Category Archives: Russian Economic Collapse
What are they gonna say about him? What are they gonna say? That he was a kind man? That he was a wise man? That he had plans? That he had wisdom? Bullshit man!… Hey, man, you don’t talk to the Colonel. You listen to him. The man’s enlarged my mind. He’s a poet-warrior in the classic sense. I mean sometimes he’ll… uh… well, you’ll say “hello” to him, right? And he’ll just walk right by you. He won’t even notice you. And suddenly he’ll grab you, and he’ll throw you in a corner, and he’ll say, “do you know that ‘if’ is the middle word in life? If you can keep your head when all about you are losing theirs and blaming it on you, if you can trust yourself when all men doubt you”… I mean I’m no, I can’t… I’m a little man, I’m a little man, he’s… he’s a great man. I should have been a pair of ragged claws scuttling across floors of silent seas…
-Dennis Hopper (as the crazed photographer in Apocalypse Now)
And then he was gone….
A perfect metaphor for America, the fake cowboy, a dude ranch desperado who was afraid of horses (try to find a picture of him on one) born with a silver spoon in his mouth as the latest incarnation of the John Wayne hammerhead icon that has become the archetype for all that is American. When that helicopter lifted his mangy, war criminal ass off of the Capitol grounds to the cheers of hundreds of thousands, a boisterous many chanting of “Nah nah nah nah, hey hey hey, goodbye”, the curses of many others throughout the land and a date with historical infamy, I personally felt nothing at all. No relief, no glee, no anger, no outrage…I just watched it fly away in the same way that I would watch a garbage truck driving down the street after a pick-up. I had run the gamut of every possible emotion for the last eight years of sorrow, stupidity and disrepute and long ago reached the point of being spent over the gross transgressions of Little Lord Fauntleroy and his cadre of Mayberry Machiavellis, his neocon conquerors and their appetite for global destruction and the portable Potemkin village that was rolled out to con the rubes and suckers that there was no bankrupt, crumbling empire behind the star spangled façade.
George W. Bush, like Colonel Walter Kurtz long ago reached the end of the river and he made us all insane and has now left behind a smoking crater that will very likely not be fixed until every reader of this post has died of old age if it ever is. The economy is in advanced deterioration, capitalism has failed and all of the pundits and Wall Street shills who are telling Americans that the worst is over….well, suffice it to say that they are the same ones that were saying that the economy was sound less than a year ago…they are full of shit. The next shoe to drop will be commercial property, the rampage of unabated greed after the Bush regime dropped all premises of regulation followed by putting a rabid fox named Henry Paulson in charge of guarding the henhouse has yet to fully play out. When you drive around and see all of the for sale or lease signs, popping up like those silly fucking yellow ribbon magnets did back in 2003 it is a sign of economic apocalypse that you don’t have to be fucking Nostradamus to predict. The dismal holiday season retail sales have only begun to be announced, the bankruptcies are forthcoming along with broken lease agreements that will then begin to take down shopping malls and creating ghost malls. I simply refer people to the great article by Dmitry Orlov on the fall of the Soviet Union: Post-Soviet Lessons for a Post-American Century on what to expect.
Tuesday there was hope throughout the land but as a hardened cynic friend of me used to say “life, work and shit are all four letter words”, you can soon add hope to that list but I’ll get to that in a little bit.
A lifelong fuckup, 9/11 made him the angry and vengeful God and it made us all the hunted in the bunting draped hell, shouted down as heretics and unpatriotic terrorist sympathizers as King George and his minions used the fear and loathing generated by those attacks as though they were a thousand pound sledgehammer to be repeatedly dropped on the heads of stunned Americans who didn’t march to the beat of the devil’s drummer Karl Rove. The greatest shame is that George W. Bush took credit for ‘protecting America’ from terrorism by dragging our ideals and morality through the darkest back alleys of some third world shithole torture state and was able to pull it all off by being able to convince a large portion Americans that the ‘terrorist’ attacks that happened on HIS watch were never his fault to begin with. What else could be expected from a gullible population of overindulgent, under informed, overfed, juiced up on Jesus sheep and lemmings? George W. Bush WAS America
Primping with plastic turkeys in heavily guarded Baghdad locations, strutting and preening in a Top Gun suit and industrial sized codpiece onboard the USS Lincoln, the man who cowered as the shadow government executed their dirty coup standing atop the pile of rubble at Ground Zero as the stench of burned and rotting flesh was still fresh in the New York City air, to Karl Rove and the rest of the America hating fascist scumbags it smelled like victory. Jackbooted fascist thugs like Rush Limbaugh and his angry army milked their cocks like turkey necks over the sadomasochistic sleaze and sexual torture of the Abu Ghraib atrocities, attached themselves like leeches to the emaciated breathing corpse that was Terri Schiavo, institutionalized torture and made Rupert Murdoch’s fictitious FOX television’s skull cracking Jack Bauer their Übermensch. The running of the pigs on Wall Street, the true damage of which is only now being seen with much worse to come turned what was once a prosperous society with a thriving middle class into Elois and Morelocks, it was fuck or walk, it was shock and awe and by God the bastard is finally gone and that he wasn’t crazed enough to invoke martial law and appoint himself dictator for life.
Bush’s legacy is a degenerate and rotting culture, institutionalized criminality, the largest percentage of prisoners on the planet, looming national bankruptcy, capitalism become cannibalism like the guy in the Stephen King story stranded on a deserted island with a boatload of heroin who hacks off parts of his own body to eat and kisses the dragon to do so, the markets are not unlike heroin addicts, Goldman Sachs and the leeches on our back must be saved at all costs and each dollar destroying fix to the jonesing junkies on Wall Street only feeds the monkey for a bit longer while millions are thrown out of their jobs and homes as a result. It included a land where until this past November more traditional forms of democracy were replaced by American Idol, where the news was swapped out with state sanctioned propaganda, where Jesus was weaponized and unleashed to fly an F-14 and drop bombs on children on missions for the moneychangers and most of all, a place where ignorance was exalted in a sad country that was renamed “The Homeland”, or translated into Nazispeak “Der Heimat”.
The progeny of Nazi collaborator Prescott Bush was finally gone, the Bush family has been run out of power, one time heir Jeb has been left to become some perverse inversion of Billy Carter a beautiful topsy-turvy, Bizzaro world, through the looking glass figure that is so perfect for this rotten and befouled era in American history that it should induce nocturnal emissions amongst the cockroaches, ghouls, vampires and pathetic legions of the pathologically fucked and doomed here in Der Heimat. Ah…what could have been had the true heir to the meticulously planned Fourth Reich not been usurped by his dumb-assed, drug-addled, mentally deficient and downright mean idiot bastard brother who was chosen precisely because Cheney, Rummy and the neocons could push his buttons and play him against his old man. For that I suppose we owe the PNAC boys some debt of gratitude but it’s hard to be jubilant, keep a stiff upper lip as the shit rises to neck level or find treasure among the smoking rubble left behind by this grand scale carnival of perversion, ruination and historical infamy that the Bushreich has wrought like a biblical plague of flesh eating shit locusts with a mandate to paint this fickle and fucked country red like Clint Eastwood in High Plains Drifter coming back to paint the town of Lago red, rename it Hell and turn the keys to the place over to the lumpen Republican dregs of society just for the sheer fuck all of it so that they may chase the citizenry around to be beggared and buggered for the sake of their amusement.
Whatever ruination we may suffer as Americans we can rest assured that if there is such a being as God that the pox upon us all of the George W. Bush years was a comeuppance. It was a vicious smiting, a celestial folly and ultimately a judgment on our failure as a nation to be the force for good and for peace that we all, given our unprecedented prosperity and global influence could have been had we not bought into the flag swaddled, four flushing fascist horseshit that has been allowed since the end of WW II. The United States could have changed the planet for the better coming out of the ‘good war’ but was diverted from any enduring mission to spread decency and promote peace abroad as the social compact as well as our very destiny was dragged through a pool of blood and shit by high-rolling Wall Street elitists, scions of the robber barons themselves and their own personal Gestapo, the CIA. That one chance was forever squandered and George W. Bush was our reward for completely blowing it.
As the saying goes and I paraphrase, those whom the gods destroy are first made mad, and we are madder than the wildest acid laced tea-party in the garden of the Queen of Hearts and the Mad fucking Hatter himself, we were seduced by the false god of capitalism, nibbled at the apple, got dumb, greedy and lazy and eventually were chased out of the garden by the false gods of our own making. Bush among all of his other dubious ‘achievements’ proved Mencken to be a prophet because it was he who once wrote:
“As democracy is perfected, the office of President represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart’s desire at last and the White House will be adorned by a downright moron.”
As for President Barack Obama, neither I nor history suffer fools kindly and those who think that he is any sort of a savior need only contemplate that the REAL Jesus was brutally beaten, tortured, mocked and crucified and the nail gun bearing idiots in the red states would do the same in a Tuscaloosa minute were the to return to Earth on inauguration day preaching the same commie liberal bullshit. Perdition is where we are headed and for fuck’s sake it’s where we all belong for our complicity in this travesty. There will be no saving grace either, as Dylan once sang “the Titanic sails at dawn” and we have all had our tickets punched and been booked for passage in steerage as the high rolling pigs party and dance, celebrating because it is in their nature while they remain willfully ignorant of the tragic disaster coming.
Americans have become a tragic, low-minded, self-indulgent, mean-spirited and just plain uncouth people over the past two and a half decades and like an alcoholic or drug addicted the acknowledgement of this is the first step to recovery. Economic displacement may bring about the necessary soul searching (providing Sarah Palin Republicans don’t use the misery to catapult a typically supine Democratic Congress to regenerate) to come out of this morass of murderous war and mammon worshipping avarice a better and more mature people.
But in all fairness, due to the influence of George Bush and the GOP the country has changed a lot for the better. Look at President Obama, shit if you would have told me a black man would be president I would have said – BULLSHIT – it will only happen when hell freezes over or the Cardinals are in the Super Bowl….and it’s going to be in the low 30s here in Tampa tonight. I do give Bush credit though, were it not for his magnificent success at fucking up every goddamned thing that he ever touched, a King Midas in reverse then we would have likely witnessed the spectacle of an orgy of jackbooted jellyfish yesterday, fondling themselves, prowling for libruls to beat, drinking blood and celebrating the inauguration of President Rudolph Giuliani.
And he never did incinerate the planet by allowing Dick Cheney to goad him into nuking Iraq, for that alone the idiot bastard son deserves credit.
Robot apartments! invisible suburbs!
skeleton treasuries! blind capitals! demonic
industries! spectral nations! invincible mad
houses! granite cocks! monstrous bombs!
– Alan Ginsberg
I now present the conclusion of this great essay that I stumbled across one day while listening to a segment of that wonderfully informative although largely unheard of radio program Unwelcome Guests (which has a tremendous archive of past shows available for downloads). The segment which I will link to here is a reading of this essay written by Dmitry Orlov that was posted on investigative reporter Michael Ruppert’s website From The Wilderness. Mr. Ruppert is the author of the very interesting book Crossing The Rubicon and while he has left the journalistic scene due to various problems his site still is up and there is a plethora of great information still available there.
