Non-State Actors and the International Institutional Order : Central Bank Capture and the Globalization of Monetary Amnesia

The role of private, non-state actors in the international institutional and legal order is often praised for providing greater pluralism, public participation and transparency in the formulation of legal norms. Often overlooked are the ways that non-state actors undermine the sovereignty and practical capabilities of nation-states to provide for the welfare and security of citizens. The growth of global capital and currency markets, fueled and dominated by non-state actors, has undermined the ability of states to incur deficits or to otherwise stimulate their economies. Non-state actors also shape today's global order by capturing the institutions of the state, contributing to the problem of iquest;democratic deficits.iquest; The capture of the Bretton Woods institutions, the International Monetary Fund and World Bank, has been widely noted by critics of the Washington Consensus. In contrast, there has been a relative silence about the capture of central banking institutions, perhaps the most significant agency capture by non-state actors in today's international legal order. This has been largely modeled on the iquest;autonomousiquest; Federal Reserve, which in turn reflects a distinctly biased reading of history, one that forgets an entire decade of Federal Reserve history, 1941 to 1951, which strangely happens to be the most successful decade in U.S. economic and social history.This forgotten decade of U.S. monetary history included massive federal spending on World War Two and the two most expensive Cold War programs, the Marshall Plan and the G.I. Bill of Rights. Federal spending and real economic growth were magnitudes greater than before or since, and the Federal Reserve was not functionally autonomous, but rather was under the strict direction of the Treasury Department.Today's monetary amnesia is a collective forgetting of our own American history and now one of the country's most insidious ideological exports