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Crisis and Reform in the World's Economy*

Published online by Cambridge University Press:  05 August 2009

Arthur Karasz
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Extract

There are several crucial reasons for the need to reform the world economy. First, the worldwide inflation, a terrible cancerous disease which, if uncontrolled, might destroy the roots of economic development. Second (a direct consequence of inflation), a sudden imbalance in our international monetary system: capital flight in monstrous dimensions, devaluation of important reserve currencies, the United States dollar, the English pound, followed by the Japanese yen and a number of European currencies. Third, growing unemployment all over the world, again as a consequence of inflation and of a worldwide lack of confidence. Finally, but not least, the growing conflict of the developing countries, mainly in the Southern Hemisphere, with the industrialized world mainly in the Northern. This north-south struggle, brewing for long years, has reached the dimensions of what we might call an “economic cold war” on a worldwide level. Thus far, efforts to find new solutions which would be satisfactory to both consumers and producers have failed.

Type
Research Article
Information
The Review of Politics , Volume 39 , Issue 2 , April 1977 , pp. 131 - 156
Copyright
Copyright © University of Notre Dame 1977

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References

1 Emminger, Otmar, On the Way to a New International Monetary Order, American Enterprise Institute for Public Policy Research (Washington, D.C., 1976), p. 2Google Scholar.

2 For more details see also Karasz, A., The Recent Washington Agreement (Rome, 1972)Google Scholar.

3 Emminger, , New International Money Order, p. 4Google Scholar.

4 The phrase is from Karl Blessing, former Governor of the Deutsche Bundesbank. Quoted by Emminger, , New International Money Order, p. 5Google Scholar.

5 Debts incurred abroad by United States debtors have become the basis for new and practically uncontrolled creation of money. Assets floating on the Euromarket are said to represent at least U.S. $100 billion equivalent. Cf., Aschinger, F., Prospects, Swiss Bank Corporation Publ., No. 146 (Zurich, 1973)Google Scholar.

6 Annual Report, IMF (Washington, D.C., 1976), p. 46Google Scholar.

7 The problem is discussed in detail by de Vries, Tom, “Jamaica or the Non-Reform of the International Monetary System,” Foreign Affairs, 54 (04, 1976), 600–601fCrossRefGoogle Scholar.

8 For more details on the Bank Group, Karasz, Arthur, “The World Bank and the Third World,” Review of Politics, 32 (10, 1970), 476–489CrossRefGoogle Scholar.

9 Trends in Lending by Sector (Bank and IDA) (U.S. $ millions, fiscal year)

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15 The phrase is from Scitovsky, Tibor, The Joyless Economy (Oxford, 1976)Google Scholar.

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17 Valéry, Nicholas, “The Europe Plus Thirty Plan,” ITT/Profile (Bruxelles, Summer, 1976), p. 4Google Scholar. Reprinted by permission of publisher.

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