|
Is globalization leading us toward a world
of fewer and fewer currencies and, consequently, simplified
monetary management? Many specialists believe this is the
case, as the territorial monopolies national governments
have long claimed over money appears to be eroding. In The
Future of Money, Benjamin Cohen argues that this view
-- which he calls the "Contraction Contention"
-- is wrong. Rigorously argued, written with extraordinary
clarity, and thoroughly up-to-date, this book demonstrates
that the global population of currencies is set to expand
greatly, not contract, making monetary governance more difficult,
not less.
At the book's core is an innovative theoretical
model for understanding the strategic preferences of states
in monetary management. Should governments defend their
traditional monetary sovereignty, or should they seek some
kind of regional consolidation of currencies? The model
offers two broad advances. First, whereas most scholarly
work evaluates strategic options individually or in comparison
to just one other alternative, this model emphasizes the
three-dimensional nature of the decisions involved. Second,
the model emphasizes degrees of currency regionalization
as a central determinant of state preferences. Cohen also
systematically explores the role of the private sector as
an alternative source of money.
The book concludes with two key policy proposals.
First, fiscal policy should be resurrected as a tool of
macroeconomic management, to offset the present-day erosion
in the effectiveness of monetary policy. Second, the international
Monetary Fund should more actively help coordinate the decentralized
strategic decisionmaking of governments.
The future of money will be perilous. But,
by mapping out the alternative policies countries can follow,
The Future of Money shows it need not be chaotic.
Benjamin J. Cohen is Louis G. Lancaster
Professor of International Political Economy at the University
of California, Santa Barbara. He is the author of nine previous
books, including Organizing the World's Money, In
Whose Interest?, and The Geography of Money.
|
