The Dollar Crisis 1971
Strange, Susan. “The Dollar Crisis 1971.” International Affairs 48, no. 2 (1972): 191-216.
Using the ‘Dollar Crisis’ as a way of examining the problems which beset academic approaches to international relations Strange suggests that: foreign policy analysis seems unable to recognise the centrality of economic problems for states; (Neo)functionalism is far too optimistic concerning the possibility of international integration; much ‘abstract theorising’, such as game theory, seems to have no connection with what is happening in the international system; and international economics has diverted attention away from international political problems. Strange forcefully argues that: political economy is crucial to understanding international relations; the US is dominant due to its financial power, not its military or economic might; internationalisation (or now ‘globalisation’) diminishes the prospective advantages of regional economic solutions; the ‘market’ must be understood as an actor! Bearing these ideas in mind she then examines the ‘Dollar Crisis’ concluding that international institutions were revealed as powerless when the US wished to follow a specific policy (revealing its power). Strange would continue to refine this position during the next two decades.
Keywords: Hegemony; International Institutions; Markets; Money and Finance; Political Economy