While I remain somewhat of an agnostic on the Peak Oil theory that Orlov bases this essay on I found the parts about surviving after the collapse of the Soviet Union to be riveting and horrifying. We would be wise to pay heed to the material here as the oligarchy has put the United States on a similar path to economic collapse that none of the fraudulent candidates participating in the dog and pony show ‘debates’ will dare to bring up – choosing instead to stick to the sideshow issues like abortion, gay marriage, pandering to the dumbest of the dumb who are the overtly religious knuckledraggers and the left behinders and invoking fear at every opportunity. There is something to fear but it is not the ridiculous terrorist of the week – it is a Soviet style total economic collapse and from all reports outside of the ridiculously irrelevant American infotainment/propaganda ‘news’ system it is coming very, very soon.
You won’t read this in the corporate media but The International Monetary Fund (IMF) is about to embark on a review of the entire U.S. house of cards financial system. Globalism comes home to roost as the chicanery of the Wall Street crooks has only succeeded in causing international investors to be bilked out of their money by the Bernanke-Paulson flim flam men and their cronies. Looter capitalism is about to be shorn of all but its figleaf but then again anyone who is really not wrapped in a television induced cocoon of denial knows that something is amiss and as the stars and stripes fly over the world’s largest lemming colony on July 4th there will be far fewer BBQ’s simply because far fewer people now own homes as a result of the massive and long running financial fraud by Wall Street banks and their whores in Washington.
Economic collapse on a scale not seen since the Great Depression is now gaining momentum and that is the BEST case scenario. Now I give to you the conclusion of Orlov’s essay – pay attention to the tips on how to survive a complete systemic collapse.
Post-Soviet Lessons for a Post-American Century
By Dmitry Orlov
Security in post-collapse Soviet Union was, shall we say, lax. I came through unscathed, but I know quite a few people who did not. A childhood friend of mine and her son were killed in their apartment over the measly sum of 100 dollars. An elderly lady I know was knocked out and had her jaw broken by a burglar who waited outside her door for her to come home, assaulted her, took her keys, and looted her place. There is an infinite supply of stories of this sort.
Empires are held together through violence or the threat of violence. Both the U.S. and Russia were, and are, serviced by a legion of servants whose expertise is in using violence: soldiers, policemen, prison wardens, and private security consultants. Both countries have a surplus of battle-hardened men who have killed, and who are psychologically damaged by the experience, and have no qualms about taking human life. In both countries, there are many, many people whose stock in trade is their use of violence, in offense or defense. No matter what else happens, they will be employed, or self-employed; preferably the former.
In a post-collapse situation, all of these violent men automatically fall into the general category of private security consultants. They have a way of creating enough work to keep their entire tribe busy: if you don’t hire them, they will still do the work, but against you rather than for you. Rackets of various sizes and shapes proliferate, and, if you have some property to protect, or wish to get something done, a great deal of your time and energy becomes absorbed by keeping your private security organization happy and effective.
To round out the violent part of the population, there are also plenty of criminals. As their sentences expire, they are released into the wild, and return to a life of violent crime, but now there is nobody to lock them up again because the machinery of law enforcement has broken down due to lack of funds. This further exacerbates the need for private security, and puts those who cannot afford it at additional risk.
There is a continuum of sorts between those who can provide security and mere thugs. Those who can provide security also tend to know how to either employ or otherwise dispose of mere thugs. Thus, from the point of view of an uneducated security consumer, it is very important to work with an organization rather than with individuals. To be fair, the need for security is huge: with a large number of desperate people about, anything that is not watched will be stolen. The scope of security-related activities is huge: from sleepless grannies who sit in watch over the cucumber patch to bicycle parking lot attendants to house-sitters, and all the way to armed convoys and snipers on rooftops.
As the government, with its policing and law enforcement functions, atrophies, private, improvised security measures cover the security gap it leaves behind. In Russia, there was a period of years during which the police was basically not functioning: they had no equipment, no budget, and their salaries were not sufficient for survival. Murders went unsolved, muggings and burglaries were not even investigated. The police could only survive through graft. There was a substantial amount of melding between the police and organized crime. As the economy came back, it all got sorted out, to some extent. In a case where there is no reason to expect the economy to ever come back, one must learn how to make strange new friends, and keep them, for life.
Loss of Normalcy
An early victim of collapse is the sense of normalcy. People are initially shocked, but quickly forget that such a thing ever existed, except for the odd vague tinge of nostalgia. Normalcy is not exactly normal: in an industrial economy, the sense of normalcy is an artificial, manufactured item. We may be hurtling towards environmental doom, and thankfully never quite get there because of resource depletion, but, in the meantime, the lights are on, there is traffic on the streets, and, even if the lights go out for a while due to a blackout, they will be back on in due course, and the shops will reopen. Business as usual will resume.
The sumptuous buffet lunch will be served on time, so that the assembled luminaries can resume discussion of measured steps we all need to take to avert certain disaster. The lunch is not served; then the lights go off. At some point, somebody calls the whole thing a farce, and the luminaries adjourn, forever. In Russia, normalcy broke down in a series of steps. First, people stopped being afraid to speak their mind. Then, they stopped taking the authorities seriously. Lastly, the authorities stopped taking themselves seriously.
In the Soviet Union, as this thing called normalcy wore thin due to the stalemate in Afghanistan, the Chernobyl disaster, and general economic stagnation, it continued to be enforced through careful management of mass media. In the United States, as the economy fails to create enough jobs for several years in a row, and the entire economy leans towards bankruptcy, business as usual continues to be a top-selling product, or so we are led to believe. American normalcy circa 2005 seems as impregnable as Soviet normalcy circa 1985 once seemed.
If there is a difference between the Soviet and the American approach to maintaining a sense of normalcy, it is this: the Soviets tried to maintain it by force, while the Americans’ superior approach is to maintain theirs through fear. You tend to feel more normal if you fear falling off your perch, and cling to it for dear life, than if somebody nails your feet to it.
More to the point: in a consumer society, anything that puts people off their shopping is dangerously disruptive, and all consumers sense this. Any expression of the truth about our lack of prospects for continued existence as a highly developed, prosperous industrial society is disruptive to the consumerist collective unconscious. There is a herd instinct to reject it, and therefore it fails, not through any overt action, but by failing to turn a profit, because it is unpopular.
In spite of this small difference in how normalcy is or was enforced, it was, and is being brought down, in the late Soviet Union as in contemporary United States, through almost identical means, though with different technology. In the Soviet Union, there was something called samizdat, or self-publishing: with the help of manual typewriters and carbon paper, Russian dissidents managed to circulate enough material to neutralize the effects of enforced normalcy. In contemporary United States, we have web sites and bloggers: different technology, same difference. These are writings for which enforced normalcy is no longer the norm; it is the truth – or at least someone’s earnest approximation of it.
So what has become of these Soviet mavericks, some of whom foretold the coming collapse with some accuracy? To be brief, they faded from view. Both tragically and ironically, those who become experts in explaining the faults of the system and in predicting the course of its demise are very much part of the system. When the system disappears, so does their area of expertise, and their audience. People stop intellectualizing their predicament and start trying to escape it – through drink or drugs or creativity or cunning – but they have no time for pondering the larger context.
Before, during, and immediately after the Soviet collapse, there was a great deal of political activity by groups we might regard as progressive: liberal, environmentalist, pro-democracy reformers. These grew out of the dissident movements of the Soviet era, and made quite a significant impact for a time. A decade later “democracy” and “liberalism” are generally considered dirty words in Russia, commonly associated with exploitation of Russia by foreigners and other rot. The Russian state is centrist, with authoritarian tendencies. Most Russians dislike and distrust their government, but are afraid of weakness, and want a strong hand.
It is easy to see why political idealism fails to thrive in the murky post-collapse political environment. There is a strong pull to the right by nationalists who want to find scapegoats (inevitably, foreigners and ethnic minorities), a strong pull to the center by members of the ancien regime trying to hold on to remnants of their power, and a great upwelling of indecision, confusion, and inconclusive debate on the left, by those trying to do good, and failing to do anything. Sometimes the liberals get a chance to try an experiment or two. Yegor Gaidar got to try some liberal economic reforms under Yeltsin. He is a tragicomic figure, and many Russians now cringe when remembering his efforts.
The liberals, reformists, and progressives in the United States, whether self-styled or so labeled, have had a hard time implementing their agenda. Even their few hard-won victories, such as Social Security, may get dismantled. Even when they managed to elect a president more to their liking, the effects were, by Western standards, reactionary. There was the Carter doctrine, according to which the United States will protect its access to oil by military aggression if necessary. There was also Clinton’s welfare reform, which forced single mothers to work menial jobs while placing their children in substandard daycare in order to have access to social services.
People in the United States have a broadly similar attitude towards politics with people of the Soviet Union. In the U.S., this is often referred to as “voter apathy”, but it might be more accurately described as disgust with politics. The Soviet Union had a single, entrenched, systemically corrupt political party, which held a monopoly on power. The U.S. has two entrenched, systemically corrupt political parties, whose positions are often indistinguishable, and which together hold a monopoly on power. In either case, there is, or was, a single governing elite, but in the United States it organized itself into opposing teams to make its stranglehold on power seem more sportsmanlike.
In the U.S., there is an industry of political commentators and pundits, which is devoted to inflaming political passions, as much as possible, and especially before elections. This is similar to what sports writers and commentators do, to draw attention to their game. It seems that the main force behind political discourse in the U.S. is boredom: one could talk about the weather, one’s job, one’s mortgage and how it relates to current and projected property values, cars and the traffic situation, sports, and, far behind sports, politics.
Although people often bemoan political apathy as if it were a grave social ill, it seems to me that this is just as it should be. Why should essentially powerless people want to engage in a humiliating farce designed to demonstrate the legitimacy of those who wield the power? In Soviet-era Russia, intelligent people did their best to ignore the Communists: paying attention to them, whether through criticism or praise, would only serve to give them comfort and encouragement, making them feel as if they mattered. Why should Americans want to act any differently with regard to the Republicans and the Democrats? For love of donkeys and elephants?
As I mentioned before, crisis-mitigating agendas for “us” to implement, whether they involve wars over access to resources, nuclear plant construction, wind farms or hydrogen dreams, are not likely to be implemented, because this “we” entity will no longer be functional. If we are not likely to be able to implement our agenda prior the collapse, then whatever is left of us is even less likely to do so after. There is no reason to organize politically if you are trying to do something useful. But if you want to prepare to take advantage of a bad situation – well, that’s a different story!
Politics has great potential for making a bad situation worse, much worse. It can cause war, ethnic cleansing and genocide. Whenever people gather into political organizations, whether voluntarily or forcibly, it is a sign of trouble. I was at the annual meeting of my community garden recently, and among the generally placid and shy group of gardeners there were a couple of self-termed “activists”. Before too long, one of these was raising the question of expelling people. People who don’t show up for annual meetings and don’t sign up to do cleaning and composting and so on – why are they allowed to hold on to their plots? Well, some of the “rogue element” the activist was referring to consisted of elderly Russians, who, due to their extensive experience with such things during the Soviet times, are exceedingly unlikely to ever be compelled to take part in communal labor or sit through community meetings. Frankly, they would prefer death. But they also love to garden.
