Susan Strange
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Key decisions and their consequences
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We are looking for the key decisions which have altered the course of world economic history in recent times, and which have shaped the development of the world economy and determined shifts in the costs and benefits, the profits and losses, the risks and opportunities amongst nations, classes and other social groups. But it is important at the start to be clear as to what we mean by a key decision and what we should be prepared to look for and include.

In the first place we are analysing the monetary system. Decisions here are not quite the same as in the study of international diplomatic relations, for instance. There, states decide to make war or to make peace, to make alliances and to intervene in the affairs of others. The action is between foreign ministers and diplomats and the key decisions are up to them. Monetary systems are different. In the real world – though not always in the fairyland of economic theory – a monetary system must have both political authority and a market. The market is essential whenever economic exchange between buyers and sellers is not all done by command of a third party. If buyers and sellers are free to exercise some degree of choice, however limited, and if their transaction is not conducted through barter, there must be money. But a monetary system cannot work efficiently unless there is political authority to say what money must be used or may be used; to enforce the execution of agreed monetary transactions; and to license, and if necessary support, major operators in the system.

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