The political economy of exchange rate policy-making: from the gold standartd to the euro

Steven Kettell analyzes the development of exchange rate policymaking from a Marxist perspective. He examines and provides a new means of understanding three key policymaking episodes in Britain: the return to the gold standard in 1925, membership of the European Exchange Rate Mechanism from 1990-1992, and the possibility of joining the Single European Currency. The alternative means of understanding these policy episodes provides a basis for making wider generalizations about the political economy of exchange rate policymaking. As the key means by which a national state is integrated into the global economy, the question of exchange rate policy-making is of central importance to an understanding of high-level political and economic developments. This book analyses the topic from an 'open Marxist' perspective, and views exchange rate policy-making as part of a wider governing strategy devised to contain class struggle, secure favourable conditions for capital accumulation, and ensure high political freedom. This provides a new and challenging means of interpreting Britain's interwar gold standard policy, its membership of the Exchange Rate Mechanism, and New Labour's attitude towards joining the single European currency. These are examined as strategies designed to address long-term economic and political difficulties through the imposition of financial discipline and through the 'depoliticisation' of economic conditions and policy-making. With the exception of the single currency, they are also considered to have been relatively successful in achieving these aims Front Matter....Pages i-x Introduction: Themes, Schemes, and Exchange Rate Regimes....Pages 1-9 The Political Economy of Exchange Rate Policy-Making....Pages 10-32 Contextualising the Return to Gold....Pages 33-56 The Return to the Gold Standard....Pages 57-77 The Golden Shield....Pages 78-100 The Collapse of the Strategy....Pages 101-118 Britain’s Membership of the Exchange Rate Mechanism....Pages 119-144 Britain and the Single European Currency....Pages 145-162 Conclusion: Exchange Rate Policy-Making Reconsidered....Pages 163-172 Back Matter....Pages 173-211