The Roman Philosopher Lucius Anneaus Seneca (4 BCE-65 CE) was perhaps the first to note the universal trend that growth is slow but ruin is rapid. I call this tendency the "Seneca Effect."
Showing posts with label Soviet Union. Show all posts
Showing posts with label Soviet Union. Show all posts

Sunday, September 11, 2022

Elegy for a Disappearing Empire: was the US Domination of Europe a Good Thing?


An interpretation of Queen Cartimandua of the Brigantes, Celts who lived in Britain at the time of the Roman invasion (Image by Kate Spitzmiller). She lived at the same time as the more commonly remembered Queen Boudica, who fought the Romans. Cartimandua, instead, was what we would call today a "collaborationist". You might also call her a traitoress of her people, but so goes history. Can we learn something from the way the Romans subdued the Britons and incorporated them into their empire? As usual, history doesn't repeat itself, but it rhymes a lot. 

Martys' Mac argues in a recent post that the American Empire had some special characteristics that make it different from other empires, especially the Soviet one. According to him, the US has been more benign, more open, more willing to let its client states develop independently, both economically and culturally.

Marty's Mac is a sharp observer but, in this case, I think he missed some basic points. Empires (and states, as well) are all very similar to each other, and the US and the USSR are not exceptions, as noted for instance by Dmitry Orlov. Not that I pretend to know more than anyone else about the old Soviet Union, but I suggest caution when discussing such wide-ranging issues. The Soviet Union was a complex reality that, in the West, remained largely unknown, shadowed by a barrier of language and propaganda. And we must be careful about falling into the trap of thinking that anything real looks in any significant way like the portrait that propaganda paints of it. 

This said, let's discuss Marty Mac's position. He starts with: 

A traditional empire does not seek to enter into mutually beneficial economic arrangements with its neighbors, but to suck up neighboring resources for its own benefit.

Which is, by all means, true. But it describes not just empires, but also states and kingdoms. There is a general law called "the rich get richer" that creates a centralization phenomenon. In all states, resources move from the periphery to the center. Think about France, which is not an Empire, but where the size of the capital, Paris, is so much larger than any other French city that it is outside the normally used statistical models. To the point that a specific term has been invented for it, "The Dragon King."

The argument Marty Mac's makes is mostly based on a comparison between the Marshall plan that the US enacted after WW2 was over, with the equivalent for the Soviet Union, the less well-known Molotov plan. 
The Soviet Union imposed severe reparations on its conquered territories. Romania was obligated to pay $300 million (in 1938 dollars, i.e., prior to war inflation) to its new Soviet masters; Hungary was also obligated to pay $300 million (200 to the USSR and 100 to Czechoslovakia and Yugoslavia). The on-paper equivalent of the Marshall Plan within the Soviet sphere was the Molotov Plan, which officially offered aid to conquered Eastern European nations. However, this assistance was meager at best (nations like Romania and Hungary still suffered under their war debts), and could reasonably be understood as a public relations effort at countering the Marshall Plan.

It is true that the Soviet Union was considerably more stingy toward its client states than the United States with theirs. But why did the two empires behave so differently? We could argue that it was because of some ideological differences, but also, more simply, structural ones. The Soviet Union was a rival of the American Empire, but it was also smaller and poorer. The population of the Warsaw Pact countries (Soviet Union+allies) was around 400 million, that of the NATO alliance (US+allies) was over 600 million. Then, in terms of GDP and expenses, I wrote in a previous post that order to survive, the Soviet Empire had to match the rival Western Empire in military terms. But the Soviet economy was much smaller: we can roughly estimate that it always was no more than about 40% of the US economy, alone. To match the huge Western economic and military machine, the Soviet Union needed to dedicate a large fraction of its economic output into the military system. Measuring this fraction has never been easy, but we can say that in absolute terms the Soviet military expenses nearly matched those of the US, although still remaining well below those of the NATO block. Another rough estimate is that during the cold war the Soviet Union spent about 20% of its gross domestic product on its military. Compare with the US: after WW2, military spending went gradually down from about 10% to the current value of about 2.4%. In relative terms, during the cold war, the USSR would normally spend at least four times more than the US for its military. 
In short, the Soviet Union just could not afford costs equivalent to the Marshall plan. So, the behavior of the US empire was, and remains, dictated by practical factors rather than ideological ones. When the US had a considerable surplus, it could afford an extravaganza such as the Marshall plan. Not just an extravaganza, though. It was also a good investment since the European states were a much better barrier against a possible Soviet attack if they were economically strong. Note also that the economic aid of the Marshall plan didn't come without strings attached. To have the money, the Western European states had to cut all ties with the Soviet Union and with the states of the Warsaw Pact. And the local communist parties, at that time still relatively strong, were to be kept outside government coalitions. 

Now, of course, things have changed a lot. In the grip of a terrible crisis, probably in its last gasps, the US empire can't even remotely conceive a new Marshall plan. On the contrary, it is behaving like the old Soviet Empire. The whole West is turning into a police state, where the government controls all the media and criminalizes dissent. Then, it is not surprising that the imperial center is extracting resources from its client states in Western Europe to the point of beggaring them. 

The discussion could be long and detailed, and Marty's Mac post is much more detailed than the few concepts I have reported here. But I think that, as usual, we can find much food for thought in the behavior of past empires. In particular, I think that a good illustration of the behavior of empires is given by how the Romans dealt with the Britons during the period that goes from the 1st century BC to the 3rd century AD. We see how the annexation of the Britons was only in part obtained by a military invasion. Mostly, it was a question of assimilation. The Romans "romanized" the Britons, making them appreciate such things as Roman money and the luxury items that money could buy. Then, they tricked them into borrowing money from Rome and, finally, when they could not repay the debt, they used that as an excuse to seize their assets and their lands. The similarities between the behavior of the US empire with Western Europe are evident. First, they offered money to the Europeans to rebuild their economy, and now they are squeezing Europe dry. 

It is the typical way of Empires: they work like pushers. First, they offer you cheap drugs, then if you don't pay for more doses, they may beat the pants off you, or kill you. In this, they are helped by the traitors that they can place at the top of the states they want to incorporate. Also here, we have an example in the story of Britannia, with Queen Cartimandua as a symmetric equivalent of Queen Boudicca. Whereas Boudicca is seen as a heroine who rebelled against the Romans, Cartimandua allied herself with them. History, as usual, rhymes. A modern incarnation of the collaborationist (or traitoress) Queen Cartimandua could be found in Ursula Von der Leyen, president of the European Commission. 

Below, a post that I published about Queen Boudica that illustrates the mechanism of corruption and assimilation that the Romans used to incorporate Britannia into their Empire.

The Queen and the Philosopher: War, Money, and Metals in Roman Britain

We know very little about Queen Boudica of the Iceni (20 AD (?) - 61 AD) and most of what we know is probably deformed by Roman propaganda. But we may still be able to put together the main elements of her story and how it was that she almost threw the mighty Roman Legions out of Britain. Above, a fantasy interpretation of the Celtic Queen from "" (This post was inspired by a note from Mireille Martini)

You probably know the story of Queen Boudica. Tall, strong, and terrible, she was the embodiment of the fierce warrioress who fought - bravely but unsuccessfully - to defend her people from the oppression of an evil empire, that the Romans. It all happened during the reign of Emperor Nero, 1st century AD. 
The passage of time has turned these events into legends, deformed by the lens of propaganda. But maybe we can still discern the reasons for Boudica's rebellion and learn something relevant for our times. As it often happens in history, to understand why something happens, you only need to follow the money.  In this particular case, it is curious that the money that triggered the war may have been provided by no one else than Lucius Annaeus Seneca, yes, the Stoic philosopher. But it is a story that needs to be told from the beginning.

