State-led or Capital-driven? The Fall of Bretton Woods and the German Currency Float Reconsidered

Julian Germann

New Political Economy, 2014, vol. 19, issue 5, 769-789

Abstract: This article argues that the lead role of West Germany in the transition from fixed to floating exchange rates sits uneasily with accounts that conceptualise the breakdown of Bretton Woods in terms of hegemonic power politics, the influence of global economic interests or a neoliberal paradigm shift. Short of a convincing explanation, the German currency float seems to be a prime example of states surrendering to financial markets. The article offers an alternative interpretation that focuses on the nexus between state agency and capital accumulation. German authorities were indeed confronted with a destabilising influx of dollars that undermined their available policy options. But as they realised that these inflationary flows emanated from the same export-oriented forces in whose interest they had sought to hold on to an undervalued currency, they chose floating in order to regain command over liquidity and create an anti-inflationary programme that was at the heart of Germany's subsequent ability to better manage the 1970s crisis than its partners. Attention to the particular circumstances and consequences of these 'structured choices', I conclude, may offer a more compelling account of financial globalisation as a state-led project than those which generalise from the US context.

Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13563467.2013.849675 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:cnpexx:v:19:y:2014:i:5:p:769-789

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/cnpe20

DOI: 10.1080/13563467.2013.849675

Access Statistics for this article

New Political Economy is currently edited by Professor Colin Hay

More articles in New Political Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().