The Finance Money Crisis and Cryptocurrencies Is the US Dollar Hegemony in an Interregnum?
Main Article Content
Keywords
Interregnum, Moribid symptoms, dollar hegemony, cryptocurrency, financialisation, fiat money
Abstract
The speculative financial services sector and the systemic failures of financial globalisation have prompted a growing call for delinking from the hegemony of the US dollar. These systemic failures have been illustrated by financial mismanagement and the financial crisis of 2007-8. This event paints a dire picture of the consequences associated with poor regulation of the financial sector. This study seeks to interpret these events in terms of Gramsci’s Prison Notebooks and his concept of the ‘morbid symptoms of the interregnum’. According to Babic (2020), these occur when a hegemony and its institutions are ‘dying’, thereby hampering their power. This notion also highlights that the future remains murky, despite public calls for change. Gramsci calls this the ‘new that cannot be born’.
This study seeks to extend this framework to the current state of the dollar hegemony. The ‘morbid symptoms’ we will examine include the call to delink from the speculative high-risk US economy, the emergence of cryptocurrencies, and the politics surrounding fiat money. Some have argued that the emergence of cryptocurrencies could be the ‘new’. However, this study argues that the negative characteristics associated with cryptocurrencies such as cybersecurity concerns and price volatility create ambiguity about whether cryptocurrency is the ideal trajectory. Therefore, it argues that ambiguity and calls for change qualify our current monetary situation to be classified as a Gramscian interregnum.
It also examines the current fiat money discourse by highlighting how the dollar hegemony may be succeeded by another fiat currency. However, it argues that the inflationary shortfalls of fiat money make this a fallible option, thereby perpetuating the ambiguities within the Gramscian interregnum.
Article Metrics Graph
References
Alessandrini, P. (2013). Bancor II. Research Finance and Money Group, 1–6.
Alvarez, F., R.E. Lucas and W.E. Weber. (2001). Interest rates and inflation. American Economic Review, 91(2): 219-225. https://doi.org/10.1257/aer.91.2.219
Amin, S. (2014). Capitalism in the age of globalisation: The management of contemporary society. Bloomsbury Publishing.
Ante, L. (2022). How Elon Musk’s Twitter activity moves cryptocurrency markets. Brl Working Paper Series. https://doi.org/10.2139/ssrn.4065313
Avgouleas, E., & W. Blair. (2020). The concept of money in the 4th industrial revolution -- a legal and economic analysis. Singapore Journal of Legal Studies, (Mar 2020), 4-34. https://doi.org/10.2139/ssrn.3534701
Babić, M. (2021). The COVID-19 pandemic and the crisis of the liberal international order: Geopolitical fissures and pathways to change. Global Perspectives, 2(1), 24051. https://doi.org/10.1525/gp.2021.24051
Baker, D. (2008). The housing bubble and the financial crisis. Real-World Economics Review, 46: 73–81.
Barna, J. (2022). Blockchain and Cryptocurrencies. Harvard Model Congress.
Brown, B., & P. Simonnot. (2020). Europe’s Century of Crises Under Dollar Hegemony: A Dialogue on the Global Tyranny of Unsound Money. Springer Nature. https://doi.org/10.1007/978-3-030-46653-4
Carbonaro, G., & P. Davies. (2022). Terra Luna 2.0: How backers of the project want to revive the failed cryptocurrency. Euronews, 18 June. At Terra 2.0 launches after Luna meltdown but the reborn crypto is crashing again | Euronews
Cerny, P. G. (1993). Finance and World Politics. Books.
Ceruleo, P. (2014). Bitcoin: a rival to fiat money or a speculative financial asset? Master’s Dissertation, Libera Universita Internazionale Degli Studi Sociali.
Chen, J. & S. Anderson. (2019). Fiat Money. Investopedia. Viitattu, 9, 2020.
DuPont, Q. (2014). The politics of cryptography: Bitcoin and the ordering machines. Journal of Peer Production, 1(4), 1-10.
Engemann, K.M. (2013). Banking Panics of 1931-33. Federal Reserve History.
Foo, K. (2020). Tracing criminal proceeds through fungible mixtures in money laundering cases. Journal of Money Laundering Control, 23(4): 783–792. https://doi.org/10.1108/JMLC-03-2020-0026
Gilpin, R.G. (2016). The political economy of international relations. Princeton University Press.
Guynn, R.D. (2012). Are bailouts inevitable. Yale J. on Reg., 29, 121.
Harvey, D. (2016). Crisis theory and the falling rate of profit. In The Great Financial Meltdown. Edward Elgar. https://doi.org/10.4337/9781784716493.00011
Heng, L. (2018). The Main Causes of Hyperinflation Zimbabwe and Venezuela: The Mismanagement of Fiscal Policy. LeaksmyHeng, Accessed at: https://leaksmyheng.wordpress.com/2018/02/23/the-main-causes-of-hyperinflation-zimbabwe-and-venezuela-the-mismanagement-of-fiscal-policy/. Date Accessed (3 February 2022)
Koch, M. (2022). State-civil society relations in Gramsci, Poulantzas and Bourdieu: Strategic implications for the degrowth movement. Ecological Economics, 193, 07275. https://doi.org/10.1016/j.ecolecon.2021.107275
Lapavitsas, C. (2009). Financialised Capitalism: Crisis and Financial Expropriation. Historical Materialism, 17 (2009):114–148. https://doi.org/10.1163/156920609X436153
Lim, K. (2019). Why, When, and How the US Dollar aas Established as World Money. Peace Studies, 27(2). https://doi.org/10.21051/PS.2019.10.27.2.257
Lipson, J.C. (2011). Defining Securitization. Southern California Law Review, 85.
