Money and Credit in Socialist Economies: a Reconsideration

Abstract

How should socialist economies treat money? Theoretically at least three different cases are conceivable. First, a form of socialist quasi-money (s-money) or labour certificate is introduced, called labour-money’. Second, another form of s-money is possible without accounting for labour-time but with publicly determined prices. Third, money exists in a market socialist economy. This paper examines the nature of money in the Soviet Union, and criticizes the Soviet orthodox view defining the rouble as real money by the false dichotomy of posing either labour certificate or real money. The possible forms and functions of (s-)money as well as those of (s-)credit in socialist economies should be more flexibly understood in accordance with various possible forms of socialist economies.