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The Evolution of Modern Political Power

From the rise of large, bureaucratic states in the early twentieth century to the triumph of neoliberalism more recently, shifts in governance models cannot simply be reduced to the natural political instincts of those who find themselves in power at any given moment. There are much larger, and subtler, dynamics at work.

CHICAGO – Where power truly lies is not always clear. In 1998, US President Bill Clinton was certainly among the most powerful people in the world. Having triumphed in the Cold War, the United States had become what French Minister of Foreign Affairs Hubert Védrine called a hyperpuissance – a superpower in terms of both hard and soft power. Notwithstanding the Monica Lewinsky scandal, America’s “New Economy” was roaring, and Clinton was still polling well after his smashing re-election victory in 1996. American-led globalization was on the march, as was representative democracy.

A central feature of the neoliberal globalization of the late 1990s was the increasing cross-border mobility of short-term financial capital. When such “hot money” fled many East Asian economies in 1997, it caused a global financial crisis. Privately pondering convening the G7, Clinton wondered about the creation of a “Bretton Woods II” to succeed the international monetary system that had underpinned the national regulation of global financial capital since the end of World War II.

As he explained in a private phone call to British Prime Minister Tony Blair, “Bretton Woods assumed 50 years ago that no matter what, the issue would be to find enough money to facilitate trade and investment – not that money flows themselves would become a greater force of nature in the global economy.” Hence, Clinton even entertained the possibility of creating a new global central bank.