Dmitry Orlov's Book--Reinventing Collapse: The Soviet Example and American Prospects
Posted by Gail the Actuary on June 2, 2008 - 7:00am
Topic: Economics/Finance
Tags: collapse, dmitry orlov, economic collapse, soviet union [list all tags]
Dmitry Orlov's new book, Reinventing Collapse: The Soviet Example and American Prospects, was published very recently. I pre-ordered a copy because Dmitry has had first hand experience with the collapse of the Soviet Union, and he believes, as I do, that economic collapse is likely to come first, if a society is on an unsustainable course. The great mystery to me is what lies on the other side of an economic collapse.
In this book, Dmitry gives his view of what may be on the other side, and how one might prepare for it. Dmitry starts with a recipe for collapse of a modern military-industrial power:
The ingredients I like to put in my superpower collapse soup are: a severe and chronic shortage in the production of crude oil (the magic elixir of industrial economies), a severe and worsening trade deficit, a runaway military budget and ballooning foreign debt. The heat and agitation can be provided most efficaciously by a humiliating military defeat and widespread fear of a looming catastrophe.
He then goes on to explain how the Soviet Union followed this recipe in the late 1980s, leading to its collapse, and how the United States, with its conflict in Iraq, may be following a similar course.
Many readers are familiar with Dmitry's talk, Closing the 'Collapse Gap': the USSR was Better Prepared for Collapse than the US. In that talk, as in the book "Reinventing Collapse", he points out that the USSR provided housing, transportation, fuel, and garden plots for Soviet citizens, so when financial collapse came, citizens could still get along fairly well. The United States lacks this safety network, so financial collapse is likely to be more of a problem here.
The kinds of things Dmitry expects after financial collapse are shortages of fuel, food, medicine and consumer items; outages of electricity, natural gas and water; transportation breakdowns; hyperinflation; widespread layoffs, plus a lot of despair, confusion, violence and lawlessness. According to him, we should not expect "any grand rescue plans, innovative technology programs, or miracles of social cohesion".
The political establishment is likely to remain intact, at least initially, and will attempt to keep up appearances. There will be paralysis due to the government's inability to spend money in the usual way. There will be less respect for authority, and many laws will be ignored. There is likely to be a flood of internal refugees, as places that require heat or air conditioning become uninhabitable.
In this setting, Dmitry expects a new informal economy to emerge -- one that is based more on barter, and is often semi-criminal. One of the biggest sources of revenue initially will be dismantling and reselling parts of what are now stranded assets--homes that cannot longer be used, airplanes that are no longer needed, and even equipment used in some factories.
Dmitry has some thoughts on how one survives and even thrives in this new setting. He mentions the possibility of a new political party, the "Collapse Party". If it is clear collapse is inevitable and the current political parties have nothing to offer, the logical thing would be to have a Collapse Party, to dismantle institutions that have no future and to save what can be saved. He doesn't think such a party is likely to succeed, however.
If it is not really possible to mitigate, he believes that what one must do is adapt--psychologically as much as any other way. In the new order, relationships with other people will become more important, and relationships based on deeds, contracts, notes, and the like will recede in importance. We will need to lower our standards as to what is acceptable in many areas, including body odor, straight teeth, and medical care. Dmitry has several creative suggestions for occupations. Dmitry suggests that some may choose to be nomadic, since there are advantages to having multiple bases of operation.
I very much enjoyed the book. Dmitry describes his book as a "series of intentionally provocative thought experiments". None of us can know what is ahead, but Dmitry offers us some helpful insights. Dmitry has a wonderful sense of humor, so we find ourselves laughing rather than crying about the future.
I like his essays and his turn of phrase. And he is right about the US being less able to adapt to a collapse scenario. Certainly the former USSR was more resilient than efficient, while the USA is more efficient than resilient.
While the Russians weathered the economic storm after the collapse of the USSR, sooner or later they are again going to have to go through the worldwide collapse with the rest of us. I wonder what else is in store for Russians in the new total collapse.
Your response in first paragraph is reasonable. But the second paragraph still reflect the AMERICAN mindset. Never mind things are changing.
WTF???
If you have an opinion on the topic share it but spare us the unsupported anti-American ad hominems. Anti-American snobs can be as bigoted and ignorant as any self-centered American racist.
There is nothing unreasonable with my observation that the Russians [and the Cubans] will suffer again as the global shit hits the fan.
Oh and by the way, I emigrated from Europe.
