Monetary crisis of capitalism: origin, development - Aleksei Stadnichenko

Translated from the Russian by Leo Lempert. Progress Publishers 1975. (Reproduced for reference only)

Submitted by Noa Rodman on February 26, 2017

Stadnichenko (Стадниченко, Алексей Иванович 1902–86) was the author of the following two works on monetary crisis:

1) Валютный кризис капитализма, 1970, pp. 232. [Monetary crisis of capitalism]
2) На рифах валютного кризиса: Крах послевоенной валютной системы капитализма и проблемы ее реформы (1974, pp. 167) [On the reefs of the currency crisis: the post-war collapse of the capitalist monetary system and problems of its reform].

Judging from the title and size, it looks like this English translation is of the first work, but there is some mention of events after 1970 in the final couple of chapters (so possibly these were later added).


Preface 7
1. Money circulation and its role in different socio-economic systems 9
2. Centralisation of the issue of money and banking and their interconnection with public finance 27
3. Evolution of some theoretical views of money circulation 44
4. Monetary and financial problems at the imperialist stage 59
5. The world economic crisis and its impact on capitalism's monetary system 80
6. The postwar world monetary system of capitalism as a product of US finance capital 94
7. The monetary system and the contradictions of capitalism 109
8. Theory and reality. President Kennedy's policy 124
9. "Defence of the Dollar" at the expense of other capitalist currencies 137
10. Differences over changing the capitalist monetary system 152
11. The essence of the monetary crisis and its manifestations. Devaluation of the Pound 167
12. The gold problem and the further undermining of the monetary system 189
13. Spread of the monetary crisis to EEC countries. The currency war and devaluation of the French Franc 204
14. Initial attempts to solve the monetary problems of capitalism 217
15. Monetary contradictions between the EEC and the USA in the early 1970s. Breakdown of the Bretton Woods system 228
16. Two devaluations of the Dollar and exploration of ways for reforming the monetary system 235


There is online also a report (by a Larouchite source: "Soviet think-tanks scrutinize international monetary system") that discusses a later article by Stadnichenko in 1978:

[...] In the July-August issue of the Moscow University Bulletin/Economics, A.I. Stadnichenko, a senior eco­nomist at the Institute of Oriental Studies of the Soviet Academy of Sciences, vigorously defends the histor­ical role of gold in all economic systems and predicts a revival for gold on an international scale in the near future. Stadnichenko identifies International Mone­tary Fund circles as the main enemies of gold and labels the Special Drawing Right their main weapon in the "anti-gold campaign."

Equally important is that Stadnichenko directly polemicizes against the Soviet Union's own antigold faction, stopping just short of accusing them openly of advocating Soviet capitulation to the International Monetary Fund. The fact that he targets writings in the magazine of the Academy's Institute of the World Economy and International Relations (IMEMO) provides a clue to the profound ramifications of this fac­tional clash. IMEMO, a nexus of British agents-of­ influence [sic] in the Soviet Union has turned up in the eye of the storm over a gold-based monetary system and the EMS in particular.

On the other side, Stadnichenko explicitly places himself and his progold allies in the modern Soviet Union in a continuous historical tradition dating back to the time of the Rapallo treaty between Soviet Russia and Germany in the 1920s. To judge by Stad­nichenko, these people refer to themselves as the same faction - Lenin's faction - that elaborated the Soviet proposals for a gold-backed international monetary system submitted at the 1922 Genoa Con­ference; the faction that fought to uphold the role of gold during the 1930s, when Anglo-American forces were bent on destroying it by organizing an inter­national boycott of Soviet-produced gold and driving down its price on the international markets; and the faction responsible for designing the gold-based trans­ferable ruble system in the Council for Mutual Eco­nomic Assistance, today's Soviet sector economic organization.

Stadnichenko then launches a polemic against the International Monetary Fund's "paper gold" Special Drawing Rights (SDR) . Following a standard antigold argument that the yellow metal is "outdated as a monetary instrument, " he writes, the creation of the SDR was accompanied by claims that gold had become inadequate since the volume of world trade so greatly exceeded the amount of gold reserves. Stad­ nichenko debunks that argument by pointing out that the question has never been to have exactly as much gold as the volume of world trade. The issue is the clearing function of gold.

Nevertheless, continues Stadnichenko, "many eco­ nomists saw in the SDR a kind of embryonic form of world money, " and insisted all the more that gold had already or would shortly lose its monetary function. "Here, it turned out that there were adherents of this view among Soviet economists as well."

The SDR in fact, counters Stadnichenko, is the main weapon in what he calls "the anti-gold campaign." Its supporters claim wonders for the SDR. "But actual experience of using SDRs has shown that they are not at all a panacea ... for the monetary crisis. Rather. they are one of the additional sources of inflation." He explains this point by showing how when SDRs are drawn to cover an account's deficit, an inflationary injection takes place. since even if a country increases its exports to remedy the deficit later. those exporters will not be paid in SDRs. but in dollars or other national currencies. The SDRs will remain on the books - but without backing.

Stadnichenko summarizes. "In other words. despite the efforts of the United States by all means to diminish the monetary functions of gold. to 'demone­tize' it. gold continues in one way or another to retain and fulfill these functions. For this reason. we cannot at all agree with those Soviet economists who predict that gold is close to its demise as a monetary metal and who sing many hymns to the world supranational money which is drawing near. in their opinion. in the form of the SDR. We are referring above all to the article by G. Matyukhin,1 "A New Form of World Money" (The World Economy and International Rela­tions. IMEMO's journal. April 1977), which was re­commended by the editors 'for the special attention of teachers of political economy'."

Stadnichenko quotes liberally. with biting sarcasm, from the Matyukhin article. which indeed had already drawn criticism from the progold economist E. Soller­tinskaya in a letter to the editor of the IMEMO journal in January of this year. Matyukhin completely rejected gold and described the SDR in detail. Stadnichenko's excerpts show. With only a cosmetic "criticism" of the SDR. he concluded that it was a "major step" on the road to a world currency. Stadnichenko warns: "I hardly need draw attention to the fact that the author of that article is not only a convinced adherent of the demonetization of gold, but is also an ardent supporter of the idea of a supranational world credit money" (emphasis added).

Stadnichenko's phrase is tantamount to accusing Matyukhin of treason on grounds of advocating the submission of the Soviet Union to the IMF and the SDR!

  • 1Matyukhin later became chairman of the Russian central bank. He was in this position during the transition to capitalism, but was soon fired. According to him the reasons were, first, his inquiry into 300 tons stolen gold from the Russian reserves (they were smuggled abroad), and second, his plan to posit some 50 tons of gold collateral in Switzerland to be able to get Western loans, but which would have given his position as head of the central bank a significant degree of power.