A brief overview of non-monetary economic thought

The first hint on non-monetary economic ideas was given by F.Quesney, the physician to Louis XV. He compiled an economic table for peasant's farming but any further application of his instrument was impossible because money efficiently solved all problems of economic control. For centuries the idea stayed latent while monetary control of economy flourished on the flux of technical progress. Prices seemingly could account for any discrepancies in social life and automatically launched adaptive processes. But where did prices come from? They came from a sophisticated machine known as market. The market knew everything and catered for everything. Strange enough the market balanced human life and a crockery pot with the same measure. But this fact was not minded as long as social crisises could be relieved by monetary policy.

The situation grew worse with the advent of international division of labour in the XIX century. Theories explaining prices through labour served to avail against a seemingly strange fact that prices worked in favour of those who did not do much labour. Now we know that prices are dependent on information factors (non-monetary) but the social thought first went to a simpler idea of energy and S.Podolinsky ("Slovo" April-May 1880,p.p.135-211) explained labour as the differential of energy potential of society. Implicitly his theory included information factors but monetary forces were still prevailing in all spheres of life and this offspring of non-monetarism went unnoticed.

The strongest impulse to non-monetarism was given by the Russian Revolution (1917). Half jokingly V.Lenin promised that public loos would be made from gold and a special state body GOSPLAN set working unrestricted by prices (alas prematurely).

Nobel prize winner V.Leontieff (former worker of GOSPLAN) in his formally monetary input-output analysis revealed a pure non-monetary fact: GNP is dependent not only on costs of production but on structures of sectors. Structure is a typical non-monetary factor that can not be expressed by a scalar price. Decades later a more radical non-monetary idea was expressed (P.Sraffa, Production of commodities by means of commodities, Cambridge, 1960 ). Prices presumably could be calculated from an input-output table. Hence market is not a source of prices but a machine controlled by physical structures. A very productive idea but a half done one - it did not include the processing of knowledge.

Though being far from scientific incentives GOSPLAN beared a truly novel non-monetary idea stealthily revealed in a rare publication by a prominent civil servant. (Yu.V.Yaremenko, Structurnie izmeneniya v socialisticheskoi ekonomike, Moscow, izd. "Mysl", 1981). Exploitation of labour so cherishingly ascribed to capitalism by communists was shown to be hidden in socialist economy in the mechanism of structural formation. The mechanism rests on existence of two non-monetary phenomena.

These phenomena were shown to underlie all structural changes and hence the market situations. However no pragmatic value of the revelation could be noticed as the phenomena were not mathematically formalized. The ideas of non-monetary economics soared dispersed in the air until their compilation with relevant ideas of thermodynamics and informatics made them liable to cybernetic analysis.

More about non-monetary economic ideas one can read in Non-monetary economic thought reflected in Russian history.
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