Coping in the global financial system: the political economy of nonpayment in Russia

Abstract

enomenal spread of unconventional means of payments has been one of the most controversial features of Russia's post-socialist economic development. Orthodox analyses tend to trace the causes of the non-monetary economy to the inconsistency of political reforms, to the legacy of the past, and to endemic corruption. This article challenges such accounts. From the perspective of international political economy, the proliferation of nonpayments, severe liquidity squeeze and the structural disjuncture between Russia's financial and productive circuits are the outcomes of the country's pursuit of the paradigm of the Washington Consensus. In this light, barter and nonpayments in Russia are neither the‘inevitable’features of the market restructuring, nor simply the residue of the command system. The non-monetary economy in Russia is a peculiar reaction to the politico-economic imperatives brought onto the country by the deregulated financial markets and by the neoliberal political ideology that underpins their global expansion.