In the summer of 1944, forty-four nations converged in Bretton Woods, New Hampshire with the unified goal creating an “international monetary order” (Spero, p14). The combined belief was “that previous monetary systems that relied primarily on market forces had proved inadequate and that the world needed a publicly managed international monetary order” (Spero, p14). Bretton Woods did indeed fufill the task of creating international organizations to perform “monetary functions for the international system” (Spero, p14). Bretton Woods was “the result of international negotiations, primarily between the United States and Great Britain” (Gilpin, p87). Europe lay in economic ruins and Britain was unable to step up to the task due to colonialism. They were being forced to withdraw from India and Palestine due to economic difficulties. Therefore, the pound was unable to meet the demand for worldwide economic stability. The United States therefore undertook the role of leadership, replacing Great Britain as a world hegemon.
During the United States’ reign as a hegemonic power, many things have been achieved concerning international well-being. One well known example is the Bretton Woods Conference which created organizations such as the GATT, World Bank and the IMF. Some less known examples would be programs encouraged by the United States such as aid to Japan and Europe “designed to rebuild productive and export capacity” (Spero, p.17). The United States has also tolerated discriminations against the U.S. dollar. For example, the U.S. allowed a surplus of Japanese exports while “accepting Japanese restrictions against U.S. exports” (Spero, p.17). Not only that, but the U.S. also supported the European Payments Union that discriminated against the dollar (Spero, p.17). This was all done in the spirit of promoting economic growth in Europe and Japan. They both recovered and expanded their markets which benefited the United States ultimately, due to the expansion of the dollar outflow. However, the United States acted on behalf of other nations, expanding their market.
Concerning the pursuance of U.S. interests, Robert Gilpin gives a perfect example. During the Nixon era in 1971, the President decided to “destroy the system of fixed exchange rates because he believed that it no longer suited American interests” (Gilpin, p88). Along with the changing interests of the United States, the international regimes evolve as well. When considering the interests of the United States, however, one must take into consideration the opinions of foreign nations as well. The United States is unable to make decisions for the entire world just on their whim. In order for international regimes to continue to strive, “the interests of al the major economic powers to at least some degree” must be met (Gilpin, p88). The United States most likely plays an important role when creating or changing the roles of international regimes, however, a consensus must be reached. These regimes are created not by one nation, but “by self-centered states in order to further both individual and collective interests” (Gilpin, p84).
When examining the relationship between the United States and international regimes there are differing opinions. British scholar Susan Strange states that the United States has a monopoly on international regimes (Gilpin, p.85). However, for this to be true, the United States would have to have some power over other nations and coerce them into doing whatever this nation says. This is not the case and is completely unbelievable. The fact that the regimes governing trade and ones concerning monetary affairs are put in place in order to favor America is a close-minded viewpoint. International regimes are just that, international. They are created by more than one nation and would not survive through time if they did not benefit those involved. Organizations such as the World Bank and the IMF are still in existence today because the international community agrees with their purpose. These international organizations were not created spontaneously by the United States to fulfill our selfish needs. These organizations were created with the participation of multiple countries that “resulted from international negotiations among states” (Gilpin, p.86).
Hegemonies are necessary when considering international regimes. This viewpoint is shared by several economists including Mancur Olson and Robert Baldwin. A hegemonic power must consider the international well-being in order for its own interests to be served as well. A positive global economy means more growth and economic stimulation for the leader nation. International regimes “must rest … on a political base established through leadership and cooperation” which means that the hegemonic system allows a platform on which stability and interests may grow (Gilpin, p.97). Hegemonic power is necessary for the stimulation and growth of the international community. The United States has stepped up and taken on the responsibility and has been holding it since the end of World War II. In response to this undertaking, many international regimes have been formed governing international policies and exchanges. Living in an age of international globalization that is completely anarchic, a leader must step forward to regulate and promote global interests. If these interests are also considered to be self-promoting, then the better it is for the global well being. If the dollar, which is the basis for currency measurement, is striving, then the world is in better shape.
