By Lambert Strether of Corrente.
The post title is taken from the lyrics to the Beatles’ “Back in the USSR,” which sadly I cannot include for copyright reasons. For those who came in late, USSR stands for “Union of Soviet Socialist Republics,” a federal, multinational, and multilingual empire of continental scope, ruled by a police state and administered by a sclerotic party apparatus using an unworkable economic theory[1]. For those of you who are saying “Wait a minute. That reminds me of something…”… This post is for you.
Now, we have actual Soviet and Russian experts as contributors to Naked Capitalism, and I couldn’t compete with them analytically on the causes and consequences of the fall of the Soviet Union, even if I wanted to. The thrust of this post is a little different: I want to open your minds to the idea that the United States shows serious signs of dissolution, just as the Union of Soviet Socialist Republics could be seen to show when looked at through the eyes of the New Soviet Man or, as we say in this country, the “consumer.” So, I’ll present some classic images of Soviet decay, and then present American parallels.
Exteme Queuing for Basic Services
The USSR was famous for its queues (via):
We have our queues, too, though they’re not necessarily so visible as in the USSR. Take ObamaCare — please!
Yves frames many useless, but rental extraction-enabling, mechanisms as a tax on time. For example, you can take a day to figure out which policy you should purchase, and you can be additional hours on the phone straightening out the policy with the insurer, and many hours straightening out any billing errors. So who do you invoice for all those hours you spent, that you would rather have spent doing some more pleasant task, like getting your teeth pulled, or cleaning your refrigerator? Nobody. That’s why it’s a tax on your time, levied on you by neoliberals because markets.
Michael Olenick describes this queue in “‘Conversation with the Receptionists’ – An Obamacare Skit”:
Receptionist: Beegbaux Medical Clinic, can I help you?
Newly Insured: Hi. I have a new Obamacare policy and I’d like to schedule a visit.
Receptionist: Who is your insurance with?
Newly Insured: A company called Corporate Welfare Assurance Company. You’ve seen their ads on TV, ‘The President’s giving you CWAP so sign up!’
Receptionist: Duh: don’t you read the news? This is a respectable medical clinic: we don’t take CWAP here.
Newly Insured: I pay 18% of my gross salary for quality affordable healthcare. I’ve had a strange looking growth for ten months but after scheduling an appointment under my old plan my last insurance company dropped me before I could show up.
Receptionist: All that is very interesting and I can relate – despite working in a medical office I have ACA CWAP insurance myself — but there’s nothing I can do. Bye. [Click sound]
[Cut to a montage of various receptionists for each line]
The queue may not be out in the street, but it’s still a queue!
Prices That Do Not Send Signals
Many economists (for example, those at the St Louis Fed) believe that a “command economy” like that of the Soviet Union cannot match supply to demand absent a price system:
A shortage is a situation in which the quantity demanded of a product is greater than the quantity supplied. In a government-run economic system, the government would most likely attempt to increase the quantity supplied by dictating that firms produce more gasoline. The government would also likely restrict the quantity that consumers could buy. This would take an extensive bureaucracy of people to provide a massive amount of information, to plan and direct resources, and enforce the new rules. Even then, the amount of gasoline produced might not match what consumers really wanted or what firms could produce efficiently. This kind of mismatch was an ongoing problem in command or centrally planned economies, such as the former Soviet Union, where government planning agencies tried, and failed, to effectively manage the economy.
Hence these ladies selling their own vegetables to supplement what the USSR’s centrally planned collective farms could not produce (via):
But we have our own dysfunctional pricing systems. I’m happy to hoist this comment from reader LaSherri, who tried to challenge a medical bill. Her comment reads in relevant part:
I have been with United Healthcare since 6/2016 (previously was with BC/BS Anthem). I recently wrote to United Healthcare, my state medical board and providers (all within 1 group)…. I detailed my treatment experiences with the providers from 2013. In particular, I went to an ER for dizziness for a week (3 days I had to move around on my hands and knees hugging the wall). I was there for 3 hours, and the bill was over $2,000 even tho there wasn’t any treatment rendered except some Zofran for nausea (and this was after markdown of costs in accordance with the insurance company). They did an EKG and a CAT scan since I have migraines. I was released with a prescription for meclizine and told I had benign paroxysmal positional vertigo and nothing could be done. I requested 3 times an explanation for the high bill (wanted the codes) as there were 2 ER charges, 5 chemistry charges, 2 med/surgical supply charges, 2 hospital services, among others. I was never supplied with anything. There were numerous similar instances listed in my 4-page complaint to the state medical board, etc. I was contacted via CM, RRR letter a month later by the physician conglomerate and informed they were requesting all reports from all departments and would schedule a meeting with me after receipt (and they gave a deadline for the reports). Over a month past the deadline, I received another CM, RRR letter from the physician conglomerate to inform me that the deadline was extended, and they still wanted a meeting. That deadline has also since passed. About 2 weeks after my complaint, I received notice from the state medical board that they were investigating. I think this is why I received the first CM, RRR letter to cover their butts. I also believe the extended deadline is to provide the physician conglomerate time to see who the state medical board finds in favor of.
LaSherri’s experience is by no means unique, as other readers have testified. Does this sound like a functioning price system to you?
A Corrupt Nomenklatura
Finally, the Soviet Union was famous for its bureaucrats (“nomenklatura“), not all of whom got to ride in limosines, but we’ll use the Zil as a symbol anyhow, since it’s never easy to hold somebody accountable if they go to and fro in a limo (via):
This last year has seen a constant drip-drip-drip of stories about unaccountable bureaucrats in this country, not all of them from the national security state:
The IRS pursued hundreds of cases from 2012 to 2015 on suspicion of structuring, but with no indications of connections to any criminal activity. Simply depositing cash in sums of less than $10,000 was all that it took to arouse agents’ suspicions, leading to the eventual seizure and forfeiture of millions of dollars in cash from people not otherwise suspected of criminal activity.
The IG took a random sample of 278 IRS forfeiture actions in cases where structuring was the primary basis for seizure. The report found that in 91 percent of those cases, the individuals and business had obtained their money legally.
They just reach right into your pocket and take your money!
The Police: “Civil asset forfeiture: Tracking the cash seized by police in a Deep South state where transparency is not required”:
Each year, law enforcement agencies seize billions of dollars in cash and other property from potential suspects – some of whom are never convicted or even charged with a crime – through a process called civil asset forfeiture.
Civil asset forfeiture laws originated and grew during the 1970s and 1980s as a way to fight drug trafficking. They have created a lucrative revenue stream for law enforcement agencies, one that grew from $94 million in 1986 to $4.5 billion by 2014, according to the Institute for Justice.
But drug traffickers are hardly the only people targeted. Often, the targets are simply people carrying cash who are stopped and searched by suspicious police.
Many times, the individual cash amounts taken are so low that it isn’t worth hiring a lawyer or taking time off work to go to court to get the money back. And sometimes, people are intimidated and unwilling to even ask about getting their money back.
Again, they just reach right into your pocket! And lest we think it’s only the organs of State security that can do this:
The Banks: “Wells Fargo Gets An Additional $110 Million Wrist Slap Over Fake Accounts Scandal”:
On the one hand, it’s frustrating to see Wells Fargo, which engaged in a remarkably large-scale, brazen fraud by opening as many as 2 million fake accounts to keep its stock-boosting cross-selling story going, get away with penny-ante costs. The initial joint regulatory fines of $185 million, combined now with an additional $110 million settlement of some private suits, seems skimpy.
But even though Wells opened tons of bogus accounts, it levied bogus fees in a smaller number of cases. Those charges didn’t add up to big bucks. While customers suffered all sorts of other harm, like possible damage to credit ratings (opening more accounts, or even just pulling more credit reports, are a demerit) and the hassle of fighting Wells to close phony accounts and get rid of fraudulent charges, regulators and courts see those costs as too intangible to be worthy of compensation.
It’s the same thing! They reach into your pocket and take your money! Because they can! As if the United States were some Third World country!
Conclusion
Of course, there’s also the drop in life expectancy in post-Soviet Russia, mirrored by the drop in life expectancy in this country two decades later, as shown by the Case-Deaton studies. One more from the USSR (via):
From bottles and cigarettes to needles and white powders. Never let it be said that the arc of history does not bend toward justice!
NOTES
[1] The USSR dissolved itself in 1991; cf. “How It Could Happen” from The Archdruid. The “unworkable economic theory” was not neoliberalism.
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Something else that would appear as a parallel is the skepticism that the populace had for what the state press would publish which hardly matched up with what was happening at the ground level.
The major difference is that there is still access to alternative news sources but the major conglomerates are doing whatever they can to stomp them out – such as YouTube’s demonetization of videos that may cause slight heart palpitations
Youtube giveth, and Youtube taketh away ;-( You never thought you were free … did you … citizen? The US hasn’t been free since about 1940, with the WW II period draft, and all the changes made to ordinary worker rights during that war, and the always growing burden of contribution plans like SS and Medicare. You can’t survive in an era of totalitarianism, without mandatory freedom, especially the freedom to do as you are told ;-)
>” the always growing burden of contribution plans like SS and Medicare”
Can you expand and clarify what you mean by this?
