This is an excellent book that deserves a wide audience of international relations scholars, economists, and policymakers: It is ambitious, intelligent, insightful, learned, thorough, and gracefully written. The Making of National Money will soon be required reading for students of international political economy, as is Eric Helleiner's States and the Reemergence of Global Finance (1994).

In the introduction, Helleiner outlines goals that appear modest, as well as deferential, to existing scholarship. The central purpose of the book, as described on page 1, is to place contemporary monetary transformations “in a longer historical context.” The author also notes that the scholarly literatures on territoriality and state building have not adequately dealt with the meaning of national money, aside from the outstanding recent work of David Woodruff.

Helleiner's project to historicize the territoriality of money, however, necessitates that he evaluate, and ultimately reject, two of the most standard propositions about money. Contrary to the view that territorial currencies are distinctly modern and “Westphalian,” some 300 years old, the author shows that they are a very recent phenomenon of distinctly political origin. This conventional wisdom will certainly be overturned by the book.

The second proposition that Helleiner effectively refutes—that the geography of money derives in any way from the optimality of currency areas—is likely to remain impervious to data and empirical findings. Among many scholars, optimum currency area (OCA) theory continues to be influential as a baseline explanatory framework, despite the fact that its originator conceived it to be a normative, not positive, approach to international money. Helleiner emphasizes “the potential usefulness of a broader analytical framework that examines how the geography of money is influenced by technological and state structures as well as by political struggles in which currencies are seen to serve broader purposes than OCA allows for” (p. 218). I am hopeful, but not optimistic, that economists and economics-inspired political scientists will adopt his more eclectic—and far more robust—analytical framework.

Helleiner's framework is composed of an analysis of four sets of motivations for territorial currencies, and he devotes the first five empirical chapters of the book to them: 1) fostering the emergence of national markets by altering transaction costs; 2) controlling the domestic money supply for macroeconomic purposes; 3) meeting the fiscal needs of the state, particularly through seigniorage; and 4) strengthening national identities. His analysis of these first three motivations is incisive and synthetic, and his examination of the relationship between national identities and national currencies is highly original and sets a new standard.

The second part of the book (Chapters 6–10) analyzes the spread of territorial currencies to most regions of the world during the twentieth century, as well as contemporary challenges to the territorial currency as an institution. Amid so many claims of novelty in international monetary affairs, Helleiner effectively documents what exactly is new among the challenges to territorial currencies. This historical perspective allows him to opine usefully about the likely influence of various trends in the coming decades. According to Helleiner, the challenges to territorial currencies include 1) a revived interest in monetary unions; 2) the growing use of foreign currencies within national territories; 3) the growth of subnational local currencies; 4) the emergence of new forms of “electronic money”; and 5) disillusionment with the various motivations that had led to the emergence of territorial currencies, particularly with the desire to engage in “macroeconomic activism.”

A book that proposes to synthesize so much is bound to be limited in other ways, and my only complaints have to do with issues on which Helleiner has chosen not to focus. Of these, the most important is the broader implications of his analysis for international relations theory. The Making of National Money is too reserved about contemporary theoretical debates among scholars of international political economy especially. Perhaps this neutrality and eclecticism will both increase the staying power of the book and widen the audience, but by not weighing in on these debates explicitly, Helleiner's approach may not get the attention it deserves. The author's insightful analysis of the motivations for territorial currencies, as well as contemporary disillusionment with those motivations, might have, for example, been linked systematically to more sociological understandings of international political economy. An important aspect of these transformations is the rise and fall of a set of ideas about the social purposes of macroeconomic policymaking, and that transformation remains to be theorized. Still, as an author, Helleiner displays so much good judgment that this sort of criticism may be seen as irrelevant for such a truly outstanding book reflecting an intellectual style that eschews disciplinary boundaries.