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Did taxes, decrees or credibility drive money? Early nineteenth century Finland from a chartalist perspective

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  • Karlo Kauko

Abstract

Chartalist theories assume the government determines the currency used by the public. Finland’s experience following the Russo-Swedish war in 1808–1809 would seem to contradict the chartalist view. Having become a Grand Duchy under Russia, the Finnish Government sought to replace Swedish riksdalers in circulation with roubles. However, due to a resilient trade surplus with Sweden and the resulting flood of Swedish money into Finland, bans on the riksdaler were largely ineffective. Taxation proved a particularly clumsy tool for leveraging the switch to roubles. Taxpayers almost forced the government to accept payments in a foreign currency. Even the government had to use Swedish money. Issuing roubles was of limited use. As a result, the rouble failed to establish itself as Finland’s main currency until the introduction of a silver standard in 1840–1842.

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  • Karlo Kauko, 2018. "Did taxes, decrees or credibility drive money? Early nineteenth century Finland from a chartalist perspective," Scandinavian Economic History Review, Taylor & Francis Journals, vol. 66(1), pages 73-90, January.
    • Handle: RePEc:taf:sehrxx:v:66:y:2018:i:1:p:73-90
    DOI: 10.1080/03585522.2017.1375427
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