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This week Jonathan Paine sat down with Ekaterina Pravilova to talk about her book The Ruble: A Political History, published by Oxford University Press in 2023. Pravilova asks, “Can money have a story?” The resulting tale of how the ruble becomes the emblem simultaneously of Russia’s autocracy and of its economic backwardness over the course of the long nineteenth century is compelling in its own right, and essential context for any scholar of Dostoevsky’s own experience and novelistic use of money.
JP: You call your book a ‘political biography’ of the Russian paper ruble from the mid-18th century to the reform of 1921-24. Could you explain what you mean by that? How does your approach differ from a more traditional economic history?
EP: Historians often compartmentalize their discipline into specific domains: economic history, political history, cultural history, and so on. Each of these fields has its own set of methods and goals, distinct from those of others. I have always found these restrictions uncomfortable and stringent, seeking to cross these boundaries and examining economic phenomena to analyze their political, cultural, and social meanings. The Ruble represents this kind of synthetic, hybrid study. It begins with a simple assumption that each economic or financial institution reflects the existing principles of governance and the regime of public and private rights, while the ideas of economic reforms suggest a vision of political change. This was especially true for Russia, where the political sphere was constrained by censorship, police control, the absence of representative institutions, and centralization. Consequently, statesmen and politicians, along with political theorists and journalists, often resorted to financial metaphors to convey their aspirations for political reforms. For instance, the ideas of constitutionalism had a financial aspect related to the management of paper currency. This was also applicable to nationalist and conservative ideologies, which, along with the concepts of autocratic power, envisioned a distinctive form of monetary organization.
JP: You argue that throughout the period Russia used its currency as a means of projecting state authority rather than as an instrument of credit designed to facilitate trade. Could you elaborate?
EP: Economists have traditionally defined the role of money as a combination of three functions: as a means of exchange, a store of value, and a unit of account. However, this definition reflects an ideal invented by classical liberalism in the late 18th to early 19th century: a market economy with a non-interfering state. In reality, money is not, or at least not solely, an instrument created by a market or a society. Historically, modern currencies are creations of the state rather than something that evolved independently either from barter or debt. Consider the history of the Russian ruble, particularly the story of paper assignats. Paper rubles were introduced by Catherine the Great for two purposes: to facilitate trade and to finance wars without levying new unpopular taxes. Later, the government recognized that money is also a powerful mechanism of governance and social control, as every subject of the state carried coins or paper bills in their pockets. The government utilized money to foster loyalty, integrate newly acquired borderlands, maintain distinctions between social estates, and project political values through the changing design of the assignats and, after 1841, credit rubles.
Here lies the specificity of the Russian case. Take Britain, for instance. The government was not directly involved in the issuance of paper money. It was the Bank of England’s task – a private bank established with private capital to offer credit to traders and producers, and occasionally, the crown. In Russia, the Assignat Banks, followed by the State Bank and the Soviet People’s Bank, were created by the government and essentially represented an element of its bureaucratic machine. There was a period under Nicholas I when credit rubles were issued by a department at the Ministry of Finance, not even a bank, and this institutional organization reflected the central idea of money in a monarchical state. Money was viewed as an extension of monarchical authority, a ruler’s prerogative. Only the ruler, and not some invisible and unruly hand of the market, could define how and when to issue money and how to regulate its flow. The attempts to defend and secure this monarchical right were also linked to the tsar’s right to wage wars and expand the empire. It does not mean, of course, that the government always controlled the ruble’s “behavior.” The story presented in the book is the tale of the state’s attempt to maintain or regain control over its currency and economy, in general.
JP: Russians must have got used to dealing with a paper currency – assignats or credit rubles – which differed in value, at times wildly, from its metallic twin – silver or gold rubles. Does your work shed any light on how this affected people’s behaviour and perceptions?
EP: The social life of money is a fascinating topic, and I attempted to shed some light on it. It is true that the economic world in which the subjects of the Russian tsars and the citizens of the early Soviet Republic lived was very different from ours. For example, people often carried coins minted by various states in their pockets, and they could still use them in transactions, but they had to know how. The same was true for paper bills. Some items could only be paid for with coins (copper, silver, or gold); others could only be paid with paper bills. During periods of inflation or financial instability, people had to check morning newspapers to learn the value of the money they possessed and determine the best method of payment. Nineteenth-century literary works, especially Nikolai Gogol’s novels, are filled with these riddles. Economic crises and wars certainly brought a lot of distress, particularly to the poor, but people tried to adapt their economic behaviors to the new realities.
The Russian monetary system was also highly socially and geographically stratified. Peasants and noblemen used different kinds of payment (most peasants never held bills of more than 10 rubles in their hands). Meanwhile, merchants in the Western provinces used bills and coins that their counterparts in Turkestan would never see in their lifetime, and vice versa. The government made attempts to unify the ruble system, but the financial costs of such unification outweighed the potential political benefits, leading the state to sometimes choose to preserve monetary diversity.