First of all, why were the Romans in Britain at the time of Queen Boudica? Simple: because of the British mineral resources. Britain had a long story of mining that went back to the Bronze Age and to even earlier times. The British mines could provide copper, tin, iron, lead, and even precious metals: gold and silver. These were all vital resources for the Roman Empire which used precious metals for coinage and all sort of metals for its various technologies.

The Romans already set foot in Britain at the time of Julius Caesar, in 55 BC. They set up a full-fledged invasion only in AD 43 under Emperor Claudius. But even before invading, according to  Strabo's Geography, there was a brisk commercial network that connected Rome to Britain. The Britons exported metals and imported luxury goods of all sorts, silk, olive oil, food, slaves, and more.

It was all part of the way the Romans managed their empire. Their expansion was not simply a question of a blitzkrieg war machine. Invading a foreign kingdom was preceded by a long period of cultural and commercial assimilation and it was attempted only when it could provide a financial return. That required a certain degree of economic development of the regions being assimilated. It didn't work with the Germans, who had no mines and only a relatively primitive economy. And they were also a tough military force, able to defeat even the mighty Roman war machine - they did that at Teutoburg, in 9 AD. So, the Romans shifted their attention to the wealthier and metal-rich Britain. It worked: the invasion of 43 AD was relatively easy in military terms. Afterward, the mines increased their production by means of Roman technology, commerce boomed, new Roman settlements were built, and Britain started being romanized.

But something went badly wrong in 60 AD, when the Romans suddenly faced a major rebellion of the Iceni people living in Eastern England, led by their redoubtable queen, Boudica. At the end of this post, you can read the details of the story as we know it, told by Jason Porath in a light-hearted style. Summarizing, when Boudica's husband, King Prasotagus, died, the Romans intervened, seized his lands, had his widow flogged, and his daughters raped. The queen was not amused and the rebellion started with all the associated atrocities. Eventually, the Romans managed to get the upper hand and Boudica killed herself.

But what made the Romans behave in a way that was nearly sure to spark a rebellion? Maybe it was just their lust for power, but there is a detail told by Dio Cassius (vol VIII, Cassius Dio, Roman History, 62.2) that can help us understand what happened. Cassius says that Seneca (yes, he was a philosopher, but also a rich man) had lent to the Iceni a large sum of money and that the Iceni were unable to return it. That suggests that the key to the story was money.

According to Dio Cassius, we are talking of 40 million sesterces. What kind of money is that? It is not so easy for us to visualize this sum, but we know that in those times a Roman legionary was paid nine hundred sestertii per annum. So, 40 million sesterces could pay some 50 thousand troops for a year - a large military force for the time. From this and other data, we could say - very roughly - that the value of a sesterce was of the order of 50 dollars. So, 40 million sesterces could be compared to some two billion dollars today. Clearly, we are discussing of a large sum for a small economy such as that of the Iceni tribe had to be.

We don't know what King Prasotagus had in mind to do with that money, but we know that something went wrong. Dio Cassius faults Seneca himself for having precipitated the rebellion by insisting to have his money back. That Seneca did that out of personal greed seems to be unlikely, as discussed by Grimal. Cassius was writing more than a century after the events and he may have wanted to cast Seneca in a bad light for ideological reasons. But that's just a detail,  what matters is that the Iceni (or, better said, the Iceni elite) defaulted on a large debt they had with the Romans.

In ancient times, defaulting on one's debt was a serious crime, so much that the early Roman laws punished it by having the debtor drawn and quartered. In Imperial times, there were considerably more lenient laws - but these laws very valid only for Roman citizens and Boudica was not one. In this light, flogging doesn't sound like an exaggerated punishment for defaulting on a large debt (2 billion dollars!). Even the rape of her daughters was not something unusual as a punishment for non-Roman citizens in those times. In any case, it is likely that the Romans didn't do what they did because they enjoyed torturing and raping women -- they used the default as an excuse to seize the Iceni kingdom. We can't even exclude that the loan was engineered from the beginning with the idea of annexing the kingdom to the Roman Empire.

Be it as it may, at this point, the Iceni elite had little choice: either lose everything or rebel against the largest military power of their time. Neither looked like a good choice, but they chose the one that turned out to be truly disastrous.

All that happened afterward was already written in the book of destiny - the archeological records tell us of cities burned to the ground, confirming the reports of initial Iceni victories told to us by Roman historians. Standard propaganda techniques probably caused the Romans to exaggerate the atrocities performed by the Iceni, just as the number of their fighters in order to highlight their own military prowess. Even Boudica herself was portrayed as a larger-than-life warrioress, but we can't even be completely sure that she actually existed. In any case, the revolt was bound to fail, and it did. In a few centuries, Boudica was forgotten by her own people: we have no mentions of her in the records from Celtic Britain. The Roman Empire faded, but the Roman influence on British customs and language remains visible to this day (and the ghost of the old queen may be pleased by the Brexit!).

What's most interesting in this story is the light it sheds on the inner workings of Empires. We tend to think that Empires exist because of their mighty armies - which is true, in part - but armies are not everything and in any case, the soldiers must be paid. Empires exist because they can control money, (or capital if you prefer). That's the real tool that builds empires: No money - no empire! 

And that takes us to the current empire, the one we call the "American Empire" or "the "Western Empire." It does have mighty armies but, really, the grip it has on the world is all based on money. Without the mighty dollar, it is hard to think that the large military and commercial network we call "globalization" could exist.

So, can we think of a modern equivalent of the Iceni rebellion? Surely we can: think of the end of the Soviet Union. It was brought down in 1991 not by military means but by financial ones. The debt the Soviet Union had with the West is estimated at US$ 70 billion, in relative terms probably not far from the 40 million sesterces the Iceni owed to the Romans. Unable to repay this debt, the Soviet elites had only two choices: dissolve or fight. They made an attempt to fight with the "August Putsch" in 1991, but it rapidly fizzled out. There was no chance for the Soviet Communists to make a mistake similar to the one Queen Boudica made, that is starting a full-fledged military rebellion against a much more powerful enemy. That was good for everybody on this planet since the Soviet Union had nuclear warheads which might have been used in desperation. Fortunately, history doesn't always repeat itself!

But, if history doesn't repeat itself, at least it rhymes and the ability of the Western Empire to use financial means to bring countries into submission is well documented. Another, more recent, case, is that of Greece: again a nation that couldn't give back the money it owed to the imperial powers. For a short moment, in 2015, it looked like the Greeks had decided to rebel against the empire but, in the end, the Greek elites chose to submit. The punishment for the Greek citizens has been harsh but, at least, their country was not bombed and destroyed, as it happens rather often nowadays when the Imperial Powers that Be become angry.

But for how long will the Western Empire remain powerful? Just like for the Roman Empire, its destiny seems to be a cycle of growth and decline - and the decline may have already started as shown by the failure of the attempt of bankrupting the heir of the Soviet Union, Russia (again, fortunately for everybody, because Russia has nuclear weapons). The globalized empire seems to be getting weaker and weaker every day. Whether this is a good or a bad thing, only time will tell.