The reason the “element” is allowed to exist in this particular community garden is because the woman who runs the place allows them to hold on to their plots. It is her decision: she exercises leadership, and she does not engage in politics. She makes the garden function, and allows the activists to make their noise, once a year, with no ill effects. But if the situation were to change and the kitchen garden suddenly became a source of sustenance rather than a hobby, how long would it take before the activist element would start demanding more power and asserting its authority?
Leadership is certainly a helpful quality in a crisis, which is a particularly bad time for lengthy deliberations and debates. In any situation, some people are better equipped to handle it than others, and can help others by giving them directions. They naturally accumulate a certain amount of power for themselves, and this is fine as long as enough people benefit from it, and as long as nobody is harmed or oppressed. Such people often spontaneously emerge in a crisis.
An equally useful quality in a crisis is apathy. The Russian people are exceptionally patient: even in the worst of post-collapse times, they did not riot, and there were no significant protests. They coped as best they could. The safest group of people to be with in a crisis is one that does not share strong ideological convictions, is not easily swayed by argument, and does not possess an overdeveloped sense of identity.
Clueless busybodies who feel that “we must do something” and can be spun around by any half-wit demagogue are bad enough, but the most dangerous group, and one to watch out for and run from, is a group of political activists resolved to organize and promote some program or other; even if the program is benign, and even if it is beneficial, the politicized approach to solving it might not be. As the saying goes, revolutions eat their children. Then they turn on everyone else. The life of a refugee is a form of survival; staying and fighting an organized mob generally isn’t.
The Balkans are the post-collapse nightmare everyone is familiar with. Within the former Soviet Union, Georgia is the prime example of nationalist politics pursued to the point of national disintegration. After winning its independence, Georgia went through a paroxysm of nationalist fervor, resulting in a somewhat smaller, slightly less populous, permanently defunct state, with two former provinces stuck in permanent political limbo, because, apparently, the world has lost its ability to redraw political boundaries.
The U.S. is much more like the Balkans than like Russia, which is inhabited by a fairly homogeneous Caucasian/Asian population. The U.S. is very much segregated, usually by race, often by ethnicity, and always by income level. During prosperous times, it is kept relatively calm by keeping a percentage of people in jail that has set an all-time world record. During less prosperous times, it is at a big risk of political explosion. Multi-ethnic societies are fragile; when they fall apart, everyone loses.
Collapse in the U.S.
In the U.S., there appear to be few ways to make the collapse scenario work out smoothly for oneself and one’s family. The whole place seems too far gone in a particular, unsustainable direction. It is a real creative challenge, and we should be giving it a lot of serious thought.
Suppose you live in a big city, in an apartment or a condo. You depend on municipal services for survival. A week without electricity, or heat, or water, or gas, or garbage removal spells extreme discomfort. Any two of these is a calamity. Any three is a disaster. Food comes from the supermarket, with help from the cash machine or the credit card slot at the checkout station. Clean clothes come from the laundromat, which requires electricity, water, and natural gas. Once all the businesses have shut down and your apartment is cold, dark, smells like garbage because it isn’t being collected and like excrement because the toilet doesn’t flush, perhaps it is time to go camping and explore the great outdoors.
So let’s consider the countryside. Suppose that you own a homestead and have a tiny mortgage that shrivels to next to nothing after a good bout of inflation, or that you own it free and clear. If it’s in a developed suburban subdivision, there will still be problems with taxes, code enforcement, strangers from outer space living next door, and other boondoggles, which could get worse as conditions deteriorate. Distressed municipalities may at first attempt jack up rates to cover their costs instead of simply closing up shop. In a misguided effort to save property values, they may also attempt to enforce codes against such necessities as compost heaps, outhouses, chicken coops, and raising crops on your front lawn. Keep in mind, also, that the pesticides and herbicides lavished on lawns and golf courses leave toxic residues. Perhaps the best thing to do with suburbia is to abandon it altogether.
A small farm offers somewhat better possibilities for farming, but most farms in the U.S. are mortgaged to the hilt, and most land that has been under intensive cultivation has been mercilessly bombarded with chemical fertilizers, herbicides and insecticides, making it an unhealthy place, inhabited by men with tiny sperm counts. Small farms tend to be lonely places, and many, without access to diesel or gasoline, would become dangerously remote. You will need neighbors to barter with, to help you, and to keep you company. Even a small farm is probably overkill in terms of the amount of farmland available, because without the ability to get crops to market, or a functioning cash economy to sell them in, there is no reason to grow a large surplus of food. Tens of acres are a waste when all you need is a few thousand square feet. Many Russian families managed to survive with the help of a standard garden plot of one sotka, which is 100 square meters, or, if you prefer, 0.024710538 acres, or 1076.391 square feet.
What is needed, of course is a small town or a village: a relatively small, relatively dense settlement, with about an acre of farmland for every 30 or so people, and with zoning regulations designed for fair use and sustainability, not opportunities for capital investment, growth, property values, or other sorts of “development”. Further, it would have to be a place where people know each other and are willing to help each other – a real community. There may still be a few hundred communities like that tucked away here and there in the poorer counties in the United States, but there are not enough of them, and most of us would not be welcome there.
People often come to me and say: “I hear that the U.S. economy is going to collapse soon; what investment tips can you give me, so that I can adjust my portfolio accordingly?” Well, I am not a professional investment adviser, so I risk nothing by making some suggestions.
The nuclear scare gave rise to the archetype of the American Survivalist, holed up in the hills, with a bomb shelter, a fantastic number of tins of spam, an assortment of guns, and plentiful ammo with which to fight off similar idiots from further downhill. And, of course, an American flag. This sort of survivalism is about as good as burying yourself alive, I suppose.
The idea of stockpiling is not altogether bad, though. Stockpiling food is, of course, a rotten idea, literally. But certain manufactured items are certainly worth considering. Suppose you have a retirement account, or some mutual funds. And suppose you know for certain that it won’t exist by the time you are scheduled to retire. And suppose you realize that you can currently buy a lot of good stuff that has a long shelf life and will be needed, and valuable, far into the future. And suppose, further, that you have a small amount of storage space: a few hundred square feet. Now, what are you going to do? Sit by and watch your savings evaporate? Or take the tax hit and invest in things that are not composed of vapor.
Once the cash machines are out of cash, the stock ticker stops ticking, and the retail chain breaks down, people will still have basic needs. There will be flea markets to fill these needs, using whatever local token of exchange is available; bundles of $100 bills, bits of gold chain, packs of cigarettes, or what have you. It’s not a bad idea to own a few of everything you will need, but you should invest in things you will be able to trade for things you will need. Think of consumer necessities that require high technology and have a long shelf life. Here are some suggestions to get you started: condoms, razor blades, and drugs (over-the-counter and prescription). Rechargeable batteries (and solar chargers) are sure to become a prized item (Ni-MH are the less toxic ones). Toiletries, such as good soap, will be luxury items. Fill some containers, nitrogen-pack them so that nothing rusts or rots, and store them somewhere.
After the Soviet collapse, there swiftly appeared a category of itinerant merchants who provided people with access to imported products. To procure their wares, these people had to travel abroad, to Poland, to China, to Turkey, on trains, carrying goods back and forth in their baggage. They would exchange a suitcase of Russian-made watches for a suitcase of other, more useful consumer products, such as shampoo or razor blades. They would have to grease the palms of officials along their route, and were often robbed. There was a period of time when these people, called “chelnoki”, which is Russian for “shuttles”, were the only source of consumer products. The products were often factory rejects, damaged, or past their sell-by date, but this did not make them any less valuable. Based on their example, it is possible to predict which items will be in high demand, and to stockpile these items ahead of time, as a hedge against economic collapse. Note that chelnoki had intact, economies to trade with, accessible by train – while this is not guaranteed to be the case in the U.S.
A stockpile of this sort, in a walkable, socially stable place, where you know everybody, where you have some close friends and some family, where you own your shelter and some land free and clear, and where you can grow most of your own food, should enable you survive economic collapse without too much trouble. And, who knows, maybe you will even find happiness there.
Although the basic, and obvious, conclusion is that the United States is worse prepared for economic collapse than Russia was, and will have a harder time than Russia had, there are some cultural facets to the United States that are not entirely unhelpful. To close on an optimistic note, I will mention three of these. I will say nothing particularly original here, so feel free to whistle your own cheerful tune as you read this.
Firstly, and perhaps most surprisingly, Americans make better Communists than Russians ever did, or cared to try. They excel at communal living, with plenty of good, stable roommate situations, which compensate for their weak, alienated, or nonexistent families. These roommate situations can be used as a template, and scaled up to village-sized self-organized communities. Communism (obviously, under a more palatable name) makes a lot more sense in an unstable, resource-scarce environment than the individualistic approach. Where any Russian would cringe at such an idea, because it stirs the still fresh memories of the failed Soviet experiment at collectivization and forced communal living, Americans maintain a reserve of community spirit and civic-mindedness.
Secondly, there is a layer of basic decency and niceness to at least some parts of American society, which has been all but destroyed in Russia over the course of Soviet history. There is an altruistic impulse to help strangers, and pride in being helpful to others. Americans are culturally homogeneous, and the biggest interpersonal barrier between them is the fear and alienation fostered by their racially and economically segregated living conditions.
Lastly, hidden behind the tawdry veneer of patriotic bumper stickers and flags, there is an undercurrent of quiet national pride, which, if engaged, can produce high morale and results. Americans are not yet willing to simply succumb to circumstance. Because many of them lack a good understanding of their national predicament, their efforts to mitigate it may turn out to be in vain, but they are virtually guaranteed to make a valiant effort, for “this is, after all, America.”
As previously mentioned, I stumbled across this great although very long essay one day while listening to a segment of that wonderfully informative although largely unheard of radio program Unwelcome Guests (which has a tremendous archive of past shows available for downloads). The segment which I will link to here is a reading of this essay by Dmitry Orlov that was posted on investigative reporter Michael Ruppert’s website From The Wilderness. Mr. Ruppert is the author of the very interesting book Crossing The Rubicon and while he has left the journalistic scene due to various problems his site still is up and there is a plethora of great information still available. While I am not particularly a believer in the Peak Oil theory that Orlov bases this essay on I found the parts about surviving after the collapse of the Soviet Union to be riveting and horrifying.
We would be wise to pay heed to the material here as the oligarchy has put the United States on a similar path to economic collapse that none of the fraudulent candidates participating in the dog and pony show ‘debates’ will dare to bring up – choosing instead to stick to the sideshow issues like abortion, gay marriage, pandering to the dumbest of the dumb who are the overtly religious knuckledraggers and the left behinders and invoking fear at every opportunity.There is something to fear but it is not the ridiculous terrorist of the week – it is a Soviet style total economic collapse.