Every dollar taken from the economy for government programs … is taken from “productive” economy. Of course some of this is necessary .. see military. But you don’t need as much military if you aren’t militant. But dolling out government favors to corporations is much more productive than dolling out government favors to individual voters. The money put into SS and Medicare are entries on a ledger .. never have been more than that .. the income from individuals and business for SS and Medicare .. are spent the year they come in, usually to cover IOUs from prior years. There is no big vault where all the SS or Medicare money is kept, separate from the general funds. If the employer contrib to SS was added to my contrib to SS, and added to my Medicare contrib, that would amount to about 20% of income. And I already pay at least that much in regular Federal income tax (we won’t even count state and local taxes). So about 40% of my income that I would have disappears before I ever see it. If the employer keeps their SS contrib, then that goes to their bottom line, and I am then estimating I am losing 33% of my income before I ever see it. That is a big chunk. BTW – so far Medicare has paid for a part of my mother’s senior expenses, but not all. Nursing home, as long as you have an estate, goes month by month to the nursing home. So part of this does go for a good cause. And my mother still collects SS on my father’s contrib, but only at half rate. It was enough to get by on, until the big medical and nursing home costs kicked in. In a manner of speaking, retirees are a drain on the economy, but the government takes a big fat chuck of that as a processing fee before the doctor sees it.
Now that is assuming you accept the consumer model, that it is consumer spending that represents the real GDP, not financial manipulation, not government war mongering.
This is pure garbage you are peddling. It’s the anti Social Security propaganda republicans have been peddling for decades.
Actually, if you believe the consumer model, Social Security is extremely productive. Similar to SNAP the majority of it is spent right away on things that are local – housing, food, medical, transportation, nursing – by the Seniors, minors, and disabled. Sure, there are a percentage who can put that away and ignore, but unlike say the top management and shareholders of Raytheon who suck a whole lot of the money out of those contracts and now our insurance companies with regard to ACA and…, that is a small percentage of Social Security beneficiaries.
I would also point out that almost everyone making this argument is less likely to spread that percentage of their income being taken in FICA around making things grow locally. They are likely to throw it down the already overheated ‘financial investment community’ as they bank it as stocks or bonds. Oh, and you can also say that since the funds collected are going to help pay for those mentioned above Raytheon contracts without raising taxes,AND that with few exceptions a lot of the people who buy Peterson’s bull are in that middle tear of the not being in the 0.01% they would be the ones paying more in taxes for it without even getting the benefit of that walking around check later.
But you keep believing that 1.) you can better invest your money, and 2.) that they would let you keep it even if they do manage to get rid of Social Security.
We have a lot of problems. But funding SS and Medicare are not among them. That’s a neoliberal talking point not supported by the evidence.
On paper, SS and Medicare are OK. But they have a lot of problems, maybe you don’t. Medicare fraud is huge. But as I pointed out, there are only fake accounting entries representing contribution plans … the money actually gets spent the year it comes in, as part of general revenue, to pay IOUs from prior years. With fiat money (no gold or silver standard) accounting fraud is very easy for the government to accomplish. And they are the biggest of the TBTF. Nobody is going to arrest Congress for white collar crime.
Information about Social Scurity
How is Social Security funded?
Social Security’s revenue was about $957 billion in 2016. The program has three sources of income. The largest source comes from workers and employers who contribute 6.2% each on wages up to $127,200 a year; this raises 87% of the total. The second source is investment income from Social Security’s reserves, which are held in Trust and invested in interest-bearing U.S. treasury bonds; this raises 9% of total revenue. Finally, Social Security gets 3% of its revenue from the taxes that beneficiaries pay on their Social Security benefits.
Where does Social Security’s surplus go?
Social Security’s surplus is in a trust fund that is invested in interest-bearing government bonds, backed by the full faith and credit of the United States.
Isn’t the trust fund just a bunch of IOUs?
No, unless you consider U.S. savings bonds mere “IOUs” or the green stuff in your wallet worthless because it, too, only has value because it is backed by the full faith and credit of the United States of America. The Social Security trust fund is fully invested in U.S. treasury bonds.
Is Social Security going bankrupt?
Social Security can never go bankrupt. Nearly all (97 percent) of its income comes from the contributions of workers and employers, or interest on these contributions. Hence as long as there are workers in America, Social Security will have income. Even if Congress were to take no action, Social Security could pay 100% of promised benefits for the next 17 years, and more than three-quarters of benefits after that. Around 2034 there will be a modest funding gap requiring modest increases in revenues to guarantee everyone 100% of promised benefits.
Medicare fraud
There are others here at NC who can speak about fiat currency and spending, not me, but I think Medicare fraud is due to fraudulent billing by providers or by entities falsely claiming to be providers (LINK), and not related to how the currency functions.
Long-term care
It’s true and outrageous that Medicare doesn’t pay for long-term care and that ordinary people must spend down any modest estate or have it clawed back from their heirs, while the 1%’rs sucking up all the country’s wealth pay little or no estate taxes. HR 676 – Expanded and Improved Medicare for All covers long-term care. Contact your Congressperson to support this bill.
Actually, it is an IOU called “Special Issue of the Treasury” it is simply a receipt for the $ 2,700,000,000,000 (according to the looters). There are no bonds to be redeemed. The stolen money will have to be restored through the normal, budget process ….if I need to explain what that means, you should avoid sophisticated sites like NC.
….if I need to explain what that means, you should avoid sophisticated sites like NC.
————–
Good advice, indeed. Fortunately, we know how to do google searches and find the SSA site.
https://www.ssa.gov/OACT/ProgData/fundFAQ.html
https://www.ssa.gov/OACT/ProgData/specialissues.html
Also, this is about the 100th time I’ve posted simple factual responses to this kind of Pete Peterson propaganda that has been going around for at least 40 years and refuses to die.
I’m really beginning to wonder why that is necessary.
Because the formal government accounting doesn’t provide the whole story? And because most of the folks advocating for more federal spending tend to pretend that the debt owed to the Social Security trust fund isn’t real, so the national debt/GDP ratio isn’t already too high to tack on a few percent more?
Considering that the actual “Debt to the Penny” national debt tends to increase much more rapidly than the nominal “budget deficit”, the federal accounting practices are deeply suspect.
Thus many of us justifiably do not trust the current Congress or Administration (nor any recent Congress or Administration) to do the right thing for the public in this situation.
Note: That doesn’t mean the Peterson schtick is correct either. Don’t try to shove straw men in our faces. (P.S. your “40 years” is BS. 35 years ago there was no trust fund, and in 1982 Social Security was actually running deep in the hole until Congress patched it up with the current scheme.)
Fortunately the whole confusing debate is expected to go away within the next 20 years, since the “trust funds” will be depleted as expenditures continue to outpace contributions.
Ah. A gold bug. A fundamentalist believer in the magic metal God. Be happy there’s no gold standard or you would likely not exist. A gold standard means NO way to deal with economic downturns, no way to ensure people don’t starve, literally, on the street. There is no limit, real or imagine, to the amount of fiat money that can be “printed” and it doesn’t cause inflation to print loads…UNLESS the economy is at full capacity and/or employment is at 100%.
So do tell how ANY economy in the known universe is anywhere near full capacity or full employment right now, or has been in the last 70 yrs. We are nowhere near either so there is a lot of space for the govt to simply print and distribute money as desired or needed. It SHOULD do so now. It SHOULD simply find SS without any contribution from workers (only from the rich, as a tool to decrease income inequality). Same goes for Medicare. The only people who should have to pay any fees for medical service are the wealthy, to serve the social benefit of decreasing income inequality and the instability that causes. Same with Federal taxes!
The govt is NOT funded via a single tax dollar. It is fully self funded. Federal taxes are ONLY a useful tool to encourage certain social benefits and to discourage damaging pursuits. Tax the wealthy (to reduce income inequality), tax inheritance (to prevent aristocracy or the self-created belief that recipients may acquire that they are aristocracy), tax families that have more than 2 kids (to prevent overpopulation and the overconsumption, pollution, habitat destruction that it causes), tax luxury purchases (second homes, vacation homes, limos, yachts, private jets, Ferraris, etc), tax corporations, etc. The only govts that require taxation to find operations are State governments because they cannot print currency, that’s it.
Any time any country had a gold standard, they played games with it to get out of jams. Look up 4th century Rome’s debased coinage problem. Britain after the world wars. Nobody sticks to a strict gold standard, because it gives zero flexibility in emergency- especially the emergencies regularly produced by finance capitalism.
Gold bugs have the mistaken religious belief that gold-backed currency is somehow stable and immune to depressions,etc, when the FACT is that economic depressions have occurred most often in history in systems using a gold-backed currency. The obvious conclusion from objective reality is that gold-backed currency is shit and is NOT better in any way, shape, or form to fiat. Fiat has the benefit of being able to support the funding of MUCH more useful pursuits than gold.
Gold has very little objective value. It is useful in small amounts in electronics. It is useful in small amounts in biology (I used dodecagold molecules to label proteins for x-ray crystallographic analysis. Makes it easier to pinpoint specific amino acids in a protein chain…but then so does mercury or selenium. So gold is about as useful as mercury and selenium in real world use.
