The strongest argument to support the view that the current global political economy is different fronm its Bretton Woods predecessor is the diminished position of the United States’ rhegemony. The predominance of the United States was bought about as a matter of consequence, more than natural economic supremacy in light of the massive devastation in Western Europe (Cohn 2000, 363). Furthermore,the chronic balance of payments deficits that the US has held since 1971 serve as a further indication of hegemonic decline (Cohn 2000, 362). Although the liberal approach to IPE has at its core a set of principles for “organizing and managing a market economy in order to achieve maximum efficiency, economic growth, and individual welfare” (Gilpin 1987, 27) to which the US strongly adhered to inthe aftermath of World War II, this is in stark contrast to the Bretton Woods conference. Indeed, its initial success was largely put down to the recognition that liberalization of markets brought negative effects and undermined the nation state (Moon 2005, 433). Nonetheless, it must also be acknowledged that the US retains a special position in the current global political economy. Indeed, theWashington Consensus, typified by the aggressive privatisation and deregulation by Ronald Reagan and Margaret Thatcher, was widely used during the 1980s and 1990s in many South American countries (Phillips 2005, 332). Moreover, the US remains the dominant member in all of the Bretton Woods institutions in terms of their voting rights with the US dollar enduring as the main international currency(Cohn 2000, 362). Thus, one could argue that US hegemony may not have been in decline since Bretton Woods.
A further argument to support the idea that the current global political economy is different from the Bretton Woods system is the growing multipolarity of IPE and the rise of the Asian economies. The use of many economic unions such as the EU, ASEAN and NAFTA indicates that the realistapproach to political economy seems false: a protection from external economic forces is now far more difficult to achieve by a single nation state (Gilpin 1987, 33). Moreover, the increased collaboration between China, soon to be the largest economy in the world, and ASEAN suggests that there is now a shared belief amongst major economies that working together to head off crises is a necessity(Breslin 2007, 153). This is in contrast to the Bretton Woods system and the post-war global economy, whose main efforts were concentrated on the reconstruction of Europe and Asia. However, it could be argued that this move to economic alliances and multipolarity is in fact an attempt to preserve the hegemonic status of the OECD economies. For example, the $256bn of goods that the US imported from Chinain 2007 indicates that bilateralism and the realist doctrine of IPE is still very pertinent (University of Southern California 2008). Thus, one may be able to draw the conclusion that bilateralism is more firmly established in the world economy than regional trade.
A third point to support the view that the current global political economy is different from its Bretton Woods predecessor isthe changed role of the WTO, IMF and World Bank. The Bretton Woods conference gave clear aims for all three organisations. The General Agreement on Tariffs and Trade (GATT, later the WTO) would lower countries’ tariffs on a multinational level, the IMF would “support international monetary stability” and the World Bank provided long term loans for post-war reconstruction in Europe (Cohn 2000, 26).Almost immediately, however, there goals were not met: the Marshall Aid superseded much of the role of the World Bank and the IMF lost one of its key functions when the fixed exchange rate system was replaced in the 1970s (Cohn 2000, 26). In addition, the role of the World Bank is now one of assisting the third and developing world, rather than that of rebuilding Western Europe. It is thus...
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