Post-Soviet Lessons for a Post-American Century
(PART TWO OF THREE)
By Dmitry Orlov
Differences between the Superpowers: Ethnicity
Our thumbnail sketch of the two superpowers would not be complete without a comparison of some of the differences, which are no less glaring than the similarities.
The United States has traditionally been a very racist country, with numerous categories of people one wouldn’t want one’s daughter or sister to marry, no matter who one happens to be. It was founded on the exploitation of African slaves and the extermination of the natives. Over its formative years, there was no formal intermarriage between the Europeans and the Africans, or the Europeans and the Indians. This stands in stark contrast to other American continent nations such as Brazil. To this day in the U.S. there remains a disdainful attitude toward any tribe other than the Anglo-Saxon. Glazed over with a layer of political correctness, at least in polite society, it comes out again when observing whom most such Anglo-Saxon people actually choose to marry, or date.
Russia is a country whose ethnic profile shifts slowly from mainly European in the West to Asian in the East. Russia’s settlement of its vast territory was accompanied by intermarriage with every tribe the Russians met on their drive east. One of the formative episodes of Russian history was the Mongol invasion, which resulted in a large infusion of Asian blood into Russian genealogy. On the other side, Russia received quite a few immigrants from Western Europe. Currently, Russia’s ethnic problems are limited to combating ethnic mafias, and to the many small but humiliating episodes of anti-Semitism, which has been a feature Russian society for centuries, and, in spite of which, Jews, my family included, have done quite well there. Jews were barred from some of the more prestigious universities and institutes, and were held back in other ways (for instance, lynching).
The United States remains a powder keg of ethnic tension, where urban blacks feel oppressed by suburban whites, who in turn fear to venture into major sections of the cities. In a time of permanent crisis, urban blacks might well riot and loot the cities, because they don’t own them, and the suburban whites are likely to get foreclosed out of their “little cabins in the woods,” as James Kunstler charmingly calls them, and decamp to a nearby trailer park. Add to this already volatile mixture the fact that firearms are widely available, and the fact that violence permeates American society, particularly in the South, the West, and the dead industrial cities like Detroit.
In short, the social atmosphere of post-collapse America is unlikely to be as placid and amicable as that of post-collapse Russia. At least in parts, it is more likely to resemble other, more ethnically mixed, and therefore less fortunate parts of the Former Soviet Union, such as the Fergana valley and, of course, that “beacon of freedom” in the Caucasus, Georgia (or so says the U.S. President).
No part of the United States is an obvious choice for the survival-minded, but some are obviously riskier than others. Any place with a history of racial or ethnic tension is probably unsafe. This rules out the South, the Southwest, and many large cities elsewhere. Some people might find a safe harbor in an ethnically homogeneous enclave of their own kind, while the rest would be well-advised to look for the few communities where inter-ethnic relations have been cemented through integrated living and intermarriage, and where the strange and fragile entity that is multi-ethnic society might have a chance of holding together.
Differences between the Superpowers: Ownership
Another key difference: in the Soviet Union, nobody owned their place of residence. What this meant is that the economy could collapse without causing homelessness: just about everyone went on living in the same place as before. There were no evictions or foreclosures. Everyone stayed put, and this prevented society from disintegrating.
One more difference: the place where they stayed put was generally accessible by public transportation, which continued to run during the worst of times. Most of the Soviet-era developments were centrally planned, and central planners do not like sprawl: it is too difficult and expensive to service. Few people owned cars, and even fewer depended on cars for getting around. Even the worst gasoline shortages resulted in only minor inconveniences for most people: in the springtime, they made it difficult to transport seedlings from the city to the dacha for planting; in the fall, they made it difficult to haul the harvest back to the city.
Differences between the Superpowers: Labor Profile
The Soviet Union was entirely self-sufficient when it came to labor. Both before and after the collapse, skilled labor was one of its main exports, along with oil, weapons, and industrial machinery. Not so with the United States, where not only is most of the manufacturing being carried out abroad, but a lot of service back home is being provided by immigrants as well. This runs the gamut from farm labor, landscaping, and office cleaning to the professions, such as engineering and medicine, without which society and its infrastructure would unravel. Most of these people came to the United States to enjoy the superior standard of living — for as long as it remains superior. Many of them will eventually head home, leaving a gaping hole in the social fabric.
I have had a chance to observe quite a few companies in the U.S. from the inside, and have spotted a certain constancy in the staffing profile. At the top, there is a group of highly compensated senior lunch-eaters. They tend to spend all of their time pleasing each other in various ways, big and small. They often hold advanced degrees in disciplines such as Technical Schmoozing and Relativistic Bean-counting. They are obsessive on the subject of money, and cultivate a posh country set atmosphere, even if they are just one generation out of the coal mines. Ask them to solve a technical problem — and they will politely demur, often taking the opportunity to flash their wit with a self-deprecating joke or two.
Somewhat further down the hierarchy are the people who actually do the work. They tend to have fewer social graces and communication skills, but they do know how to get the work done. Among them are found the technical innovators, who are often the company’s raison d’être.
More often than not, the senior lunch-eaters at the top are native-born Americans, and, more often than not, the ones lower down are either visiting foreigners or immigrants. These find themselves in a variety of situations, from the working visa holders who are often forced to choose between keeping their job and going home, to those who are waiting for a green card and must play their other cards just right, to those who have one, to citizens.
The natives at the top always try to standardize the job descriptions and lower the pay scale of the immigrants at the bottom, playing them against each other, while trying to portray themselves as super-achieving entrepreneurial mavericks who can’t be pinned down to a mere set of marketable skills. The opposite is often the case: the natives are often the commodity items, and would perform similar functions whether their business were biotechnology or salted fish, while those who work for them may be unique specialists, doing what has never been done before.
It is no surprise that this situation should have come about. For the last few generations, native-born Americans have preferred disciplines such as law, communications, and business administration, while immigrants and foreigners tended to choose the sciences and engineering. All their lives the natives were told to expect prosperity without end, and so they felt safe in joining professions that are mere embroidery on the fabric of an affluent society.
This process became known as “brain drain” — America’s extraction of talent from foreign lands, to its advantage, and to their detriment. This flow of brain power is likely to reverse direction, leaving the U.S. even less capable of finding ways to cope with its economic predicament. This may mean that, even in areas where there will be ample scope for innovation and development, such as restoration of rail service, or renewable energy, America may find itself without the necessary talent to make it happen.
Differences between the Superpowers: Religion
The last dimension worth mentioning along which the Soviet Union and the United States are in stark contrast is that of religion.
Pre-revolutionary Russia’s two-headed eagle symbolized the monarchy and the church, with a crown on one head and a miter on the other. Along with its somewhat holier manifestations, such as its iconography and its monastic tradition, the Russian church was as bloated with wealth and ostentation, and as oppressive, as the monarchy whose power it helped legitimize. But over the course of the 20th century Russia managed to evolve in a distinctly secular way, oppressing religious people with compulsory atheism.
The United States, uncharacteristically for a Western nation, remains a fairly religious place, where most people look for and find God in a church, or a synagogue, or a mosque. The colonies’ precocious move to leave the fold of the British Empire has made the U.S. something of a living fossil in terms of cultural evolution. This is manifested in some trivial ways, such as the inability to grasp the metric system (a problem considered mostly solved in England itself) or its distinctly 18th century tendency to make a fetish of its national flag, as well as in some major ones, such as its rather half-hearted embrace of secularism.
What this difference means in the context of economic collapse is, surprisingly, next to nothing. Perhaps the American is more likely than not to start quoting the Bible and going on about the Apocalypse, the end of times, and the Rapture. These thoughts, need I say, are not conducive to survival. But the supposedly atheist Russian turned out to be just as likely to go on about The End of the World, and flocked to the newly opened churches in search of certainty and solace.
Perhaps the more significant difference is not between the prevalence and the lack of religion, but the differences between the dominant religions. In spite of the architectural ostentation of the Russian Orthodox Church, and the pomp and circumstance of its rituals, its message has always been one of asceticism as the road to salvation. Salvation is for the poor and the humble, because one’s rewards are either in this world or the next, not both.
This is rather different from Protestantism, the dominant religion in America, which made the dramatic shift to considering wealth as one of God’s blessings, ignoring some inconvenient points rather emphatically made by Jesus to the effect that rich people are extremely unlikely to be saved. Conversely, poverty became associated with laziness and vice, robbing poor people of their dignity.
Thus, a Russian is less likely to consider sudden descent into poverty as a fall from God’s grace, and economic collapse as God’s punishment upon the people, while the religions that dominate America — Protestantism, Judaism, and Islam — all feature temporal success of their followers as a key piece of evidence that God is well-disposed toward them. What will happen once God’s good will toward them is no longer manifest? Chances are, they will become angry and try to find someone other than their own selves to blame, that being one of the central mechanisms of human psychology. We should look forward to unexpectedly wrathful congregations eager to do the work of an unexpectedly wrathful God.
The United States is by no means homogeneous when it comes to intensity of religious sentiment. When looking for a survivable place to settle, it is probably a good idea to look for a place where religious fervor does not run to extremes.
The Loss of Technological Comforts
Warning: what I am about to say may be somewhat unpleasant, but I’d like to get the issue out of the way. Most of the technological progress of the 20th century resulted in a higher level of physical comfort. Yes, that’s why we caused global warming, a hole in the ozone layer, and a mass extinction of plants, fish, birds, and mammals: to be somewhat more comfortable for a little while.
We all expect heating and air-conditioning, hot and cold water, reliable electricity, personal transportation, paved roads, illuminated streets and parking lots, maybe even high-speed Internet. Well, what if you had to give up all that? Or, rather, what will you do when you have to give up all that?
Most of our ancestors put up with a level of physical discomfort we would find appalling: no running hot water, an outhouse instead of a flush toilet, no central heat, and one’s own two feet, or a horse, as the main means for getting around. And still they managed to produce a civilization and a culture that we can just barely manage to emulate and preserve.
It doesn’t take a crisis to make public utilities go on the blink, but a crisis certainly helps. Any crisis will do: economic, financial, or even political. Consider the governor of Primorye, a region on the far side of Siberia, who simply stole all the money that was supposed to buy coal for the winter. Primorye froze. With winter temperatures around 40 below, it’s a wonder there’s anyone still living there. It’s a testament to human perseverance. As the economic situation degenerates, events seem to unfold in a certain sequence, regardless of locale. They always seem to lead to the same result: unsanitary conditions. But an energy crisis seems to me by far the most efficacious way of depriving one of one’s treasured utility services.
First, electricity begins to wink in and out. Eventually, this settles into a rhythm. Countries such as Georgia, Bulgaria and Romania, as well as some peripheral regions of Russia, have had to put up with a few hours of electricity a day, sometimes for several years. North Korea is perhaps the best Soviet pupil we have, surviving without much electricity for years. Lights flicker on as the sun begins to set. The generators struggle on for a few hours, powering light bulbs, television sets, and radios. When it’s time for bed, the lights wink out once again.
