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Money Unmade: Barter and the Fate of Russian Capitalism. By David Woodruff. Ithaca, NX: Cornell University Press, 1999. xvii + 228pp. Appendices, figures, index, and tables. $29.95. ISBN 0801436605.
David Woodruff's Money Unmade is a richly textured study of Russia's apparently stalemated transition to a modern market economy. It focuses on one of the central puzzles of Russian economic reform: the reversion of the industrialized economy to barter, and the fracturing of the monetary system that the first wave of reform, the so called "shock therapy" of 1992, sought to introduce. This left the Russian economy of mid-1999 mired in a deep depression, and the Russian state and polity fragmented. Professor Woodruff's analysis provides a fascinating explanation of how and why this occurred, and intriguing speculation on where it is leading.
This is a study of political economy, taking a sociological-institutional approach deriving from the writings of George Simmel (Philosophy of Money [1990]), Karl Polanyi (The Great Transformation [1965]), and George Knapp (The State Theory of Money [1924]). Noting that an essential power of a sovereign state is that of the definition and creation of money, Woodruff studies the Russian transformation as an example of the "politics of monetary consolidation" in the aftermath of the collapse of the largely demonetized Soviet economy. The analysis places particular emphasis on the state-building function of monetary control as an assertion of national over local sovereignty. That control, he argues, is currently subject to contention among differing national visions or "projects" pursued by differing political actors. This conflict arose because monetized national integration leads to regional and local disintegration as the specific dependencies of local interaction, and hence the inherited structure of production, are disrupted by the creation of generalized (monetized) opportunities and dependencies. Thus the national project of consolidation through uniform monetization has faced an alternative "productivist" project of integrating disparate valuation spheres built around the maintenance of local "substantive" economies. It is the conflict of these visions, one far deeper than that over monetary policy and rent-seeking typically analyzed, which is laid out in rich detail in this study.
The story begins with the Soviet economic debates leading to the credit and monetary reforms of the early 1930s that created the classical Soviet monetary system. It provides...