The Nexus of Public Debt and Private Finance: Forging the International Monetary Order

The contested alliance of state and finance embodied in public debt forms a nexus that has shaped the emergence of capitalism, and has also strengthened and transformed as capitalism developed. The state's recourse to debt is the foundation for the emergence of a powerful financier class, but this powerful class of financiers has also come to depend on the state to provide the fodder for its continual growth. This paper investigates the key role of this nexus in constituting the international monetary hierarchy and by ordering relations between advanced capitalist countries and enforcing the financial subordination of the periphery through a comparative-historical analysis of British hegemony in the 19th century and US hegemony in the 20th century.