Second in line is heat. Every year, it comes on later and goes off sooner. People watch television or listen to the radio, when there’s electricity, or just sit, under piles of blankets. Sharing bodily warmth has been a favored survival technique among humans through the ice ages. People get used to having less heat, and eventually stop complaining. Even in these relatively prosperous times, there are apartment blocks in St. Petersburg that are heated every other day, even during the coldest parts of winter. Thick sweaters and down comforters are used in place of the missing buckets of coal.
Third in line is hot water: the shower runs cold. Unless you’ve been deprived of a cold shower, you won’t be able to appreciate it for the luxury that it affords. In case you are curious, it’s a quick shower. Get wet, lather up, rinse off, towel off, dress, and shiver, under several layers of blankets, and let’s not forget shared bodily warmth. A less radical approach is to wash standing in a bucket of warm water — heated up on the stove. Get wet, lather, rinse. And don’t forget to shiver.
Next, water pressure drops off altogether. People learn to wash with even less water. There is a lot of running around with buckets and plastic jugs. The worst part of this is not the lack of running water; it is that the toilets won’t flush. If the population is enlightened and disciplined, it will realize what it must do: collect their excretions in buckets and hand-carry them to a sewer inlet. The super-enlightened build outhouses and put together composting toilets, and use the proceeds to fertilize their kitchen gardens.
Under this combined set of circumstances, there are three causes of mortality to avoid. The first is simply avoiding freezing to death. It takes some preparation to be able to go camping in wintertime. But this is by far the easiest problem. The next is avoiding humans’ worst companions through the ages: bedbugs, fleas, and lice. These never fail to make their appearance wherever unwashed people huddle together, and spread diseases such as typhoid, which have claimed millions of lives. A hot bath and a complete change of clothes can be a lifesaver. The hair-free look becomes fashionable. Baking the clothes in an oven kills the lice and their eggs. The last is avoiding cholera and other diseases spread through feces by boiling all drinking water.
It seems safe to assume that the creature comforts to which we are accustomed are going to be few and far between. But if we are willing to withstand the little indignities of reading by candlelight, bundling up throughout the cold months, running around with buckets of water, shivering while standing in a bucket of tepid water, and carrying our poop out in a bucket, then none of this is enough to stop us from maintaining a level of civilization worthy of our ancestors, who probably had it worse than we ever will. They were either depressed or cheerful about it, in keeping with their personal disposition and national character, but apparently they survived, or you wouldn’t be reading this.
It can be said that the U.S. economy is run either very well or very badly. On the plus side, companies are lean, and downsized as needed to stay profitable, or at least in business. There are bankruptcy laws that weed out the unfit and competition to keep productivity going up. Businesses use just-in-time delivery to cut down on inventory and make heavy use of information technology to work out the logistics of operating in a global economy.
On the minus side, the U.S. economy runs ever larger structural deficits. It fails to provide the majority of the population with the sort of economic security that people in other developed nations take for granted. It spends more on medicine and education than many other countries, and gets less for it. Instead of a single government-owned airline, it has several permanently bankrupt government-supported ones. It spends heavily on law enforcement, and has a high crime rate. It continues to export high-wage manufacturing jobs and replace them with low-wage service jobs. As I mentioned before, it is, technically, bankrupt.
Both in the former Soviet Union and in North America, the landscape has fallen victim to a massive, centrally managed uglification program. Moscow’s central planners put up identical drab and soulless buildings throughout its territory, disregarding regional architectural traditions and erasing local culture. America’s land developers have played a largely similar role, with a similarly ghastly result: the United States of Generica, where many places can be told apart only by reading their highway signs.
In North America, there is also a pervasive childish idiocy that has spread desolation across the entire continent: the idiocy of the traffic engineer. As Jane Jacobs cleverly illustrates, these are not engineers of the sort that solve problems and draw conclusions based on evidence, but “little boys with toy cars happily murmuring ‘Zoom, Zooom, Zooooom!'” [Dark Age Ahead, p. 79] The landscape that makes them happy is designed to waste as much fuel as possible by trapping people in their cars and making them drive around in circles.
It can also be said that the Soviet economy was run either very well or very badly. On the plus side, that system, for all its many failings, managed to eradicate the more extreme forms of poverty, malnutrition, many diseases, and illiteracy. It provided economic security of an extreme sort: everyone knew exactly how much they would earn, and the prices of everyday objects remained fixed. Housing, health care, education, and pensions were all guaranteed. Quality varied; education was generally excellent, housing much less so, and Soviet medicine was often called “the freest medicine in the world” — with reasonable service achievable only through private arrangements.
On the minus side, the centrally planned behemoth was extremely inefficient, with high levels of loss and outright waste at every level. The distribution system was so inflexible that enterprises hoarded inventory. It excelled at producing capital goods, but when it came to manufacturing consumer goods, which require much more flexibility than a centrally planned system can provide, it failed. It also failed miserably at producing food, and was forced to resort to importing many basic foodstuffs. It operated a huge military and political empire, but, paradoxically, failed to derive any economic benefit from it, running the entire enterprise at a net loss.
Also paradoxically, these very failings and inefficiencies made for a soft landing. Because there was no mechanism by which state enterprises could go bankrupt, they often continued to operate for a time at some low level, holding back salaries or scaling back production. This lessened the number of instant mass layoffs or outright closings, but where these did occur, they were accompanied by very high mortality rates among men between the ages of 45 and 55, who turn out to be psychologically the most vulnerable to sudden loss of career, and who either drank themselves to death or committed suicide.
People could sometimes use their old, semi-defunct place of employment as a base of operations of sorts, from which to run the kind of black market business that allowed many of them to gradually transition to private enterprise. The inefficient distribution system, and the hoarding to which it gave rise, resulted in very high levels of inventory, which could be bartered. Some enterprises continued to operate in this manner, bartering their leftover inventory with other enterprises, in order to supply their employees with something they could use or sell.
What parallels can we draw from this to employment in the post-collapse United States? Public sector employment may provide somewhat better chances for keeping one’s job. For instance, it is unlikely that all schools, colleges, and universities will dismiss all of their faculty and staff at the same time. It is somewhat more likely that their salaries will not be enough to live on, but they may, for a time, be able to maintain their social niche. Properties and facilities management is probably a safe bet: as long as there are properties that are considered valuable, they will need to be looked after. When the time comes to dismantle them and barter off the pieces, it will help if they are still intact, and one has the keys to them.
Economic Collapse in the U.S.
A spontaneous soft landing is unlikely in the U.S., where a large company can decide to shut its doors by executive decision, laying off personnel and auctioning off capital equipment and inventory. Since in many cases the equipment is leased and the inventory is just-in-time and therefore very thin, a business can be made to evaporate virtually overnight. Since many executives may decide to cut their losses all at once, seeing the same economic projections and interpreting them similarly, the effect on communities can be utterly devastating.
Most people in the U.S. cannot survive very long without an income. This may sound curious to some people — how can anyone, anywhere survive without an income? Well, in post-collapse Russia, if you didn’t pay rent or utilities — because no-one else was paying them either — and if you grew or gathered a bit of your own food, and you had some friends and relatives to help you out, then an income was not a prerequisite for survival. Most people got by, somehow.
But most people in the U.S., once their savings are depleted, would in due course be forced to live in their car, or in some secluded stretch of woods, in a tent, or under a tarp. There is currently no mechanism by which landlords can be made not to evict deadbeat tenants, or banks be prevailed upon not to foreclose on nonperforming loans. A wholesale reintroduction of rent control seems politically unlikely. Once enough residential and commercial real estate becomes vacant, and law enforcement becomes lax or nonexistent, squatting becomes a real possibility. Squatters usually find it hard to get mail and other services, but this is a very minor issue. More importantly, they can be easily dislodged again and again.
The term “loitering” does not translate into Russian. The closest equivalent one can find is something along the lines of “hanging around” or “wasting time,” in public. This is important, because once nobody has a job to go to, the two choices they are presented with are sitting at home, and, as it were, loitering. If loitering is illegal, then sitting at home becomes the only choice.
The U.S. and the Soviet Union were at two extremes of a continuum between the public and the private. In the Soviet Union, most land was open to the public. Even apartments were often communal, meaning that the bedrooms were private, but the kitchen, bathroom, and hallway were common areas. In the U.S., most of the land is privately owned, some by people who put up signs threatening to shoot trespassers. Most public places are in fact private, marked “Customers Only” and “No Loitering.” Where there are public parks, these are often “closed” at night, and anyone trying to spend a night there is likely to be told to “move along” by the police.
After the collapse, Russia experienced a swelling of the ranks of people described by the acronym “BOMZh,” which is actually short for “BOMZh i Z,” and stands for “persons without a definite place of residence or employment.” The bomzhies, as they came to be called, often inhabited unused bits of the urban or rural landscape, where, with nobody to tell them to “move along,” they were left largely in peace. Such an indefinite place of residence was often referred to as bomzhatnik. English badly needs a term for that. Perhaps we could call it a “bum garden” — it is as much a garden as an “office park” is a park.
When the U.S. economy collapses, one would expect employment rates, and, with them, residency rates, to plummet. It is hard to estimate what percentage of the U.S. population would, as a result, become homeless, but it could be quite high, perhaps becoming so commonplace as to remove the stigma. A country where most of the neighborhoods are structured so as to exclude people of inadequate means, in order to preserve property values, is not a pleasant place to be a bum. Then again, when property values start dropping to zero, we may find that some of the properties spontaneously re-zone themselves into “bum gardens,” with no political will or power anywhere to do anything about it.
I do not mean to imply that Russian bums have a good time of it. But because most of the Russian population was able to keep their place of residence in spite of a collapsing economy, the percentage of bomzhies in the general population never made it into the double digits. These most unfortunate cases led short, brutal lives, often in an alcoholic haze, and accounted for quite a lot of Russia’s spike in post-collapse mortality. Some of them were refugees — Russians ethnically cleansed from the newly independent, suddenly nationalistic republics — who could not be easily reabsorbed into the Russian population due to Russia’s chronic housing shortage.
Russia’s chronic housing shortage was partly caused by the spectacular decline of Russian agriculture, which caused people to migrate to the cities, and partly due simply to the inability of the government to put up buildings quickly enough. What the government wanted to put up was invariably an apartment building: 5 floors, 9 floors, and even some 14-floor towers. The buildings went up on vacant, or vacated, land, and were usually surrounded by a generous portion of wasteland, which, in the smaller cities and towns, and in places where the soil is not frozen year-round, or covered with sulfur or soot from a nearby factory, was quickly converted into kitchen gardens.
The quality of construction always looked a bit shabby, but has turned out to be surprisingly sound structurally and quite practical. Mostly it was reinforced concrete slab construction, with ceramic tile on the outside and hard plaster for insulation on the inside. It was cheap to heat, and usually had heat, at least enough of it so that the pipes wouldn’t freeze, with the steam supplied by a gigantic central boiler that served an entire neighborhood.
One often hears that the shabbiest of these Soviet-era apartment blocks, termed “Khrushcheby” — a melding of Khrushchev, who ordered them built, and “trushcheby” (Russian for “slums”) — are about to start collapsing, but they haven’t done so yet. Yes, they are dank and dreary, and the apartments are cramped, and the walls are cracked, and the roof often leaks, and the hallways and stairwells are dark and smell of urine, but it’s housing.