Bangles don’t count as valuable or useful.
There’s at least one other purpose, which is to establish a value for the currency. With my “worthless” dollar bill, I can pay one dollar’s worth of taxes. Think of it as an inducement to stick to the issued currency, and not invent one’s own.
Otherwise, spot on.
Dear Disturbed:
You were sort-of rigtt uintil recently, FICA used to go into the general fund. In the last year or so, the need for funds to write social security checks has become just large enought that FICA funds go directly to that purpose. Damn retiring boomers!
The shortfall is now just enough that the the social security administration has to deposit trust fund bonds to make up the small difference
This pulls money out the the general fund automatically to make up the missing amount.
This is why some Republiicans are having a hissy-fit: They can’t act like deadbeats (as some would prefer) without destrying the full faith and credit thingy, and a lot of people who invest in government bonds take that real seriously.
My thought – the alternative news sources exist because our elites are learned a little from USSR history. If the only news you get is gummint propaganda, then the frustration is focused in only one direction. If there are rags and tags scattered from left to right, then you can keep us fighting amongst ourselves.
Worse … the best opposition is controlled opposition. “They say” that the majority of Black Panthers at their meetings were FBI agents. Much of the alt-right press is government run … Alex Jones in particular.
If I understand what you said about alt – right press like Alex Jones , then this is the first thing you posted that is accurate.
Is this a Robert Conquest blog? Lines were non-existent until Gorby’s market reforms destroyed the planning; the lines in USSR were a result of everyone having entry into goods and services; prices were subsidized in a period before computerization; the USSR did not fall, it was dismantled by a nomenklatura that saw more benefit with their bourgeois counterparts in the West. (Read Katz’s “Revolution From Above”)
One of the ironies here is that, since bigger insurance pools are generally better, it’s our federal government that has the best chance of delivering health care dollars efficiently. Yet we (as a country) eschew this idea because it’s “socialism”, and thus, bad.
Tractors and rockets might be better made in a proper market system, but there are some things that can’t be, and I wish we had a clearer understanding of this.
Bigger insurance pools…generally better.
Do we dream of a universal health care for all through the United Nations?
“In this local universe, everyone is covered under Local Universal Health Care.”
And one day, it will cover when you visit Mars.
I’m all for a world wide healthcare system if it is like the French system. Best in the world. No out of pocket, no lines, can get MRIs out PET scans as needed, better outcome than anywhere in the US.
Same here, though I’d also take Canada’s over ours. I don’t know if the UN is capable of such a thing, but the idea of the whole world having a health care system that anyone, anywhere has access to is very appealing.
Russian writer Dmitry Orlov has in fact written an entire book on just this subject: “Reinventing Collapse: The Soviet Experience and American Prospects” (2011). In it he argues that the American empire is headed for the same kind of collapse as the Soviet Union experienced, but that Americans will have a harder time of it as we’re much less self-sufficient both individually and as a society as a whole.
Just found a used copy (in “very good condition”) at http://www.betterworldbooks.com for $4.68. Thanks for the recommendation!
Thank YOU for using Better World Books. I volunteer at our local library and we send many of our discarded books to BWB and they PAY us for them. So their business helps support libraries : )
Yes, he likens it to falling out of a several stories high window, as opposed to falling out of a ground floor window. People were used to getting by with less and so when the USSR collapsed (economically, not in any other way) people didn’t have that hard a time of it. Not to worry, the gradual diminishing of expectations that’s being conducted right now should help us along.
good book to read to re-evaluate your mode of living
Thank you very much for this, Lambert. I am in the late stages of an anthropology doctorate and have been studying the Soviet Union and its legacy for nearly a decade. The parallels between the U.S. and the late Soviet period have been becoming more obvious with each passing year. I especially think that your emphasis on the out-of-touch character of the elite nomenklatura is on point. To me this stands out as one of the primary reasons for the Soviet Union’s dissolution. It was their increasing desire to emulate Western consumption, their appetite for foreign goods, and their own loss of faith in the Soviet project that was instrumental to tearing it apart. In Central Asia, where I’ve done most of my work, it is rarely the Soviet Union per se that is the subject of critique, but rather the actions of its leaders, who lived in an increasingly insular world with its own set of institutions and norms, their own resorts, their own stores, etc. apart from the rest of the population.
There are important differences with the contemporary U.S., however. Despite hiccups and shortages in many areas of the economy, the late Soviet Union did a very good job of ensuring access to basic goods such as food, housing, and medical care. Even with quotas and shortages, my sense is that the average person had far better access to these things in the USSR than many people in the U.S. do today. i.e. You could not always get an apartment in central Moscow, but you would have a place to live somewhere in the country. The planned economy did a very poor job at providing automobiles and “consumer goods,” which many came to desire, but it did a very good job at providing basic welfare, especially in its later years. It’s critical to emphasis this point so as not to fall into the narrative of capitalist inevitability, what Francis Fukuyama called “the end of history.” I don’t think the Soviet Union’s end was inevitable and it could have been managed differently if the interests of the broader population rather than the elites had been the focus of concern. (There are also important differences across regions: the Baltic states, Ukraine, etc. had a much more hostile relationship to Moscow than did Central Asia and the Caucasus; a lot of this nuance sometimes gets lost in discussions of the end of the USSR in which Eastern Europe looms large in the U.S. imagination).
The more important parallel, it seems to me, is what the post-Soviet situation can tell us about our own near-future. The experience of the Soviet Union’s end left people in a state of shock and surprise. It also exposed the way in which so many social institutions only work to the extent that people believe in them or at least act as if they believe in them. It is a profoundly disorienting sensation and I think that that is where some of the greatest parallels between the end of these two different empires will be most pronounced.
Something you might look into: When I was in college and studying anthropology, about 1967, I was told there was an Indian (from India) anthropologist doing fieldwork in a small town in the greater midwest – Missouri? I never followed up and found his monograph, but it’s probably out there, and there should be many more like it.
So, the bigger question: is there ethnography of the US, done by cultural outsiders? It should be very revealing.
And best of luck with your degree.
Speaking of ethnography and the end of the USSR, I recently published an ethnography titled, “East German Intellectuals and the Unification of Germany: An Ethnographic View.” Although most East German (GDR) intellectuals wanted their nation to remain a socialist nation and move towards merger with the West Germans slowly, the majority of the people -“the workers”- were fed-up with the socialist party that had been ruling the GDR since the end of WWII. (They voted for immediate unification, and then many of them regretted it when capitalism arrived.) However, virtually all GDR citizens viewed the government as out of touch with social, political, and economic realities. The government was delegitimized by 1989, yet the manifestation of this sentiment occurred rather rapidly in contrast to its decades long gestation. Of course, unification is a nuanced and complex story due the fact that -unlike other Warsaw Pact nations- Germany divided into two nations with different cultural cosmologies during the Cold War. These differences never got discussed, let alone resolved; and this is why West Germans complain that East Germans suffer from Ostalgie and East German note the hubris and discriminatory conduct of many West Germans.
Etnog
Confused…ussr politboro & military had created great animus among muslim southern flank provinces with its bombing of muslims in Afghanistan…not that the blob did not help, but the advent of cheap/affordable still & video cameras, along with the vcr removed the power of the govt approved media to control the narrative…with porous borders along the muslim provinces, the central committee had lost control of the Soviet union and was not prepared to revert to Stalinist retributions to regain control…
As to the main question…there is no breaking up america…russia spans two/three continents and had a very distinct religious divide with borders across dozens of countries…with enemies on all sides working to disrupt it…
Neither canada nor mexico have a navy, air force nor army of any real consequence and except for opportunistic economic activities, do not have any history or inkling of wanting to disrupt the u.s. of “ay what you lookin at”
Many parts of the country have been economically abandoned and most state and local govts are led and fed by failed attorneys hiding their incompetence on the bench or in elected office…
Things are not as they should be, but most people will suffer and live rather than fight and die…
We don’t have all the loose ends which brought the soviet collapse…and sadly, we killed off most of those who were here before us, taking advantage of their own disunity and discooperationalism to slowly eliminate them in the quest for sea to shining sea…
The world is not full of people who are looking to pay tens of thousnds of dollars to be illegally entered into russia for its “opportunities”
We are stuck with each other…
I don’t think he was saying “fight and die” I think he was talking about a huffy split into a group of autonomous regions with some sort of defense contract (hell at 1+ bil/yr the military is a country unto itself, no?)
And in fact Imperial Washington would clearly be happy to divest itself of everything but the shiny brass. They’d be more than a bit disappointed about how the half-dozen regions would regard “defense” theories that say killing 35 nobodies 1/2 world away with a 16 million dollar bomb is the greatest thing ever but they are so stupid it wouldn’t occur to them until it was too late.
Also we haven’t had other countries helping us along towards collapse, as the USA did to USSR through the USA creation of Taliban/ISIS to stir up and support anti-Russian conflict in Afghanistan.
This was a deliberate strategy and one that has been documented. I think Kissinger took credit for it.