I take it Dmitry is only thinking about a "local" economy - the USA in particular. Such a collapse as happened in the former USSR was circumscribed, as have all collapses been, historically. Those who could escape the boundaries did so. Those that couldn't managed to adapt. But in the end, there was energy inflow to provide recovery.
But what about a world-wide collapse? What about the case where there is never going to be increases in energy production, leaving just the annual solar flux to provide energy flow? There will be no escape, no reprieve, only continuous contraction. It seems to me that is the scenario we need to be thinking about.
My last three blogs have asked some questions along these lines. See: Question Everything.
George
George - I believe you are correct, however Orlov is saying that the U.S. because of it's huge deficits, foreign military entanglements, and the unsustainablilty of its suburban lifestyles will be liable to be the first to collapse.
IMO the U.S. will be hugely destructive to other economies as the U.S. economic contractions gather speed.
How many will we drag down with us? No idea. But there is no denying that a rapidly contracting U.S. economy could become an economic black-hole for the entire planet.
There will be, no doubt, a worldwide collapse and Russia will suffer along with everyone else. Yet, Russia and the Russian people are probably in the very best position to survive. I mean there will likely be a higher percentage of Russians surviving the collapse than any other nation in the world.
Think about it, they have plenty of oil, if they just stop exporting, and they probably will. They have plenty of coal, again if they stop exporting. And they have land, lots and lots of land. And unlike almost every other place in the world, Russia has few if any water problems. And Russia, because of its immense size and sparse population, is less affected by all the other environmental problems like pollution and erosion than almost any other place in the world.
The Russian people are in the catbird seat when the world's economies collapse. True, many will suffer and many will die, but the average Russian will have a very good chance of surviving the collapse.
Ron Patterson
How is Russia going to protect itself from China if China decides it wants to 'share' some of those resources? 1 Billion vs. 150 million seems like a tall order without resorting to nukes, especially since Russia already gave China its best 'toys'.
That's why they would immediately escalate to a nuclear strike - and China knows it.
It might not stop them though.
China's army runs on oil. It will be in short supply and very expensive. Also, China will soon be in the throes of dealing with too many huge internal issues to invade Russia. Drought is already wracking their cropland, and the've become a food importer for the first time ever. That situation will only increase, causing internal strife. And if they do manage to invade? What, Siberia? Without oil and gas for heat, it's almost impossible to live there.
Siberia is where most of Russia's oil is.
Having internal troubles often means that a war is sought to divert attention.
Ron, while I believe your comments on the natural advantages of Russia are basicly correct it is not true that they have few environmental or pollution problems.The 70 years of communist management resulted in appalling degradation.
Nancy Lubin wrote a chapter on this subject in "The New World Order" edited by Carol Rae Hansen (1992).
Also,Vaclav Smil's "China's Environmental Crisis"(1993) could be of interest.
I'm sure there is more up to date information around as well.
thirra,
You should re-read the original post. He did not say that Russia has "few environmental/population problems". Here it is again, for your benefit:
"Russia, because of its immense size and sparse population, is less affected by all the other environmental problems like pollution and erosion than almost any other place in the world."
I think Australia is in a much better position than Russia. As a net energy exporter, Australia stands to benefit from any rise in energy prices.
Oil seeps off the NSW coast are yet to be assayed, perhaps a billion barrels there. The QLD coast is completely unexplored because of the great barrier reef. SA has geothermal energy sources estimated in excess of 50 billion barrels. Every state has massive energy resources close to population centers.
Australia also has vast areas of prime agricultural land that are uninhabited. Not to mention a climate which is warm and varied. Even though we are still in the grip of the worst drought ever Australia still manages to produce enough food for 70 million people. Much of this is energy intensive meat and dairy products. Water is a huge issue, but considering how bad things are now, is it really that critical?
If you consider Japan with only 17% of it's land arable and that's including land for urban and industrial use can supply half it's food requirements, Australia could support a population in excess of 200 million. Of course the lifestyle would be radically different, but that is a matter of choice. Just think about it; we cull 5 million kangaroos every year that go into dog food. Even that amount of meat would be sufficient. Dogs and cats just need a little bit of curry powder.
There is so much excess consumption here it is ridiculous, people just throw stuff away that is perfectly good. Many will loose their jobs, but there are so many areas that there are labor shortages that people will simply have to change.
Social order is the most important issue. How people react will determine their fate. Once people realize how well off they are compared to the rest of the world they will have great incentive to ensure that social cohesion is maintained.
