¹ For a more detailed analysis of the reasons for which foreign economic policy has assumed a new political significance, see my essay, “The Transformation of Foreign Policies: Modernization, Interdependence, and Externalization,” World Politics, XXII (April 1970), esp. 379–83.Google Scholar

² These questions will not be taken up in this essay in the order in which they are posed here. Rather, it is hoped that the exposition of the argument in this essay will clarify answers to them.

³ Certain economists had, by 1960, begun to predict a series of future crises in the international monetary system. These predictions were, by and large, focused upon a presumed insufficiency of liquidity to meet the needs of a burgeoning level of global trade. They failed to predict either the political significance of the crises which did occur, or the form they would assume due to the relatively free floating market of short-term capital that later emerged. See, for example, Triffin, Robert, Gold and the Dollar Crisis (New Haven 1960).Google Scholar

⁴ The distinction between Grosspolitik, or “high politics,” and “low politics” belongs to the Saint-Simonian tradition of meliorism as it was embodied in the “functionalist” school of thought on supranational integration. Areas of “low politics” were assumed in this tradition to be amenable to non-political and technical manipulation by experts. When combined with the assumption that the growth and the survival of industrialized societies is dependent upon the coordination internationally of national policies related to these “technical” issues, this argument produced a powerful prescription for functional integration. Theorists who argued this position profoundly overestimated both the urgency of the task and the degree to which “technical” problems could remain out of politics. For a succinct statement of this position, see Haas, Ernst, “Technocracy, Pluralism and the New Europe,” in Graubard, Stephen R., A New Europe (Boston 1964), 62–88.Google Scholar

⁵ See, for example, the outline of this argument in Buchan, Alastair, Crisis Management: The New Diplomacy (Paris 1966).Google Scholar An analysis of the political science literature on crises can be found in Hermann, Charles F., “International Crisis as a Situational Variable,” in Rosenau, James N., ed., International Politics and Foreign Policy (rev. ed., New York 1969), 409–21.Google Scholar

⁶ For a forcefully argued example of a systemic analysis of crises involving the use of force, see Young, Oran R., The Politics of Force (Princeton 1968).Google Scholar An economic conceptualization of the same sort can be found in Mundell, Robert A., “The Crisis Problem,” in Mundell, Robert A. and Swoboda, Alexander K., eds., Monetary Problems of the International Economy (Chicago 1969), 343–49.Google Scholar

⁷ This pattern of analysis is typical of the work of Charles A. McClelland, but can also be found in a variety of other writings. See, for example, McClelland, , “The Acute International Crisis,” World Politics, XIV (June 1961), 182–204CrossRefGoogle Scholar, and his “Access to Berlin: The Quantity and Variety of Events, 1948–1963,” in Singer, J. David, ed., Quantitative International Politics: Insights and Evidence (New York 1968), 159–86.Google Scholar

⁸ For a fuller but more sympathetic exposition of systemic analysis of crises, see Hermann (fn. 5), 411–13.

⁹ Mundell(fn. 6), 343.

¹⁰ There is a set of additional problems associated with etiological or “stage” analysis of crises which can be identified, but the full exposition of them is beyond the scope of this essay. For example, such analyses assume that a class of crisis situations can be identified which bear similarities in the way they begin or terminate. These assumptions frequently are not warranted. They, therefore, assume that the dynamics of crises tend to be similar and that generalizations about them can be fruitful. This assumption has never been fully tested empirically. Moreover, as a premise it has not yielded notably powerful propositions.

¹¹ For a short descriptive history of this and other economic crises in the nineteenth and twentieth centuries, see Flamant, Maurice and Singer-Kerel, Jeanne, Modern Economic Crises and Recessions, translated by Wardroper, Pat (New York 1968).Google Scholar

¹² For a fuller account of both policies, see Hirsch, Fred, Money International: Economics and Politics of World Money (Garden City 1969), 250–59.Google Scholar

¹³ Arguments about neomercantilism can be found in Robinson, Joan, The New Mercantilism (Cambridge 1966)Google Scholar, and in Malmgren, Harold B., Trade Wars or Trade Negotiations? Non-Tariff Barriers and Economic Peacekeeping (New York 1971).Google Scholar

¹⁴ In Jacob Viner's paradigm of the policy of mercantilism, the following more accurate relationships are postulated between power and plenty. “(1) wealth is an absolutely essential means to power, whether for security or for aggression; (2) power is essential or valuable as a means to the acquisition or retention of wealth; (3) wealth and power are each proper ultimate ends of national policy; (4) there is a long-run harmony between these ends, although in particular circumstances it may be necessary for a time to make economic sacrifices in the interest of military security and therefore also of long-run prosperity.” See “Power Versus Plenty as Objectives of Foreign Policy in the Seventeenth and Eighteenth Centuries,” World Politics, 1 (October 1948), 10.Google Scholar

¹⁵ Hallett Carr, Edward, Nationalism and After (London 1967), 5.Google Scholar

¹⁶ Viner (fn. 14), 10.

