National Currencies and National Identities: Historical Origins and Ironies of the Neoliberal Baltic Model

Author: Zenonas Norkus
Institution: Vilnius University
Year of publication: 2014
Source: Show
Pages: 40-66
DOI Address: https://doi.org/10.15804/kie.2014.06.03
PDF: kie/106/kie10603.pdf

During recent economic crisis 2008 – 2010, the economic policy of internal devaluation in the Baltic States earned the applause of exponents of the neoliberal orthodoxy. How to explain the choice and ability of the Baltic States to maintain the fixed exchange parity? Economists look for conventional costbenefit calculation. The paper advances culturalist NeoWeberian argument, elaborating the concept of “nation neoliberalism” of Henri Vogt and the research of Eric Helleiner on the contribution of national currencies to the modern nation building. Because of the destruction of the national Baltic States by Soviet occupation in 1940, postcommunist transformation in the Baltic States was restitutionally oriented. Hard national currency, modelled after “that old good Litas, Lats, or Kroon” of the interwar time became a central symbol of national identity along with national flag, anthem and coat of arms. This “monetization” of the Baltic identities predisposed indigenous Baltic peoples to embrace the neoliberal model of capitalism and to accept the cost of the defence of currency peg during the crisis. The success was ironically selfdefeating, as it enabled Baltic nations to join European Monetary Union, which conclusively disenchants the money by abolishing national currencies.

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economic crisis 2008 – 2010 post–communism internal devaluation democratic corporatism neoliberal capitalism national money disenchantment

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