Anyway, moral of this story; you better hurry up and emigrate while the doors are wide open. They will slam shut once the ideals of endless economic growth are seriously challenged.
Global Warming is turning Australia into even more of a desert than it already is. Extended, years long drought is destroying what little crop land there is. In 10 years it will struggle to support its current population, never mind 200m people. Russia on the other hand will be come a more temperate place, and areas formerly too cold to farm will become farmable. With plenty of sunlight, Australia will be able to produce lots of electricity, but for whom? All population areas will be too far away for export.
Japan only produces 23% of its food locally. I can dig out the article if you're interested. The rest is imported. 95% of energy is imported. They're in for a world of hurt, but at least their population is declining.
why would there not be an increase in energy production? you use solar to to MAKE solar. there is your energy production increase. there is also DIY energy production that I think at some point people will take up.
http://www.treehugger.com/files/2007/06/sixty_six_bottl.php
http://www.treehugger.com/files/2007/04/pop_can_solar_p.php
What are you saying? we can't truly make solar with solar yet or maybe ever..
Right, what I am saying is even if we can manufacture solar panels using solar panels, we can't transport them or mine the material to make them without solar power..
I don't follow.
I am saying that if we can manufacture solar power with solar power, we would also have to mine the materials ect and transport them using solar power, or else your not truly using solar power. We can't get away from fossil fuels like one would think.
You seem to keep passing over nuclear.
The world is not going to be all solar for a long time, if ever.
Or are you looking at theoretical solutions to problems we might have thousands of years in the future?
The world is not going to be all solar for a long time, if ever.
DaveMart - the world *IS* Solar.
Coal, oil, wind, water - all expressions of energy from sol. (ok, ok. Wind also has a spinning globe effect.)
No matter what the source of energy, the energy conversion capital equipment must produce enough excess useful energy above consumption needs to be self-sustaining. Since fossil fuels are such high-quality sources with relatively cheap conversion capital (including refining and transport) they have been self-sustaining. The problem is they are not renewable, hence peak oil, etc. In order to expand energy production you need excess energy to mine, form, and construct the conversion capital (not to mention maintenance). These are the questions we need to answer about any proposed alternative energy production technology. Is the conversion capital self-sustaining, or does it need subsidization? If the latter, it probably isn't a good choice.
George
electric vehicles charged from solar panels.
Where can I buy one of those?
The development of fossil fuel technologies in the 18th and 19th centuries was initiated through the use of biomass energy (a relatively inefficient form of solar energy) mostly in the form of food for workers and animals. With 21st century knowledge even more efficient solar energy utilization methods can be used to grow a solar based economy. Concentrated solar thermal can be used directly to melt metals and glass in order to make parts for more CSP systems.
We could eliminate the requirement for biomass consumption by downloading our conciousness-es into solar powered android bodies and giant orbital solar reflectors would beam sunshine down upon us 24 hrs a day. Our positronic brains would be much faster so we would need to learn Dolphin to speak to each other.
This technology is only 5 years away, perhaps 10.
I love it!!! Where do I sign up? Can our pets become androids too?
Experimenting with brain downloads is Educational and Entertaining.
It's EduTainment!
http://ieeexplore.ieee.org/xpl/freeabs_all.jsp?arnumber=4107853
http://www.mcon.org/
Learn Dolphin here
http://www.speakdolphin.com/
LOL @ the peace flag photo...
thomas deplume -
As you probably know, many here at TOD hold the view that we can't get from Here to There because we are presently dependent upon a dying technology, i.e., the burning of fossil fuels to produce useful work. They say that we can't go solar, wind, etc. in a big way because a significant amount of fossil fuel is required to create the infrastructure for such systems.
I say that this view is sorely off base. If one studies the history of technology, one sees that new technologies don't just suddenly snap into being like spring flowers. Rather, they are generally bootstrapped and gradually carried into being by the older technologies, of which they gradually displace.
Much horsepower (of the kind with hooves) had been used to bring the steam engine into being, and much fossil fuel technology was required to bring nuclear energy into being. One builds on the other, hopefully in not too wrenching of a way.
