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A Christmas Eve story

Two things happened to me over this weekend before Christmas that jarred me a little. One was when an old friend said I sounded crazy, and the second was when I read the galley proof of Dmitry Orlov's forthcoming book, Reinventing Collapse (New Society Press, Spring 2008).

I ran into my old friend "G" on our town's main street, Broadway, on Saturday afternoon and we ducked out of the drizzle into a nearby coffee shop to catch up. G had worked the past twenty-five years in the software industry and recently bought the company that employed him. He was consumed now with plans for "growing" this company. I made a point not to antagonize him with my Long Emergency notions, since his obvious mental investment in the wish for a reliable "growth" economy was a bulwark of his current world view. But the conversation did get around to the various troubles in the capital markets and the possible connection of this with the global oil predicament.

G doesn't believe we have a problem with oil. He said, if the fuel efficiency of every American vehicle on the road was increased five percent, we wouldn't have to import any oil. This assertion was, shall we say, not consistent with anything I understood about the situation, and I said so, pretty much in those words, to avoid ramping rhetorically into debate mode. G said, "Do the math." I suppose G had read this "formula" somewhere and was impressed by it. "The Market," he said, would "take care" of our motor fuel problems. Just wait and see. We talked for a while about getting the railroads working again. G said it would never happen. "This isn't Europe."

I was content to let is drop, but G then said. "You know, you've been predicting all these catastrophes for years now, but we're still here, the cars are all rolling down Broadway out there, and life is going on. You're beginning to sound like a crazy person." It didn't bother me especially that G thought my my ideas were outlandish so much as being comprehensively written off by an old friend as a crazy person, someone who... I dunno... rummages through dumpsters and talks to himself on the street without any sign of a cell phone in hand. I didn't hasten to defend myself. G obviously needed to feel that the world would continue functioning like a well-oiled machine now that he was responsible for an operation that employed a hundred other people. We parted agreeing to acknowledge a difference in our view of things.

Dmitry Orlov's publisher sent me the galley proof to get a blurb for the dust-jacket, and I'll furnish one in short order because Reinventing Collapse is an exceptionally clear, authoritative, witty, and original view of our prospects. The thesis is that the United States is headed for troubles as broad and deep as the ones that brought down the Soviet system in Russia, though we will get there via a somewhat different route. Orlov has been in the privileged position of living under both systems at critical times, and the parallels are striking, but the differences even more so.

The Soviet experience was a collapse of consensual reality as much as of economy. Nobody could continue to support the credibility of a one-party, centrally-planned, "command" economy best represented by the joke: "We pretend to work and they pretend to pay us." An economy in which nobody had any real stake other than ideological finally ground ignominiously to a halt. Once the state surrendered its authority, the society was stripped of assets. The social safety net dissolved. A lot of people on the margins slipped through the cracks and died. Eventually, the Russian economy (and government) reorganized on a different basis -- largely because its remaining oil resources and annual production exceed its domestic consumption. So, this reorganized new oil-exporting state, with its shocking poles of extreme wealth and poverty, will go on for a while until the oil is gone, and then it will face more transformations.

The comparison with the American situation is chilling. For all its gross faults, the Russians were ironically better prepared for economic collapse and political turmoil than we will be. For one thing, all housing there was owned by the state, and allocated under bare nominal rents, so when the economy collapsed, people just stayed in their apartments. Nobody got evicted. There was scant private car ownership in pre-1990 Russia, so gasoline allocation problems did not paralyze movement. Train service was excellent and cheap, and the cities all had a rich matrix of underground metros, on-street electric trams, and trolley-buses, which continued to run even when central authority flickered out. There was no suburban sprawl to strand and isolate people (in homes owned by banks, that can be taken away after the third monthly failure to make a mortgage payment). Official Soviet agriculture was such a fiasco for half a century that the Soviet people were long-conditioned to provide for themselves. For decades, 90 percent of the food was coming from tiny household gardens, wherever it was possible to grow stuff. When America's just-in-time supermarket resupply system wobbles, and the Cheez Doodles disappear from the WalMart shelves, few Americans will have a Plan B.

Perhaps most striking is that the Soviet collapse provoked almost no bloodshed (at least in Russia itself). The political failure was so comprehensive that the party leadership didn't even have the will to defend its prerogatives anymore, and for a while politics simply slipped into a vacuum -- until Mr. Putin came along and revived the oil industry and managed to get the police back on a payroll that inspired them to do their jobs. Meanwhile, the tremendous drain of the Soviet armed forces and all their equipment -- apart from the nuclear arsenal (as far as we know) -- was allowed to wither away, along with its monumental demands on the nation's resources.

Whatever other differences there may be between Soviet Russia and Clusterfuck Nation, a big one here is that our domestic oil consumption long ago exceeded our production capacity, and when we run into just a little supply trouble with our oil imports (apart from mere rising prices) it will shake the foundations of our economic life. We are stuck with a physical infrastructure for daily living that has no future in an oil-scarce world. Our cities, for the most part, have imploded internally. Our public transportation is grossly unbalanced on the side of private cars and airplanes utterly dependent on imported oil. At the moment, our capital finance sector is cratering in the aftermath of an unprecedented surrender of responsibility in the management of securitized debt -- an event that may end up as a curious parallel to the looting of assets that occurred in the Soviet twilight.

The biggest difference, though, between Soviet Russia and America today is the psychology of the people. Soviet citizens were prepared for trouble by lifetimes of comparative hardship. I won't even go into the Stalin terror and the agony of World War Two. In more recent Soviet times, money meant little in a system without real shopping -- but maintaining personal networks based on mutual trust or strength-of-character was the greatest asset in acquiring life's necessities. Americans didn't need political dictators to whip us into line -- we volunteered to become a nation of TV zombies. Our fantasies are arguably more disabling than the mere cognitive dissonance that reigned in Soviet times. Liberty itself has allowed the American public to freely choose passivity, illusion, and incompetence. Anyway, when it comes out in 2008, Dmitry Orlov's book will deserve the attention of whatever thoughtful people remain in the land of the free and the home of the brave.

It was disheartening, of course, to be written off as sounding "like a crazy person," by an old friend. I don't doubt that his perception is genuine. I'm prepared to live with the disconnect between what my friends believe and what I think. I even reserve a portion of my mind for the possibility that their view may be more realistic than mine -- but I won't torture myself about it. Someday, surely, I'll meet this old friend again and perhaps he'll say something like "...things didn't work out quite the way I expected...."

In the meantime, Christmas Eve is upon us, truly my favorite night of the year (Hebrew though I am), and I am very fortunate to be going to a warm house full of people tonight where the wassail will flow. I'll be back next week with a review of 2007 and my predictions (ha!) for 2008. In the meantime, God bless us every one.

Editorial Notes: Dmitry Orlov's presentation, Closing the 'Collapse Gap': the USSR was better prepared for collapse than the US, is posted at Energy Bulletin. It has been one of our most viewed pages. -BA

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