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Developing Just Monetary Arrangements

Published online by Cambridge University Press:  28 September 2012

Sanjay G. Reddy
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Abstract

International monetary arrangements–the practices and rules governing the creation, distribution, and management of money and credit in the world economy–have received little attention from philosophers concerned with international distributive justice. A convincing account of international distributive justice requires a description of how these arrangements should function. International monetary arrangements currently appear to have consequences that are incompatible with a global egalitarian conception of distributive justice.

There are at least three categories of questions– relating respectively to money supply, exchange rates, and debt–that can be raised in the international context. First, who should have control over key monetary decisions, such as how much, and on what terms, money and credit are being supplied within each monetary zone? Should this control belong to the citizens of a given monetary zone and their representatives alone? How should the benefits arising from the ability to create money be distributed internationally? Second, should the stability of exchange rates be a goal and, if so, how should the responsibility for maintaining stability be apportioned? When adjustment of exchange rates is required, who should bear the burdens associated with such adjustment? Third, what arrangements should govern the accumulation and discharge of debt in the international setting? In what respects should debt contracted by states be governed by different rules than debt contracted by private agents? What forms of conditionality may be imposed by creditors, such as international institutions, governments, or private lenders, as part of a just framework of international borrowing and repayment? These questions exemplify rather than exhaust the dilemmas that arise with regard to international monetary arrangements. Global egalitarians should imagine the alternative forms that such arrangements can take as elements of a realistic utopia.

Type
Articles
Information
Ethics & International Affairs , Volume 17 , Issue 1 , March 2003 , pp. 81 - 93
Copyright
Copyright © Carnegie Council for Ethics in International Affairs 2003

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References

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2 I refer to just institutions without wishing to suggest that institutions can be identified that are wholly just, but rather that can be more wholly supported from the standpoint of justice.

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19 On the relationship between the IMF and creditors' interests, see Stiglitz, Globalization and Its Discontents, ch. 8.

20 See in this regard the recent proposal to eliminate this monopoly in Unger, Roberto M., “The Really New Bretton Woods,” in Uzan, Marc, ed., The Financial System under Stress: An Architecture for the New World Economy (New York: Rutledge, 1996Google Scholar).