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Monday, April 27, 2009

Reading List: Reinventing Collapse

Orlov, Dimitry. Reinventing Collapse. Gabriola Island, BC, Canada: New Society Publishers, 2008. ISBN 978-0-86571-606-3.
The author was born in Leningrad and emigrated to the United States with his family in the mid-1970s at the age of 12. He experienced the collapse of the Soviet Union and the subsequent events in Russia on a series of extended visits between the late 1980s and mid 1990s. In this book he describes firsthand what happens when a continental scale superpower experiences economic and societal collapse, what it means to those living through it, and how those who survived managed to do so, in some cases prospering amid the rubble.

He then goes on to pose the question of whether the remaining superpower, the United States, is poised to experience a collapse of the same magnitude. This he answers in the affirmative, with only the timing uncertain (these events tend to happen abruptly and with little warning—in 1985 virtually every Western analyst assumed the Soviet Union was a permanent fixture on the world stage; six years later it was gone). He presents a U.S. collapse scenario in the form of the following theorem on p. 3, based upon the axioms of “Peak Oil” and the unsustainability of the debt the U.S. is assuming to finance its oil imports (as well as much of the rest of its consumer economy and public sector).

Oil powers just about everything in the US economy, from food production and distribution to shipping, construction and plastics manufacturing. When less oil becomes available, less is produced, but the amount of money in circulation remains the same, causing the prices for the now scarcer products to be bid up, causing inflation. The US relies on foreign investors to finance its purchases of oil, and foreign investors, seeing high inflation and economic turmoil, flee in droves. Result: less money with which to buy oil and, consequently, less oil with which to produce things. Lather, rinse, repeat; stop when you run out of oil. Now look around: Where did that economy disappear to?
Now if you believe in Peak Oil (as the author most certainly does, along with most of the rest of the catechism of the environmental left), this is pretty persuasive. But even if you don't, you can make the case for a purely economic collapse, especially with the unprecedented deficits and money creation as the present process of deleveraging accelerates into debt liquidation (either through inflation or outright default and bankruptcy). The ultimate trigger doesn't make a great deal of difference to the central argument: the U.S. runs on oil (and has no near-term politically and economically viable substitute) and depends upon borrowed money both to purchase oil and to service its ever-growing debt. At the moment creditors begin to doubt they're every going to be repaid (as happened with the Soviet Union in its final days), it's game over for the economy, even if the supply of oil remains constant.

Drawing upon the Soviet example, the author examines what an economic collapse on a comparable scale would mean for the U.S. Ironically, he concludes that many of the weaknesses which were perceived as hastening the fall of the Soviet system—lack of a viable cash economy, hoarding and self-sufficiency at the enterprise level, failure to produce consumer goods, lack of consumer credit, no private ownership of housing, and a huge and inefficient state agricultural sector which led many Soviet citizens to maintain their own small garden plots— resulted, along with the fact that the collapse was from a much lower level of prosperity, in mitigating the effects of collapse upon individuals. In the United States, which has outsourced much of its manufacturing capability, depends heavily upon immigrants in the technology sector, and has optimised its business models around high-velocity cash transactions and just in time delivery, the consequences post-collapse may be more dire than in the “primitive” Soviet system. If you're going to end up primitive, you may be better starting out primitive.

The author, although a U.S. resident for all of his adult life, did not seem to leave his dark Russian cynicism and pessimism back in the USSR. Indeed, on numerous occasions he mocks the U.S. and finds it falls short of the Soviet standard in areas such as education, health care, public transportation, energy production and distribution, approach to religion, strength of the family, and durability and repairability of capital and the few consumer goods produced. These are indicative of what he terms a “collapse gap”, which will leave the post-collapse U.S. in much worse shape than ex-Soviet Russia: in fact he believes it will never recover and after a die-off and civil strife, may fracture into a number of political entities, all reduced to a largely 19th century agrarian lifestyle. All of this seems a bit much, and is compounded by offhand remarks about the modern lifestyle which seem to indicate that his idea of a “sustainable” world would be one largely depopulated of humans in which the remainder lived in communities much like traditional African villages. That's what it may come to, but I find it difficult to see this as desirable. Sign me up for L. Neil Smith's “freedom, immortality, and the stars” instead.

The final chapter proffers a list of career opportunities which proved rewarding in post-collapse Russia and may be equally attractive elsewhere. Former lawyers, marketing executives, financial derivatives traders, food chemists, bank regulators, university administrators, and all the other towering overhead of drones and dross whose services will no longer be needed in post-collapse America may have a bright future in the fields of asset stripping, private security (or its mirror image, violent racketeering), herbalism and medical quackery, drugs and alcohol, and even employment in what remains of the public sector. Hit those books!

There are some valuable insights here into the Soviet collapse as seen from the perspective of citizens living through it and trying to make the best of the situation, and there are some observations about the U.S. which will make you think and question assumptions about the stability and prospects for survival of the economy and society on its present course. But there are so many extreme statements you come away from the book feeling like you've endured an “end is nigh” rant by a wild-eyed eccentric which dilutes the valuable observations the author makes.

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