This Time Is Different: Money and Financial Crises in Historical Perspective
This course will explore the functions and meanings of money from the earliest known use of trading accounts in ancient Ur to the world financial crisis of 2008 and beyond. After a brief foray into the theory and mechanics of money, we will begin by addressing a variety of historical issues, including: the changing role of money and credit in pre-capitalist economic systems; the role of money and credit in medieval Europe and in Europe’s transition to capitalism; the relationship between hegemonic international powers (e.g., Pax Britanica) and international currency systems; the US banking disaster of the late 1920s/early 1930s and the changing role of the state vis-à-vis US banking (e.g., the Glass Steagall Act); postwar Pax Americana and the Bretton Woods system, including the development of modern tools of monetary policy; globalization, neoliberalism, and the increasing incidence of international currency crises; currency crises in developing countries (e.g., the Mexican and Asian crises); the IMF’s structural adjustment policy responses and their implications for development; a detailed analysis of the 2008 world financial crisis and of the US and international responses (e.g., TARP, CCAR, Fed “special facilities,” and Dodd-Frank); and the tools of and prospects for stabilizing the domestic and international financial systems in the wake of 2008 (e.g., Basel III). Along the way, we’ll address a variety of theoretical issues from both orthodox and heterodox perspectives. In addition to regular short papers on a variety of assigned readings, students will work in groups to research and make presentations on topics related to international finance (e.g., the Swedish banking crisis of the early 1990s and that government’s response); Islamic banking and finance: its meanings and dynamics; questions of currency exchange rate manipulation for purposes of competitive advantage (e.g., the Chinese renminbi); and the viability and future of the Euro.