ABSTRACT
This chapter explains an entirely contradictory process - the evolution of a system of international economic organisation which initially sustained a massive increase in integration, but only achieved this through processes which, because of their uneven nature. It considers two things - the factors which offset the tendencies to uneven development and allowed the recovery and upswing to occur and their effects, and the effect of these structural changes on the workability of the monetary arrangements established at Bretton Woods. American domestic demand was buttressed by military expenditure which between 1951 and 1961 amounted to $451 billion. The Bretton Woods system was based upon four key commitments to the United States dollar as a universal currency convertible into gold at fixed price. The decline and the corresponding instability could only have been halted through a return to surplus on the part of the US economy, together with a transition to deficit on the part of the now surplus industrial economies.
