[FLPERMACULTURE] Closing the 'Collapse Gap': the USSR was better prepared for peak oil than the US

[Joseph Wetmore]

Closing the 'Collapse Gap': the USSR was better
prepared for peak oil than the US

by Dmitry Orlov


Good evening, ladies and gentlemen. I am not an expert
or a scholar or an activist. I am more of an
eye-witness. I watched the Soviet Union collapse, and
I have tried to put my observations into a concise
message. I will leave it up to you to decide just how
urgent a message it is.

My talk tonight is about the lack of
collapse-preparedness here in the United States. I
will compare it with the situation in the Soviet
Union, prior to its collapse. The rhetorical device I
am going to use is the "Collapse Gap" – to go along
with the Nuclear Gap, and the Space Gap, and various
other superpower gaps that were fashionable during the
Cold War.



Slide [2] The subject of economic collapse is
generally a sad one. But I am an optimistic, cheerful
sort of person, and I believe that, with a bit of
preparation, such events can be taken in stride. As
you can probably surmise, I am actually rather keen on
observing economic collapses. Perhaps when I am really
old, all collapses will start looking the same to me,
but I am not at that point yet.

And this next one certainly has me intrigued. From
what I've seen and read, it seems that there is a fair
chance that the U.S. economy will collapse sometime
within the foreseeable future. It also would seem that
we won't be particularly well-prepared for it. As
things stand, the U.S. economy is poised to perform
something like a disappearing act. And so I am eager
to put my observations of the Soviet collapse to good
use.



Slide [3] I anticipate that some people will react
rather badly to having their country compared to the
USSR. I would like to assure you that the Soviet
people would have reacted similarly, had the United
States collapsed first. Feelings aside, here are two
20th century superpowers, who wanted more or less the
same things – things like technological progress,
economic growth, full employment, and world domination
– but they disagreed about the methods. And they
obtained similar results – each had a good run,
intimidated the whole planet, and kept the other
scared. Each eventually went bankrupt.



Slide [4] The USA and the USSR were evenly matched in
many categories, but let me just mention four.

The Soviet manned space program is alive and well
under Russian management, and now offers first-ever
space charters. The Americans have been hitching rides
on the Soyuz while their remaining spaceships sit in
the shop.

The arms race has not produced a clear winner, and
that is excellent news, because Mutual Assured
Destruction remains in effect. Russia still has more
nuclear warheads than the US, and has supersonic
cruise missile technology that can penetrate any
missile shield, especially a nonexistent one.

The Jails Race once showed the Soviets with a decisive
lead, thanks to their innovative GULAG program. But
they gradually fell behind, and in the end the Jails
Race has been won by the Americans, with the highest
percentage of people in jail ever.

The Hated Evil Empire Race is also finally being won
by the Americans. It's easy now that they don't have
anyone to compete against.



Slide [5] Continuing with our list of superpower
similarities, many of the problems that sunk the
Soviet Union are now endangering the United States as
well. Such as a huge, well-equipped, very expensive
military, with no clear mission, bogged down in
fighting Muslim insurgents. Such as energy shortfalls
linked to peaking oil production. Such as a
persistently unfavorable trade balance, resulting in
runaway foreign debt. Add to that a delusional
self-image, an inflexible ideology, and an
unresponsive political system.



Slide [6] An economic collapse is amazing to observe,
and very interesting if described accurately and in
detail. A general description tends to fall short of
the mark, but let me try. An economic arrangement can
continue for quite some time after it becomes
untenable, through sheer inertia. But at some point a
tide of broken promises and invalidated assumptions
sweeps it all out to sea. One such untenable
arrangement rests on the notion that it is possible to
perpetually borrow more and more money from abroad, to
pay for more and more energy imports, while the price
of these imports continues to double every few years.
Free money with which to buy energy equals free
energy, and free energy does not occur in nature. This
must therefore be a transient condition. When the flow
of energy snaps back toward equilibrium, much of the
US economy will be forced to shut down.