Sunday, February 20, 2022

Turning the West into a new Soviet Union -2: the Demise of Restaurants


Restaurants were never a feature of the old Soviet Union, discouraged because of their bourgeois nature. Earlier on, though, Russia had restaurants patterned on the West European model. This scene is from the 1965 version of "Doctor Zhivago," taking place during the years of the Russian Revolution. It shows the contrast between the well-dressed middle-class customers and the revolutionaries singing in the street. 

This is the second post of a series dedicated on how the West is turning into an organization very similar to the old Soviet Union. The first post was titled "Becoming what we despised"

I think I was in elementary school when one of my assignments was to read a story that I still remember as one of the cruelest things I ever read in my life. It told of a peasant who went to town and decided to eat at a restaurant, something that he had never done in his life. He sat at a table, anticipating in his mind the good things he would eat. But he stumbled immediately into a problem: he couldn't read the menu. Through a series of mishaps, he managed to order three times the same peasant dish of pasta e fagioli (pasta with beans) that he used to eat every day at home. The image on the right is not directly related to this story, but it may well illustrate it (from "Storia di un Naso" by Vamba, 1953).

I imagine that the story of that poor peasant was supposed to be fun, or perhaps even "educational," although how anyone could think of such a thing escapes my mind. But the author had caught something right. A fundamental feature of restaurants in Europe was the social discrimination aspect. 
The first establishments called "restaurants" appeared in France in the late 18th century, before the French Revolution. They were different from the old "taverns" that catered mostly to travelers and non-residents. You see in the figure (from Google "Ngrams") how the term "restaurant" replaced that of "tavern" over the 19th century

In many senses, restaurants followed the evolution of the European society. The nobles of old would never dream of "eating out" -- they had their cooks, their kitchens, their mansions, as in the story told in the recent movie "Delicious." Restaurants, instead, were a typical bourgeois thing: they didn't cater to the nobles, but neither to the working class. The menu was the first barrier that kept the illiterate out (those we call "deplorables" nowadays). Then, different prices selected customers according to their wealth. Being seen to eat at a classy and expensive restaurant was a way to prove one's social status. So, the restaurant experience was patterned according to how the middle class imagined the life of nobles, including the illusion that they could afford an assorted range of servants: stewards, butlers, cooks, and maids. 

Over a couple of centuries of existence, restaurants followed the social evolution of Western society. With the prosperity of the "magic decades" of the mid 20th century, there appeared a market for restaurants for the working class. The "fast food" concept prospered, pushed onward by the new way of life, with women not anymore forced stay home to prepare food. 

If formal restaurants had mirrored the life of the Upper Class, fast food joints mirrored the life of the working class. No question of being served by waiters: customers would simply pick up their food at the counter and carry it to their table, the way they would do it at their company's canteen. The extreme of this category was the "vending machine restaurant" with no human employees at all. It was the equivalent of picking up one's tv dinner from the refrigerator, at home, and eat it in front of the TV. The concept never really caught up in the West, but it seems to be popular in Japan. 

Over the 20th century, with the increasing monetization of society, more and more people could afford to eat out, a fashion that had never existed before. Eateries soon started to fulfill a new role in addition to feeding people: socialization. Busier and busier people didn't have the time and the resources to invite friends for dinner at home, so they started to meet in restaurants. A further role also appeared with the increasing perception of rising crime. Eating out offered safety for the price of a hamburger and a soft drink. Your children could also have a safe birthday party at a fast-food restaurant.  

With time, tourism expanded the demand for eating out: restaurants popped up everywhere. Variety paid: everything that was exotic and innovative was favored and enjoyed. Entire cities, such as Florence in Italy, were turned into giant food courts to serve millions of tourists for whom the culinary experience abroad had mostly replaced the cultural one. 

In parallel, on the other side of the iron curtain, a completely different social situation was developing. During the 19th century, restaurants had been introduced in Russia in the French style, termed ресторан (restoran). But, with the Soviet Union, restaurants were discouraged by the state: they were seen as a waste of resources and their class divisive character was incompatible with the idea that the Soviet society had no social classes -- theoretically. 

Even after the fall of the Soviet Union, up to relatively recent times, you could walk along the streets of former Soviet cities and find no "Restaurant" sign. That doesn't mean, of course, that restaurants didn't exist. They did, of course, but mainly as part of hotels as a service for travelers. There was no tradition of "eating out" among Soviet citizens. But the Soviet elites, the members of the номенклату́ра (nomenklatura) had their perks and could enjoy good food in establishments reserved for them. 

Over the years, the former Soviet Union has been "westernizing" and, today, if you walk in the streets of Moscow or any other large Russian city you'll find the familiar signs of all kinds of restaurants, including ethnical and fast food ones. Curiously, though, the West may be starting a movement in the opposite direction: "sovietizing." Restaurants may be among the first victims of this trend. 

It happened during the past two years. It was unexpected, sudden, even brutal. "Eating out" had been the normal thing for nearly a century in the West. Then, with the pandemic, governments started enacting all sorts of quixotic laws, rules, and restrictions, with many of them seemingly specifically directed to punish restaurants and their customers.

Not only restaurants were forced to close during lockdowns, but when they reopened, their schedule was limited by law, they could not operate at full capacity, in some cases you could eat only outside, not inside, or maybe standing and not sitting (or the reverse). The body temperature of the customer was taken at the entrance and, for a certain period, in Italy, you were supposed to give your name and address to the management. Then, they would communicate it to the authorities as part of a statewide "tracing" mechanism (it never worked). The police could come inside at any moment to check that everyone followed the rules. 

Right now, in Italy, the QR code is replacing all the previous rules (except for face masks, still mandatory). It applies to all restaurants, everywhere: no QR code, no food. And to have a QR code you need an updated status of three vaccination shots (you'll need more in the future -- they already announced that). That leaves out all those (millions of people) who didn't want to be vaccinated and those who decided to avoid restaurants as a form of solidarity for them. In addition, the government as acted with rules that seemed to have the only purpose to stop international tourism, one of the main sources of revenue for Italian restaurants. In the photo, you see a restaurant in Venice. It was taken by the author during the Christmas tourist season at lunchtime: no customers whatsoever. 

In a city like Florence, the result was a disaster. I don't have quantitative data, but you can see the situation by walking around in Florence. The restaurants that were once chock-full of people, now are half-empty -- at best. In many cases, it is clear that the owners can resist for just a little longer, but that then they will soon go bankrupt. Many have already closed. In the picture, you see a restaurant closed and for sale in the suburbs of Florence. 

Officially, it was all part of restrictions designed to fight the pandemic. Yes, but the haphazard nature of the rules and the lack of proof that they had any effect is remarkable. What happened that made restaurants a preferred target for the government's wrath? Were they really spreading the covid around? Or were they guilty of some unspeakable sin? 

I don't think there ever was a concerted effort on the part of the PTB (powers that be) to destroy restaurants. It was just part of the "new normal" or the "Great Reset." In many ways, it involves turning back and walking in reverse the path that has led us to where we are today. 

As I said, restaurants have always been a typical middle-class thing. They appeared together with the European middle class, and they are following its destiny. During the past few decades, the middle class has been gradually pushed back into the fold of the lower class. The restaurant business could not avoid being affected by the trend. 

The tradition of eating out is still alive in the West, but the resources for doing that are not there anymore for a middle class that's struggling to survive, and failing at that. On their side, the rich, like the nobles of old, don't eat at restaurants, at least not at the same kind of restaurants that the deplorables can afford. For the very rich and politically exposed persons (PEPs), appearing at a restaurant without an armed escort would be dangerous. Like the nobles of old, they have their private cooks and exclusive places. And they socialize with each other throwing expensive parties at their homes. A habit that we find in ancient history, even in Roman times and earlier. 