Because apartments were so hard to come by, with waiting lists stretched out for decades, several generations generally lived together. This was often an unpleasant, stressful, and even traumatic way to live, but also very cheap. Grandparents often did a lot of the work of raising children, while the parents worked. When the economy collapsed, it was often the grandparents who took to serious gardening and raised food during the summer months. Working-age people took to experimenting in the black market, with mixed results: some would get lucky and strike it rich, while for others it was lean times. With enough people living together, these accidental disparities tended to even out at least to some extent.
A curious reversal took place. Whereas before the collapse, parents were often in a position to provide some financial help to their adult children, now the opposite is true. Older people who do not have children are much more likely to live in poverty than those who have children to support them. Once financial capital is wiped out, human capital becomes essential.
A key difference between Russia and the U.S. is that Russians, like most people around the world, generally spend their entire lives living in one place, whereas Americans move around constantly. Russians generally know, or at least recognize, most of the people who surround them. When the economy collapses, everyone has to confront an unfamiliar situation. The Russians, at least, did not have to confront it in the company of complete strangers. On the other hand, Americans are far more likely than Russians to help out strangers, at least when they have something to spare.
Another element that was helpful to Russians was a particular feature of Russian culture: since money was not particularly useful in the Soviet era economy, and did not convey status or success, it was not particularly prized either, and shared rather freely. Friends thought nothing of helping each other out in times of need. It was important that everyone had some, not that one had more than the others. With the arrival of market economics, this cultural trait disappeared, but it persisted long enough to help people to survive the transition.
Smelling the Roses
Another note on culture: once the economy collapses, there is generally less to do, making it a good time for the naturally idle and a bad time for those predisposed to keeping busy.
Soviet-era culture had room for two types of activity: normal, which generally meant avoiding breaking a sweat, and heroic. Normal activity was expected, and there was never any reason to do it harder than expected. In fact, that sort of thing tended to be frowned upon by “the collective,” or the rank and file. Heroic activity was celebrated, but not necessarily rewarded financially.
Russians tend to look in bemused puzzlement on the American compulsion to “work hard and play hard.” The term “career” was in the Soviet days a pejorative term — the attribute of a “careerist” — someone greedy, unscrupulous, and overly “ambitious” (also a pejorative term). Terms like “success” and “achievement” were very rarely applied on a personal level, because they sounded overweening and pompous. They were reserved for bombastic public pronouncements about the great successes of the Soviet people. Not that positive personal characteristics did not exist: on a personal level, there was respect given to talent, professionalism, decency, sometimes even creativity. But “hard worker,” to a Russian, sounded a lot like “fool.”
A collapsing economy is especially hard on those who are accustomed to prompt, courteous service. In the Soviet Union, most official service was rude and slow, and involved standing in long lines. Many of the products that were in short supply could not be obtained even in this manner, and required something called blat: special, unofficial access or favor. The exchange of personal favors was far more important to the actual functioning of the economy than the exchange of money. To Russians, blat is almost a sacred thing: a vital part of culture that holds society together. It is also the only part of the economy that is collapse-proof, and, as such, a valuable cultural adaptation.
Most Americans have heard of Communism, and automatically believe that it is an apt description of the Soviet system, even though there was nothing particularly communal about a welfare state and a vast industrial empire run by an elitist central planning bureaucracy. But very few of them have ever heard of the real operative “ism” that dominated Soviet life: Dofenism, which can be loosely translated as “not giving a rat’s ass.” A lot of people, more and more during the “stagnation” period of the 1980’s, felt nothing but contempt for the system, did what little they had to do to get by (night watchman and furnace stoker were favorite jobs among the highly educated) and got all their pleasure from their friends, from their reading, or from nature.
This sort of disposition may seem like a cop-out, but when there is a collapse on the horizon, it works as psychological insurance: instead of going through the agonizing process of losing and rediscovering one’s identity in a post-collapse environment, one could simply sit back and watch events unfold. If you are currently “a mover and a shaker,” of things or people or whatever, then collapse will surely come as a shock to you, and it will take you a long time, perhaps forever, to find more things to move and to shake to your satisfaction. However, if your current occupation is as a keen observer of grass and trees, then, post-collapse, you could take on something else that’s useful, such as dismantling useless things.
The ability to stop and smell the roses — to let it all go, to refuse to harbor regrets or nurture grievances, to confine one’s serious attention only to that which is immediately necessary, and not to worry too much about the rest — is perhaps the one most critical to post-collapse survival. The most psychologically devastated are usually the middle-aged breadwinners, who, once they are no longer gainfully employed, feel completely lost. Detachment and indifference can be most healing, provided they do not become morbid. It is good to take your sentimental nostalgia for what once was, is, and will soon no longer be, up front, and get it over with.
Russia’s post-collapse economy was for a time dominated by one type of wholesale business: asset stripping. To put it in an American setting: suppose you have title, or otherwise unhindered access, to an entire suburban subdivision, which is no longer accessible by transportation, either public or private, too far to reach by bicycle, and is generally no longer suitable for its intended purpose of housing and accumulating equity for fully employed commuters who shop at the now defunct nearby mall. After the mortgages are foreclosed and the properties repossessed, what more is there to do, except board it all up and let it rot? Well, what has been developed can be just as easily undeveloped.
What you do is strip it of anything valuable or reusable, and either sell or stockpile the materials. Pull the copper out of the streets and the walls. Haul away the curbstones and the utility poles. Take down the vinyl siding. Yank out the fiberglass insulation. The sinks and windows can surely find a new use somewhere else, especially if no new ones are being made.
Having bits of the landscape disappear can be a rude surprise. One summer I arrived in St. Petersburg and found that a new scourge had descended on the land while I was gone: a lot of manhole covers were mysteriously missing. Nobody knew where they went or who profited from their removal. One guess was that the municipal workers, who hadn’t been paid in months, took them home with them, to be returned once they got paid. They did eventually reappear, so there may be some merit to this theory. With the gaping manholes positioned throughout the city like so many anteater traps for cars, you had the choice of driving either very slowly and carefully, or very fast, and betting your life on the proper functioning of the shock absorbers.
Post-collapse Russia’s housing stock stayed largely intact, but an orgy of asset stripping of a different kind took place: not just left-over inventory, but entire factories were stripped down and exported. What went on in Russia under the guise of privatization, is a subject for a different article, but whether it’s called “privatization” or “liquidation” or “theft” doesn’t matter: those with title to something worthless will find a way to extract value from it, making it even more worthless. An abandoned suburban subdivision might be worthless as housing, but valuable as a dump site for toxic waste.
Just because the economy is going to collapse in the most oil-addicted country on earth doesn’t necessarily mean that things will be just as bad everywhere else. As the Soviet example shows, if the entire country is for sale, buyers will materialize out of nowhere, crate it up, and haul it away. They will export everything: furnishings, equipment, works of art, antiques. The last remnant of industrial activity is usually the scrap iron business. There seems to be no limit to the amount of iron that can be extracted from a mature post-industrial site.
The dismal state of Soviet agriculture turned out to be paradoxically beneficial in fostering a kitchen garden economy, which helped Russians to survive the collapse. At one point it became informally known that 10% of the farmland — the part allocated to private plots — was being used to produce 90% of the food. Beyond underscoring the gross inadequacies of Soviet-style command and control industrial agriculture, it is indicative of a general fact: agriculture is far more efficient when it is carried out on a small scale, using manual labor.
Russians always grew some of their own food, and scarcity of high-quality produce in the government stores kept the kitchen garden tradition going during even the more prosperous times of the 60s and the 70s. After the collapse, these kitchen gardens turned out to be lifesavers. What many Russians practiced, either through tradition or by trial and error, or sheer laziness, was in some ways akin to the new organic farming and permaculture techniques. Many productive plots in Russia look like a riot of herbs, vegetables, and flowers growing in wild profusion.
Forests in Russia have always been used as an important additional source of food. Russians recognize, and eat, just about every edible mushroom variety, and all of the edible berries. During the peak mushroom season, which is generally in the fall, forests are overrun with mushroom-pickers. The mushrooms are either pickled or dried and stored, and often last throughout the winter.
Recreational Drug Use
A rather striking similarity between Russians and Americans is their propensity to self-medicate. While the Russian has traditionally been single-heartedly dedicated to the pursuit of vodka, the American is more likely than not to have also tried cannabis. Cocaine has also had a big effect on American culture, as have opiates. There are differences as well: the Russian is somewhat less likely to drink alone, or to be apprehended for drinking, or being drunk, in public. To a Russian, being drunk is almost a sacred right; to an American, it is a guilty pleasure. Many of the unhappier Americans are forced by their circumstances to drink and drive; this does not make them, nor the other drivers, nor the pedestrians (should any still exist) any happier.
The Russian can get furiously drunk in public, stagger about singing patriotic songs, fall into a snow bank, and either freeze to death or be carted off to a drunk tank. All this produces little or no remorse in him. Based on my reading of H. L. Mencken, America was also once upon a time a land of happy drunks, where a whiskey bottle would be passed around the courtroom at the start of the proceedings, and where a drunken jury would later render a drunken verdict, but Prohibition ruined all that. Russia’s prohibition lasted only a few short years, when Gorbachev tried to save the nation from itself, and failed miserably.
When the economy collapses, hard-drinking people everywhere find all the more reason to get drunk, but much less wherewithal with which to procure drink. In Russia, innovative market-based solutions were quickly improvised, which it was my privilege to observe. It was summer, and I was on a local electric train heading out of St. Petersburg. It was packed, so I stood in the vestibule of the car, and observed rainbows (it had just rained) through the missing windowpane. Soon, activity within the vestibule caught my attention: at each stop, grannies with jugs of moonshine would approach the car door and offer a sniff to the eager customers waiting inside. Price and quality were quickly discussed, an agreed-upon quantity was dispensed in exchange for a fistful of notes, jug to mug, and the train moved on. It was a tense atmosphere, because along with the paying customers there came many others, who were simply along for the ride, but expected their fair share nevertheless. I was forced to make a hasty exit and jam myself into the salon, because the freeloaders thought I was taking up valuable freeloading space.
There might be a few moonshine-makers left in rural parts of the United States, but most of the country seems to be addicted to cans and bottles of beer, or jugs, plastic or glass, of liquor. When this source dries up due to problems with interstate trucking, local breweries will no doubt continue to operate, and even expand production, to cope with both old and new demand, but there will still be plenty of room for improvisation. I would also expect cannabis to become even more widespread; it makes people less prone to violence than liquor, which is good, but it also stimulates their appetite, which is bad if there isn’t a lot of food. Still, it is much cheaper to produce than alcohol, which requires either grain or natural gas and complicated chemistry.
In all, I expect drugs and alcohol to become one of the largest short-term post-collapse entrepreneurial opportunities in the United States, along with asset stripping, and security.
The conclusion to this excellent essay is forthcoming.