But in having created the monster, we have lost control of it. Oh I am aware that much of our “terrorism” problem have been goads for unpopular but desired actions, but not all. And real terrorism here AND gorilla fighting in areas we would rather not be wasting time and money having to continually reestablish control are very telling that as with so much our betters have been blind to long term consequences.
The parallels are not exact regarding the pressures, but unfortunately the similarities of the arrogant and oblivious nature of the leadership classes probably will dull any advantage in the current situation.
You make good points – and accurate ones. Indeed, the access to basics was much better. Of course, people always want stuff (and more stuff). USSR’s demise was by no means inevitable – and I don’t think we have the entire story out yet. So it is quite premature to make any kind of sweeping conclusions. In fact, near the end (the exact year eludes me), there was a referendum on whether to continue with the USSR and a vast majority of the people voted in the affirmative (even in the Ukr. areas; not sure about the Baltics, though). There is a story – repeated by many people – that one day, the leaders of Ukr., Belorussian, and Russian (socialist) republics got together, got really drunk, and by the early morning, USSR was no more. It was not something that most people really wanted – even though it cannot be denied that a certain malaise had set in and the system was in no shape to respond effectively. Also, economic pressure from the west cannot be discounted (persistent, deliberate, and comprehensive), plus the dispiriting effects of the Afghan war. This topic is way too complex to dispense with in just one post… but it is good that it has been raised.
Yes, in my experience people talk often about the referendum and the surprise that despite the affirmative vote things nonetheless broke up so quickly. I’ve also heard the story about the Ukraine-Belarus-Russian leadership deciding the matter, quite possible while inebriated. ;)
Of course you’re right to note that sweeping conclusions are not especially helpful here, everyone tends to have their own favorite story about why things ended the way they did and none of the narratives are definitive.
Alex Morfesis’s point that the Afghan war was especially draining is also valuable, I think, though I just don’t buy the story that there was “great animus among the Muslim southern flank.” Obviously there were substantial differences by region, but I’ve spent years with Tajiks not far from the Afghan border and there is no visible animus, hardly even a trace of one. Opinions and times change, but Tajiks were among the least eager of the republics to see a break-up of the USSR. Tajik is very close to Afghan Dari and I knew a man who had served as a Russian-Dari interpreter during the Afghan war. He had some horrible experiences, but even he did not attempt to blame the fall of the USSR on the Afghanistan conflict. Most of the Muslims in these regions saw themselves as equally Soviet and Muslim.
You raise great points about the demise of the USSR although it would be great if you could dig deeper into an analogy with the USA.
I think the key point that you make is how easily a large and complex social system may fall once a certain number of people stop believing in it or stop pretending to believe.
I have the impression that authoritarian social systems (i.e. all social systems with a State) have two layers of containment: ideological and coercive. If too many people fail to be contained by the ideological layer there is still the coercive layer and with that in place the system may go on for quite a long time with great effort until it builds new ideological layers.
A system then collapses suddenly when the coercive layer itself ceases to be contained by the ideological layer, as in the police and military losing faith. To me this is the crucial element. Without ideological failure at the coercive layer the system still may collapse but it will take a very long, protracted process of warfare, which may in the result in having the system survive for yet another long period.
Yes, that would be my assessment, too…
The “great animus” bit is way overblown
(Not to forget, also, that just like in the case of Syria, USSR was invited by the-then govt. of Afg. to come help it with the “rebels.” Not that you’d know it from the western media reporting.)
Also, the great irony of the Ukraine is that in USSR, it was the richest republic, developed and productive… it has only gone downhill since then.
And to Ruben’s point – there are certainly at least two stories here (if not more) – one, the demise of USSR as an economic and political entity (the specifics of it) and two, a more general story of a civilizational collapse (along the lines of Peter Turchin’s analysis).
All these are fascinating topics (and very instructive) that deserve a lot more attention.
Re: “Even with quotas and shortages, my sense is that the average person had far better access to these things in the USSR than many people in the U.S. do today.”
I know people who visited the USSR in the late 1980s, who would disagree very strongly with this claim.
Unless you mean different demographic segments when you refer to “average” in Russia and “many people” in the USA?
Americans today aren’t going hungry en masse due to lack of food availability; 14% of SNAP spending is on soda and junk foods.
In the 1980s the USA was jokingly referred to as the only place in the world where poor people had parking problems. Because the poor elsewhere did not even have cars.
Also, if you look at the USSR’s history of food production, you’ll discover that in the 1970s the USSR was a huge net importer of grains and other foods… one presumes this was because the USSR could not grow enough to feed its own people.
Those years had low rainfall. USSR was second only to the USA in foodstuff production. (UN Factbook)
The economy decreased 15% by 1990 due to Gorby’s market reforms.
Perhaps we should change our name to the CCSA.
Corporate Capitalist States of America.
CCSA.
Thanks for posting this, Lambert. Like many others, I’ve been thinking about how the US has been following a similar downward path as the USSR. I recently read “Armageddon Averted” by Stephen Kotkin, who pointed to the following reasons for Soviet collapse:
1. Economic stagnation (no incentives for workers, stalled productivity, R&D diverted to military applications, inflexibility and high costs of the heavy industry physical plant)
2. Elite apathy on the communist project (who saw they could make more money under capitalism while retaining power in a new regime)
3. Degradation of public health and morale (popular cynicism and civic disengagement, escalating drug, alcohol use, illness, and disability)
The reasons I think we may go a different way than the USSR (perhaps even avoiding collapse) is that while we have been suffering stagnation for about a decade now, we still have a pretty dynamic economy. Many Americans aspire to be small business owners and workers across sectors have, comparatively, pretty high productivity. The ethos for fairness and hard work is very strong, it is just hard to believe this country is fair on any fronts these days (we’re all cynics now). Even though cartels and a complicit government have allowed the financialization and oligopoloziation of the economy, it is not outside the realm of possibility that these things get dismantled over the next few decades if the right groups get energized, mobilized, and gain power.
Another reason for the likely perpetuation of the status quo or avoidance of collapse is that the elites are raking in the money. American capitalism has worked and continues to work very well for them. If anything, they may be more willing now to turn away from the democratic project (but they’ve always been against democracy). Then again, we should ask ourselves: are we more/less democratic or more/less surveilled and oppressed now than we were fifty or sixty years ago, under Jim Crow and the Red Scare? How much more/less? Probably about the same. In other words, the elite are probably not willing to let the USA go down the tubes the same way the elites of the USSR were okay with their collapse.
I think the symptoms of USSR/USA collapse are similar, but the causes are very different. And we also have some historical experience with these causes (monopolies/oligopolies, wealth inequality, anti-democratic elites). It can be reversed.
“Then again, we should ask ourselves: are we more/less democratic or more/less surveilled and oppressed now than we were fifty or sixty years ago, under Jim Crow and the Red Scare? How much more/less? Probably about the same.”
I would say Big Brother has many more ways to watch us and track our every movement now. Also, it’s my impression that Americans under 40 not only don’t know the value of privacy, they don’t even want to know what it is.
Also, American materialism has had another 5-6 decades to do its corrosive work of undermining the human spirit.
So, I would say, in many ways, more surveilled/less democratic.
“Then again, we should ask ourselves: are we more/less democratic or more/less surveilled and oppressed now than we were fifty or sixty years ago, under Jim Crow and the Red Scare? How much more/less? Probably about the same.”
I live in western NH. The two largish towns near me: Hanover and Lebanon have cameras on almost every intersection. There are cameras and possibly plate readers on the interstate one exit north of Hanover, and a few other locations between Hanover and the Candian border.
I live in the boonies and I can’t from my home to my office without being surveilled in some way. Now and then I try making a game of it: can I find a route from point a to point b that won’t put me in front of a single camera. The answer, so far, is that I can’t if I need to get into town, and since that’s where I work, I am subject to surveillance almost every day. It’s depressing and infuriating.
Between 2001 and 2009, the border patrol regularly set up check points on the interstate. There are two state highways that run parallel to the interstate, one in VT and one in NH, so even if some nefarious actors were trying to infiltrate our region, they’d have to be spectacularly inept if they couldn’t figure out how to get off the highway before the checkpoint and hop back on right after it.
Our local gadfly columnist wrote about the checkpoint probably once or twice a month. He asked the border patrol for arrest statistics. He tried to get them to tell us what kind of dangerous elements they were protecting us from. He never got an answer. He did hear from plenty of people in the area who, by dint of their skin color and/or not speaking perfect, unaccented English, were stopped and questioned.
The last time I went through one of those check points was not long before Obama was elected. I was sick of it, and I’m guessing I was not in the minority. Maybe people were smiling at them back in 2001 when they were “keeping us safe” but 7 years on, they were just getting a lot of sullen glares. The agent who was checking the cars in my lane looked tense and angry.
Unlike all those cameras everywhere, the border patrol, at least, went way.
As someone who has started three businesses, two of them successful (I went to Australia right before the Gulf War started, which led to new business in Sydney coming to a complete halt for six months; things might have worked out with better luck on timing), you need your head examined to start a small business. The most common characteristic of people running their own business was that they’d been fired twice.
If you can tolerate the BS, it is vastly better to be on a payroll. 90% of all new businesses fail and running one is no picnic.