Slide [7] I've described what happened to Russia in
some detail in one of my articles, which is available
on SurvivingPeakOil.com. I don't see why what happens
to the United States should be entirely dissimilar, at
least in general terms. The specifics will be
different, and we will get to them in a moment. We
should certainly expect shortages of fuel, food,
medicine, and countless consumer items, outages of
electricity, gas, and water, breakdowns in
transportation systems and other infrastructure,
hyperinflation, widespread shutdowns and mass layoffs,
along with a lot of despair, confusion, violence, and
lawlessness. We definitely should not expect any grand
rescue plans, innovative technology programs, or
miracles of social cohesion.



Slide [8] When faced with such developments, some
people are quick to realize what it is they have to do
to survive, and start doing these things, generally
without anyone's permission. A sort of economy
emerges, completely informal, and often semi-criminal.
It revolves around liquidating, and recycling, the
remains of the old economy. It is based on direct
access to resources, and the threat of force, rather
than ownership or legal authority. People who have a
problem with this way of doing things, quickly find
themselves out of the game.

These are the generalities. Now let's look at some
specifics.



Slide [9] One important element of
collapse-preparedness is making sure that you don't
need a functioning economy to keep a roof over your
head. In the Soviet Union, all housing belonged to the
government, which made it available directly to the
people. Since all housing was also built by the
government, it was only built in places that the
government could service using public transportation.
After the collapse, almost everyone managed to keep
their place.

In the United States, very few people own their place
of residence free and clear, and even they need an
income to pay real estate taxes. People without an
income face homelessness. When the economy collapses,
very few people will continue to have an income, so
homelessness will become rampant. Add to that the
car-dependent nature of most suburbs, and what you
will get is mass migrations of homeless people toward
city centers.



Slide [10] Soviet public transportation was more or
less all there was, but there was plenty of it. There
were also a few private cars, but so few that gasoline
rationing and shortages were mostly inconsequential.
All of this public infrastructure was designed to be
almost infinitely maintainable, and continued to run
even as the rest of the economy collapsed.

The population of the United States is almost entirely
car-dependent, and relies on markets that control oil
import, refining, and distribution. They also rely on
continuous public investment in road construction and
repair. The cars themselves require a steady stream of
imported parts, and are not designed to last very
long. When these intricately interconnected systems
stop functioning, much of the population will find
itself stranded.



Slide [11] Economic collapse affects public sector
employment almost as much as private sector
employment, eventually. Because government
bureaucracies tend to be slow to act, they collapse
more slowly. Also, because state-owned enterprises
tend to be inefficient, and stockpile inventory, there
is plenty of it left over, for the employees to take
home, and use in barter. Most Soviet employment was in
the public sector, and this gave people some time to
think of what to do next.

Private enterprises tend to be much more efficient at
many things. Such laying off their people, shutting
their doors, and liquidating their assets. Since most
employment in the United States is in the private
sector, we should expect the transition to permanent
unemployment to be quite abrupt for most people.



Slide [12] When confronting hardship, people usually
fall back on their families for support. The Soviet
Union experienced chronic housing shortages, which
often resulted in three generations living together
under one roof. This didn't make them happy, but at
least they were used to each other. The usual
expectation was that they would stick it out together,
come what may.

In the United States, families tend to be atomized,
spread out over several states. They sometimes have
trouble tolerating each other when they come together
for Thanksgiving, or Christmas, even during the best
of times. They might find it difficult to get along,
in bad times. There is already too much loneliness in
this country, and I doubt that economic collapse will
cure it.



Slide [13] To keep evil at bay, Americans require
money. In an economic collapse, there is usually
hyperinflation, which wipes out savings. There is also
rampant unemployment, which wipes out incomes. The
result is a population that is largely penniless.

In the Soviet Union, very little could be obtained for
money. It was treated as tokens rather than as wealth,
and was shared among friends. Many things – housing
and transportation among them – were either free or
almost free.



