STUDY OF MONEY 415 could still reap the political benefits afforded by national money,such as seigniorage and the ability to practice macroeconomic management;in both cases such autonomy is circumscribed by the need to"retain com- petitive superiority in the marketplace"and by"how official policies interact with market preferences"(pp.123,135).Thus Cohen's oli- gopolists may face the constraints of perfect competition.5 This is critical for Cohen's analysis,because if the wiggle room of the oligopolist is eliminated,then we must confront the possibility that we are de facto in the purely globalized world where states have no power and markets rule.While Cohen raises political concerns about markets (equity and accountability,as mentioned above),he still holds to a fun- damental faith that unfettered market forces will yield optimal out- comes.Smaller states,for example,may achieve "a much healthier economic performance"if they "in effect submit their national sover- eignty,at least in part,to the strict discipline of the marketplace" p.126). But what if laissez-faire is suboptimal when it comes to international money?This,one of the fundamental divergences between Cohen and Strange,remains an unresolved question;it will be addressed at length below.Cohen does offer at least one good deductive reason to suspect that unregulated money is not a good idea.He notes,for example,that one technique of bolstering a currency's reputation is to raise interest rates.But in a world of oligopolistic competition,where reputation is relative,this may lead to competitive interest-rate increases-for polit- ical reasons,rather than for economic ones.The result-suboptimally high interest rates having no economic justification-would slow global economic activity. The prospect of flaws in the functioning of the international macro- economy is the weak link of Cohen's analysis and,by extension,of the study of money from this perspective in the IPE field as a whole.Cohen explicitly embraces the market,and quite pointedly so,explaining that as state power erodes,we are left not with anarchy but with governance by the market.Indeed,responding directly to the assertion by Strange that states have been replaced by anarchy,Cohen answers that"nothing s Cohen recognizes this,explaining that autonomy is likely to erode even for the most powerful states and noting that public policy will have to conform increasingly with what markets want(pp.130, 133).His faith in market efficiency masks the tension between these observations and his oligopoly analogy. For an illustration of the potentially disastrous consequences of interest-rate competition,derived in part from a concern with market reputation,see Barry Eichengreen,Golden Fetters:The Gold Stan- dard and the Great Depression (Oxford:Oxford University Press,1992).See also Jonathan Kirshner, "Disinflation,Structural Change,and Distribution,"Review of Radical Political Economics 30(March 1998).could still reap the political benefits afforded by national money, such as seigniorage and the ability to practice macroeconomic management; in both cases such autonomy is circumscribed by the need to “retain com￾petitive superiority in the marketplace” and by “how official policies interact with market preferences” (pp. 123, 135). Thus Cohen’s oli￾gopolists may face the constraints of perfect competition.5 This is critical for Cohen’s analysis, because if the wiggle room of the oligopolist is eliminated, then we must confront the possibility that we are de facto in the purely globalized world where states have no power and markets rule. While Cohen raises political concerns about markets (equity and accountability, as mentioned above), he still holds to a fun￾damental faith that unfettered market forces will yield optimal out￾comes. Smaller states, for example, may achieve “a much healthier economic performance” if they “in effect submit their national sover￾eignty, at least in part, to the strict discipline of the marketplace” (p. 126). But what if laissez-faire is suboptimal when it comes to international money? This, one of the fundamental divergences between Cohen and Strange, remains an unresolved question; it will be addressed at length below. Cohen does offer at least one good deductive reason to suspect that unregulated money is not a good idea. He notes, for example, that one technique of bolstering a currency’s reputation is to raise interest rates. But in a world of oligopolistic competition, where reputation is relative, this may lead to competitive interest-rate increases—for polit￾ical reasons, rather than for economic ones.6 The result—suboptimally high interest rates having no economic justification—would slow global economic activity. The prospect of flaws in the functioning of the international macro￾economy is the weak link of Cohen’s analysis and, by extension, of the study of money from this perspective in the IPE field as a whole. Cohen explicitly embraces the market, and quite pointedly so, explaining that as state power erodes, we are left not with anarchy but with governance by the market. Indeed, responding directly to the assertion by Strange that states have been replaced by anarchy, Cohen answers that “nothing STUDY OF MONEY 415 5 Cohen recognizes this, explaining that autonomy is likely to erode even for the most powerful states and noting that public policy will have to conform increasingly with what markets want (pp. 130, 133). His faith in market efficiency masks the tension between these observations and his oligopoly analogy. 6 For an illustration of the potentially disastrous consequences of interest-rate competition, derived in part from a concern with market reputation, see Barry Eichengreen, Golden Fetters: The Gold Stan￾dard and the Great Depression (Oxford: Oxford University Press, 1992). See also Jonathan Kirshner, “Disinflation, Structural Change, and Distribution,” Review of Radical Political Economics 30 (March 1998)