And new business formation has dived in the US, due mainly IMHO to less than robust demand in many sectors of the economy.
Unless your family fully bankrolls you until BK kicks in…(snark). I would have loved to write as a career. Unfortunately, at the time, promises that had been made were broken and I had to go to work for a F500 just to survive right after my undergraduate degree was completed. Fate and Karma.
You’re so right. It used to be that there were set asides for small businesses but nowadays Federal and State Governments are only interested in contracts with large businesses. The SBA classification for small business is based on NAICS code (used to be SIC code) is usually $1-2 million or up to 500 employees. I wonder how they can be small businesses!
To survive, small businesses need to sell their goods/services to large businesses. Most of the decision makers who purchase these items are unreachable or already have their favorites. Unless your small business has invented a better mousetrap you’re SOL!
It used to be (twenty years ago) that a small software firm could get a Federal contract. Then came Section 1706 of Tax Reform Act of 1986, and those contracts had to go through brokers.
I read this over and over and I am sure it’s true but I personally know a lot of people who have started their own businesses and their success rate is *astronomically* higher than the published average. It’s far closer to 90% success. There must be other factors influencing that, although I’m not sure exactly what.
The plural of anecdote is not data. Everybody who’s bothered to actually do research on the topic has found what Yves says: ~90% failure rate before year 5 (iirc). Worker co-ops have a much better survival rate, as you’ve got more brains working to keep the enterprise afloat, but it’s still not cakewalk. I’m starting a worker co-op right now and I have to say, figuring out how to produce and sell a product that people want is waaaaay easier than trying to figure out how to jump through all the legal hoops. Sometimes I think that all the insurance requirements and taxes and whatnot are actually designed to keep small businesses repressed…not that I’m foily.
Yves Smith: Depends. I understand what you are saying, given that I became a free lance for twenty-five years after having pretty much walked out on two jobs.
I’d draw some distinctions. In certain areas, such as writing, design (graphic), editing, architecture, acting, or even public relations, it is common to be self-employed. These are businesses that don’t require much capital, and free lances avoid taking on employees. My capital costs as a writer are computers, printers, and the workshop (second bedroom).
You may have had bigger capital costs, which are what sink small businesses. The classic case is the groovy restaurant that makes a splash, gets a lot of press, and turns out not to have had enough money in the bank to pay the rent, pay the waitstaff, or deal with success (pay the suppliers).
The danger these days in being self-employed or having a small business is the degradation of work. And as the Eastern Bloc collectively once joked, They pretend to pay us, and we pretend to work. So you see little card shops or florists or shoe stores undercut by Amazon and its predatory pricing. You see free-lance like proofreading or copyediting undermined by on-line services that bid down the fees of the free lances. The bid hardware chains have destroyed independent hardware stores and locksmiths.
It is hard to open that dream B&B when Airbnb is undercutting on price and is avoiding the insurance and liability issues. And Chicago taxi drivers, who are often independent small business, are happy to fill a rider in about Uber (and Uber’s customers) if you want to get the full story from them–often in spicy terms. Their medallions, their capital, are ruined.
Yet I believe that my 25 years as a free lance were good for my outlook and character. Wendell Berry has a great essay on dealing with artisans, people in the trades, small farmers, and independent business people. They don’t take much crap.
It is true especially when you have to pay employer + employee health insurance contributions and carry risk without a premium. The trouble is too many people feel their jobs are too safe and treat risk-takers as criminals. If employment were more precarious the self-employed would be respected more
I used to have benign positional vertigo, which, fortunately, was diagnosed with only a doctor’s visit. I now believe this vertigo was caused by a NatureMade multivitamin I was taking.
FYI, something like 40% of those over 55 experience vertigo from time to time. One cause is the shifting of calcium crystals in the inner ear. The good news is that for this condition, no medications are necessary. The Eply maneuver (and others) are postures designed to put the crystals back in their original pocket.
This is common enough that some Kaiser nurses do nothing all day but instruct patients in these maneuvers. The horrible vertigo, headaches, and even worse, the anxiety (do I dare do X?) that paralyzes people is reassuringly easy to overcome….at least if these postures work for you. YMMV.
Unfortunately, migraine-induced vertigo has quite different causes. The Eply maneuver and its alternatives won’t help with that. Triptans, which otherwise are very helpful for migraine symptoms, likewise won’t help with vertiginous migraine. Another problem is that if you suffer a long enough bout of vertigo because of migraine or any other reason, your brain is trained to be vertiginous, and can continue to replicate the vertiginous symptomology for a while. You have to be careful to reduce or eliminate behaviors (like rapid head movement) that trigger the vertiginous response in the brain, sometimes for quite a while after the organic cause of the vertigo has been resolved.
I’m aware of this in part because I have had chronic migraines for years now, and while mine don’t tend to present with vertigo, I had a horrible bout of vertiginous migraine after the New York primary that lasted about two weeks. A big problem with effective treatment of migraine is that they are the result of neurological factors that are often impacted by the gut as well as the brain, plus hormones play a big role in migraine. AND migraines are suffered disproportionately (although not exclusively by any means) by women. So you get the entrenched bias of not taking the medical needs and conditions of women as seriously as those of men resulting in migraine not being taken seriously enough for a long time, despite how widespread it is, layered on top of the problem that your neurologist is likely to be undereducated and trained re: the role of the gut in neurological function, combined with the problem that your ob-gyn knows about one crucial piece of the problem and your neurologist another, but they don’t know to consult each other, and most patients never realize this. They just take their triptans — if they’re lucky enough to have insurance coverage for them — and continue to suffer.
If you’re reading this and you suffer from migraines, at the very least start taking 400 mgs of B2 and 400 mgs of magnesium daily. That’s no longer considered fringe. Any decent neurologist should tell you to do it, but too many still don’t know. Also if you have TMJ, the odds are very high that’s really a migraine. A triptan will give you immediate relief.
I used to have migraine-like headaches that would lay me down low…Santa Ana winds would be the precursor: pressure changes were the bane of my brain! Used to beg family members for their unused hydrocodone. Long story short, started taking blood pressure meds – no more killer sinus headaches! Did some research on this and discovered its a serendipitous cure, allegedly not connected to the bp.
My doctor blamed the aforementioned crystals for the vertigo, although he didn’t mention and must not have been familiar with the Eply maneuver. I didn’t have a migraine. Eventually, the vertigo went away and I also stopped taking the multivitamin. Then, years later, for a short time, I started taking the multivitamin again and the vertigo returned. When I stopped taking the supplement the problem went away, which makes me believe that it was the source of the malady.
Here in North America, fossil fuels are priced far below their actual long term cost, hence we squander now and will pay later. All according to economic theory. Fossil Fuel Products priced below their actual cost of productiion will probably be the demise of most “western” countries.
Whoever it was that mentioned loss of faith in the Soviet project is on to something.
Um, “Prices That Do Not Send Signals”: can we put the price of our centrally planned, monopoly-issued, fiat-declared money into that category? The
PolitboroFed meets and declares exactly how much money the system will need at what precise time and at what precise price. Then the analysts practice their Kremlinology (did Yellen say “may increase” or “might increase”?) and then scramble to buy or sell the goods and services represented by this so-called “money”. Right now theCommissarsFed analysts have decided that the precisely-right price of money according to their calculations and astrological observations should be the lowest it has ever been in recorded history. Like the Soviet Union, however, they come out every so often to declare “все прекрасно” (“everything is great!”)Setting the base rate of money is not a terribly offense, market-wise. However, practices like the Greenspan-Bernanke and presumably Yellen put, to intervene to stop stock market swoon is one example. Another is the extensive intervention in the mortgage market, with 90% of mortgages now government guaranteed. The result of artificially cheap credit is inflated housing prices, which helps builders and brokers (and those who got in early, meaning older people who could buy housing and haven’t suffered reversals) at the expense of most citizens.
Agreed. And recently I came to the conclusion that the same is true of tax reductions. They just result in more scope for rent extraction.
Which taken to its logical conclusion means that tax increases may well be cause a reversal of home price appreciation trends.
Seems slicing and dicing income streams, w/ long expectation tails, w/ at the center of it is RE, w/ everything else bolted on it, all whilst wages and jobs are crapified, meaning the aforementioned is a substitute for the former… wellie… that’s a wee bit of pressure on the – unknown – future ™ and as we all know you can’t price the unknown now can we….
Don’t know about the centrally planned rant, the bimetallism standard, is just as, if not more authoritarian, let alone just an sole object as a price anchor vs. a basket of assets. But as YS is want to repetitively inform political and ideological factors during the Vietnam period had a much more fundamental role in setting the stage than say bimetallism vs fiat fixations. Had the anti taxers taken a intellectual and functional purview of the state of things, then we might not be in this mess, but yeah ev’bal fiat…. sigh…
I would add per your last response to a comment of mine wrt enabling capital flows freedom, remind me again the manifold size of the shadow sector and its velocity vs USD base money. Not to mention its ability to FX shape shift in a blink of an eye.
disheveled…. with no less than a hundred years of history its a bit much to lay it all at the feet of fiat.