You may have seen the picture of Bill Gates supposedly standing in line waiting for his turn for a burger. It is surprising that many Westerners seem to believe in this kind of cheap PR stunts. In the old Soviet Union, if Leonid Brezhnev had diffused a picture of himself standing in line to buy shoes, people would have laughed themselves to death. But it is known that Westerners are sensitive to propaganda.

In any case, the current Western elites are acting just like the old Soviet elites. They don't care about what the commoners eat, although they are worried that they may revolt if they go hungry. So, they tend to allow a basic supply of food for the deplorables, but they consider restaurants (and the associated tourism) as a waste of resources. The rich much prefer to funnel the surplus produced by the economy into their own pockets rather than having it dissipated by the commoners. Worse, restaurants are a place where the deplorables can socialize and maybe concot evil plans. So, it is better to force them to stay at home.

The Covid pandemic offered plenty of excuses to stop people from eating out. Different factors reinforced each other. One result of the financial strain is that the quality of the food and of the service is going down (I can testify that myself). And I shiver at the thought of what they could do to the food they serve to you in order to save a little money. Finally, the QR code turned out to be the perfect method to keep the deplorables out. It is a more sophisticated and tuneable tool than the old written menu. 

So, Western restaurants are in the crosshair and it is unlikely that they will survive, at least in the form we are used to seeing them. It is not so much because the PTB are evil -- they are no more evil than most categories. It is mostly because the economic contraction coming from the twin impact of depletion and pollution is pushing the Western economy back to what it was a couple of hundred years ago. 

And what is in store for us, the deplorables? We have to adapt, as always people do when things change. Our ancestors would have found our habit of "eating out" weird and incomprehensible. Yet, sharing food remains one of the basic ways for humans to socialize. Even in the old Soviet Union, people did socialize. They would do that mostly at home, cheaply, rather than paying money to multinational restaurant chains. In terms of material goods, they were surely much poorer than the average Western family, and the living quarters were cramped -- no suburban two-story homes for them! They had to adapt and help each other locally. And they surely did. 

Curiously (actually, not so curiously), we are seeing something similar in Italy. People being barred from entering restaurants are organizing informal parties in the street. The photo shows a "free aperitif" in Italy with free food for everyone and no need for QR codes). It looks remarkably similar to the paintings of life in a medieval village that Peter Bruegel left to us. But, of course, the police tend to intervene in force to disperse those subversives!
Things always keep moving. We may need to accept that not everything can be monetized and that there are ways to socialize that don't necessitate paying money for bad food and the pretended "safety" of a restaurant. In my case, like a peasant of old, I haven't eaten at a restaurant for months, and I am discovering that it is perfectly possible to do that and be perfectly happy. And no "espresso" coffee either. Another Italian tradition that's going down the drain. 

Maybe we can retake our lives in our hands and socialize the way our ancestors have been doing for millennia. Maybe we will return to the ancient peasant use of the veglia (vigil) when several families would collect in someone's home to chat and save on the wood for eating. Or maybe we'll get back to something like the Sumerian times when the alewives served beer to everyone with the blessing of the Goddess of Beer Ninkasi. Why not?

Below: a Sumerian QR code to assign rations of beer. Some things never change, some things always return. 

Note added after publication: on the subject of restaurants, you may be interested in this article by Kara Voght describing how mom and pop restaurants lost it big with the pandemic, unlike the large restaurant chains (h/t Christine Eleanor Anderson). You may also be interested in this recent article by Jeffrey Tucker that arrives to conclusions similar to mine. As a general note about PEPs in restaurants, I can cite two cases I know of in Italy. Some years ago, the mayor of Florence was having dinner at a restaurant, when another customer rose up and criticized him for some policies he disapproved. According to the newspapers, the mayor was so distressed to have been addressed by a commoner that he suffered a minor nervous breakdown. More recently, the mayor of Rome had dinner with his wife in a restaurant. Later, he was accused to have paid for the dinner with the city's official credit card. It was all part of a smear campaign orchestrated against him and, in this case, it was only based on the statement of the restaurant owner. It was shown that it was a complete fabrication, but only after that he had been forced to resign.  

Sunday, February 13, 2022

How we Became What we Despised. Turning the West into a New Soviet Union


For everything that happens, there is a reason for it to happen. Even for turning the former Free World into something that looks very much like the old "Evil Empire," the Soviet Union. I understand that this series of reflections will be seen as controversial, but I thought that this matter is important and fascinating enough to deserve a discussion.

It all started two years ago when we were asked to stay home for two weeks "to flatten the curve." Two years later, we are looking, bewildered, at the wreckage around us and asking ourselves: 'what the hell has happened?'

In such a short time, we found that our world had turned into something very similar to one that we used to despite. The old Soviet Union, complete with heavy-handed police, censorship of the media, criminalization of dissent, internal passports, and the state intruding on matters that, once, were thought to be part of every citizen's private decision sphere. 

Surprising, perhaps. But it is a rule of the universe that everything that happens has a reason to happen. The Soviet Union was what it was because there were reasons for it to be that. It was not an alien world populated by little green men. It was an empire similar to the Western one, just a little smaller, and it concluded its cycle a few decades before us. We can learn a lot from its story. 

Dmitri Orlov, born in Russia, was among the first who noted the parallel paths that the Western and the Soviet empire were following. His first book was titled "Reinventing Collapse" (2011). Let me propose to you an excerpt where Orlov tells us of an event he experienced in St. Petersburg in the years just after the collapse of the Union. At that time, the people who had dollars, as Orlov did, had a market power that ordinary Russians couldn't even dream of. We see here the consequences of being so rich that you don't worry about carrying small change with you. 

There was also an old woman in front of the store, selling buns from a tray. I offered her a thousand-ruble note. "Don't throw your money around!" she said. I offered to buy her entire tray. "What are the other people going to eat?" she asked. I went and stood in line for the cashier, presented my thousand-ruble note, got a pile of useless change and a receipt, presented the receipt at the counter, collected a glass of warm brown liquid, drank it, returned the glass, paid the old woman, got my sweet bun, and thanked her very much. It was a lesson in civility. 

Looks like a funny story, but it is not just that. It is a deep metaphor of how a market economy works, and also how it may NOT work. The problem is that, unless some specific conditions are met, a market economy is unstable. Money tends to end all in the hands of a few, leaving the rest with nothing. It is the law that says "the rich get richer." It has a corollary that says, "and everyone else gets poorer." 

There is only a way to avoid that a market economy leads to the rich getting everything: it is growth. If the economy grows, then the rich cannot pull money out of the market fast enough to beggar everyone else. The result is the illusion of a fair share. So, you may understand why our leaders are so fixated with growth at all costs. But don't forget that those who believe that an economy can grow forever can only be madmen or economists. 

But how do you make the economy grow? The magic word is "resources." No resources, no growth (actually, no economy, either). And if you exploit a resource faster than it can reform (it is called overexploitation), then, at some moment, the whole system will crash down. It is what happened to the Soviet Union and may well happen to us, too. But let's go in order.  

