We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Samizdata quote of the day

The paper money of the Soviet Republic supported the Soviet Government in its most difficult moments, when there was no possibility of paying for the civil war out of direct tax receipts. Glory to the printing press! To be sure, its days are numbered now but it has accomplished three-quarters of the task. In the archives of the great proletarian revolution, alongside the modern guns, rifles, and machine guns which mowed down the enemies of the proletariat, an honorary place will be occupied by that machine gun of the People’s Commissariat of Finance which attacked the bourgeois regime in its rear – its monetary system – by converting the bourgeois economic law of money circulation into a means of destruction of that same regime and into a source of financing the revolution.

– Bolshevik economist Evgeny A. Preobrazhensky, in his booklet entitled Paper Money during the Proletarian Dictatorship, published in 1920.

Quoted by Dominic Frisby in Life After The State (p. 92).

13 comments to Samizdata quote of the day

  • Laird

    An extraordinary quote, from what looks to be a fascinating book. It’s gone onto my list. Thanks.

  • Vinegar Joe

    I wonder what kind of gun was used to shoot Preobrazhensky…..

  • Paul Marks

    The paper money only worked because people were forced to accept it – by the Social Justice of the Red Terror.

    Ordinary commercial enterprises can not use the methods of the Red Army and the organs of state security.

    For example the banking system can (and does) expand lending beyond real savings – expand “broad money” (indeed before 1844 banks could just their own bank notes – not that banning this had any fundamental practical effect, banks just found other ways of expanding “broad money”). However……

    Ordinary commercial banks can not do what Lenin and co did – because people can always say “no” to their bank notes (or their other debt instruments), unless the government backs them up.

    Without government intervention commercial banks (via their complex interactions)can expand “broad money” and create a “boom” – but their is an inevitably a “bust” (with the bank credit shrinking down towards the monetary base of REAL SAVINGS – i.e. the sacrifice of consumption) and the credit bubble banks (or some of them) going bankrupt (closing their doors – and reopening them).

    Only government can prevent this (even a “private” Central Bank has to be government backed to be effective) – by increasing the monetary base (in the end with the printing press) and using this money to back up the existing (and future) credit expansion.

    So only GOVERNMENTS (not ordinary commercial banks) can create hyper inflation.

    And governments can create hyper inflation without any need for ordinary banks.

    As both Lenin and Peron (in Argentina) showed.

  • Runcie Balspune

    In was in a book, it may have been Holy Blood, Holy Grail, or one of its successors, of all places, where I found a good diatribe about how ideologies such as fascism, communism and certain other political ideologies, even democracy, sought to replace the religious institutions. The above text sounds like the standard tract of how certain activities, normally shunned or forbidden by the “religion”, are excusable if they are used to advance the cause.

  • John K

    As the ineffable Paul Krugman has pointed out, the reason the US Dollar works is because it is backed by men with guns. Of course, because he is a prize asshat, he thinks this is a good thing, but that’s another story. And they have the cheek to call gold a barbarous relic!

  • the other rob

    @ Vinegar Joe: Probably an M1895 Nagant revolver – the Soviet’s weapon of choice for shooting their own men in the head.

    I have one, which I bought on the open market in a free exchange of value for value. Tee hee.

  • John K

    Yes, given the number of people executed by a bullet to the head in the USSR, the cranky old Nagant probably killed more people than any other pistol ever made. True gun control would keep handguns out of the clutches of the state.

  • Laird

    “As the ineffable Paul Krugman . . . “

    Wrong adjective; just a typo, I’m sure. It should read “As the execrable Paul Krugman . . . ”

    There. Fixed it for you.

  • John K

    He’s not effable, that’s for sure.

  • John K

    Ineffable in the sense of unutterable, and not in a good way, that is.

  • Paul Marks

    A lot of good comments.

  • Ragnar Danneskjold

    Where can I find the complete online text to Evgeny A. Preobrazhensky’s Paper Money during the Proletarian Dictatorship? A thorough google search yields little…

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