Is globalization leading us toward a world of fewer and fewer currencies and, consequently, simplified monetary management? Many specialists believe this is the case, as the territorial monopolies national governments have long claimed over money appears to be eroding. In The Future of Money, Benjamin Cohen argues that this view—which he calls the “Contraction Contention”—is wrong. Rigorously argued, written with extraordinary clarity, and thoroughly up-to-date, this book demonstrates that the global population of currencies is set to expand greatly, not contract, making monetary governance more difficult, not less.
At the book’s core is an innovative theoretical model for understanding the strategic preferences of states in monetary management. Should governments defend their traditional monetary sovereignty, or should they seek some kind of regional consolidation of currencies? The model offers two broad advances. First, whereas most scholarly work evaluates strategic options individually or in comparison to just one other alternative, this model emphasizes the three-dimensional nature of the decisions involved. Second, the model emphasizes degrees of currency regionalization as a central determinant of state preferences. Cohen also systematically explores the role of the private sector as an alternative source of money.
The book concludes with two key policy proposals. First, fiscal policy should be resurrected as a tool of macroeconomic management, to offset the present-day erosion in the effectiveness of monetary policy. Second, the International Monetary Fund should more actively help coordinate the decentralized strategic decision-making of governments. The future of money will be perilous. But, by mapping out the alternative policies countries can follow, The Future of Money shows it need not be chaotic.
Benjamin J. Cohen is Louis G. Lancaster Professor of International Political Economy at the University of California, Santa Barbara. He is the author of nine previous books, including Organizing the World's Money, In Whose Interest?, and The Geography of Money.
"An informative discussion of various currency arrangements, from exclusive reliance on a national currency to bimonetarism to the adoption of foreign currency as official legal tender, touching on both academic and practical arguments for each."—Richard N. Cooper, Foreign Affairs
"Cohen has produced yet another excellent volume on the political economy of international monetary affairs. . . . Like most of Cohen's scholarship, [this book] displays the author's remarkable facility with the vast breadth of issues, theories, puzzles, and esoterica associated with monetary matters, as well as a confident command of monetary policy and history."—Jonathan Kirshner, Perspectives on Politics
"Jerry Cohen is without peer as a scholar working at the crossroads of international economics and international relations. Here is the definitive book on the contemporary and likely future politics of global money. Well researched and well written, it provides a comprehensive overview of the theory and practice of international monetary relations. Specialists will discover original and iconoclastic insights. Undergraduate and graduate students will find an exceptionally clear and accessible presentation of an important and multifaceted subject. Practitioners will benefit from provocative and convincing forecasts. Highly recommended."—Louis W. Pauly, Canada Research Chair and Director, Centre for International Studies, University of Toronto
"Cohen knows both economics and political science intimately and fuses them skillfully. "The Future of Money" is both a definitive analytical survey of the money question today and a judicious synthesis of the increasingly complex challenges facing policymakers in a globalizing world. Whether dealing with the fashion for dollarization, real world examples of how governments-from the leading currency countries to the most powerless-have tried to cope, or the growing impact of private market actors, electronic currencies, and the like, Cohen demonstrates a mastery of both empirical detail and theoretical analysis. And the book is full of common sense, too."—Philip Cerny, University of Manchester
"Benjamin J. Cohen's third major work on the political economy of international monetary affairs addresses another major issue confronting the international community: how to stabilize and govern an international monetary system composed of several competing national currencies. Professor Cohen presents and analyzes a number of mechanisms available to the international community to prevent monetary collapse and anarchy. However, as he emphasizes, the choice of a stabilizing mechanism rests on the political as well as economic interests of the major economic powers. Cohen's knowledge, insights, and wisdom will be of immense value to the creators of a more stable and efficient international monetary system. This book should also be of interest to scholars, government officials, and others interested in the future of international monetary affairs."—Robert Gilpin, Princeton University
"This book is an outstanding addition to the literature. It uses a neat analytical framework to synthesize and analyze a vast, disparate body of research, including work in both economics and political science, and raises important questions about the evolution of money and monetary arrangements."—Peter B. Kenen, Princeton University, author of The International Financial Architecture
"Benjamin Cohen has written an important book about a compelling question of modern political economics: how many currencies will there be, and what arrangement will govern them? Unusually well written, this is a book I will assign to my students."—Dennis Quinn, Georgetown University
