Toward a True Form of World Money
As we move toward a world dominated by trade, global production networks, and huge cross-border movements of capital, the traditional policy apparatus of nation-states no longer suffices. The emerging global accumulation regime requires an additional layer of management and regulation, based on new multilateral arrangements and international policy-making institutions. One of the most pressing issues in this transformation is the replacement of our current multicurrency system with a new kind of universal credit-money that provides the world economy with sufficient liquidity and balanced adjustments. Keynes's Bancor plan, the Special Drawing Rights issued by the IMF, the European Currency Units of the EC are all first steps toward truly stateless money managed by an international monetary authority. Such a money form is, in my opinion, a logical step in the evolution of contemporary capitalism, a distinct possibility as we complete our transition to a global accumulation regime. In this chapter we shall examine how such a uniform money standard might operate in practice.
International monetary reform is necessary, because the system we have now in place is flawed. The use of national credit-money as world money is an inherently unstable arrangement. On their own, dollars, yen, and other key currencies represent fully effective money only at home, within the country of their issue. When they are used in international transactions they fail to perform as means of payment, allowing the issuing country to pay for its overseas obligations in its own money (the so-called seigniorage benefit). Nor do they act as units of account, for they can only be valued in terms of other currencies, whose value they are supposed to define in the first place. Such use of an inadequate money form has fed chronic external account imbalances, volatile exchange rates, massive speculation, and an unstable global (Euro)banking network beyond the reach of government regulators. These problems have tended to become more