Free Trade and Migration in Peril As Politicians Shun Globalization

Americans are anything but optimistic right now, and critics will continue to use Polanyi-like arguments to blame the excesses of neoliberalism. But protectionists have been in power for the last six years, and their policies are partially responsible for steep inflation, goods shortages, and a faltering service sector. Perhaps this next decade will produce a successor to Reagan, someone who can marry hard-headed economics with the optimism necessary to sell it.

The alternative is dire. “The true nature of the international system under which we were living was not realized until it failed,” Polanyi wrote in The Great Transformation. “Hardly anyone understood the political function of the international monetary system; the awful suddenness of the transformation thus took the world completely by surprise&.When it broke, the effect was bound to be instantaneous.”

via reason.com

I like the sound of this. But what does Prof. Drezner mean about the “international monetary system”? What is its political function? He does not say.