Let's go back to the story of Dmitry Orlov trying to buy a sweet bun in St. Petersburg. If the old woman had accepted Orlov's offer to buy the whole tray, the price of the buns would have skyrocketed to levels so high that nobody except him could have bought them. So, Orlov could have crashed the whole market of sweet buns of that particular place. The standard Western economic theory has that, at that moment, another old woman with another tray should have magically appeared to sell buns. Supply must always match demand: it is a postulate. But things don't work like that in the real world.

The market mechanism that matches demand and offer, the way you are taught in the Economics 101 course, can work only in conditions of relative abundance. If people have dollars, then someone will make buns for them and profit from the sales. If they only have rubles, then it may well be that nobody will bother to satisfy their demand: no profit can be made from nearly worthless rubles. 

But rubles and dollars are the same thing: pieces of paper with numbers printed on them. What makes the difference is a working -- or not working -- economy. The Russian economy after the fall of the Soviet Union wasn't working anymore: its roubles could buy little more than sweet buns and even that risked being disrupted by a rich foreigner passing by.

The problem was structural. Even before the collapse, the Soviet system couldn't produce an output large enough to sustain a free market economy. In part, it was an ideological choice, but mostly it was because it was because of the need to funnel a large fraction of production to military expenses. The Soviet Union was rich in natural resources, especially mineral ones. That was an advantage, but also a temptation for other countries to invade it. The idea of turning Russia into "the world's gas station" is recent, but it was around already long ago. And that was not just a temptation: over a couple of centuries, Russia, was invaded several times, the last time in 1941. If there ever was an "existential risk" for a country, that was it. The invading Germans had clearly stated that their plan was to exterminate some 20-30 million of Soviet citizens. 

The consequence is obvious: in order to survive, the Soviet Empire had to match the rival Western Empire in military terms. But the Soviet economy was much smaller: we can roughly estimate that it always was no more than about 40% of the US economy, alone. To match the huge Western economic and military machine, the Soviet Union needed to dedicate a large fraction of its economic output into the military system. Measuring this fraction has never been easy, but we can say that in absolute terms the Soviet military expenses nearly matched those of the US, although still remaining well below those of the NATO block. Another rough estimate is that during the cold war the Soviet Union spent about 20% of its gross domestic product on its military. Compare with the US: after WW2, military spending went gradually down from about 10% to the current value of about 2.4%. In relative terms, during the cold war, the USSR would normally spend four times more than the US for its military.

In a free-market economy, these huge military expenses would have drained the market of resources, beggaring a large fraction of the Soviet citizens. To keep the market functioning, the Soviet government had to play the role of the wise old woman in Orlov's story. It used its "five-year plans" to make sure that sweet buns for the Soviet citizens were produced, that is, the fundamental needs for life: food, shelter, clothing, fuel, and vodka.  

The five-year plans also had the purpose to limit the production of items that were considered "luxuries." For instance, the Soviet Union was a producer of caviar and, nominally, the price of caviar was low enough that most Soviet citizens could afford it. But caviar was not normally available in shops. When a batch of caviar tins appeared, people would stand in line hoping that there would remain a few cans left for when their turn came. This feature avoided that the rich could corner the caviar market, driving prices sky-high, just like Dmitry Orlov could have done with the sweet buns. It also had the effect of giving Soviet citizens the illusion that their rubles were worth something. But they understood that the ruble was a form of "funny money," not the same thing as the mighty dollar. Soviet people used to say "they pretend to pay us, and we pretend to work," and they were perfectly right. The ruble was a limited kind of money: it couldn't be always be used to buy what one wanted (just like when the Western government locked their citizens in their homes: they had money, but they couldn't use it). 

Now the pieces of the puzzle go to their places. The need for a tight control of the economy shaped the Soviet society: the media were controlled, censorship enacted, dissent criminalized, and more. Those who publicly disagreed that communism was the best possible government were considered to have psychiatric problems thanks to a subservient medical establishment. Then, they could be hospitalized, sometimes for life. (I know that it looks very much like.... you know what, but let's keep going).

Not only the Soviet system was strained to the limit, but it was also critically dependent on the availability of cheap resources. So, it was vulnerable to depletion, probably the factor that caused its collapse in the late 1980s. It is not that the Soviet Union ran out of anything, but the costs of natural resources simply became incompatible for the Soviet economy. Later on, the core of the Soviet Empire, Russia, could return to being a functioning state only because it didn't have to pay the enormous costs related to keeping an empire together.  

On the other side of the iron curtain, the relatively low military expenses and abundant natural resouces made it possible for the American citizens (most of them, at least) to enjoy an extravagant lifestyle, unthinkable elsewhere in the world. They lived in suburban houses, had two cars in every garage, could go wherever they wanted, had overseas vacations every year, could buy whatever they wanted without standing in line. The US citizens could even afford a certain degree of variety in the information they received. The state control on the media was enacted in subtle ways, giving citizens the illusion that they were not exposed to propaganda.

It was the kind of lifestyle that president Bush said was "not up for negotiation" -- except that when you deal with Nature, everything is up to negotiation.

The current problem is that the resources that made the West so rich and so powerful, mainly crude oil and other fossil fuels, are not infinite. They are being depleted, and production costs increase with depletion. And that's not the only problem: something else is choking the Western economic system: it is the enormous cost of the health care system

In 2018, the US spent $3.6 trillion in health costs, nearly 18% of its GDP. Today, it is probably slightly more than that. Yes, health costs in the US are nearly ten times larger than military costs. It is probably not a coincidence that troubles started to appear when these costs reached the same level, about 20%, of the military expenses for the Soviet Union. 

Someone has to pay for those costs and, as always, the task falls on the middle class which becomes poorer and poorer. On one extreme of the wealth distribution curve, former middle class citizens are losing everything and are being gradually squeezed out of the market. And here is the problem: those who have no money to spend can't buy their sweet buns. They become "non-people," aka, "deplorables." What is to be done with them? A possible solution (that I am sure some elites are contemplating), is just to let them die and cease to be a problem (it is the zombie scenario). But we are not there, yet. The elites themselves don't want the chaos that would result from starving a large fraction of the citizens. How to avoid that?

The solution is well known from ancient times: it is rationing. The Romans had already developed a system called "Annona" that distributed food to the poor. During WW2, the US had ration books, ration stamps and other forms of rationing. Food stamps were introduced at that time, and they still exist. The Soviets used a kind of funny money called "ruble." In the West, rationing seems to be a silly idea but it was done during WW2 and, if there is a serious economic crash -- as it is perfectly possible -- it can return. It must return because, without rationing, we'll have the zombie apocalypse all over simply because there is no mechanism in place to limit those who still have money from hoarding all they can, when they can. 

That explains many of the things we have seen happening: whereas the Soviet Government acted by restricting supply, the Western ones seem to find it easier to restrict demand -- it is the same thing: it means cooling the economy by reducing consumption. The lockdowns of 2020 seem to have had exactly that purpose, as argued convincingly by Fabio Vighi. Their effect was to reduce consumption, and avoid a crash of the REPO market that seemed to be imminent. 

Once you start thinking in these terms, you see how more pieces of the puzzle fall to their places. The West is moving to reorganize its economy in a more centrally controlled manner, as argued, among others, by Shoshana Zuboff. That means chocking private consumption and using the remaining resources to keep the system alive facing the twin threat of depletion and pollution, the latter also in the form of climate change.  

