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The Theory of the Emission Economy Bolshevik roots of "Modern Monetary Theory"

Nenovsky, Nikolay (2020): The Theory of the Emission Economy Bolshevik roots of "Modern Monetary Theory".

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Abstract

In this article we present the monetary theory, called the "Theory of Emission Economy (TEE)", most fully formulated by the Russian economist S. Falkner (1890-1938). Formulated exactly a century ago, it is strikingly reminiscent of modern "Modern Monetary Theory, MMT." Like MMT, TEE has had both supporters and serious critics. More importantly, in a certain period of time, 1918–1920, the TEE was put into practice, and the MMT's "consolidation hypothesis", that of merging the central bank with the treasury (government), became a reality (January 1920). The Bolsheviks' brief experience with MMT ended in disaster. Lenin himself, who at first shared its basic ideas, was forced to undertake monetary stabilization based on the parallel introduction of gold coins, chervonets. The purpose of this article is to present the theoretical discussions about TEE, as well as the monetary policies of Bolshevik Russia in order to derive some useful patterns for the state of monetary theory and practice today.

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