State-led or capital-driven? The fall of Bretton Woods and the German currency float reconsidered

Germann, Julian (2014) State-led or capital-driven? The fall of Bretton Woods and the German currency float reconsidered. New Political Economy, 19 (5). pp. 769-789. ISSN 1356-3467

[img] PDF (For REF only) - Published Version
Restricted to SRO admin only

Download (397kB)


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.

Item Type: Article
Additional Information: Awarded the New Political Economy Graduate Student Prize for Best Paper in 2013.
Schools and Departments: School of Global Studies > International Relations
Subjects: J Political Science > JZ International relations
Depositing User: Jayne Paulin
Date Deposited: 26 Jul 2013 12:58
Last Modified: 08 Mar 2021 09:45

View download statistics for this item

📧 Request an update