Chapter 7 introduces students to the monetary and financial dimensions of East Asian international relations, which are fragmented regionally while tied closely with the Western-dominated monetary order. Monetary power is arguably as important as military power, but it is not well understood and not commonly included in an IR textbook. As a social construction, monetary and financial power are related to but not equivalent to productive power. East Asia does not stand in isolation, because its contemporary monetary and financial practices and theories are integrated into the global system. Thus, this chapter examines U.S. dollar hegemony. Following a broader discussion of the exchange-rate regimes adopted by East Asian nations, the chapter discusses the 1997–1998 Asian Financial Crisis, a monumental event in post-war East Asian international relations triggered by a currency crisis. The chapter ends with a discussion of the 2008 Great Recession.

After 1945, the United States took unprecedented levels of responsibility for leadership of the capitalist world economy, offering the dollar as the anchor for world currencies, championing free trade, and setting the standard for the consumer society, to which most other countries aspired. Related to that, it also acted as pacesetter in the adoption of petroleum-based fuels. For three decades, the system championed by America seemed to work well, not least for the West Germans and the Japanese. Suddenly, however, everything changed. US President Richard Nixon ended the Bretton Woods system in 1971, ushering in floating currency exchange rates. Two years later came the first of two oil crises that buffeted global trade and economies. The Germans and Japanese must have felt that, instead of entering a US-style Garden of Eden of earthly delights, they had instead been led down the garden path. The impact of these crises involved unaccustomed negative current account deficits for both countries through the early 1980s. However, reduced use of energy, changes in the energy mix, and highly successful export drives soon led to a pronounced recovery. These surpluses have generally remained positive ever since, although at far more modest levels in Japan than in Germany.

What is the relationship between the global economy and international law? In this chapter, we examine instruments that reflect the liberalism that has prevailed in international trading relations for the last half-century.  The resulting instruments include the articles of the World Trade Organization, the World Intellectual Property Organization, and the Trade-Related Aspects of Intellectual Property Agreement. We also highlight anti-corruption instruments and various non-governmental organizations that also share the goals and processes of international liberalism.   The middle section examines attempts to combat the various and increasingly sophisticated forms of corruption in international business transactions, especially the explosion of difficult-to-combat cyber fraud.  The latter part of the chapter notes a growing trend towards economic nationalist goals, and anti-competitive behavior among state and business elites.

The systemic crisis we face today imposes the need for a new paradigm of global order and governance that takes into account the dynamics brought by globalization.

First and foremost, the fate of mankind as a whole now faces a series of very large-scale threats. These threats require an endeavor beyond just optimizing nation-states’ self-interests, because they are of their nature transnational not international. Issues such as climate change, environmental problems, cybercrime, the proliferation of weapons of mass destruction and terror have now reached a scale that presents a threat to everyone, everywhere, and are becoming increasingly difficult to resolve purely through inter-state relations based on “territorial sovereignty and hegemonic geopolitics” . There is a clear need for a comprehensive new system of values in which states and concerned international civil society can participate to address these threats to humanity’s shared destiny, together with conventions based on such a system.

From this perspective in the eight chapter of the book the principal elements of a vision for a possible new global order are analysed and the author’s recommendations on a result-oriented UN reform process are discussed.

The epilogue takes up the story of the men followed in the book after the calamity ofWorld War II and the Holocaust, offering reflections on West Germany’s transformation into a peaceful democracy and its reintegration into the world economy enabled by the Bretton Woods System, the NATO alliance, and debt forgiveness. It concludes with observations about Fritz Fischer’s interpretation of the course of German history and the continued relevance of the German past for understanding the challenges of globalization in the twenty-first century.