Lipton, A., A. Sardon, F. Schär, & C. Schüpbach. (2020). From Tether to Libra: Stablecoins, Digital Currency and the Future of Money. ArXiv Preprint ArXiv:2005.12949.
Macrina, A. & E. Phetteplace. (2015). The Tor browser and intellectual freedom in the digital age. Reference and User Services Quarterly, 54(4): 17–20. https://doi.org/10.5860/rusq.54n4.17
Malik, V. & S. Bandyopadhyay. (2021). Cryptocurrency: A Bubble waiting for a Burst? Economy Polity Environment: An International Peer-Reviewed Journal of Social Studies, 3(1): 44–56.
Marx, K. (1867). Primitive Accumulation. In F. Engels (Ed.), Capital (1st ed., Vol. 1, pp. 1–549). Progress Publishers.
Morrow, A. (2022). Stablecoins, explained: Why the crash of Terra and Luna has investors on edge - CNN. CNN Business. 13 May.
Nakamoto, S. (2008). Bitcoin An Electronic Peer-to-Peer Electronic Cash System. Accessed at: https://bitcoin.org/bitcoin.pdf. Date accessed (2021/06/23).Nicolini, J.P. (2010). Hyperinflation. Monetary Economics, 123–126.
Pandya, S., Mittapalli, M., Gulla, S. V. T., & Landau, O. (2019). Cryptocurrency: Adoption efforts and security challenges in different countries. HOLISTICA–Journal of Business and Public Administration, 10(2), 167-186. https://doi.org/10.2478/hjbpa-2019-0024
Pennington-Cross, A., g. Ho. (2010). The Termination of Subprime Hybrid and Fixed-Rate Mortgages. Real Estate Economics, 38(3): 399–426. https://doi.org/10.1111/j.1540-6229.2010.00271.x
Reilly, S.G. (2020). Hyperinflation in Venezuela: How to address the problem. Doctoral dissertation, University of Texas.
Sigalos, M. (2022). Why the $2 trillion crypto market crash won’t kill the economy. CNBC. 18 June. At Why the $2 trillion crypto market crash won’t kill the economy (cnbc.com)
Taggart, J. (2020). Global Development Governance in the ‘Interregnum’: Legitimacy and the Global Partnership for Effective Development Cooperation. Doctoral dissertation, Durham University.
Taskinsoy, J. (2019a). Is Facebook’s Libra Project Already a Miscarriage? https://doi.org/10.2139/ssrn.3437857
Taskinsoy, J. (2019b). Turkish Lira–A Fiat Currency that Resembles the Volatility of Cryptocurrencies: The Effects of Exchange Rate Volatility on Turkish Economy. https://doi.org/10.2139/ssrn.3335545
Taskinsoy, J. (2020). Diminishing dollar hegemony: What wars and sanctions failed to accomplish, COVID-19 has. https://doi.org/10.2139/ssrn.3570910
Van Hemert, O. et al. (2011). Understanding the Subprime Mortgage Crisis. The Review of Financial Studies, 24(6): 1848–1880. https://doi.org/10.1093/rfs/hhp033
Wachira, V.K., & E.W. Wachira. (2021). Digital Currencies and Their Potential to Disrupt and Replace Fiat Money: The Case of Bitcoins. European Journal of Economic and Financial Research, 5(1). https://doi.org/10.46827/ejefr.v5i1.1052
Wessels, G.M. (2011). Is The Reign of The US Dollar Coming To an End? J.Stud.Econ. Econometrics, 1, 35. https://doi.org/10.1080/10800379.2011.12097217
Whitacre, B.E. (2010). The diffusion of internet technologies to rural communities: A portrait of broadband supply and demand. American Behavioral Scientist, 53(9): 1283–1303. https://doi.org/10.1177/0002764210361684
Wigmore, B.A. (1987). Was the Bank Holiday of 1933 Caused by a Run on the Dollar? The Journal of Economic History, 47(3): 739–755. https://doi.org/10.1017/S0022050700049081
Wong, E., Tsui, S., Chi, L. K., & Tiejun, W. (2020). In Transition to Rural Vitalization: China’s Strategy amid the Global Crises. Agrarian South: Journal of Political Economy, 9(3), 368-387. https://doi.org/10.1177/2277976020977228
Zamani, E., Y. He & M> Phillips. (2020). On the Security Risks of the Blockchain. Journal of Computer Information Systems, 60(6): 495–506. https://doi.org/10.1080/08874417.2018.1538709
Zimmermann, H. (2002). Money and Security: troops, monetary policy, and West Germany’s relations with the United States and Britain, 1950-1971. Cambridge University Press. https://doi.org/10.1017/CBO9781139052290
Article Sidebar
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Licensing information
Creative Commons CC Attribution-NonCommercial 4.0 International Public License
© Author(s)