¹⁷ For elaborations of the political and economic arguments associated with liberalism, see Carr (fn. 15), 11–17, and The Twenty Years' Crisis, 1919–1939 (London 1939)Google Scholar, chap. 4. The origins of liberal doctrine in the eighteenth century are traced in Gilbert, Felix, To the Farewell Address: Ideas of Early American Foreign Policy (Princeton 1961), 44–75.Google Scholar

¹⁸ Robinson (fn. 13), 9–10. Richard N. Cooper presents a different but complementary argument for the political tensions which characterize international commercial and financial interactions. See “Introduction” to Hirsch (fn. 12), xiv-xvii.

¹⁹ For a compatible view on this which relates to the declining value of territorial conquest in international affairs, see Knorr, Klaus, On the Uses of Military Power in the Nuclear Age (Princeton 1966), 21–34.Google Scholar

²⁰ Hirsch (fn. 12), 56.

²¹ The outstanding example of this position may be found in Waltz, Kenneth, “The Myth of National Interdependence,” in Kindleberger, Charles P., ed., The International Corporation (Cambridge, Mass. 1970), 205–23.Google Scholar The argument, however, is shared by a large number of political scientists.

²² I have critically examined this literature elsewhere and will only summarize my argument here. For a more detailed analysis, see my essay, “Transnational Economic Processes in the Twentieth Century,” International Organization, XXV (Summer 1971).Google Scholar

²³ For a more formal definition of strategic behavior and of rationality models, see the essay by Norman Frohlich and Joe A. Oppenheimer, “Entrepreneurial Politics and Foreign Policy,” in this volume.

²⁴ Arrow, Kenneth, “Public and Private Values,” in Hook, Sidney, ed., Human Values and Economic Policy (New York 1967), 5.Google Scholar

²⁵ This argument is more fully developed in Morse (fn. I), 383–86.

²⁶ Tinbergen, Jan, On the Theory of Economic Policy (Amsterdam 1963 [1952])Google Scholar, and Economic Policy, Principles and Design (Amsterdam 1956).Google Scholar

²⁷ Meade, J. E., The Theory of International Economic Policy, 1 (London 1951).Google Scholar

²⁸ For a lucid exposition, see Johansen, Leif, Public Economics (Amsterdam 1965), 9–17.Google Scholar

²⁹ Tinbergen, On the Theory of Economic Policy (fn. 26), 37–38.

³⁰ See Cooper, Richard N., The Economics of Interdependence (New York 1968), 153–59.Google Scholar

³¹ I am indebted to Harold Sprout for the definition of this range.

³² See Alting von Geusau, F.A.M., Beyond the European Community (Leyden 1969), 41Google Scholar, and Lindberg, Leon N., “Integration as a Source of Stress on the European Community System,” International Organization, XX (Spring 1966), 233–65.CrossRefGoogle Scholar

³³ It can be argued that this may involve a rather special case where a government is actually willing to pay the price of opting out of the community. However, de Gaulle always cast his threats ambiguously which led to their being taken seriously by the other Five. For a classical discussion of this sort of threat, see Schelling, Thomas C., Arms and Influence (New Haven 1966), esp. chap. 2.Google Scholar

³⁴ Alting von Geusau (fn. 32), 59.

³⁵ For a description of crisis diplomacy in the GATT and an elaboration of these points, see Preeg, Ernest H., Traders and Diplomats (Washington, D.C. 1970), 178–95.Google Scholar

³⁶ Indeed, the Commission's proposals for sweeping changes in the structure of the Community which led to the French boycott of 1965 was predicated on the stake of the French in the CAP. See Newhouse, John, Collision in Brussels, The Common Market Crisis of jo June 1965 (New York 1967).Google Scholar

³⁷ For a discussion and reformulation of the “free rider problem,” see Frohlich, Norman and Oppenheimer, Joe A., “I Get By With a Little Help From My Friends,” World Politics, XXIII (October 1970), 104–20.CrossRefGoogle Scholar

³⁸ The role of domestic factors in crises cannot, in the present state of knowledge, be precisely determined. Governments can manipulate domestic opinion to a degree, especially in the short term, but the extent of manipulability is dependent upon many factors, including the political saliency of the issues involved. Moreover, once an interdependence is identified between some domestic factors and some external factors, a government may provoke an institutional crisis in order to achieve predominantly domestic ends. This is often the case, for example, when a government's legitimacy is at stake.

³⁹ A fourth reason, independent of the French case, might be given. This has to do with the bargaining position of “small” or “weak” parties over “larger” or “stronger” parties.

⁴⁰ For a review of this literature in predominantly economic terms, see Clement, M. O. and others, Theoretical Issues in International Economics (New York 1967), 213–48.Google Scholar

⁴¹ This is the view presented by Valery Giscard D'Estaing when he first was Finance Minister of France (1962–1966). It is summarized in Kolm, Serge-Christophe, “La monétisation américaine du capital français,” Revue economique, XVIII (November 1967) 1038–57.Google Scholar

⁴² This sensitivity has been exacerbated by technological changes which have increased the mobility of persons, of ideas, of goods and services, of monies, and of patents.

⁴³ See Triffin, Robert, “The International Monetary Scene Today and Tomorrow,” Lo Spettatore Internaztonale [English Edition], V (July-December 1970), 375–90.CrossRefGoogle Scholar