Slide [14] Soviet consumer products were always an
object of derision – refrigerators that kept the house
warm – and the food, and so on. You'd be lucky if you
got one at all, and it would be up to you to make it
work once you got it home. But once you got it to
work, it would become a priceless family heirloom,
handed down from generation to generation, sturdy, and
almost infinitely maintainable.

In the United States, you often hear that something
"is not worth fixing." This is enough to make a
Russian see red. I once heard of an elderly Russian
who became irate when a hardware store in Boston
wouldn't sell him replacement bedsprings: "People are
throwing away perfectly good mattresses, how am I
supposed to fix them?"

Economic collapse tends to shut down both local
production and imports, and so it is vitally important
that anything you own wears out slowly, and that you
can fix it yourself if it breaks. Soviet-made stuff
generally wore incredibly hard. The Chinese-made stuff
you can get around here – much less so.



Slide [15] The Soviet agricultural sector was
notoriously inefficient. Many people grew and gathered
their own food even in relatively prosperous times.
There were food warehouses in every city, stocked
according to a government allocation scheme. There
were very few restaurants, and most families cooked
and ate at home. Shopping was rather labor-intensive,
and involved carrying heavy loads. Sometimes it
resembled hunting – stalking that elusive piece of
meat lurking behind some store counter. So the people
were well-prepared for what came next.

In the United States, most people get their food from
a supermarket, which is supplied from far away using
refrigerated diesel trucks. Many people don't even
bother to shop and just eat fast food. When people do
cook, they rarely cook from scratch. This is all very
unhealthy, and the effect on the nation's girth, is
visible, clear across the parking lot. A lot of the
people, who just waddle to and from their cars, seem
unprepared for what comes next. If they suddenly had
to start living like the Russians, they would blow out
their knees.



Slide [16] The Soviet government threw resources at
immunization programs, infectious disease control, and
basic care. It directly operated a system of
state-owned clinics, hospitals, and sanatoriums.
People with fatal ailments or chronic conditions often
had reason to complain, and had to pay for private
care – if they had the money.

In the United States, medicine is for profit. People
seems to think nothing of this fact. There are really
very few fields of endeavor to which Americans would
deny the profit motive. The problem is, once the
economy is removed, so is the profit, along with the
services it once helped to motivate.



Slide [17] The Soviet education system was generally
quite excellent. It produced an overwhelmingly
literate population and many great specialists. The
education was free at all levels, but higher education
sometimes paid a stipend, and often provided room and
board. The educational system held together quite well
after the economy collapsed. The problem was that the
graduates had no jobs to look forward to upon
graduation. Many of them lost their way.

The higher education system in the United States is
good at many things – government and industrial
research, team sports, vocational training... Primary
and secondary education fails to achieve in 12 years
what Soviet schools generally achieved in 8. The
massive scale and expense of maintaining these
institutions is likely to prove too much for the
post-collapse environment. Illiteracy is already a
problem in the United States, and we should expect it
to get a lot worse.



Slide [18] The Soviet Union did not need to import
energy. The production and distribution system
faltered, but never collapsed. Price controls kept the
lights on even as hyperinflation raged.

The term "market failure" seems to fit the energy
situation in the United States. Free markets develop
some pernicious characteristics when there are
shortages of key commodities. During World War II, the
United States government understood this, and
successfully rationed many things, from gasoline to
bicycle parts. But that was a long time ago. Since
then, the inviolability of free markets has become an
article of faith.



Slide [19] My conclusion is that the Soviet Union was
much better-prepared for economic collapse than the
United States is.

I have left out two important superpower asymmetries,
because they don't have anything to do with
collapse-preparedness. Some countries are simply
luckier than others. But I will mention them, for the
sake of completeness.

In terms of racial and ethnic composition, the United
States resembles Yugoslavia more than it resembles
Russia, so we shouldn't expect it to be as peaceful as
Russia was, following the collapse. Ethnically mixed
societies are fragile and have a tendency to explode.

