US Power reflected on the global political economy
Assignment #2
Yohanan Zemichael
PSCI 2602: A03
October 11, 2012
The framework of global political economy has evolved through a series of historical periods. For this paper, I will be comparing the overall structure and organization of the global political economy during the Bretton Woods period (1945-1975) and the Contemporary period (1975-2010). The main objective will be the United States’ projection of political power throughout these two historical periods. By comparing, the Bretton Woods period and the Contemporary period, it can be determined that the US projects its political power on the global political economy. Before understanding the role of the US in the global political economy during the Bretton Woods period, it is important to highlight the key aspects of the Bretton Woods system itself, and how it came to be. After the Second World War, American and British postwar planners began to realize the need for a stable international monetary system for international economic activity and peace (O’Brien & Williams, 2013). These planners desired a system that would provide stability in exchange rates, but would also allow adjustments. Considering the fact that the United States was the world’s foremost economic and political power, they were more in a position to assume the responsibility of leadership. In essence, their solution was the gold exchange system of the Bretton Woods (O’Brien & Williams, 2013). Although the two most influential participants were the US and Great Britain, it can be said that agreements were ultimately made in favour of the United States’ ambitions. For instance, the British were more inclined to a system that would restrict capital flows and provide for strong international monetary institutions, however, the US favoured a more liberal system with less regulation (O’Brien & Williams, 2013). Essentially, the US was able to secure an agreement that was closer to its motives. One
Yohanan Zemichael
PSCI 2602: A03
October 11, 2012
The framework of global political economy has evolved through a series of historical periods. For this paper, I will be comparing the overall structure and organization of the global political economy during the Bretton Woods period (1945-1975) and the Contemporary period (1975-2010). The main objective will be the United States’ projection of political power throughout these two historical periods. By comparing, the Bretton Woods period and the Contemporary period, it can be determined that the US projects its political power on the global political economy. Before understanding the role of the US in the global political economy during the Bretton Woods period, it is important to highlight the key aspects of the Bretton Woods system itself, and how it came to be. After the Second World War, American and British postwar planners began to realize the need for a stable international monetary system for international economic activity and peace (O’Brien & Williams, 2013). These planners desired a system that would provide stability in exchange rates, but would also allow adjustments. Considering the fact that the United States was the world’s foremost economic and political power, they were more in a position to assume the responsibility of leadership. In essence, their solution was the gold exchange system of the Bretton Woods (O’Brien & Williams, 2013). Although the two most influential participants were the US and Great Britain, it can be said that agreements were ultimately made in favour of the United States’ ambitions. For instance, the British were more inclined to a system that would restrict capital flows and provide for strong international monetary institutions, however, the US favoured a more liberal system with less regulation (O’Brien & Williams, 2013). Essentially, the US was able to secure an agreement that was closer to its motives. One
References: Eric Helleiner, “A Bretton Woods Moment? The 2007-2008 crisis and the future of global finance,” International Affairs, Vol. 86, no. 3 (May 2010): 619-36. Robert Keohane, and Joseph Nye. Power and Interdependence. 4th ed. UK: Pearson. (2011). Robert O’Brien and Marc Williams, Global Political Economy: evolution and dynamics, 4th edition (Palgrave, 2013) Stephen Gill, “American Hegemony: Its Limits and Prospects in the Reagan Era,” Millennium, Vol.15, no.3 (1986): 311-336. Susan Strange, “The Persistent Myth of Lost Hegemony,” International Organization, Vol. 41, no.4 (Autumn 1987): 551-74.