One of my favorite little examples of this sort of thing is that of the Japanese Zero fighter plane of WW II. The Japanese got into the aeronautics game quite late, but they were amazingly quick learners. Contrary to blatant racist views to the contrary, they had mastered the state of the art of aeronautical engineer and were good flyers. Their Zero fighter was developed a year or so prior to Pearl Harbor under great secrecy. At the time it was arguable the best fighter plane in the world. However, I read that when they took the first prototype Zero from its hanger to the test field, they had to tow it by horse-drawn wagons because trucks were in such short supply in Japan. So here we had 18th-Century technology helping to bring 20th-Century technolgy into being.
That's the way things usually work. As such, I think the best possible use of our dwindling fossil fuel reserves is to create a sustainable energy infrastructure. Sort of like towing a Zero fighter plane with a horse.
True, but we had not hit "peak horse" or peak oil respectively at the times that those technologies emerged.
Exactly, and while what Joule says is theoretically possible, if the downside slope is too steep, or causes too much social unrest that the infrastructure can't be built, then what? I can easily imagine a scenario where the rich bunker off and continue to use oil the way we waste it today, not building that solar / wind / whatever energy infrastructure for the next generation. The majority of the planet could be left to fend for itself. Need some real world examples of that? Look at how poor nations that can only afford a little oil use it. IN many many countries, it is used by a very few rich and the army, while the vast majority of the population get none and live in poverty. This could very easily be the case. We need a plan B.
We have a built infrastructure problem. Even if we could suddenly make solar powered vehicles of all types, all of our current vehicles would lose most of their value - become "stranded assets". If we somehow had a cheap attachment to our existing cars and trucks that allowed them to run on solar power, we would be a whole lot better off--but no one even suggests this may be possible.
I give cars and trucks as an example. We would really need ways of transforming other parts of the economy to run on solar power also--all very cheaply.
Gail - I want to thank-you for posting this about the Dmitry Orlov book. I ordered it this morning on-line.
I have watched a presentation that you gave on Peak Oil (on-line I don't have the link) and I was very impressed. I have just begun giving peak oil presentations and I want to ask you about giving peak oil presentations to high school senoirs. Do you think that's too young?
Joe
I don't know how old high school seniors are in America, but here in Britain a presentation aimed at 16-18 year olds would be great! I'm 16 and have a good understanding of peak oil and have already made at least 4 people aware, so the answer to your question is no, it's not too young.
Hell no. I'm doing a peak oil presentation to 5 year olds this coming week. It will be about soil - healthy soil, sick soil, what grows in healthy and sick soil. Or doesn't.
Of course, 5 year olds come with parents attached. Doubleplus good.
cfm in Gray, ME, Milliways
With the amount Peak Oil is now being discussed in the media, it is likely that they are going to start hearing about it one way or another. If you can make a presentation to them, that would be good.
Hey - I am working on a set of presentations for exactly this purpose (will be uploaded to Apocollapse.com when I switch that on)... but I'd love input and feedback and ideas - more brains better than fewer... i am emailable (address in my personal details on here) if anyone is interested in shared work in this regard
Joe -- Go for it!
I just did a presentation for my son and his peers in a fifth-sixth grade classroom. These 11 and 12 year-old students really want to talk about the world they are growing up to live in.
My presentation included rides in the bed of my Zap Xebra electric truck, and rides on some inexpensive electric scooters. Most of these kids have already gotten rides on my pedicab or cargo trike. (Those are now sold and I am building up another pedal machine -- a pedicab/cargo trike combo.)
We talked at length about ecological footprint, over-consumption, mis-consumption, overpopulation, resource depletion (especially petroleum and water), and resource war.
Believe me, kids today do not get enough healthy discussion with adults about reality!!!
The students I've spoken with really wanted to keep going. One of my son's former teachers grabbed me by the arm playfully, but said quite seriously "I wish I still had a child of yours in my class!" as I tend to provide plenty of fodder for classroom discussion.
I encouraged the students to take the discussion home as well -- and armed them with a few websites and published material to discuss with their parents.
Go for it, Joe.
Cars depreciate so rapidly that they are pretty valueless after 5 years anyway.
The exception to this would be electric cars which cost very little on maintenance and last many years.
If 5 year old cars are valueless just try buying one for less than $5,000. For the majority of American families 5 year old cars are unaffordable.
It serves me right for commenting on another market.
Still, $5k is a fraction of the new price, so for the original buyer, who gets new cars, he has lost most of his money.
Certainly that is the way it works in the UK.
EDIT: to add addenda:
I am trying to make the point that to car manufacturers it is the new buyer that counts, and that if they keep the car for the average of 4-5 years then they have already lost most of the value of their purchase.