I stumbled across this great although very long essay one day while listening to a segment of that wonderfully informative although largely unheard of radio program Unwelcome Guests (which has a tremendous archive of past shows available for downloads). The segment which I will link to here is a reading of this essay by Dmitry Orlov that was posted on investigative reporter Michael Ruppert’s website From The Wilderness. Mr. Ruppert is the author of the very interesting book Crossing The Rubicon and while he has left the journalistic scene due to various problems his site still is up and there is a plethora of great information still available. While I am not particularly a believer in the Peak Oil theory that Orlov bases this essay on I found the parts about surviving after the collapse of the Soviet Union to be riveting and horrifying.
We would be wise to pay heed to the material here as the oligarchy has put the United States on a similar path to economic collapse that none of the fraudulent candidates participating in the dog and pony show ‘debates’ will dare to bring up – choosing instead to stick to the sideshow issues like abortion, gay marriage, pandering to the dumbest of the dumb who are the overtly religious knuckledraggers and the left behinders and invoking fear at every opportunity.
There is something to fear but it is not the ridiculous terrorist of the week – it is a Soviet style total economic collapse.
Post-Soviet Lessons for a Post-American Century
(PART ONE OF THREE)
By Dmitry Orlov
A decade and a half ago the world went from bipolar to unipolar, because one of the poles fell apart: The S.U. is no more. The other pole – symmetrically named the U.S. – has not fallen apart – yet, but there are ominous rumblings on the horizon. The collapse of the United States seems about as unlikely now as the collapse of the Soviet Union seemed in 1985. The experience of the first collapse may be instructive to those who wish to survive the second.
Reasonable people would never argue that that the two poles were exactly symmetrical; along with significant similarities, there were equally significant differences, both of which are valuable in predicting how the second half of the clay-footed superpower giant that once bestrode the planet will fare once it too falls apart.
I have wanted to write this article for almost a decade now. Until recently, however, few people would have taken it seriously. After all, who could have doubted that the world economic powerhouse that is the United States, having recently won the Cold War and the Gulf War, would continue, triumphantly, into the bright future of superhighways, supersonic jets, and interplanetary colonies?
But more recently the number of doubters has started to climb steadily. The U.S. is desperately dependent on the availability of cheap, plentiful oil and natural gas, and addicted to economic growth. Once oil and gas become expensive (as they already have) and in ever-shorter supply (a matter of one or two years at most), economic growth will stop, and the U.S. economy will collapse.
Many may still scoff at this cheerless prognosis, but this article should find a few readers anyway. In October 2004, when I started working on it, an Internet search for “peak oil” and “economic collapse” yielded about 16,300 documents; by April of 2005 that number climbed to 4,220,000. This is a dramatic change in public opinion only, because what is known on the subject now is more or less what was known a decade or so ago, when there was exactly one Web site devoted to the subject: Jay Hanson’s Dieoff.org. This sea change in public opinion is not restricted to the Internet, but is visible in the mainstream and the specialist press as well. Thus, the lack of attention paid to the subject over the decades resulted not from ignorance, but from denial: although the basic theory that is used to model and predict resource depletion has been well understood since the 1960s, most people prefer to remain in denial.
Although this is a bit off the subject of Soviet collapse and what it may teach us about our own, I can’t resist saying a few words about denial, for it is such an interesting subject. I also hope that it will help some of you to go beyond denial, this being a helpful step towards understanding what I am going to say here.
Now that a lot of the predictions are coming true more or less on schedule, and it is becoming increasingly difficult to ignore the steady climb of energy prices and the dire warnings from energy experts of every stripe, outright denial is being gradually replaced with subtler forms of denial, which center around avoiding any serious, down-to-earth discussion of the likely actual consequences of peak oil, and of the ways one might cope with them.
Instead, there is much discussion of policy: what “we” should do. The “we” in question is presumably some embodiment of the great American Can-Do Spirit: a brilliantly organized consortium of government agencies, leading universities and research centers, and major corporations, all working together toward the goal of providing plentiful, clean, environmentally safe energy, to fuel another century of economic expansion. Welcome to the sideshow at the end of the universe!
One often hears that “We could get this done, if only we wanted to.” Most often one hears this from non-specialists, sometimes from economists, and hardly ever from scientists or engineers. A few back-of-the-envelope calculations are generally enough to suggest otherwise, but here logic runs up against faith in the Goddess of Technology: that she will provide. On her altar are assembled various ritualistic objects used to summon the Can-Do Spirit: a photovoltaic cell, a fuel cell, a vial of ethanol, and a vial of bio-diesel. Off to the side of the altar is a Pandora’s box packed with coal, tar sand, oceanic hydrates, and plutonium: if the Goddess gets angry, it’s curtains for life on Earth.
But let us look beyond mere faith, and focus on something slightly more rational instead. This “we,” this highly organized, high-powered problem-solving entity, is quickly running out of energy, and once it does, it will not be so high-powered any more. I would like to humbly suggest that any long-term plan it attempts to undertake is doomed, simply because crisis conditions will make long-term planning, along with large, ambitious projects, impossible. Thus, I would suggest against waiting around for some miracle device to put under the hood of every SUV and in the basement of every McMansion, so that all can live happily ever after in this suburban dream, which is looking more and more like a nightmare in any case.
The next circle of denial revolves around what must inevitably come to pass if the Goddess of Technology were to fail us: a series of wars over ever more scarce resources. Paul Roberts, who is very well informed on the subject of peak oil, has this to say: “what desperate states have always done when resources turn scarce… [is] fight for them.” [ MotherJones.com, 11/12 2004] Let us not argue that this has never happened, but did it ever amount to anything more than a futile gesture of desperation? Wars take resources, and, when resources are already scarce, fighting wars over resources becomes a lethal exercise in futility. Those with more resources would be expected to win. I am not arguing that wars over resources will not occur. I am suggesting that they will be futile, and that victory in these conflicts will be barely distinguishable from defeat. I would also like to suggest that these conflicts would be self-limiting: modern warfare uses up prodigious amounts of energy, and if the conflicts are over oil and gas installations, then they will get blown up, as has happened repeatedly in Iraq. This will result in less energy being available and, consequently, less warfare.
Take, for example, the last two US involvements in Iraq. In each case, as a result of US actions, Iraqi oil production decreased. It now appears that the whole strategy is a failure. Supporting Saddam, then fighting Saddam, then imposing sanctions on Saddam, then finally overthrowing him, has left Iraqi oil fields so badly damaged that the “ultimate recoverable” estimate for Iraqi oil is now down to 10-12% of what was once thought to be underground (according to the New York Times).
Some people are even suggesting a war over resources with a nuclear endgame. On this point, I am optimistic. As Robert McNamara once thought, nuclear weapons are too difficult to use. And although he has done a great deal of work to make them easier to use, with the introduction of small, tactical, battlefield nukes and the like, and despite recently renewed interest in nuclear “bunker busters,” they still make a bit of a mess, and are hard to work into any sort of a sensible strategy that would reliably lead to an increased supply of energy. Noting that conventional weapons have not been effective in this area, it is unclear why nuclear weapons would produce better results.
But these are all details; the point I really want to make is that proposing resource wars, even as a worst-case scenario, is still a form of denial. The implicit assumption is this: if all else fails, we will go to war; we will win; the oil will flow again, and we will be back to business as usual in no time. Again, I would suggest against waiting around for the success of a global police action to redirect the lion’s share of the dwindling world oil supplies toward the United States.
Outside this last circle of denial lies a vast wilderness called the Collapse of Western Civilization, roamed by the Four Horsemen of the Apocalypse, or so some people will have you believe. Here we find not denial but escapism: a hankering for a grand finale, a heroic final chapter. Civilizations do collapse – this is one of the best-known facts about them – but as anyone who has read The Decline and Fall of the Roman Empire will tell you, the process can take many centuries.
What tends to collapse rather suddenly is the economy. Economies, too, are known to collapse, and do so with far greater regularity than civilizations. An economy does not collapse into a black hole from which no light can escape. Instead, something else happens: society begins to spontaneously reconfigure itself, establish new relationships, and evolve new rules, in order to find a point of equilibrium at a lower rate of resource expenditure.
Note that the exercise carries a high human cost: without an economy, many people suddenly find themselves as helpless as newborn babes. Many of them die, sooner than they would otherwise: some would call this a “die-off.” There is a part of the population that is most vulnerable: the young, the old, and the infirm; the foolish and the suicidal. There is also another part of the population that can survive indefinitely on insects and tree bark. Most people fall somewhere in between.
Economic collapse gives rise to new, smaller and poorer economies. That pattern has been repeated many times, so we can reason inductively about similarities and differences between a collapse that has already occurred and one that is about to occur. Unlike astrophysicists, who can confidently predict whether a given star will collapse into a neutron star or a black hole based on measurements and calculations, we have to work with general observations and anecdotal evidence. However, I hope that my thought experiment will allow me to guess correctly at the general shape of the new economy, and arrive at survival strategies that may be of use to individuals and small communities.
The Collapse of the Soviet Union – an Overview
What happens when a modern economy collapses, and the complex society it supports disintegrates? A look at a country that has recently undergone such an experience can be most educational. We are lucky enough to have such an example in the Soviet Union. I spent about six months living, traveling, and doing business in Russia during the perestroika period and immediately afterward, and was fascinated by the transformation I witnessed.
The specifics are different, of course. The Soviet problems seem to have been largely organizational rather than physical in nature, although the fact that the Soviet Union collapsed just 3 years after reaching peak oil production is hardly a coincidence. The ultimate cause of Soviet Union’s spontaneous collapse remains shrouded in mystery. Was it Ronald Reagan’s Star Wars? Or was it Raisa Gorbachev’s American Express card? It is possible to fake a missile defense shield; but it is not so easy to fake a Herod’s department store. The arguments go back and forth. One contemporary theory would have it that the Soviet elite scuttled the whole program when they decided that Soviet Socialism was not going to make them rich. (It remains unclear why it should have taken the Soviet elite 70 years to come to this startlingly obvious conclusion).
A slightly more commonsense explanation is this: during the pre-perestroika “stagnation” period, due to the chronic underperformance of the economy, coupled with record levels of military expenditure, trade deficit, and foreign debt, it became increasingly difficult for the average Russian middle-class family of three, with both parents working, to make ends meet. (Now, isn’t that beginning to sound familiar?) Of course, the government bureaucrats were not too concerned about the plight of the people. But the people found ways to survive by circumventing government controls in a myriad of ways, preventing the government from getting the results it needed to keep the system going. Therefore, the system had to be reformed. When this became the consensus view, reformers lined up to try and reform the system. Alas, the system could not be reformed. Instead of adapting, it fell apart.
Russia was able to bounce back economically because it remains fairly rich in oil and very rich in natural gas, and will probably continue in relative prosperity for at least a few more decades. In North America, on the other hand, oil production peaked in the early 1970s and has been in decline ever since, while natural gas production is now set to fall off a production cliff. Yet energy demand continues to rise far above what the continent can supply, making such a spontaneous recovery unlikely. When I say that Russia bounced back, I am not trying to understate the human cost of the Soviet collapse, or the lopsidedness and the economic disparities of the re-born Russian economy. But I am suggesting that where Russia bounced back because it was not fully spent, the United States will be more fully spent, and less capable of bouncing back.
