Encyclopedia of Russian History

Kahan, Arcadius. (1991). Studies and Essays on the Soviet and East European Economies, Vol 1: Published Works on the Soviet Economy. Newtonville, MA: Oriental Research Partners. Laird, Roy D., ed. (1963). Soviet Agriculture and Peasant Affairs. Lawrence: University of Kansas Press.

D. GALE JOHNSON

VIRTUAL ECONOMY

The term virtual economy has been used to describe conditions in Russia’s transition economy where privatized enterprises continued to engage in value-subtracting production because they maintained buyers from the Soviet era who were willing to purchase goods at prices that failed to accurately reflect production costs or market value. Relying on relational capital, contacts and connections with other managers and government officials developed in the Soviet economy, enterprise directors in Russia’s transition economy were able to acquire resources and goods without cash payments either prior to, or after, the acquisition. Since neither the privatization process nor their ongoing operations provided Russian manufacturing firms with funds to renovate their obsolete capital stock, enterprise managers faced few options for upgrading product quality or changing the firms’ production assortment in order to compete effectively in domestic and global markets. In effect, the term virtual econ1642 omy refers to the situation where Russian privatized firms continued to operate as they had in the Soviet economy despite the facade that profitability considerations and market forces governed their activities.

As Russia’s transition process progressed in the 1990s, purchases between manufacturing firms increasingly involved barter and other non-monetary transactions, reducing the cash available for firms to acquire materials or pay taxes. In a virtual economy, barter and other non-monetary transactions play an important role in sustaining ongoing operations which transfer value from productive activities to loss-making sectors of the economy. Reliance on barter transactions restricts the firms’ ability to restructure their operations in order to produce higher value-added output. See also: VALUE SUBTRACTION

BIBLIOGRAPHY

Ericson, Richard E, and Ickes, Barry. (2001). “A Model of Russia’s ‘Virtual Economy.’” Review of Economic Design 6(2):185-214. Gaddy, Clifford, and Ickes, Barry. (2002). Russia’s Virtual Economy. Washington, DC: Brookings Institution Press. Krueger, Gary, and Linz, Susan J. (2002). “Virtual Reality: Barter and Restructuring in Russian Industry.” Problems of Post-Communism 49(5):1-13. Marin, Dalia. (2002). “Trust versus Illusion: What is Driving Demonetization in the Former Soviet Union.” Economics of Transition 10(1):173-200.

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VLADIMIR MONOMAKH

(1053-1125), one of the ablest grand princes of Kiev and the progenitor of the Monomashichi of Vladimir in Volyn, Smolensk, and Suzdalia. Born Vladimir Vsevolodovich, he inherited his sobriquet “Monomakh” from his Greek mother, a relative of Emperor Constantine IX Monomachus.

In reporting his early career in his autobiographical “Instruction” to his sons, Monomakh writes how his father Vsevolod, a son of Yaroslav Vladimirovich the Wise, had him administer

ENCYCLOPEDIA OF RUSSIAN HISTORY

VLADIMIR, ST.

Pereyaslavl, Rostov, Smolensk, Turov, and Novgorod, and how he campaigned against Polotsk and the Czechs. In 1078, when Vsevolod became grand prince of Kiev, he transferred Monomakh from Smolensk to Chernigov, therewith depriving his nephews, Svyatoslav’s sons, of their patrimony. In 1093, when his father died, Monomakh declined the Kievans’ invitation to be their prince, evidently not wishing to violate the ladder system of succession allegedly introduced by Yaroslav the Wise. He deferred to his genealogically elder cousin Svy-atopolk Izyaslavich, with whom he formed an alliance against the Polovtsy. The latter attacked the cousins, inflicted a crushing defeat on them, and then intensified their raids on Rus.