In terms of religion, the Soviet Union was relatively
free of apocalyptic doomsday cults. Very few people
there wished for a planet-sized atomic fireball to
herald the second coming of their savior. This was
indeed a blessing.



Slide [20] One area in which I cannot discern any
Collapse Gap is national politics. The ideologies may
be different, but the blind adherence to them couldn't
be more similar.

It is certainly more fun to watch two Capitalist
parties go at each other than just having the one
Communist party to vote for. The things they fight
over in public are generally symbolic little tokens of
social policy, chosen for ease of public posturing.
The Communist party offered just one bitter pill. The
two Capitalist parties offer a choice of two placebos.
The latest innovation is the photo finish election,
where each party buys 50% of the vote, and the result
is pulled out of statistical noise, like a rabbit out
of a hat.

The American way of dealing with dissent and with
protest is certainly more advanced: why imprison
dissidents when you can just let them shout into the
wind to their heart's content?

The American approach to bookkeeping is more subtle
and nuanced than the Soviet. Why make a state secret
of some statistic, when you can just distort it, in
obscure ways? Here's a simple example: inflation is
"controlled" by substituting hamburger for steak, in
order to minimize increases to Social Security
payments.



Slide [21] Many people expend a lot of energy
protesting against their irresponsible, unresponsive
government. It seems like a terrible waste of time,
considering how ineffectual their protests are. Is it
enough of a consolation for them to be able to read
about their efforts in the foreign press? I think that
they would feel better if they tuned out the
politicians, the way the politicians tune them out.
It's as easy as turning off the television set. If
they try it, they will probably observe that nothing
about their lives has changed, nothing at all, except
maybe their mood has improved. They might also find
that they have more time and energy to devote to more
important things.



Slide [22] I will now sketch out some approaches,
realistic and otherwise, to closing the Collapse Gap.
My little list of approaches might seem a bit glib,
but keep in mind that this is a very difficult
problem. In fact, it's important to keep in mind that
not all problems have solutions. I can promise you
that we will not solve this problem tonight. What I
will try to do is to shed some light on it from
several angles.



Slide [23] Many people rail against the
unresponsiveness and irresponsibility of the
government. They often say things like "What is needed
is..." plus the name of some big, successful
government project from the glorious past – the
Marshall Plan, the Manhattan Project, the Apollo
program. But there is nothing in the history books
about a government preparing for collapse. Gorbachev's
"Perestroika" is an example of a government trying to
avert or delay collapse. It probably helped speed it
along.



Slide [24] There are some things that I would like the
government to take care of in preparation for
collapse. I am particularly concerned about all the
radioactive and toxic installations, stockpiles, and
dumps. Future generations are unlikely to able to
control them, especially if global warming puts them
underwater. There is enough of this muck sitting
around to kill off most of us. I am also worried about
soldiers getting stranded overseas – abandoning one's
soldiers is among the most shameful things a country
can do. Overseas military bases should be dismantled,
and the troops repatriated. I'd like to see the huge
prison population whittled away in a controlled
manner, ahead of time, instead of in a chaotic general
amnesty. Lastly, I think that this farce with debts
that will never be repaid, has gone on long enough.
Wiping the slate clean will give society time to
readjust. So, you see, I am not asking for any
miracles. Although, if any of these things do get
done, I would consider it a miracle.



Slide [25] A private sector solution is not
impossible; just very, very unlikely. Certain Soviet
state enterprises were basically states within states.
They controlled what amounted to an entire economic
system, and could go on even without the larger
economy. They kept to this arrangement even after they
were privatized. They drove Western management
consultants mad, with their endless kindergartens,
retirement homes, laundries, and free clinics. These
weren't part of their core competency, you see. They
needed to divest and to streamline their operations.
The Western management gurus overlooked the most
important thing: the core competency of these
enterprises lay in their ability to survive economic
collapse. Maybe the young geniuses at Google can wrap
their heads around this one, but I doubt that their
stockholders will.



