MONEY AND THE EXTENSION OF MORALS: THE CASE OF THE SOVIET UNION

Functioning markets require a state that will enforce property rights; contracts mediated by money; and the prevalence of a certain type of morality that prevents people from cheating in complex exchange relationships. Monetary exchange abstracts from the personal loyalties that bind small groups to...

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Bibliographic Details
Published in:Critical review (New York, N.Y.) N.Y.), 2012-03, Vol.24 (1), p.115-129
Main Author: Zweynert, Joachim
Format: Article
Language:English
Subjects:
Capitalism
Contracts
Economic conditions
Ethics
Group membership
Loyalty
Market
Markets
Money
Monopolies
Morality
Networks
Norms
Property Rights
Small Groups
State
U.S.S.R
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Summary:Functioning markets require a state that will enforce property rights; contracts mediated by money; and the prevalence of a certain type of morality that prevents people from cheating in complex exchange relationships. Monetary exchange abstracts from the personal loyalties that bind small groups together, but at the same time it creates an overarching commitment to norms that bind people more loosely in national societies-as long as monetary exchanges are enforced by the state. In the Soviet Union, conversely, the abolition of money as a universal medium of exchange led both to a deterioration of the norms of impersonal morality and to a loss of state capacity. The state lost control of the economy to informal, personally binding economic networks, and it lost its monopoly on violence in competition with sub-state, personal enforcers of impersonal economic commitments between these networks. Thus, capitalism can be seen as diverting people from norms of loyalty to the members of the relatively small groups of which they are a part toward loyalty to the abstract norms that make it possible for anonymous people to deal with each other reliably.
ISSN:0891-3811
1933-8007
DOI:10.1080/08913811.2012.684480