A SOVIET THEORY ON HYPERINFLATION: AN EMISSION ECONOMY 1918 – 1924 ; UNE THEORIE SOVIETIQUE DE L'HYPERINFLATION : L'ECONOMIE D'EMISSION 1918 - 1924

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Abstract

For almost ten years, from August 1914 to February 1924, the various Russian governments resorted to printing money in order to finance all or part of their expenses. This phenomena, incredible in and of itself for any specialist in monetary issues at the time, S. A. Fal'kner was going to study it starting in the Spring of 1918, not as a temporary expedient, a pathological manifestation, a "deviation from the norm", but as a durable situation, an emission economy, having its own rules of development, and being susceptible to be controlled and used par the Soviet power, as long it had analyzed correctly how it worked. Needless to say, it went against general opinion.Starting in 1923, on the basis of Fal'kner's ideas, O. Schmidt and V. Bazarov elaborate two models of mathematical laws of the emission economy. There will be a discussion at the Socialist Academy on whether the use of mathematical models in social sciences is legitimate. Kacenelenbaum, Yurovskii and Preobrazenskii disapproved of this kind of attempt.However running an emission economy has negative effects, especially for distribution since those who have fixed wages, such as salary workers, will be subject to most of the emission tax. Fal'kner proposes to put in place a rationing system and to set administered prices of basic necessities to regulate the system in order to reduce its disruptiveness on the national economy.Through a long process of trial and error, the Bolshevik government will finally succeed in putting an end to financing the country's budget by issuing paper money. Here again two opposite orientations will emerge: the iemission economy partisans, with Kuzovkov, will endorse a progressive stability of the paper-ruble, whereas the "orthodox" monetary issues specialists, whether they be Marxists such as Sokol'nikov, or former tzariste Secretary, such as Kutler, will endorse a completely different monetary unit and the adoption of the gold-currency. ; Pendant presque dix ans, d'Août 1914 à Février 1924, les différents gouvernements ...