JP: What part did the ruble play in Russia’s failure to develop an economy, and particularly a capital market, able to compete with the West? What tensions were caused by the visibility of alternative economic and monetary models on the European doorstep?
EP: The most damaging aspects of the Russian monetary system were inflation and the paper ruble’s inconvertibility to metals—silver and, starting in the mid-19th century, gold. Inflation made future planning impossible, shrinking the temporary horizons for business and discouraging investors from putting money into Russian industry. Who would want to invest in a new enterprise if its profit could be wiped away? The ruble’s instability defined how economists and politicians viewed Russia’s place in the world economy: as an exporter of raw produce, namely grain. There were reputational losses associated with the ruble’s erratic movement; the Russian government relied on foreign loans, but the costs of obtaining these loans were heavily influenced by the Russian financial situation. In the 19th century, the criteria for a healthy financial system were different from those of today. Back then, good currencies had to be pegged to a gold “standard,” meaning that the value of paper bills was backed by a gold reserve. In practice, this meant that anyone could go to a bank and request to exchange their rubles for gold coins. While most people preferred to use paper money rather than coins, the convertibility to gold ensured that the national currency had a common denominator with other currencies on the gold standard.
The paper ruble was mostly inconvertible during its existence, making it appear as a weak currency compared to the French franc, German mark, Finnish markka (within the Russian Empire!), US dollar, and other currencies worldwide that were pegged to gold. Thus, the transition to the gold standard became perceived as a ticket to the club of respected, civilized nations. The “gold” reform undertaken between 1895 and 1897 was costly and unpopular; it benefited industrial capitalists at the expense of agricultural producers, especially peasants, and increased Russia’s foreign debt. Nonetheless, it led to a period of economic growth in the years leading up to the First World War.
JP: Throughout your book you draw analogies between money and narrative – you ask “can money tell a story?” and refer to concepts like credibility and authenticity which have resonance in both economic and literary theory. Are there parallels to be drawn between the story told by the ruble and the way in which 19th-century authors approached narrative?
EP: I came to the idea of writing this book through a back door. Initially, it was a byproduct of my larger project on the concepts and practices of truth and authenticity in Russia. While researching authenticity, I stumbled upon a simple question: how did Catherine the Great’s government make people accept paper notes as “real money”? How did it secure the public’s trust? It turned out that this trust often hinged on a very thin thread, and many people viewed the government as a fraudster and counterfeiter (the biggest lie was, for instance, the promise to exchange rubles for gold printed on each ruble bill – a promise the government could not fulfill). So, I set the truth project aside and focused on the history of the ruble. The themes of trust, authenticity, and representation run throughout the book, holding it together. Indeed, these ideas are central to economics, political theory, and literature.
There are many points at which the history of the ruble intersects with the history of literature and literary theories. Take, for instance, the Aristotelian idea of money as language and a mechanism of sociability. Or the Enlightenment concept of money as a form of representation, also akin to language (money represents the value of things, just as words stand for objects and phenomena). Russian writers and economists of the late 18th and 19th centuries viewed money through this lens, marking the biggest difference between the contemporary, technical view of money and its 19th-century interpretation. Dostoevsky, for example, repeatedly uses the motif of money to undermine the idea that narrative can be relied upon to have fixed or rational value, just as assignat or credit rubles told a different story from silver. The purse (ladonka) which Dmitry Karamazov claims he carried, supposedly containing 1,500 rubles, is simultaneously his alibi and the proof of his guilt. A copying mistake by Makar Devushkin earns him not a reprimand but 100 rubles. And The Gambler (Igrok) represents the hero’s own narrative as just as speculative as his forays at the roulette table.
Nineteenth-century writers, captivated by money’s unique ability to traverse both space and social landscapes, passing through the hands of individuals of different occupations and beliefs, often employed the trope of a wandering ruble to narrate the stories of people. The ruble frequently appeared as a human being, observing the behavior of its temporary masters. What could a ruble bill or a coin tell? I found this idea intriguing and used it to frame the narrative in my book. This book is a story of the Russian state, economy, and culture, told by the paper ruble, from its birth in the 18th century until the 1920s.
Ekaterina Pravilova is Rosengarten Professor of Modern and Contemporary History and Director of the Program in Russian, East European and Eurasian Studies at Princeton University. She is the author of the award-winning A Public Empire: Property and the Quest for the Common Good in Imperial Russia, as well as Legality and Individual Rights: Administrative Justice in Russia and Finances of Empire: Money and Power in Russian Policy in the Imperial Borderlands, published in Russian. She is a native of St. Petersburg.
Dr. Jonathan Paine is a Supernumerary Fellow of Wolfson College, Oxford, a former investment banker and a trustee of The Guardian newspaper. He is the author of Selling the Story (Harvard: Harvard University Press, 2019) and a scholar of the relationship between economics and literature.