internal sources of weakness such as the poor performance of the American economy and its gross mismanagement by successive administrations. Secondly, the thesis is concerned with relational power, whereas the international role of the dollar is a form of structural power. Whatever developments and policies affect its exchange value will necessarily oblige foreign governments to respond. The dollar has the ability to extend or restrict the range of options open to others. General de Gaulle saw this clearly, tried to counterattack but was defeated by an outbreak of disorder at home. Shortly afterwards,