Lenin's Plan for the Annihilation of the Power of Money

Two eminent monetary scholars, Michael V. White and Kurt Schuler -- as noted in an earlier posting -- published in a 2009 issue of the Journal of Economic Perspectives as Retrospectives: Who Said “Debauch the Currency”: Keynes or Lenin? 


"Comrade Lenin Cleanses the Earth of Filth"

Russian Propaganda Poster Courtesy of Wikipedia

It contains more remarkable observations than a simple resolution of the controversy among historians as to whether Keynes's attribution to Lenin that “the best way to destroy the capitalist system [is] to debauch the currency” was authentic.  It contains a putative description of "a plan for the annihilation of the power of money in the world.”

To wit:

A report of an interview with Lenin was published on April 23, 1919, by the Daily Chronicle in London and the New York Times. Dated April 22 and cabled from Geneva, the article claimed to be based on “authentic notes of an interview with Vladimir Ulianoff Lenin, the high priest of Bolshevism, which were communicated to me by a recent visitor to Moscow.” Attributed to the Chronicle’s unnamed “Special Correspondent,” the visitor was also unidentified. One section of the article recorded: “Lenin is obsessed at present by a plan for the annihilation of the power of money in the world.” A long series of quotations attributed to Lenin began as follows:


Hundreds of thousands of rouble notes are being issued daily by our treasury. This is done, not in order to fill the coffers of the State with practically worthless paper, but with the deliberate intention of destroying the value of money as a means of payment. There is no justification for the existence of money in the Bolshevik state, where the necessities of life shall be paid for by work alone.

Experience has taught us it is impossible to root out the evils of capitalism merely by confiscation and expropriation, for however ruthlessly such measures may be applied, astute speculators and obstinate survivors of the capitalist classes will always manage to evade them and continue to corrupt the life of the community. The simplest way to exterminate the very spirit of capitalism is therefore to flood the country with notes of a high face-value without financial guarantees of any sort.


Already even a hundred-rouble note is almost valueless in Russia. Soon even the simplest peasant will realise that it is only a scrap of paper, not worth more than the rags from which it is manufactured. Men will cease to covet and hoard it so soon as they discover it will not buy anything, and the great illusion of the value and power of money, on which the capitalist state is based will have been definitely destroyed. This is the real reason why our presses are printing rouble bills day and night, without rest.

Lenin's savage statements toward money may have been a blend of ignorance and rationalization.  White and Schuler: "the underlying rationale for the argument was subsequently explained by the historian E. H. Carr in a brief memorandum for Fetter (1977, p. 78): 'None of the Bolsheviks wanted, or planned, inflation. But, when that happened (since the printing press was their main source of revenue) they rationalized it ex post facto by describing it as (a) death to the capitalists and (b) a foretaste of the moneyless Communist Society.'"