Monetary Economics, Banking and Policy

13 Money in the early years of the Soviet Union Barter and back again – a short-lived experiment of transformation

Kobil Ruziev

DOI: 10.4324/9781003142317-14

Introduction

In the earlier drafts of the General Theory, Keynes explicitly argued that the classical tradition of distinguishing between real and monetary variables was not helpful in analysing the real-world capitalist economies which could only be examined in monetary terms. To explain his point, Keynes made a distinction between a cooperative (barter) economy and an entrepreneurial (monetary) economy. He then showed that in a barter economy, where goods are exchanged for goods, effective demand did not fluctuate and hence perpetual full employment was attainable. In contrast, in ...