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The glory and demise of monetary nationalism in the post‐communist Baltic states

Nations and Nationalism

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Abstract

--- - |2 Abstract This paper contributes to the body of research on the monetary variety of nationalism, which conceives of national currency as an essential element of nation state and national identity (‘one nation, one money’), exploring its contribution to the successful internal devaluation in the Baltic states during the economic crisis of 2008–2010. Contrary to the predictions of renowned experts in economics and finance, Estonia, Latvia and Lithuania were able to keep the peg of their national currencies to euro. Because of peculiar features of their histories (a brief period of independence with national currencies allegedly based on a gold standard, interrupted by prolonged Soviet occupation and the despised ‘wooden rouble’) monetary nationalism was very strong in the restored independent Baltic states. Monetary nationalism predisposed their indigenous populations to embrace the neoliberal model of capitalism and to accept the welfare cost of the defence of currency pegging during the crisis. Paradoxically, the success was self‐defeating, as it enabled the Baltic states to join Eurozone, abolishing national currencies. Theorizing about this case study of Baltic monetary nationalism, this paper closes with the interpretation of the rise and demise of national currencies as the reversal of the Weberian disenchantment process. Monetary nationalism (making money a core part of national identity) is a product of this reversal. - 'Nations and Nationalism, Volume 24, Issue 4, Page 871-892, October 2018. '