But such “big picture” differences are not so interesting. It is the micro-scale similarities that offer interesting practical lessons on how small groups of individuals can successfully cope with economic and social collapse. And that is where the post-Soviet experience offers a multitude of useful lessons.
Returning to Russia
I first flew back to Leningrad, which was soon to be rechristened St. Petersburg, in the summer of 1989, about a year after Gorbachev freed the last batch of political prisoners, my uncle among them, who had been locked up by General Secretary Andropov’s final, senile attempt at clenching an iron fist. For the first time it became possible for Soviet escapees to go back and visit. More than a decade had passed since I left, but the place was much as I remembered it: bustling streets full of Volgas and Ladas, Communist slogans on the roofs of towering buildings lit up in neon, long lines in shops.
About the only thing new was a bustle of activity around a newly organized Cooperative movement. A newly hatched entrepreneurial class was busy complaining that their cooperatives were only allowed to sell to the government, at government prices, while hatching ingenuous schemes to skim something off the top through barter arrangements. Most were going bankrupt. It did not turn out to be a successful business model for them or for the government, which was, as it turned out, also on its last legs.
I went back a year later, and found a place I did not quite recognize. First of all, it smelled different: the smog was gone. The factories had largely shut down, there was very little traffic, and the fresh air smelled wonderful! The stores were largely empty and often closed. There were very few gas stations open, and the ones that were open had lines that stretched for many blocks. There was a ten-liter limit on gasoline purchases.
Since there was nothing better for us to do, my friends and I decided to take a road trip, to visit the ancient Russian cities of Pskov and Novgorod, taking in the surrounding countryside along the way. For this, we had to obtain fuel. It was hard to come by. It was available on the black market, but no one felt particularly inclined to let go of something so valuable in exchange for something so useless as money. Soviet money ceased to have value, since there was so little that could be bought with it, and people still felt skittish around foreign currency.
Luckily, there was a limited supply of another sort of currency available to us. It was close to the end of Gorbachev’s ill-fated anti-alcoholism campaign, during which vodka was rationed. There was a death in my family, for which we received a funeral’s worth of vodka coupons, which we of course redeemed right away. What was left of the vodka was placed in the trunk of the trusty old Lada, and off we went. Each half-liter bottle of vodka was exchanged for ten liters of gasoline, giving vodka far greater effective energy density than rocket fuel.
There is a lesson here: when faced with a collapsing economy, one should stop thinking of wealth in terms of money. Access to actual physical resources and assets, as well as intangibles such as connections and relationships, quickly becomes much more valuable than mere cash.
Two years later, I was back again, this time in the dead of winter. I was traveling on business through Minsk, St. Petersburg and Moscow. My mission was to see whether any of the former Soviet defense industry could be converted to civilian use. The business part of the trip was a total fiasco and a complete waste of time, just as one would expect. In other ways, it was quite educational.
Minsk seemed like a city rudely awakened from hibernation. During the short daylight hours, the streets were full of people, who just stood around, as if wondering what to do next. The same feeling pervaded the executive offices, where people I used to think of as the representatives of the “evil empire” sat around under dusty portraits of Lenin bemoaning their fate. No one had any answers.
The only beam of sunshine came from a smarmy New York lawyer who hung around the place trying to organize a state lottery. He was almost the only man with a plan. (The director of a research institute which was formerly charged with explosion-welding parts for nuclear fusion reactor vessels, or some such thing, also had a plan: he wanted to build summer cottages.) I wrapped up my business early and caught a night train to St. Petersburg. On the train, a comfortable old sleeper car, I shared a compartment with a young, newly retired army doctor, who showed me his fat roll of hundred-dollar bills and told me all about the local diamond trade. We split a bottle of cognac and snoozed off. It was a pleasant trip.
St. Petersburg was a shock. There was a sense of despair that hung in the winter air. There were old women standing around in spontaneous open-air flea markets trying to sell toys that probably belonged to their grandchildren, to buy something to eat. Middle-class people could be seen digging around in the trash. Everyone’s savings were wiped out by hyperinflation. I arrived with a large stack of one-dollar bills. Everything was one dollar, or a thousand rubles, which was about five times the average monthly salary. I handed out lots of these silly thousand-ruble notes: “Here, I just want to make sure you have enough.” People would recoil in shock: “That’s a lot of money!” “No, it isn’t. Be sure to spend it right away.” However, all the lights were on, there was heat in many of the homes, and the trains ran on time.
My business itinerary involved a trip to the countryside to tour and to have meetings at some scientific facility. The phone lines to the place were down, and so I decided to just jump on a train and go there. The only train left at 7 am. I showed up around 6, thinking I could find breakfast at the station. The station was dark and locked. Across the street, there was a store selling coffee, with a line that wrapped around the block. There was also an old woman in front of the store, selling buns from a tray. I offered her a thousand-ruble note. “Don’t throw your money around!” she said. I offered to buy her entire tray. “What are the other people going to eat?” she asked. I went and stood in line for the cashier, presented my thousand-ruble note, got a pile of useless change and a receipt, presented the receipt at the counter, collected a glass of warm brown liquid, drank it, returned the glass, paid the old woman, got my sweet bun, and thanked her very much. It was a lesson in civility.
Three years later, I was back again, and the economy had clearly started to recover, at least to the extent that goods were available to those who had money, but enterprises were continuing to shut down, and most people were still clearly suffering. There were new, private stores, which had tight security, and which sold imported goods for foreign currency. Very few people could afford to shop at these stores. There were also open air markets in many city squares, at which most of the shopping was done. Many kinds of goods were dispensed from locked metal booths, quite a few of which belonged to the Chechen mafia: one shoved a large pile of paper money through a hole and was handed back the item.
There were sporadic difficulties with the money supply. I recall standing around waiting for banks to open in order to cash my traveler’s checks. The banks were closed because they were fresh out of money; they were all waiting for cash to be delivered. Once in a while, a bank manager would come out and make an announcement: the money is on its way, no need to worry.
There was a great divide between those who were unemployed, underemployed, or working in the old economy, and the new merchant class. For those working for the old state-owned enterprises – schools, hospitals, the railways, the telephone exchanges, and what remained of the rest of the Soviet economy – it was lean times. Salaries were paid sporadically, or not at all. Even when people got their money, it was barely enough to subsist on.
But the worst of it was clearly over. A new economic reality had taken hold. A large segment of the population saw its standard of living reduced, sometimes permanently. It took the economy ten years to get back to its pre-collapse level, and the recovery was uneven. Alongside the nouveau riche, there were many whose income would never recover. Those who could not become part of the new economy, especially the pensioners, but also many others, who had benefited from the now defunct socialist state, could barely eke out a living.
This thumbnail sketch of my experiences in Russia is intended to convey a general sense of what I had witnessed. But it is the details of what I have observed that I hope will be of value to those who see an economic collapse looming ahead, and want to plan, in order to survive it.
Similarities between the Superpowers
Some would find a direct comparison between the United States and the Soviet Union incongruous, if not downright insulting. After all, what grounds are there to compare a failed Communist empire to the world’s largest economy? Others might find it humorous that the loser might have advice for the winner in what they might see as an ideological conflict. Since the differences between the two appear glaring to most, let me just indicate some similarities, which I hope you will find are no less obvious.
The Soviet Union and the United States are each either the winner or the first runner-up in the following categories: the space race, the arms race, the jails race, the hated evil empire race, the squandering of natural resources race, and the bankruptcy race. In some of these categories, the United States is, shall we say, a late bloomer, setting new records even after its rival was forced to forfeit. Both believed, with giddy zeal, in science, technology, and progress, right up until the Chernobyl disaster occurred. After that, there was only one true believer left.
They are the two post-World War II industrial empires that attempted to impose their ideologies on the rest of the world: democracy and capitalism versus socialism and central planning. Both had some successes: while the United States reveled in growth and prosperity, the Soviet Union achieved universal literacy, universal health care, far less social inequality, and a guaranteed – albeit lower – standard of living for all citizens. The state-controlled media took pains to make sure that most people didn’t realize just how much lower it was: “Those happy Russians don’t know how badly they live,” Simone Signoret said after a visit.
Both empires made a big mess of quite a few other countries, each one financing and directly taking part in bloody conflicts around the world in order to impose its ideology, and to thwart the other. Both made quite a big mess of their own country, setting world records for the percentage of population held in jails ( South Africa was a contender at one point). In this last category, the U.S. is now a runaway success, supporting a burgeoning, partially privatized prison-industrial complex (a great source of near-slave wage labor).
While the United States used to have far more goodwill around the world than the Soviet Union, the “evil empire” gap has narrowed since the Soviet Union disappeared from the scene. Now, in many countries around the world, including Western countries like Sweden, the United States ranks as a bigger threat to peace than Iran or North Korea. In the hated-empire race, the United States is now beginning to look like the champion. Nobody likes a loser, but especially if the loser is a failed superpower. Nobody had any pity for the poor defunct Soviet Union; and nobody will have any pity for poor defunct America either .
The bankruptcy race is particularly interesting. Prior to its collapse, the Soviet Union was taking on foreign debt at a rate that could not be sustained. The combination of low world oil prices and a peak in Soviet oil production sealed its fate. Later, the Russian Federation, which inherited the Soviet foreign debt, was forced to default on its obligations, precipitating a financial crisis. Russia’s finances later improved, primarily due to rising oil prices, along with rising oil exports. At this point, Russia is eager to wipe out the remaining Soviet debt as quickly as possible, and over the past few years the Russian rouble has done just a bit better than the U.S. dollar.
The United States is now facing a current account deficit that cannot be sustained, a falling currency, and an energy crisis, all at once. It is now the world’s largest debtor nation, and most people do not see how it can avoid defaulting on its debt. According to a lot of analysts, it is technically bankrupt, and is being propped up by foreign reserve banks, which hold a lot of dollar-denominated assets, and, for the time being, want to protect the value of their reserves. This game can only go on for so long. Thus, while the Soviet Union deserves honorable mention for going bankrupt first, the gold in this category (pun intended) will undoubtedly go to the United States, for the largest default ever.
There are many other similarities as well. Women received the right to education and a career in Russia earlier than in the U.S. Russian and American families are in similarly sad shape, with high divorce rates and many out-of-wedlock births, although the chronic shortage of housing in Russia did force many families to stick it out, with mixed results. Both countries have been experiencing chronic depopulation of farming districts. In Russia, family farms were decimated during collectivization, along with agricultural output; in the U.S., a variety of other forces produced a similar result with regard to rural population, but without any loss of production. Both countries replaced family farms with unsustainable, ecologically disastrous industrial agribusiness, addicted to fossil fuels. The American ones work better, as long as energy is cheap, and, after that, probably not at all.
The similarities are too numerous to mention. I hope that what I outlined above is enough to signal a key fact: that these are, or were, the antipodes of the same industrial, technological civilization.
Part two will be forthcoming