The Aporetic

The dollar is weak! President X’s policies have weakened the dollar! We need a strong dollar, a dollar with vigor and health!

Political debates about money are never just about money. Money is central to who we are. We buy things that express out taste, out political beliefs, our “lifestyle choices,” and these things confer status in the imagination and in the eyes of others. So debates about money are never just about money; they’re always debates about other anxieties.

Just to review, “weak” and “strong” are used to describe the dollar in comparison to other currencies. Consider dollars vs British pounds. Right now the dollar is “weak,” which means it takes a lot of dollars to buy a British pound. If the dollar was “strong.” It would take fewer dollars to buy a British pound.

It’s interesting language. It sets up all sorts of anxieties about national decline. For example, this site, worrying that the dollar is about to become “the world’s weakest currency.” It suggests the dollar as a puny beach-goer, sitting helplessly as international bullies kick sand at it. A weak dollar lacks the strength to do what needs to be done!

“Weak” and “strong” in dollar terms emerged in discussions of international trade, and so they’ve always been associated with  empire and nation ranking. You can find many examples claiming that “weak currency” caused the fall of the Roman Empire. Here’s a video on the same subject. A weak dollar equals national weakness. Who would want a weak dollar when they could have a strong doller? The danger of weak currency played a prominent role in the thinking of people like Oswald Spengler, who linked weak currency to racial weakness in The Decline of the West. If you google “weak dollar” and “white race” you’ll see the idea hasn’t gone away.

But of course it’s not that simple. A “weak” dollar means that other nations find US made goods more attractive, because they’re cheaper. For the last two decades, the Chinese have kept their currency artificially low/weak. That’s one of the main reasons why everything you buy is made in China: their currency is “weak,” so their goods are cheap. China has had the world’s fastest growing economy for the last decade at least. It can’t make the stuff fast enough. A weak dollar would similarly raise demand for American goods.; it makes a tourist trip to the US more affordable.

A strong dollar, on the other hand, makes American goods more expensive, in  the same way that the present weak American dollar makes a vacation in Europe, and European goods,  more expensive. The weaker the dollar gets, the more attractive American cars are in Japan.

Chinese consumers have paid a price for this growth, in that the weak renminbi has depressed their purchasing power. But the Chinese govt. decided that massive economic growth was a better deal. A weak currency doesn’t seem to have hurt China at all.

The analysis of international trade emerged in the context of imperialism, and so it’s always highly fraught with concern about imperial collapse. When it hears talk of the relative advantages of a weak dollar, The Foundation for Economic Education invokes Orwell and insists decline is at hand. There are whole blogs devoted to the idea that currency decline equals imperial decline.

In American history, talk about the dollar often took the form of “hard money” vs “soft money,” hard money being figured as strong and masculine and soft money being figured as feminine, flaccid, and weak. Do I need to say more?

Debates about money are always about other things.