As for the advantages from seigniorage, here's a helpful formulation with numbers that weaken my case (do note that one of Brenner's most important contributions, as Richard Walker has emphasized, is to put the politics of currency at the center of analysis which in turn is enabled by his neo Leninist focus on competition between capitals organized as nation states;Seth's interesting message on dollar diplomacy just came in--good!)
>From Benjamin Cohen, The Geography of Money, 1998
"The larger a currency's authoritative domain, the easier it should be for its issuing government to exploit the fiscal benefits of seigniorage. Not only is the domestic monetary monopoly preserved. Now foreigners too are a source of revenue to the extent that hey are willing to hold the money or use it outside its country of origin. Expanded cross-border circulation generates the equivalent of a subsidized or interest-free loan from abraod--an implicit transfer that is real resource gains for the state as a whole. [There are] two components of intl seignorage. One, a current portion, consists of the direct, one time augmentation of expenditures made possible by an increase in foreign holdings of the currency, somewhat akin to 'living beyond one's means.' The other, a capital portion, is the flow of net interest saved so long as the moeny continues ot circulate abroad, in cash form or as interest bearing claims, rather than return to be spent at home.
"Intl seignorage can be quite considerable, as the historical experiences of both the pound sterling and the US dollar amply demonstrate. For Britain, the greatest benefit of the pound's intl preeminence, came during WWI, when net sterling liabilities increased by some 3 billion pounds ($12 B), mostly to finance London's military efforts in the Middle East and Asia. In the words of one British economist: 'The major economic support obtained in that conflict is probably the biggest gain Britain has derived from the sterling system.'
"For the US, seigniorage gains still acrrue from the use of dollars oversea. Consider just the foeign circulation of US banknotes alone, which as we know has been conservatively estimated at some $250 B a year--equivalent to rather less than 1 percent of our economy's annual consumption, but hardly trivial.
"The benefit has been colorfully described by one journalist:
The United States has an advantage few other contries enjoy: It prinsts green paper with George Washington's and Ben Franklin's and Thomas Jefferson's pictures on it. These pieces of green paper are called 'dollars'. Americans give this green paper to people around the world, and they give Americans in return automobiles, pasta, stereos, taxi rides, hotel room and all sorts of other goods and services. As long as these foreigners can be induced to hold those dollars, either in their mattresses, their banks or in their circulation, Americans have exchanged green paper for hard goods. (T. Friedman[yuck!]1994)"
Yet there is also a problem. Cohen continues:
"As overseas circulation grows, foreigners may legitimately worry about the possibility of future devaluation or even restrictions on the usability of their holdings. Henc,e over time, the issuing govt will have to pay increasing attention to competition from other currencies and to curb its appetite for the inflation tax accordingly. Policy will almost certainly be inhibited by the need to discourage sudden or substantial conversions through the exchange market. At a minimum, interest rates may to be raised significantly to maintain the money's attractiveness. Utlimatley the capial portion of international seigniorage, on a net basis, may well be reduced to zero or even turn negative."
pp123-5