The Dollar and Its Rivals: Recession, Inflation, and International Finance

216 Pages·1981·7.277 MB·English

by  Riccardo Parboni, Jon Rothschild (transl.)

The Dollar and Its Rivals
Riccardo Parboni
Most accounts of the economic crisis that has
afflicted the West since the mid-seventies treat
problems of the international monetary system as
a by-product of the recession. Riccardo Parboni
argues on the contrary that turmoil in
international finance has been a major cause of the
inflation and recession that show every sign of
persisting well into the eighties. Intensified
competition between industrialized countries led
to the destruction of the Bretton Woods system,
which had ensured world monetary stability since
the end of the Second World War, as the US
government sought to halt the decline of the
American economy. Parboni analyses the
functioning and effects of the new ‘dollar
standard’ of floating exchange rates, examining
such issues as the devaluation of the dollar; the oil
crisis; the conflict between the United States and
Germany and its effects on the European
economy; the structure of European finance, from
the ‘snake’ to the European Monetary System.
The book concludes with a description of the
structural changes in the world market during the
seventies, particularly the rapid development of
some Third World countries and their dependence
on international loans. Perhaps the only book of
its kind, The Dollar and Its Rivals presents the
complexities of international finance thoroughly
yet in a manner comprehensible to non-specialists.
£10.00 ISBN 0 86091046 6
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Riccardo Parboni
NLB
The Dollar and
Its Rivals
Recession, Inflation, and
International Finance
Translated by Jon Rothschild
332.4,P213d
Parboni, Riccardo
dollar and its rivals
British Library
Cataloguing in Publication Data
Parboni, Riccardo
The dollar and its rivals.
1. International finance—History—20th century
I. Title II. Finanza e crisi
internazionale, English
332.4'5 HG3881
ISBN 0-86019-046-6 cloth
ISBN 0-86019-744-4 pbk
First published as
Finanza e crisi internazionale
by Etas Libri, Milan 1980
© Etas Libri S.p.A., 1980
This edition first published 1981
© NLB, 1981
NLB and Verso Editions, 15 Greek Street, London W1
Photoset in 10 on 12pt. Times New Roman by
Servis Filmsetting Ltd, Manchester
Printed in Great Britain by
Billings Ltd,
S. F. Ptfrt.TC LIBFAP?
Worcester
3 1223 00886 5595
Contents
Preface to the English Edition 7
Preface 25
1. The Dollar Standard 29
1. The End of Bretton Woods 29
2. Flexible Exchange Rates 30
3. The Freedom of the Dollar 34
4. The Rise of Dollar Holdings 38
5. Interpretations of Seigniorage 40
6. The Link Between Private and Official Liquidity 43
7. Seigniorage in the Seventies 45
8. The American Payments Deficits 49
9. Alternatives to the Dollar 58
2. The Devaluation of the Dollar 76
1. The Great Crisis 76
2. Us Monetary Policy and the Dollar 79
3. The Currency Crises of 1971 and 1973 82
4. Devaluation and the International Position of the
Dollar 8()
5. The Relative Decline of the American Economy 92
6. The Precedent of Britain 96
3. Crisis and Inflation in the World Economy 99
1. The Effects of the Dollar Devaluation 99
2. The Effects of the Oil Crisis 101
3. Alternative Explanations of the Crisis 102
4. The Inadequacy of International Liquidity 108
5. The Perverse Functioning of International
Financial Institutions H3
6. Blackmailing the Weak Countries 116
4. The Conflict Between the United States and Germany 118
1. Strong and Weak Countries 118
2. The German Economic Zone 120
3. The Missed Recovery of the European Economy 124
4. The New Depreciation of the Dollar 125
5. German Deflation 132
6. The Fate of the European Economy 137
5. The European Monetary System 141
1. From the ‘Snake’ to the Ems 141
2. The Problem of Asymmetry 151
3. Consequences of the Ems for the European
Economy 155
4. Germany and the Ems 157
5. The Future of the Ems 163
6. The Extension of the World Market 169
1. The Ambivalence of the Crisis 169
2. Characteristics of Post-War Development 170
3. The Development of the Developing Countries 174
4. The Role of International Finance 178
5. The Historical Precedents 182
6. Lack of Finance and Underdevelopment 186
7. The End of Non-Alignment 188
8. Modifications of the International Division of
Labour 198
9. Structural Features of the Crisis 200
10. The New Laissez-Faire Wave 204