Yes I went over the top. But some “price discovery” in the price of money would be much healthier than the situation we’re in, where the issuer of the scrip is simultanously also its biggest buyer/customer (esp. Japan) and must intervene to keep debt issuers (nominally) solvent, or at least liquid. And yes the shadow sector globally is huge and uncontrollable, the Chinese couldn’t tighten if they wanted to. So what then do you do with a world with no effective control of money issuance? Sell wheelbarrows to people to carry enough of the stuff to the store? (Try http://www.chapwoodindex.com for a real measure of goods & services inflation). Or treat the lack of wage inflation with legislation? Or try Back to Square A, where money requires work to create. It’s not as though the “unlimited free money anytime we want to print it” trick has not been tried before…and before…and before. I say separate money from credit, get mortgage rates commensurate with risk and let the rest of the (money based) economy operate successfully without always having to pay for bad (or nonexistent) credit underwriting.
Sorry but…. how do you separate money from credit.
You know I’m in the MMT – PK camp so no need to go there, self explanatory.
China is tightening and from associates its making inroads, still some back roads, but then you have that risk. I think they don’t want to do another cultural revolution over night so its more nuanced considering all things. The Crown Casino thingy is getting warmer and now polies are starting to fear both sunlight and mirrors.
Risk eh… from what I can discern rating agencies are walking wounded and more and more are doing that work in house, sans the econnomic models that built so much incentive and path dependency into the whole thing. Under stand the Xerox thingy in the past, but its still a self inflicted wound.
I thought the political system took the first hit and by most part the results are a reflection of that. Dominance since the 70s has only been met with more or increasing refusal to accept both social and market failures, where only more Bernays – Grandin-esque reality knob [in]fighting is on offer.
disheveled…. as such I don’t see much happening for citizens unless there is a coherent objective w/ the attendant infrastructure to affect political change. Sanders might lay the foundation, but it will be someone else down the road that embodies it. Decades of atomistic individual materialism does not just go away because its failing.
“Decades of atomistic individual materialism does not just go away because its failing.” I think it goes away as natural resources scarcity appears. However, under neoliberal logic the 1% must attempt to take more and more -and never share- from the 99% as resource scarcity increases. Also, Bernie Sanders is the first pancake, necessary to get started, yet not for consumption.
I read somewhere that one thing the Founding Fathers WANTed Congress to do was to issue the money and “regulate the value thereof”. I presume that means they wanted the value of the money kept constant so people could always understand what “things cost” or “were worth” in relation to eachother.. .
now, right now, tomorrow and next week.
It is fun making The Amazing Rubber Yardstick longer or shorter at your every whim, but just try measuring something with The Amazing Rubber Yardstick.
You have to be careful about reading into history, you have to make sure its in accurate context. Observational Bias has a pertinacity to project ones desires where they are not warrantied.
That’s a fair point, and I don’t know enough to know if I am doing that here. I feeeeel like I’m not, but I don’t know enough to know.
This is deep! Have a look at Wittgenstein’s rubber ruler in Remarks on The Foundations of Mathematics.
Wittgenstein raised so many interesting problems for those of us interested in discerning, and, even more, describing reality! Here’s a little taste of the deep woods that old Ludwig can lead us into:
The Dispositionalist Solution to Wittgenstein’s Problem About Understanding a Rule: Answering Kripke’s Objection.
Carl Ginet , 1992, Midwest Studies in Philosophy 17 (1):53-73.
The best I can find:
The Amazing Rubber Yardstick only gets longer. That’s why it’s Amazing. It’s up way past 11 already.
There are some parallels, particularly WRT leadership, but our situation is fairly unique in that we are getting far too much of what we don’t need for cheap (bad food, entertainment, junk consumer products) and getting far too little of what we need for a premium (good food, education, healthcare, etc.). Capitalists figured out Brave New World was far more effective than 1984.
Yes, I agree. A lot will depend on the depth of the initial shock, to my mind. If the shock leaves the electricity running in most places we’ll manage something like the Soviet model collapse. If the power goes off and stays off in significant areas, the situation here will be much more severe.
The Soviets had a vast central bureaucracy that also extended into hierarchical regional commands: we have a systemically underfunded bureaucracy that from the center does almost nothing but write checks to private corporations that plan the balance of the economy.
If the power stays on, the Fed/Treasury will be able to re-flate with some sort of QE to the masses to sustain the global supply chain necessary to American subsistence in its current form: without the grid and the internet, localism will suddenly become essential and the ability to locally create an autarky and defend it from external chaos or export it successfully into that chaos will define the scale of survival. Unlike the Soviet model, where in a systemic failure appeals to national identity and the forces of the state could be brought to bear, if the checks/electronic transfers quit clearing, our private local and regional planners, profit maximizing private corporations, will simply self liquidate leaving what are already deeply dysfunctional and under funded, dis-organized local governments to re-imagine from near zero a local subsistence economy, and hopefully from there, surplus producing ones. That will be a long, painful process.
Communities that self organize to serve themselves, and that can successfully defend themselves, will provide models for those that don’t, but the scale of external economic dependence now suggests that without communications in more or less their present form, the down side scope is potentially very large, much worse than what the Russians dealt with.
If retail is completely destroyed, it’s going to be hard to get it going again. On the local subsistence economy, see David Fleming on “Lean Logic.”
Thank you for the link!
Retail is just one of a huge number of nearly devastated systems of distribution that the centralizing force of unbridled monopoly is foisting on the anglophone world.
The “disruptive” technologies that get traction are almost all for newly possible “public goods” that should have had their copyright expire a decade ago: Google; Facebook; Amazon; etc. To the extent we approach a self driving car or that Amazon gets its automated drone fleet, these things would be nearly categorical goods if “public” while in actuality nearly impregnable commercial fortresses.
Thanks for the post. I find this an interesting subject. A few years ago, I met Johan Galtung, who wrote a book on this, in 2009.
Here’s a link (has a short video clip)
https://www.transcend.org/tup/index.php?book=5
The Fall of the US Empire – And Then What?
Successors, Regionalization or Globalization? US Fascism or US Blossoming?
This book explores the why, how, when and where of the present decline and fall of the US Empire, based on a theory of synergizing contradictions used in 1980 to predict the fall of the Soviet empire. It then maps possible futures for the US and the world, with a blueprint for a desirable global future. This book is best read as a companion to Peace Economics: From a Killing to a Life Enhancing Economy.
Author: Johan Galtung, born 1930 in Oslo, Norway. Lives in Spain, France, Japan and the USA and is mainly engaged in mediation and research. He founded TRANSCEND: A network for Peace and Development, in 1993, and is the rector of TRANSCEND Peace University.
I would like to disagree with the thesis of this article, and if I think of something I’ll let you know. I don’t think I’ll be letting you know. Sure, there are differences, but there are numerous similarities between the late stage USSR and the current USA, and we ignore them at our peril.
I’m reminded of the Sovoks. Here’s some very early, pre-fame, classic eXile Taibbi on the subject:
http://www.russialist.org/archives/5622-11.php
As for part of the problem with Russian queuing in general, the initial discussion of this particular breed of post-USSR-fall Russians c. 2001 at McDonald’s in Taibbi’s writeup is a good and very funny illustration in short (quote below). But the full length of it is golden prose and very worth reading for those of you who might be interested in keen observation of social types, with an interesting early assessment of Putin as anti-Sovok. It’s overall right on the money to anyone who has ever spent any time in Russian social circles.
____________________________
Divide and conquer. Many fast food places use the roving kids with their headsets and tablets to speed up the line processing. Take the Old Believer, Babushka, Vodka Aficionado or other local fauna off to the side for more intensive menu review. No caviar was harmed in the making of this comment, although some borscht was spilt.
America is a hot, decaying mess. And using examples of our mess of a healthcare system is spot on, though you could have just as easily used our decaying infrastructure, for example. Anyway, I just spent the last two weeks dealing with a very serious health scare, and I bless my lucky stars for having access to the VA system. Given my sharply reduced income, the “market”-based system would have really extracted a nice chunk of my savings. All I had to worry about with the VA was showing up on time for my many appointments with various specialists (all of which were made in a timely manner, given the urgency of my situation). I want EVERYBODY to have what I have, because it is good and it saves lives, rather than mint cash for stockholders and MBA douchenozzles. Of course, that’s precisely why the VA is a thorn in the side of our politicos, and explaisn why they have been trying to strangle the VA and privatize it in order to turn it into yet another rent-extraction opportunity for our rentier class.
I’m glad things turned out right.
Two more stories on our amazing health care system from weekend visit with in-laws:
1. In-law couple #1 is self-employed painter (always overbooked) + spouse with job with “benefits,” who works in accounts payable for a decent-sized company. Just spitballing, they must bring in 80k-ish together but health insurance options have deteriorated so much they either can’t afford company policy or it’s so bad it doesn’t meet O-care standard. So they buy minimal catastrophic and pay Ocare 2K penalty rather than 11K in premiums for high-deductible “comprehensive.” Painter had 3 spots removed from face, bill for 15 minutes = $2300, subsequently negotiated down to $1600. Family conclusion: we can’t afford to see doctor anymore.
