Introduction

IPE scholars have often regarded the post–World War II Bretton Woods system as the height of American power in international finance (Block 1977; Ruggie 1982; Gilpin 1987; Cerny 1993a, 1993b). According to this perspective, after the disastrous events of the interwar period the United States adopted a more enlightened understanding of its national interest and emerged as a hegemonic power – not only able but also willing to provide the international markets with stabilizing institutional foundations. American policies, it is argued, ensured the reproduction of a liberal international economy by embedding it in regulatory institutions: The “embedded liberal” structures of the Bretton Woods system allowed liberal economic relations to develop while at the same time shielding countries from the vagaries of unregulated international capital movements. Similarly, the decline of Bretton Woods and the accelerating expansion of international financial markets have often been seen as marking the end of American financial hegemony. More recent strands in IPE have begun to reconsider this picture of post–World War II order by relativizing the coherence of Bretton Woods and presenting a more nuanced analysis of hegemonic decline (Strange 1986; Walter 1993; Helleiner 1994; Germain 1997). But they have not broken with the idea that the transition from embedded liberalism to disembedded markets holds the key to understanding financial developments from World War II to the present day.