In his 1919 work The Economic Consequences of the Peace, JohnMaynard Keynes remarked (in chapter 6) that "Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency." Readers who have tried to find where Lenin made such a statement have been unsuccessful, leading some to suspect that Keynes was stating his own thoughts rather than Lenin's. (See, for example, Frank Whitson Fetter, " Lenin, Keynes and Inflation, " Economica, February 1977, pages 77-80.) However, I have found a source suggesting that Keynes was accurately paraphrasing Lenin. The annual report of the U.S. Mint for 1919 reprints part of a newspaper article describing an interview with Lenin. Here is the text from the Mint report:
According to [an] account of an interview, Lenin has this to say of money:
"Hundreds of thousands of ruble 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 a Bolshevist state, where the necessities of life shall be paid
by work alone. * * *
"Already even the hundred-ruble note is almost valueless in Russia. Soon even the simplest peasant will realize 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
son as they discover it will not buy anything, and the great illusion of the value and power of the money on which the
capitalist state is based will have been definitely destroyed.
"This is the real reason why our presses are printing ruble bills day and night without rest. But this simple process must,
like all the measures of Bolshevism, be applied all over the world in order to render it effective. Fortunately, the frantic
financial debauch in which al lthe Governments have indulged during the [First World] war has paved theway everywhere
for its application."
--Commercial and Financial Chronicle [New York], May 3, 1919
[End of text in Mint report. The citation is United States Department of the Treasury, Bureau of the Mint, Annual Report of
the Director of the Mint, 1919, page 225.]
It is quite possible that Keynes read a report of the same interview in a British or French newspaper while he was part of the
British delegation to the Paris peace conference, which addressed issues arisingf rom the First World War. Somebody with
ready access to a library containing micofilm copies of the Times, Guardian, and Economist should start with them. Keynes
resigned his position in frustration and returned to England in June 1919. Later that month he began writing The Economic
Consequences of the Peace.
August 8, 2007
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