Lenin and the Currency Competition Reflections on the NEP Experience
Institutional competition stirs the interest of economists following a certain cyclical pattern. In this context, it is very interesting to look back at the experience of Lenin and the Bolsheviks of adopting monetary competition to stabilize their political and economic power after the crash of the war communism (and the attempts to annihilate money). The currency competition lasts less than two years and ends up with establishing the chervonetz as the only monetary unit. As a whole, this can be considered a successful economic experience. Nevertheless, the main conditions for effective institutional competition were not met – the two currencies were unequally positioned and, what is more, the institutional complementarity principle was not present. Other basic market institutions were lacking or much diminished in functions – mostly the property rights, the principle of free price setting as well as competition in the political and ideological sphere. In general, the NEP model is utterly controversial and its market structure is to a great extent false. This is what actually doomed monetary stability afterwards and left no room for money competition to spread its wings. Despite all these shortcomings, even in its reduced form, the monetary competition, gives a number of positive, though only temporary, results. This reveals the presence of purely technological characteristics of currency competition related to the behavior of money users. In part one we remind briefly of the chronology of events in the first years of the Bolshevik’s regime; part two shows the dynamics of currency competition between the sovznak and the chervonetz, and in the last part we attempt to draw some theoretical observations related to the necessary conditions for a successful institutional competition.
|Date of creation:||Jul 2006|
|Date of revision:|
|Contact details of provider:|| Postal: Corso Unione Sovietica, 218bis - 10134 Torino - Italy|
Phone: +39 011 6706060
Fax: +39 011 6706062
Web page: http://www.esomas.unito.it/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:icr:wpicer:22-2006. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Simone Pellegrino)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.