2. In-law couple #2: Self-made hubby (wealth from growing and selling 2 cos.) now in semi-retirement (forced out of last co but with nice payout) + spouse with “good” job running a small higher ed library system but also with MS (but perfectly functional, you never would know). OK health insurance but just prescribed new MS drug that costs $14K per month and is not covered. Even they feel like they can’t afford health care.
The system is crashing and burning.
Maybe I am too radical but I don’t see why employees cannot pay for healthcare 50:50 with employer and have free choice of insurer with an Insurer of Last Resort for everyone backed by Government and funded by removing tax relief from private insurance.
That is basically how Germany works
But German overall health care spending is a fraction of what US is, and as I bet you know, their entire system and model are altogether different from what we suffer from. And outcomes are a lot better. Why is that? Maybe because the German system is tightly regulated? Maybe because there’s some kind of “socialist” gene in the German system? And of course the German system benefits from their colonization of the rest of the EU, maybe, so there’s lots of wealth flowing in and up to the Teutons? And there’s some kind of rule of law there? And they are collectively not stupid enough to buy into the libertarian-neoliberal BS about “skin in the game” and “market efficiencies” and the rest? Where actual HEALTH CARE is the deliverable out of the system, not “UNSURANCE” and “COVERAGE” and profit for insurance companies and Pharma and hospital corps and MD-MBAs, who game the politics with the wealth that they take, courtesy of corruption and regulatory capture?
Just a thought. But keep pitching for that false equivalence — it’s so mainstream, isn’t it?
German health insurance is not ideal with 350 different insurers and major corporations running own health insurance funds. It has enormous inefficiency. The US problem is…..and I was insured with the Blues…….is the costs of complexity and the failure to apply a costs brake. In fact I would introduce the New Zealand system of Cost Capping Malpractice Payouts and having the Government carry the risk to cut malpractice premiums for doctors. So much of the US Cost Base is inflated by Tort Law allowing recovery of Damages > Actual Loss
The problem isn’t the care (it’s good care when you can get it), but the bogus pricing and cost-shifting.
The bogus pricing is due to monopolies and lack of appropriate enforcement of antitrust and various other consumer-friendly laws. In what other service industry would you not be told what you were going to pay, until after the service was provided?
Then toss in layers and layers of embedded “insurance” middlemen, and remember that no one works for free: in the aggregate, people are paying for the whole crazy system, somehow. That means prices are higher than in a simpler system.
Then remember that it’s not “insurance” (as traditionally defined) when you’re paying for a known future expenses. Insurance originally meant a small payment to protect against a large but very improbable expense (e.g. catastrophic accident at work). Older people with known medical issues don’t need insurance (except against new issues). They need affordable care options. That requires a simpler system, not a more complex one.
Fortunately the insanity is starting to reach its systemic limits. The current corrupt healthcare system is already 14% of GDP and growing faster than inflation… within 10 years it will consume so much of GDP that it simply cannot grow any further. Also, prices are now so high that it’s becoming cheaper in many cases to simply get care outside the system. For non-urgent issues one can often fly overseas and pay for care without insurance, at a lower price than one would have to pay for care provided locally at US prices. For more urgent or less pricey issues, there are now many doctors and nurses willing to provide care on a “fee for service” business. Because they can now do just fine by simply charging you at cost, rather than having to pay the overheads for the “insurance” system to pay them for taking care of you.
In fact, the same “Gig economy” that was being lambasted on another thread could do wonders for a lot of basic medical care situations.
A simple boost for this would be to mod O-Care to allow any reasonable medical cost to be offset against the current already-high deductibles. That would put the purchasing decisions back in the hands of the consumers. Together with transparent pricing so consumers can make informed choices, and costs will come down.
Yes. The fall of the Soviet Union was due to the party elite finding a way to cash out and the people felt that they no longer had a vested interest In their government thanks gulf between reality and the propaganda. Both are occurring in the USA right now with similar results.
Not so. It is a US perspective. Andropov chose Gorbachev as his successor because he knew economic reform was necessary – Chernenko got in the way. Gorbachev did not want to “cash out”. The CPSU staged a coup against Gorbachev who was put under house arrest. Eltsin revolted and outflanked the CPSU no doubt with US “assistance”. That destroyed the USSR and it was comparable to England withdrawing from the UK.
Thanks for examples! I’ve been saying this since the Clinton-fans went into Permanent Putin mode, but I wasn’t able to break it down with examples.
I think the Russia Paranoia has 2 psychological roots:
the pundit class is terrified that USA is going to be like post-communism Russia: they lost their empire and became a laughing-stock, despite going capitalist. That’s why a Russian future is more scary to them than a, say, Chinese or Nazi future. In their hearts they know it’s more likely. That’s why nobody big is accusing trump of being a “chinese spy”
Plus even though Russia is no longer communist, the word ‘russia’ still packs commie connotations. So centrist Dems frightened of a Sanders-like party takeover can say “russia” to strike at their left flank and right flank simultaneously.
No other country I can think of fills both these psychological needs so well.
Russia did not become a laughing stock but a victim of US kleptomania as Jewish Mafia emerged as partners in crime.to steal Soviet resources in privatization scams and bank frauds impoverishing ordinary people as the Yeltsin gang looted.
The CIA fixing of Yeltsin’s re-election in 1996 after he had shelled the Russian Duma showed how deep US interference went and why Siloviki reacted
> So centrist Dems frightened of a Sanders-like party takeover can say “russia” to strike at their left flank and right flank simultaneously.
I hate to say this but “centrist Dems” of a certain age. The 90s were, well, a long time ago…
The question for America’s future is . . . does America “have” an Empire? Or is America “is” an Empire?
If we “have” an Empire, perhaps we can get rid of it gracefully and preserve our worthwhile national existence. If we “are” an Empire, then we may delaminate into tens or dozens of mutually hostile nasty little pieces and no-man’s-lands between them. Because we don’t have a core Mother AngloSaxonia dominating other regions the way the USSR had a core Mother Russia. We are a bunch of other regions with no core. If the “sum total” of the regions is NOT a core, then there is NO CORE.
And that would be bad.
Good question. It should be clear from the math, where 500 or so men and women, mostly constant over time, dispose of 20% of the economic output of 300 million people, and one man commands the mightiest military the world has ever seen, that the US is an empire, or to say the very least, a form of despotism. The forms of equality are a sham, as they were under Augustus, or Napoleon III.
De Tocqueville, Author’s Foreward to Ancien Regime:
and
It should be clear from these quotations that liberalism, as endorsed by De Tocqueville, one of the worlds’ wisest observers of political theory and practice, implies a direct and continuous involvement of every individual with the political world, such that he deputes political authority but never surrenders it. That is Locke. But today’s world is Hobbes, not Locke; the ship sailed a long time ago. The best we can do is hope for Trajan, not Nero.
US economy is a classic War Economy run for the MIC which includes University contractors like MIT, Harvard, Stanford the latter using CIA funds through fronts to fund Google and Big Data projects like Facebook.
Consumer goods are offshored and Education and Health expand employment and costs exponentially backed by indirect State funding in War Socialism
The elite in the USSR, especially those who ran the nominally state-owned businesses, wanted to be capitalists, and ditching the nominally socialist system was their ticket. What do the elites in the US want to be? And what do they want to ditch the whatever-you-call-what-we-got-now system for?
(This is the biggest difference. The other big diff might be if the general population arises in the US rather than a sector of the elites as happened in the USSR.)
They did not want to be capitalists. The Mafia cajoled of blackmailed to get goods and raw materials diverted. You do not understand Soviet factories or The Plan or the KGB and the role of GULAG
Distribution was the Soviet problem and Theft
Demand and Production could not be matched
No, the OP is right. Most Russians at the time wanted reform but not revolution (look it up). Yeltsin and his cronies knew that they could make billions, and that’s how the USSR was dissolved. Not by a referendum but by a secret treaty between a few of the Republics’ leaders that realized the huge amounts of money they could make. And so that’s why we got full-scale, wild west capitalism from ’91 onwards, where a few well-connected individuals made tens or hundreds of millions (or billions) while millions fell below the poverty line and lacked basic necessities they always had during Soviet times (like jobs and roofs over their heads).
President Reagan called the USSR “the evil empire”.
I suspect that the USA (NATO, Five Eyes, etc.) has fallen from grace and can claim that title now.
USSR and GDR were bust in 1972 and saved by OPEC 1973 and Iran 1978 until 1986 oil price collapse
queues and being embarrassed by petty apparatchik: Found at any North American airport, stadium, coming to your local subway and train station? Meanwhile oligarchy in private jets go unsoiled.
Again great subject and totally ignored in MSM although call for much closer examination.
here is an excerpt from interesting essay that vividly addresses observations made in this post namely uncanny resemblance between two so-called diametrically opposing systems or were they really?
https://contrarianopinion.wordpress.com/2015/01/06/pools-and-propaganda-case-of-political-system/
“Very little known Philosophical History theory of “Convergence of Political Systems” was floating in the middle of last century seemingly indicating that political systems of USA and Soviets would eventually merge into something new but different from what it was before. Of course, it met devastating criticism from American as well as Soviet economists and philosophers, who called it utter non-sense adding that their respective systems will thrive in unchanged perfection for millennia, signifying the End of History.
