"The dollar standard is founded on the trust to political and military power of the United States, and this is beyond economic rationalism."

There is no such thing as economic rationalism. The free market imposes discipline on each of the individual participants. That is the free market doesn't work because people are rational, it works because it imposes rationality on the participants. It was almost inevitable that America would abuse a world currency that isn't backed by anything. The Federal Reserve = Central Planning. Of course, central planning doesn't work.

You seem enamored with the state. One book I hope to read soon is Martin van Creveld's _The Rise and Decline of the State_. Perhaps as a useful counterpoint to your own views, you might find it interesting as well.
matt at anarchyjapan | Homepage | 06.24.09 - 9:16 am | #

Shah, you are so right, but Nero is still fiddling what can I say.... I don't know what happened to Hillary! I know she went to China, but thereafter???? Great post as usual....
Tapline | Homepage | 06.30.09 - 3:57 pm | #

tap,

Hillary's close ties with China.... I hope she acts as the Secretary of State, nevertheless. No more campaign money from Chinese businessmen/
Shah Alexander | Homepage | 07.16.09 - 3:30 pm | #

Matt,

Any economic policy is related to politics. The most famous example is the "1 dollar=308 yen" deal. This was politically settled.

Rivalry against Russia and China is a security issue as well. That is why things must be considered beyond the market.

I am no advocate of central planning.

The book you introduced me sounds interesting. Yes, the global economy is eroding state dominance as you say.
Shah Alexander | Homepage | 07.19.09 - 8:14 pm | #