The last hopes for a stable international economic order lingering from those hot summer days in 1944 at Bretton Woods have now faded for good. The IMF and the World Bank were created to prevent the roller-coaster instabilities of the 1930s. Fernand Braudel, the French historian, argued in his classic The Wheels of Commerce that finance has been global since the fifteenth century. But it is hard to imagine the Medicis plugged into their computer terminals like some Renaissance George Soros deciding the fate of the ducat one day and the doubloon the next. The amount of money that moves through computers and along elaborate undersea cable wire or is beamed off satellites on a single weekday is more than three times what Japan earns through trade in a whole year.
Currency speculation sets off rapid changes of value in the foreign-exchange charts.
One effect is to undermine even the modest attempts by economic planners or political reformers in the Third World. Currency, bond and stock markets are complex and require an insider's knowledge. Once inside, the financial investor can derive huge returns. This is the heartless world of ruthless takeovers, currency manipulations and leveraged buy-outs made infamous in Oliver Stone's movie Wall Street with its biting critique of the acquisitive spirit of the 1980s. This casino economy is now in a position to dictate not only whose currency will be strongest and whose goods cheapest but perhaps most importantly to set 'acceptable limits' on the economic reforms and social changes so badly needed by the shantytown dwellers of Lima or the rural poor of northern Ghana.