Slide [26] It's important to understand that the
Soviet Union achieved collapse-preparedness
inadvertently, and not because of the success of some
crash program. Economic collapse has a way of turning
economic negatives into positives. The last thing we
want is a perfectly functioning, growing, prosperous
economy that suddenly collapses one day, and leaves
everybody in the lurch. It is not necessary for us to
embrace the tenets of command economy and central
planning to match the Soviet lackluster performance in
this area. We have our own methods, that are working
almost as well. I call them "boondoggles." They are
solutions to problems that cause more problems than
they solve.

Just look around you, and you will see boondoggles
sprouting up everywhere, in every field of endeavor:
we have military boondoggles like Iraq, financial
boondoggles like the doomed retirement system, medical
boondoggles like private health insurance, legal
boondoggles like the intellectual property system. The
combined weight of all these boondoggles is slowly but
surely pushing us all down. If it pushes us down far
enough, then economic collapse, when it arrives, will
be like falling out of a ground floor window. We just
have to help this process along, or at least not
interfere with it. So if somebody comes to you and
says "I want to make a boondoggle that runs on
hydrogen" – by all means encourage him! It's not as
good as a boondoggle that burns money directly, but
it's a step in the right direction.



Slide [27] Certain types of mainstream economic
behavior are not prudent on a personal level, and are
also counterproductive to bridging the Collapse Gap.
Any behavior that might result in continued economic
growth and prosperity is counterproductive: the higher
you jump, the harder you land. It is traumatic to go
from having a big retirement fund to having no
retirement fund because of a market crash. It is also
traumatic to go from a high income to little or no
income. If, on top of that, you have kept yourself
incredibly busy, and suddenly have nothing to do, then
you will really be in rough shape.

Economic collapse is about the worst possible time for
someone to suffer a nervous breakdown, yet this is
what often happens. The people who are most at risk
psychologically are successful middle-aged men. When
their career is suddenly over, their savings are gone,
and their property worthless, much of their sense of
self-worth is gone as well. They tend to drink
themselves to death and commit suicide in
disproportionate numbers. Since they tend to be the
most experienced and capable people, this is a
staggering loss to society.

If the economy, and your place within it, is really
important to you, you will be really hurt when it goes
away. You can cultivate an attitude of studied
indifference, but it has to be more than just a
conceit. You have to develop the lifestyle and the
habits and the physical stamina to back it up. It
takes a lot of creativity and effort to put together a
fulfilling existence on the margins of society. After
the collapse, these margins may turn out to be some of
the best places to live.



Slide [28] I hope that I didn't make it sound as if
the Soviet collapse was a walk in the park, because it
was really quite awful in many ways. The point that I
do want to stress is that when this economy collapses,
it is bound to be much worse. Another point I would
like to stress is that collapse here is likely to be
permanent. The factors that allowed Russia and the
other former Soviet republics to recover are not
present here.

In spite of all this, I believe that in every age and
circumstance, people can sometimes find not just a
means and a reason to survive, but enlightenment,
fulfillment, and freedom. If we can find them even
after the economy collapses, then why not start
looking for them now?

Thank you.

~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~

Energy Bulletin published an excerpt from this talk
yesterday (Dec 3), and Dmitry reported that his small
webserver was overwhelmed with requests. Although it's
good news that his writing has such a following,
PLEASE don't access the document on his web server
(Club Orlov). The same content is here, on Energy
Bulletin's heavier duty webserver.
---
Orlov has many penetrating insights, couched in his
dark humor. Particularly striking is the strong case
he makes that the peoples of the USSR were actually
better prepared for a collapse because

    * they had learned to be more self-reliant
    * many crucial functions (like housing and
transportation) were taken care of by the state sector
which was more stable than a private sector would have
been.

Orlov's cynicism about the possibility of intelligent
government action was probably justified in the case
of the Soviet Union, but I think it would be a tragic
mistake to abandon efforts to change the direction of
the U.S. The Soviets had little chance to make
democratic institutions work. We do have that chance.
-BA


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