In the study of international political economy, economics and politics perennially struggle for dominance. Are state policies best explained by the logic of economics, driven by market forces and a desire to maximize social welfare, or by dirty old politics? Nearly three decades ago, Robert Gilpin sought to resolve the question by stressing the endogeneity of both. The relationship between “the pursuit of wealth [economics] and the pursuit of power [politics],” he suggested in U.S. Power and the Multinational Corporation (1975, p. 45), is “reciprocal and dynamic,” not unidirectional or hierarchical. But that hardly sufficed to settle the matter, as this impressive new collection of essays starkly demonstrates. For Jonathan Kirshner and his colleagues, there is no doubt that as far as international monetary relations are concerned, politics, not economics, is key. The purpose of Monetary Orders, Kirshner declares, is “to contribute to and encourage an emphasis on the study of the politics of money” (p. 4, italics in the original). Following a path well worn by the late Susan Strange, the authors all seek to make the case for the primacy of politics in shaping monetary decisions and outcomes.

The central theme of the book is established early in a well-crafted introduction by the editor. “The principal argument of this volume,” Kirshner writes, “is that economic theory is indeterminate in its ability to account for most of the monetary policy choices and reforms that are observable in the world today….Economic logic limits the range of policy choices to a plausible set, but the outcomes observed are largely attributable to politics” (p. 4). In a manner reminiscent of the sonata form of a classical symphony, this theme is then elaborately developed in 10 chapters by an outstanding group of younger scholars before brief recapitulation in a second, concluding essay by the editor. Though the individual chapters address a wide variety of countries and eras, the volume is unusually well integrated in analytical terms, perhaps because all the contributions were composed expressly for this project.

Monetary Orders is a must read for anyone interested in the political economy of global money and finance. The scholarship, which mostly relies on case-study methodology, is generally of a high order, even if inevitably somewhat uneven in quality. In substantive terms it is cutting edge, providing a valuable guide to the thinking of the latest generation of specialists in the field. Topics addressed include the role of ideology in contemporary financial liberalization (Ilene Grabel, Mark Blyth), central-bank design in developing countries (Eric Helleiner), the operation of the African Financial Community (CFA) franc zone (David Stasavage), the collapse of the ruble zone (Rawi Abdelal), Argentina's now-defunct currency board (Hector Schamis), Chinese exchange-rate policy (Hongying Wang), internationalization of the yen (William Grimes), U.S. international monetary policy in the 1960s (Francis Gavin), and European monetary integration (Michele Chang). Collectively, the authors offer a powerful and coherent argument in favor of a strictly political interpretation of monetary affairs.

But is the argument persuasive? As the volume's subtitle suggests, the theme really disaggregates into two separate propositions. The first has to do with the ambiguity of economics. Economic theory, we are told, is indeterminate as a guide to policy choices, since only rarely can one single policy be said to be uniquely correct. Typically, a range of options is plausible—that is, sound and sustainable—from the perspective of economic reasoning. Hence, economics is powerless to explain why one policy is chosen over another. The second proposition has to do with the ubiquity of politics. Given the indeterminacy of economic theory, outcomes are necessarily attributable to politics. In Kirshner's words, “political factors … provide the missing link between the plausible set and the outcome observed” (p. 262). Neither proposition is demonstrably false; together, they have the truth of a logical syllogism. Nonetheless, in each case caveats are in order.

Consider the ambiguity of economics. Here the volume appears to be pushing against an open door. No economist would deny the complexities of economic policymaking. Beyond the most parsimonious of theoretical models, policy optimality is always understood to be represented by a utility frontier, where difficult choices must be made, not by a single point. Hence, most economists would agree that economic reasoning alone is insufficient to explain what policymakers actually do. Economists may exhibit a bit of hubris in their readiness to forecast the behavior of private market actors. But when it comes to public policy, their aims are traditionally more modest—mostly to be normative, assessing the material costs and benefits of alternative choices, rather than predictive. Economic theory has never aspired to do more than define a plausible set of policy options. To suggest more is to set up a straw man.

Or consider the ubiquity of politics. Here the volume tends to promise more than it delivers. Political factors no doubt do provide the main link between policy options and outcomes. But what factors and under what conditions? The list of factors cited in the volume is long and varied, including all possible levels of analysis—state power at the international level, group conflict at the domestic level, and ideas at the cognitive level. But a comparison across the diverse chapters yields few useful generalizations about what factors are likely to be most influential under what circumstances, or how any of them might combine or interact over time. Different factors are highlighted by different authors. Where the influence of geopolitics is stressed by, inter alia, Helleiner, Gavin, and Chang, distributional conflicts are emphasized by Grabel, Blyth, and Schamis, and the role of ideology by Abdelal, Gavin, and Kirshner. The implication appears to be that politics is little more than a grab bag of variables from which analysts can draw whatever suits their specific purpose. But if that is so, in what sense, then, can politics be regarded as any less ambiguous than economics? Political theory, too, seems indeterminant as a guide to policy choices.

In the end, therefore, the case for the primacy of politics remains unproved. Kirshner and his colleagues are on the side of the angels in encouraging an emphasis on politics in the study of money. But in so doing, it is important neither to over-sell the usefulness of political analysis nor to discount the contribution that economic theory can make. After all these years, Gilpin's original insight remains valid. Neither economics nor politics alone can explain policy outcomes. Both matter.