It is happening, we see it happening, Note that it is probable that there is no "command center" somewhere that dictated the various actions that governments took over the last two years. It was just a series of common interests among different lobbies that happened to align with each other. The financial lobby was terrified of a new financial crash, worse than that of 2008, and pushed for the control of the economy. The pharmaceutical lobby saw a chance to obtain huge profits from forcing medical treatments on everyone. And states saw their chance to gain control of their citizens at a level they couldn't have dreamed of before. The epidemic was just a trigger that led these lobbies with similar goals to act in concert. 

Lockdowns were just a temporary test. The final result was the "vaccination QR code." At present, it has been imposed as a sanitary measure, but it can be used to control all economic transactions, that is what individuals can or cannot buy. It is much better than the lines in front of shops of the old Soviet Union, so it may be used to ration essential goods before the zombies start marching. 

Does that mean that the QR code is a good thing? No, but do not forget the basic rule of the universe: for everything that happens there is a reason. Before the current crisis, the Western society had embarked on a free ride of wasteful consumption: it was good as long as it lasted. Now, it is the time of reckoning. In this sense, if the QR code were used for the good of society, it could be a fundamental instrument to avoid waste, reduce pollution, provide at least a basic supply of goods for everyone.  

But the QR can do that only if the citizens trust their government and governments trust their citizens. Here, we see the limits of the Western approach to governance. During the past decades, the Western governments couldn't do anything important without imposing it on their citizens by a shock-and-awe campaign of lies. That was the way in which governments imposed QR codes or, better said, they are trying to impose QR codes. The problem is that, over the years, the Western Governments have managed to lie to their citizens so many times that nowadays they have no credibility anymore.  

So, what's going to happen? Several scenarios are possible. The Western governments may succeed in their "sovietization" of society. That would mean a heavy crackdown on all forms of communication not directly controlled by the government and the criminalization of all dissent. The government may not necessarily need to arrive to concentration camps or to mass exterminations, but it might. In this case, after that the dust settles, we face at least a few decades of Soviet-like life. The government will use QR codes to control everything we do. If you dissent or protest, you'll risk being declared officially insane, and be subjected to mandatory psychiatric treatment in a hospital, or exiled in the Western equivalent of Siberia, or worse. Even if you are not branded as insane, you'll still be forced to submit to whatever medical treatment the pharmaceutical industry will decide is good for you. Bad, but at least you'll have something to eat and a roof under which to sleep. Don't forget that the Soviet Union survived for about 70 years and, in some periods, even prospered. 

That's not the only possible outcome. We might just sidestep the "Soviet" phase and move directly to the "post-Soviet" one. It would mean the collapse of the Western Empire, fragmenting into smaller states. That may imply severe political disturbance and civil wars are perfectly possible. The transition will be tough: it is not obvious that you'll have sweet buns for your breakfast. But after the "hot" phase, the lower governance costs of smaller state could allow them to recover and rebuild a functioning economy, at least in part, just like Russia did (but there is also the example of Ukraine). 

But history never repeats: it just rhymes. So, the Soviet system is just one of the many possible ways that a state can control the supply of goods to society. There may be other ways: after all, there was no Internet at the time of the Soviet Union. There were only the "media" which could be hijacked by the state and controlled from above: a "vertical" communication system. Instead, the Web is naturally a horizontal communication system. Controlling the Web may turn out to be difficult for states, perhaps impossible despite the unleashing of legions of those demonic creatures called "fact-checkers."  Because of the complexity and the versatility of the communication system available today, the Western society might manage to avoid the heavy top-down control that eventually led to the collapse of the Soviet Union. Just maybe.

The future is full of surprises and, who knows? It may even surprise us in a pleasant manner. We might perhaps escape the "Great Reset" and move to the "Great Awakening."

Monday, December 13, 2021

Lessons from the USSR Crisis - What brought down the second largest empire of modern times?


The collapse of the Soviet Union, in 1991, was seen in the West as a demonstration of the superiority of the Western economical and political system. In reality, the story was much more complex and the Soviet Union fell because of the same reasons which may cause the impending collapse of the West. This point was made forcefully by Dmitry Orlov, but he is not the only one who noted the similarities of the two systems. Here, a guest post by the Russian Scientist Svatoslav Zabelin. It is a revised and updated version of a piece that appeared in 1998. Zabelin is also a contributor of the book on the 50th anniversary of the publication of the 1972 book "The Limits to Growth," expected to appear on the market in March 2022.  

Lessons from the USSR Crisis

From “A time to seek, and a time to lose.” 1998.

 by Sviatoslav Zabelin


...there are no limits to development, but there are limits to growth.

Meadows DH, Meadows DL, Randers Y. (Beyond limits to growth. Moscow, 1994)

From the book by Donella H. Meadows et al. The Limits to Growth. New York. Universe Books. 1972.

"The world community is developing without any major political changes for as long as possible. The number of people and industrial production increases as long as the state of the environment and natural resources does not limit the ability of the industrial capital sector to provide investment. Industrial capital begins to depreciate faster than new investment flows. As its reserves decrease, food production and health care also fall, leading to a reduction in life expectancy and an increase in mortality."

1. The collapse of the USSR

The ecological and socio-economic macro-crises we are seeing are in one way or another a kind of crisis of the limits of growth. They bring a qualitative change that occurs sooner or later with any system where there is a quantitative growth of any parameter. These crises have not yet happened, in the West, and therefore for too many people remain an unknown and unimaginable danger, a speculative abstraction. 

However, how THIS happens, how IT can be, can already be studied on a concrete and recent example. The events of the 1980s and 1990s which happened to the USSR, its economy, population, and power system, are the result of the sum of several crises of growth limits in a highly isolated system from the world economy. The fact that the crisis was relatively soft can be explained considering that, with the end of the cold war, the USSR had become part of the world economic system that took care of at least some of the problems. Nobody really wanted the former USSR states to collapse completely, if nothing else because Russia was considered "the world's service station." But, if the global economic system starts collapsing, help from the Moon or Mars will not come.

First, it was the crisis of the limits to growth of the price that society can pay for the extraction of natural resources, as described as early as 1972 by the World3 model of a team of authors who prepared the report "Limits to growth" for the club of Rome.

"When the deposits begin to run out," it becomes necessary to use ever-increasing amounts of capital in resource industries, which reduces the share going to investment and growth in other industries. Finally, investment becomes so small that it can no longer cover even the depreciation of capital, and there is a crisis of the industrial production base." D. H. Meadows, D. L. Meadows, Y. Randers, V. V. Behrens III. The limits to growth.

The industrial system of the USSR "broke down" on the production of oil in the Siberian fields -- a vital export commodity on which the country survived during the era of stagnation, in the 1970s.  Then, production and proven oil reserves began to decline catastrophically, and attempts to maintain the achieved level found the USSR relying on outdated and worn-out technologies. In some industries, 70-80%, the main production tools were estimated as obsolete. 

The country's industry could not bear the memorable "acceleration" on such "horses", and in a few years Russia turned from a self-sufficient space power into a country where raw materials are exported abroad on an ever-increasing scale, and its processed products were imported from abroad. The result was that the production of consumer goods was replaced by imports, and the facilities for internal production were irretrievably lost. 

Simply put, the USSR paid for the growth of natural resource extraction by destroying the system of converting these natural resources into goods that people need, and even more simply, it paid for the destruction of most of the production itself, which resulted in unemployment, lack of funds for education, health, science, non - payment of pensions, and many other troubles that are common for all post-Soviet countries. And it is clear: where will the funds for education come from if the country's industry no longer produces something that can be sold?

