institutions are weak or nonexistent and that by default the rest of the world has to submit to U.S. regulation. Alternatively, is the United States prepared to play the leading role in constructing a new international system of collective risk management? The European Union has launched the euro not only to promote the cause of European integration but overtly as a rival to the dollar. The Europeans want to protect their culture and particular form of economic and social organization, and they see the euro as a means to that goal. Already there are signs that capital is moving from Wall Street to Frankfurt and Paris as investors fear Wall Street and the dollar are overvalued; for the first time since World War II, there are markets asliquid and deep as those in the United States, but with a prospect of an appreciating rather than depreciating currency. How does the United States propose to meet this challenge? Will it confront it head to head or instead work collaboratively with the European Union to manage the world economy?

The United States of the immediate postwar period would have been unhesitating in its choice; it would have worked to establish a liberal world order in which it surrendered a measure of domestic sovereignty to gain the leadership of new world institutions—in the 1940s, the IMF and World Bank. But the contemporary United States—with Republican Senate majorities voting down the Comprehensive Nuclear Test-Ban Treaty and shamelessly cutting back aid—is a different proposition. The conservatives assert U.S. hegemony, and American