By Max Kohnstamm
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Additional resources for A Nation Writ Large?: Foreign-Policy Problems before the European Community
G. in the regulation of business activity. In other areas joint responsibility, including financial solidarity, for the victims of the larger market was thought to be necessary. As the crucial importance of monetary influences, and the harmful effects and futility of dealing with 1 'Economic Interdependence and Foreign Policy in the Seventies', World Politics, XXIV (January 1972). 38 A Nation Writ Large? these separately became apparent, the Community began to consider the much more ambitious project of economic and monetary union.
True, it was recognised that this was only beneficial in conditions of full employment, and if it took place within an adequate monetary adjustment mechanism. The latter was thought to have been achieved with the Bretton Woods system, leaving to our days the question of who was to decide the amount of total liquidity in the international system, and hence the rate of expansion of the international economy. As to employment, Keynes managed to secure agreement that it was legitimate to impose quotas to protect employment, a step described at the time as 'an economic Munich' by one American purist.
The interpretation of the rules by one power - once a necessary precondition for the flexibility and management of the system, was now no longer accepted. The reaction, so far, has not been the logical one of establishing a joint responsibility by the major economic powers. Rather it has been a free-for-all, where rules are accepted selectively and interpreted to suit particular interests. If this disappearance of leadership were the only change in the international economic system, this in itself would make very urgent indeed a profound reflection by the enlarged Community on the implications of that joint responsibility with Japan, and with the participation of the less developed countries - which must now take the place of the much simpler single responsibility exercised by the United States.