Second, it was a crisis of limits to the growth of the money supply. In the U.S.S.R., the money printing press worked non-stop to pay for a huge mass of dead labor - to produce a gigantic quantity of weapons that were not sold to anyone, to dig canals that never paid off, to build reservoirs on the site of the most fertile pastures and arable land, and so on.

By the end of 1991, it turned out that they had printed several thousand times more than they "needed". And in 1992, when this money bubble burst, the country found itself without money, and every citizen had lost all the savings accumulated. In other words, the consequence of the industrial crisis left the country and its population literally left with empty pockets, without money to start a new life with.

Third, it was a crisis of the limits to growth, pollution of the environment in relation to the possibilities of human populations to tolerate it resulting in a catastrophic decline in the immune status of the population, a catastrophic increase in morbidity of newborn generations, lower life expectancy, increase in mortality and reduction in the number of Russians. The crisis caused by the placement of industrial enterprises in cities, deepened by the Chernobyl disaster, reinforced by the large-scale and stupid reliance on chemicals in agriculture and many other decisions of the Soviet government.

Fourth, it was a crisis of the limits of the increasing complexity of the managed system in relation to the control system.

The Soviet system of management was an extreme case of the 20th-century expression of a strictly hierarchical system of management of society as a whole, a management system where, in the end, the final decision depends on the ability of one person to choose the best option from the available or proposed set of options.

When it comes to accounting for the interests or managing the behavior of a hundred or a thousand subjects (people, businesses, battalions), this is still possible (provided that the decision-maker is smart and experienced, and his assistants, offering options, at least, do not seek personal gain). When subjects are numbered in the tens and hundreds of thousands, millions, and so on, no brain is able to make an objectively balanced decision. He can guess it, but the more complex the situation, the less likely it is to be guessed. As a result, in search of stability or in the name of survival of its constituent elements, the system under the leader begins to split into simpler self-managed subsystems.<>

One of the results of the crisis of the management system was the collapse of the USSR into its constituent parts, which at the beginning of the perestroika were objectively almost independent subjects with their own interests, which they defended in the fight against other similar subjects. First, there were the former republics of the USSR, whose transformation into sovereign countries was secured by the Bialowieza agreements of December 1991. Second, agencies that began to form industrial conglomerates, such as Gazprom, RAO, "EU Russia", etc. Another result of the crisis of the management system was a sharp reduction in the number of functions performed by the state, in the form of its taking care of most of the normal functions of social security of the population (education, health, etc.)...), as well as ensuring law and order.

With the country's bankruptcy, and then the persistent budget deficit, this process of simplification of state power was essentially irreversible and supported by the law of positive feedback:

  • lower budget - less ability to take care of the population, less ability to ensure order;
  • less care and order - less interest in paying taxes; worse with tax collection - less budget...

Of course, I do not pretend that the list of crises of the limits of growth in the USSR that I have given is exhaustive. But these crises are real and, from my point of view, obvious and understandable. All the causes of these crises, which led to the collapse of the "USSR" system, continue to operate in the global system, of which the fragments of the socialist camp have become an organic part.

2. The Future

The production of all types of natural resources, including energy carriers, continues to grow. And the growth of financial resources continues to outstrip the growth of production, determined by speculative play on the dynamics of the difference in the exchange rates of the world's leading currencies, the distribution of loans that have no prospects of repayment, etc.

"In the mid-and late '80s, global markets were gripped by financial fever. Financial and currency speculation carried out with the help of computer communication systems, turned into a game completely disconnected from the real economic reality." King A., Schneider B. The First global revolution. Report of the club of Rome. Moscow, 1991.

Environmental pollution from human waste continues to grow.

"Over the past 20 years, the number of natural disasters, primarily hurricane-force winds, and floods, has increased four times, the amount of material damage caused by them - eight times, and the losses of insurance companies associated with these disasters - 15 times, and this is a direct consequence of environmentally poorly controlled human economic activity," - said in one of the reports of specialists of "Munich Re", a German insurance company." Financial News. July 21, 1998

The complexity of the world economic system as such continues to grow in relation to the structures created to manage it by the UN, the World Bank, the World Trade Organization, etc. and sooner rather than later, all these crises will happen to humanity as "unexpectedly" as the ones described above happened to the population of the USSR. The World3 model predicts a resource crisis for approximately 2010-2015.

The self-destruction of the Soviet system was mainly reflected in the loss of the integrity and coherence of the system, which was replaced by the sum of economic, social, etc., subjects, who lost almost the entire set of familiar connections as they were known before.

Citizens have lost their former support and protection of the state - from crime, from diseases, from the elements, as well as pension protection, payment for public service, The same time, citizens have lost their usual connections with friends and relatives scattered throughout the crisis territory.

State authorities at all levels have lost the support of the population, lost the usual sources of income (both taxes from the bottom and subsidies from the top), and the usual levers of control.

Economic entities have lost established ties with their" neighbors " along the technological chain, with familiar consumers, sales markets, sources of investment, lost government orders, and lost ground in the form of a population able to buy.

The social consequences of an unexpected fall into crisis are most clearly shown in the example of Russia.

Escalating violence at all levels - from domestic to state, violence becomes the main lever of control: the power of law is everywhere replaced by the power of force, including the power of money, which is absent from the majority of the population.

The loss of science is not so much as a complex of knowledge, but primarily as a tool in demand by society for organizing life, interacting with the environment, etc., including in the field of health and education. Discontinuation of high-tech production, discontinuation of production of complex equipment.

Disruption of communications, primarily systems for the physical movement of raw materials, goods, and people. The safety of electronic communications turned out to depend on the production or purchase of computer equipment abroad that ensures their functioning, so it is also questionable.

Mass unemployment, the transition to pre-industrial forms of self-sufficiency in food and basic necessities, and life support in general. A sharp drop in living standards.

The increase in morbidity and mortality is most noticeable among young and middle-aged people: from stress, accidents, armed conflicts, and epidemics.

Of course, we would like to see developed countries, whose behavior largely determines the timing and scale of upcoming global crises, try this scenario on themselves. And if they don't want to do this, they would draw conclusions. But this is unlikely.

"In other words, a dispassionate person might have noticed that in a certain sense the nineteenth century in the West is still going on. In Russia, it ended; and if I say that it ended in tragedy, it is primarily because of the number of human victims that the social and chronological change brought about. In a real tragedy, it is not the hero who dies - it is the chorus that dies." Joseph Brodsky. Nobel lecture. 1987.

3. Lessons from the Soviet Collapse

From my point of view, it is important for residents of post-Soviet States to understand the following.

First, the "USSR" system did not lag behind, but overtook the so-called civilized world, becoming the first industrially developed country to survive the crisis of growth limits predicted by the experts of the club of Rome in all its various aspects.

Therefore, it is initially pointless to look for a way out of the crisis in the past or in the "West", since this has not happened before with industrialized countries. And the countries that reached the limits of the growth of natural resource exploitation at earlier stages of development simply disappeared from the face of the Earth long ago, leaving descendants only picturesque ruins.

That is why the sincere advice and recipes of leading Western economists, to their and our surprise, did not work for the former USSR republic, even if you cry, even if you laugh. And the economic revival is being pushed back and back to an uncertain day after tomorrow.

"Blind copying by developing countries of the path that the Western economy has taken is not a viable strategy, both from the point of view of ecology and for other reasons." King A., Schneider B. The First global revolution. Report of the club of Rome. Moscow, 1991.