Ironically, while, USSR is gone, here, we have practically, banking monopoly, industrial monopoly, communications monopoly, massive surveillance, synthetic candidates and farcical elections, fake choices, fake jobs, fake retirement, fake healthcare, exhausted resources, astronomic debt never to be repaid, eternal ZIRP for few, massive monopolistic propaganda, state lawlessness, no Habeas Corpus, militarized police force, foreign wars (Afghanistan), torture, legal kidnapping, murder and unlimited detention for mysterious enemies of the system. Should I go on ? It sounds like Soviet Union to me, except for Kim Kardashian butt. They missed that.”
Additional ways in which the USA is even more vulnerable than the USSR was: breakdown in family structure & communities; non-existent public transportation services in many places; growing lack of basic cooking skills.
I believe that Soviet refrigerators were built like Soviet tanks, and so lasted for decades. Ours won’t. We make a lot of assumptions about refrigeration.
Compressors are the key. I believe a Malaysian company is today one of the biggest manufacturers of compressors Tecumseh
Newsbud will be delivering a course on “Foundations of Anglo-American & Russian Geopolitics” on June 10-11.
The shelves might as well be soviet-cliche-empty here in the US anyhow — half the time items aren’t really available except to order online.
I went to Sears a couple weeks ago. Saturday afternoon, it was deserted. Half the shelves were empty, most of the checkouts were unstaffed. I thought of the poor soviet union era consumers who maybe had it even worse.
Except they were probably 99.9% employed and had a roof over their heads.
The Sears in the Bangor Mall is the most depressing store I’ve ever been in. Not just empty shelves and a demoralized sales force, but big swathes of vacancy, stained and ripped carpets and all. All under horrid fluorescent lighting.
A Soviet shortage joke:
A man walks into a shop and asks, “You wouldn’t happen to have fish, would you?”. The shop assistant replies, “You’ve got it wrong – ours is a butcher’s shop: we wouldn’t happen to have meat. You’re looking for the fish shop across the road. There they wouldn’t happen to have fish!”
A Soviet queue joke:
A Soviet man is waiting in line to purchase vodka from a liquor store, but due to restrictions imposed by Gorbachev, the line is very long. The man loses his composure and screams, “I can’t take this waiting in line anymore, I HATE Gorbachev, I am going to the Kremlin right now, and I am going to kill him!” After 40 minutes the man returns and elbows his way back to his place in line. The crowd begin to ask if he has succeeded in killing Gorbachev. “No, I got to the Kremlin all right, but the line to kill Gorbachev was even longer than here!”.
Boom boom!
Dmitri Orlov covered this so well in his Reinventing Collapse. Simply watching US TV where every series has Agency Men in black SUVs and SWAT teams in paramilitary gear smashing down doors. That is portrayed an new reality.
The entire US Federal Income Tax goes to the Pentagram
Government employs more than the manufacturing sector
Basic consumer goods are imported
I thought the fall of the U.S.S.R.had something to do with the Uzbeks?
Joking aside it almost feels like the SCTV CCCP1 episode was a more accurate portrayal of Russia than the one the U.S. media is giving us today…
Funny sketch….that SCTV is funny !
Those pictures are of Yeltsin’s Russia in 1991. There are pictures more appropriate to Soviet shortages. I have seen similar scenes in empty supermarkets in Czechoslovakia at this time. There were probably similar scenes in UK in 1947 – after all food rationing did not cease until 1954 and clothing until 1949….in fact rationing was worse in UK AFTER May 1945
Entirely possible. Do you have a link to a better picture archive?
google “soviet food shortages” under Images
Capitalism is a system where man exploits his fellow man, whereas communism is just the reverse!
Sorry for the non-gender-neutral structure but it’s an old saying.
An unregulated and unaccountable private monopoly is the economic equivalent of an orthodox communist enterprise. Private ownership does not create efficiency. Competition does. And competition is of course only for little people.
homo homini lupus est……….irrespective of “system”
Good post and great comments!
The current danger could be the current Republican delirium of a Constitutional convention.
Every State from the foothills of the Rockies to the Pacific Coast (about 20 to 25) would violently oppose such a scheme, and in the extreme write their own rules for any new Constitution, which they could could then impose on themselves.
Sic transit Gloria!
One thing that has been a preoccupation for me lately is display of prices and uniformity of prices for the same product / service, which is transforming us into a culture of perceived cheating and bribery. The case that we are all familiar with is paying the surcharge on your ticket for a flight so that you can buy legroom. The airlines have every customer on the plane at a different price. Much of the resentment at United Express is that people are being charged for every possible commodity on a plane (hand over your credit card to pay for a lousy boxed sandwich) and still being manhandled.
I am reminded of stories of the shortages and low-level cheating and horror of the customer at my local farmers market, which is in a middle / upper-middle class neighborhood. Some of the vendors, like the cheese merchant, no longer display prices. It is all a guess, and the scale is kept behind her. I smell of whiff of an Estonian dairy in 1984…
So even at the level of verifying a price and getting a receipt, you have deterioration. You don’t have to be a Chicago-School Capitalist to see that if the interactions of customer/seller are perceived as dishonest, the market will fall apart.
Sad. There used to be so many good things in the USA to compensate for the bad. The loss of the good is all the mores painful when the bad is so prevalent
Great post Lambert…thanks!!
I think there’s something in the ? beers the administrations have been drinking in the last half century or so. Maybe it’s time to admit that it’s time to ban Canadian ale. Trade disputes being all the rage these days.
http://www.flyingmonkeys.ca/beers/
Trump drinks smashbomb, Bannon drinks Netherworld- that’s why he looks like Edgar the bug, the base drinks hoptical illusion. Hoptical illusion is strong stuff, I drank some before I went to try to vote for Jill after helping Bernie buy a new house. Not sure where my little vote ultimately wound up.
I went on a tour of Eastern Russia using Google Maps and looked at photos that people have posted. Given the size of land within their borders, many of which still remain undeveloped, I couldn’t help but wonder if Russia has more in-house ‘stored’ equity and resources than any other nation on our planet.
It appears the northern latitudes of the Russian plains may become a more desirable place to be climate wise as well as growth wise?
117 comments as I write this and only two citations of Dmitry Orlov? Perhaps he’s so “Bob’s your uncle!” obvious that he doesn’t merit mentioning. Like telling people who are breathing “Hey, did you know about this stuff called ‘air’?” For my money, the “Collapse Gap” book was a better read than “Reinventing.” Although I did learn about the Ik tribe through the latter. Unfortunately, Orlov parroted a fake news view of that self-hating society which came via an Anglo anthropologist who was so skewed he made Margaret Mead look like Walter Cronkite. Anyone who hasn’t read the original “Collapse Gap” essay from 2006 should. It’s what Lambert said, in spades. Maybe it’s the Correntians whose game he’s trying to lift.
My ex visited Ukrainian family in the 1980s to early 1990s. Visas and detailed itineraries were required. As a Westerner, he could shop in the USD only stores, but locals could not. His cousin did not know how to open a tab top can of Coca Cola. He flew on Aeroflot and deja vu with United, the ground crew went on the already boarded plane and removed locals so that USD paying tourists could have the seats. In the 1990s I visited Poland which had just opened up after the Berlin Wall fell. Conditions were primitive but one of the Ukrainian cousins visited us in far eastern Poland (20 miles from Ukrainian border). She had visited us in the US and told us that coming to Poland from Ukraine was as great a change in conditions as coming to the US. That is how primitive things were at the time. Easy to bribe, life is cheap environment. Things have greatly improved for locals since then, especially in Poland. Meanwhile, in the US, it is looking more and more like former USSR with police state building and increasing incidents like United Airlines treatment of passengers.
A couple of issues here.
Everyone loves to talk about the 80’s in the USSR, after some very poor decisions, an ossified bureaucracy led by octogenarians, and alcoholism destroyed worker productivity.
Why don’t people talk about the first two decades after the end of World War II, when the USSR was probably the fastest growing economy in history? What’s the St. Louis Fed’s response to that?
Their bit about price signals, btw, is out of date. The advances in IT have made supply/demand management in a command economy a conceivable possibility through the use of algorithms.
But anyway, even though people were dissatisfied with the system, they didn’t necessarily want full-blown capitalism, or even the breakup of the USSR. Let’s not forget that the latter didn’t happen by referendum but rather by a secret treaty by Yeltsin and a few other top officials. And the privatization and wild west capitalism that happened in Russia was not demanded by popular mandate, either (I can’t find the polls at the moment, but most people wanted reform but not revolution), but rather the schemes of top-level apparatchiks who knew that they stood to gain billions if the economy became full-on capitalist.
About half of Russians regret the breakup of the Soviet Union (look it up), and only a small portion of the population even remembers the good times.
The standard Cold War explanations we in the West get on this stuff are so far from the truth yet so little questioned that you wonder if their use of propaganda was any more sinister than ours.
I’m not certain health care will ever be right in this country because of the zero sum game played by all of the participants.
see more at http://www.democraticcapitalism.com