Full transcript of Dmitry Orlov’s talk (part of Long Now’s longer term thinking seminar series). This is much better than the Thriving in the Age of Collapse and Post-Soviet Lessons for a Post-American Century papers I’d read before.
Moving on to shelter. Again, let’s look at how the Russians managed to muddle through. In the Soviet Union, people did not own their place of residence. Everyone was assigned a place to live, which was recorded in a person’s internal passport. People could not be dislodged from their place of residence for as long as they drew oxygen. Since most people in Russia live in cities, the place of residence was usually an apartment, or a room in a communal apartment, with shared bathroom and kitchen. There was a permanent housing shortage, and so people often doubled up, with three generations living together. The apartments were often crowded, sometimes bordering on squalid. If people wanted to move, they had to find somebody else who wanted to move, who would want to exchange rooms or apartments with them. There were always long waiting lists for apartments, and children often grew up, got married, and had children before receiving a place of their own.
These all seem like negatives, but consider the flip side of all this: the high population density made this living arrangement quite affordable. With several generations living together, families were on hand to help each other. Grandparents provided day care, freeing up their children’s time to do other things. The apartment buildings were always built near public transportation, so they did not have to rely on private cars to get around. Apartment buildings are relatively cheap to heat, and municipal services easy to provide and maintain because of the short runs of pipe and cable. Perhaps most importantly, after the economy collapsed, people lost their savings, many people lost their jobs, even those that still had jobs often did not get paid for months, and when they were the value of their wages was destroyed by hyperinflation, but there were no foreclosures, no evictions, municipal services such as heat, water, and sometimes even hot water continued to be provided, and everyone had their families close by. Also, because it was so difficult to relocate, people generally stayed in one place for generations, and so they tended to know all the people around them. After the economic collapse, there was a large spike in the crime rate, which made it very helpful to be surrounded by people who weren’t strangers, and who could keep an eye on things. Lastly, in an interesting twist, the Soviet housing arrangement delivered an amazing final windfall: in the 1990s all of these apartments were privatized, and the people who lived in them suddenly became owners of some very valuable real estate, free and clear.
Or read Stewart Brand’s summary reprinted at Grinding.
Somewhat related: My round-up of commentary on Obama’s stimulus bill.
February 17, 2009 at 12:59 am
Although he makes some very good points and the downfall of the USSR is a fascinating and highly relevant topic, I’m not sure I can realistically sign on with the full scope of Orlov’s argument. Clearly we’re in for some shit, but I think he’s getting into survivalist fantasy with a lot of it.
The economic crash is absolutely a global phenomenon, unlike the USSR, which was relegated to just the communist bloc, or other crashes, as in Argentina.
The sort of utter collapse Orlov points to will only occur when the value of the dollar collapses when compared with the price of oil and. In turn, that can’t happen until the we finish the cycle of deflation. Right now, wealth is evaporating, which increases the buying power of the dollar. So while yes, we’re printing money, foreign markets are still gobbling it up, which offsets the inflation associated with expanding the money supply. They do this because they’re all fucked just like we are and Americans have a somewhat undeserved reputation for knowing wtf we’re doing when it comes to financial markets. We will not see heavy inflation (except for food) until the market is done contracting and the ability of the foreign markets to swallow our debt runs dry, AND the dollar is replaced by the euro (or some other currency) as the world’s premier reserve currency. All of that may happen, but even then, we will only see inflation running rampant to the degree which we outspend the global ability to pay for it. In short, while depression and massive social change is likely, total collapse of the state is HIGHLY unlikely, short of gross incompetence of those in charge on a level difficult to pull off in today’s political climate.
I mentioned food having serious inflation in the short term. That’s because our industrial food system is entirely predicated on credit being available to farmers. Credit is notoriously hard to come by right now for all those farmers whose property is worth less than their debt, farmers still hurting from last year’s high energy prices, which means the actual capacity of the US to produce food will drop precipitously, perhaps by 10-20% over the next two years as the market finally settles out. The end result of that is, of course, huge inflation on food prices long before oil gets expensive again. Expect insane food prices starting this year and continuing for the foreseeable future.
Then, as the market hits bottom 6-18 months from now, up comes the price of energy as the slow resurgence of demand clashes with the lack of production and economic and political strife among the oil producing nations of the world, caused by the currently low prices that are bankrupting many of the companies that invested on the presumption of $70+/bbl oil in perpetuity over the last several years.
This will be far worse for the southwest than anywhere else in the country, as the crippling 30% real estate losses already seen in much of CA, NV, and AZ effectively neuter those states’ ability to provide services and bankruptcies destroy their ability to feed themselves (much less the rest of the country). You might see a greater degree of breakdown of the social order there than elsewhere, with the possible exception of Florida, which is, similarly, royally fucked, as their ability to recover from their increasingly frequent natural disasters has been compromised.
The date of the recovery is largely the same as the date of the completion of the so-called green revolution.
March 8, 2009 at 12:49 am
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