Secondly, all the factors and causes that led to the crisis of the USSR are present and active in the global economic system. The crisis of the USSR is misunderstood as the defeat of one of the management systems (socialism) in competition with another management system (capitalism), and not as the defeat of the way nature is managed (including the use of human resources) inherent in our civilization.

Therefore, the global systemic crisis of growth limits should be considered an inevitable event in the near future, which should be prepared for in order to minimize suffering and losses. There is no reason to expect universal economic prosperity in the twenty-FIRST century. This century will be no less difficult than the twentieth. And it depends only on us how difficult it is.

Third, the population of post-Soviet States objectively finds itself in a winning situation, which it may or may not take advantage of.

In fact, due to external investment and foreign trade in raw materials, the decline in living standards was not so terrible. And at the stage of pre-crisis growth of the global economy, the standard of living in post-Soviet countries will grow or stabilize.

The relatively high average intellectual level of the population in principle allows you to understand what happened and draw constructive conclusions from it, that is, to learn from your own experience, which is incomparably easier than from someone else's.

External and internal resources, if desired, can be used to create infrastructure and production facilities that allow us to meet the global crisis more prepared (including significantly more prepared) than our own domestic one.

Fourth, in our experience, there are many forces for which the predicted development of events in the crisis scenario is objectively acceptable and even favorable.

These are almost all structures of organized crime. Perhaps with the exception of the drug mafia, whose profits are directly proportional to the strictness of prohibitions on the production and consumption of drugs.

These are manufacturers of low-tech battlefield weapons, the demand for which will grow.

These are any organized structures and groups focused on establishing authoritarian control over the population, including some associations that call themselves "green".

This also needs to be remembered by ourselves and reminded by others.

Fifth, looking at fifteen to twenty past years of crisis, we have every reason to say that the next wave of the crisis can be overcome if most of the population will be aware of the reasons for the crisis. If socially active citizens will understand that given the past you can come to a crisis armed with new connections, new relations, such that will help to overcome the crisis, preserving the best of our civilization.

You don't need to work miracles to do this. The elements of the constructor from which a new civilization is being built are scattered on the ground: you only have to bend down to pick them up, you only have to unite, reach out to each other to put these elements together.

If everyone adapts, we may not notice how the waves of history will carry away the mistakes and errors, the dirt and pride of our world, as one morning we will find ourselves on the other side.



Monday, December 6, 2021

Propaganda: the Doom of the Western Empire

This painting by Konstantin Vasiliev (1942-1976) celebrates the great patriotic war of 1941-1945 (Вели́кая Оте́чественная война́). It is a good example of Soviet propaganda at its best: sometimes it could produce stunningly beautiful images. But, on average, propaganda in the Soviet Union was primitive and heavily based on censorship, eventually turning out to be unable to keep together the Union in a moment of crisis. In the West, propaganda was much more sophisticated and, for a while, it managed to convince Western citizens that they were told the truth by their governments. That phase is now over and the Western propaganda system has moved to a fully "Soviet-style" censorship system. With this development, the Western Empire may well have sealed its doom: no government can survive for long if the people it rules don't believe in it.

“The devil's finest trick is to persuade you that he does not exist.” Charles Baudelaire

I distinctly remember when I was a child and my father saw me reading a small book illustrated with images showing red flags, sickles, and hammers. Worried, he took it from my hands, looked at it, and gave it back to me. "It is all right," he said. "It is our propaganda." 

What I had in my hands was an anti-communist pamphlet of the 1960s, issued by the Christian Democratic party. I remember it well, it was full of images of evil Soviet Communists slaughtering their own dissidents, part of the general anti-communist propaganda in Italy of the post-war period. 

At that time, it was still fine to state openly that something was propaganda. And it was normal in a bi-polar world to be expected to believe in the propaganda issued by one's political side while despising the symmetrical propaganda issued by the other side. 

Things changed over the years. With the Soviet Union spiraling down into a crisis from which it would not survive, its propaganda system revealed its limits. It is the basic problem of censorship: if you have to suppress contrasting opinions, it means that you have something to hide. The Soviet public understood that very well and it maintained a healthy dose of skepticism toward anything that their government was telling them. They still do.  

In the West, instead, the propaganda system evolved into a more and more sophisticated instrument that even managed to elevate itself into a "non-propaganda" system by abandoning censorship. In this way, it managed to convince most people that propaganda did not exist in the West (the devil's finest trick, according to Baudelaire). 

Consequently, Westerners started to believe that their "free press" was providing them with objective and trustworthy information, unlike the state-controlled press of those evil Soviets. That was truly a triumph: still today, the naïve trust of Western citizens in the media baffles the people who lived on the other side of the Iron Curtain. 

But things keep changing, as they always do. The apparent triumph of the West turned out to be hollow. Now, the West faces the same problems that the Soviet Union faced at the time of its demise: how to maintain the cohesion of a large group of states and populations which don't find it attractive anymore to be part of an empire?

One consequence is the return of rather primitive propaganda methods to support the military control of the Western sphere of influence. During the past few decades, the West started using a series of "shock and awe" propaganda campaigns designed to demonize foreign governments, and to open the way for their military elimination. Saddam Hussein was the first victim, others followed. The mechanism is still in operation, although it seems to have become less effective in recent times.

During the past two years, the Western propaganda system underwent a further evolution. Under the banner of fighting "fake news," it started to enforce a pervasive Soviet-Style censorship system over the Web, coupled with the complete government control of the media. Propaganda has become truly all-encompassing and brutal, at present taking as a target for demonization the so-called "anti-vaxxers." 

Why this evolution? Everything that happens, happens for a reason. And it is clear that the West is reacting to a major economic, environmental, and resource crisis. As it happens to all societies in crisis, it reacts by trying to tighten the links that keep the system together. But these "solutions" may well be worsening the problem. 

It is a well-known story, noted perhaps for the first time by the founder of System Dynamics, Jay Forrester. When people find themselves in trouble, they are normally able to identify the elements that cause the problems: the "leverage points" of the system. And almost always they tend to act on these points in such a way to worsen the problem. 

In this case, the evolution of the Western propaganda system into a censorship-based Soviet-style apparatus may temporarily be effective, But, in the long run, is destined to have disastrous effects. Eliminating dissent looks like a good idea by the elites in power, but it has a deadly consequence: it "freezes" society into a rigid structure. Rigid means fragile, as those who work in materials science know very well. In this case, it becomes impossible for society to adapt to new problems except by collapsing: it is the "Seneca Effect."  

Most Westerners have been taken by surprise by this rapid change in the management of a communication system that, up to just a few years ago, glorified "freedom of speech." They seem to refuse to believe in what's happening, even though they see it happening in front of them. They still have to develop the memetic antibodies against propaganda that the Soviet citizens had developed long ago. But, as they are fed more and more blatant lies, eventually they are going to develop a certain degree of immunity. 

And that's the basic problem: no government can exist for long if the people it rules don't believe in it. That was the doom of the Soviet Empire and it may well be that the Western Empire has sealed its own doom by destroying its free press system of which it was justly proud. Without an internal method to critically evaluate the government's decisions, huge mistakes -- even deadly ones -- are unavoidable.

What form the doom of the Western Empire will take, and how fast it will come, is difficult to say. We may just remember Seneca's statement that "increases are of sluggish growth but the way to ruin is rapid." 

On this subject, see also Simon Sheridan's "The Twilight of Narrative"  and Franco Bifo Berardi's "Rassegnatevi" (in Italian)