Instead of a total economic collapse

In his book: Reinventing collapse : the Soviet example and American prospects, Dmitry Orlov suggests that the planned economy of the USSR was in far better shape to endure its collapse than the market economy of the U.S. can be prepared for its own undoing. He makes a convincing argument so long as we think inside the box of existing economies. In brief, here is the argument he lays out:
  1. Lots of Soviet citizens live in public housing with "free rent". Only one third of US homes are owned outright. Two thirds of US "homeowners" can be evicted by defaulting on their mortgages. All can be evicted for failure to pay property taxes levied on their homes.
  2. Most food sold in Russian stores is the result of planned production by the government that does not account for making a profit or losing money. Most food sold in American stores is delivered by rival enterprises in a global capitalistic system that depends on profitability and private investment to stay in business.
  3. Most travel within urban centers in Russia relies on public transportation with government access to fuel supplies. Most travel in the US from the suburban sprawl to urban employment relies on private automobiles that become immobilized during gasoline shortages.
  4. Soviet students who want to continue their studies through college can do so for free or very little expense. American students go into massive debt to personally finance the cost of soaring tuition rates and exorbitant college expenses.
  5. Russians benefit from "free" public services for health care, social services, trash collection and prison operations. US citizens deal with an increasing number of privatized hospitals, social services, trash collection companies and prison operation enterprises -- that can all go out of business and suspend services.
  6. Soviet citizens get news and entertainment from state owned media outlets. Americans get their news and entertainment from advertising support media outlets that need audience share to attract revenue and robust economies for companies to afford to advertise.
  7. Russians have become accustomed to shortages of commodity goods which has taught them to stockpile essentials. US citizens rely on the stores, warehouses, trucking firms and suppliers to keep every shelf well stocked.

Extrapolating from Dmitry Orlov's argument, it's easy to imagine a nightmare scenario for the US. Evicted homeowners will be wandering suburban streets, sleeping in vacated homes, evading the over-taxed police and falling into substance abuse, suicide and crime. Cars will be abandoned wherever they ran out of gas. Trash will get piled high at the curb. Stores will have half empty shelves and shoppers will be unable to eat well or at all. Radio and TV will go off the air. Newspapers and magazines will suspend publications. Colleges will close their doors. Privatized governmental services, operating in the red, will release their patients, inmates and dependent clientele onto the public.

For this scenario to play out, several resources, safety nets and initiatives need to get counted out:
  • The quantity and quality of innovations, creativity, user-generated content, and online collaborations in the past decade.
  • The groundswell of initiatives, outreach and activism recently enjoyed to bring about Obama's election, Web 2.0 spaces and numerous crowdsourced resources
  • The volume of digital communications between cellphones, PDA's and computers
  • The potential nationalization of banks, broadband internet access, and privatized governmental services
When I consider the implications of all this potential for resurgence, the nightmare scenario seems unlikely to me. Rather, I expect to see a new, collaborative, compassionate, comprehensive economy emerge from the fall of the artificial economy.


  1. Hello, nice to meet you here
    I'm a college student from Hong Kong, i just randomly browsed your blogs.
    I discovered you are emphaszed on changing, learning, or something related to knowledge.
    I'm taking a couse which is empasized on Organizational Learning. So I am quite interested in your writings.

  2. Thanks for adding a comment and appreciating what I've been writing. Good luck with all your learning about Organizational Learning.


  3. If the economic crisis was the only crisis we were facing I'd saying your prediction of a new form of economy might be accurate, and I certainly hope a model like the one you describe comes to pass, but what about Peak Energy and climate change as a result of global warming? I know you are fully aware of theses crises.

    Civilisation will grind to a halt if we don't find an alternative to oil soon, which seems highly unlikely. Agriculture would stop for starters. Modern agriculture is dependent on fossil fuels for not only farm machines, irrigation, transport and refrigeration, but also for modern fertilizers and pesticides (read Michael Pollan). It would be impossible to maintain infrastructure such as roads (including wind farms and solar arrays, which can only ever go a short way to replacing fossil fuel's energy output anyway) without trucks and other oil-run equipment.

    Then there's climate change. The cost of dealing with the social effects and infrastructure impact from extreme weather effects such as flooding, drought, heat waves, cyclones, hurricanes and severe snow and ice storms that are expected are likely to overwhelm the government's capacity to cope and afford appropriate disaster responses.

    And then there's the social unrest. Many predict a break down in social order with riots and looting and marauding gangs, resulting in martial law, curfews etc. The cost of maintaining order through riot police, the National Guard and the Army would overwhelm the government as well. We've already had rioting in Iceland and now Paris.

    And the initiatives you count on for salvation - crowd-sourced, peer-produced solutions based on the digital communications and digital devices? I'm concerned about the sustainability of these technologies. They use exorbitant amounts of cheap fossil-fuel-based energy to run, and are developed in factories dependent on energy and a constant flow of ever-diminishing resources like precious metals and fossil-fuel-derived plastics.

    I'm not saying that things will get as bad as I've described, but a lot of smart people are.

    I don't mean to be sounding pessimistic, but I'm wondering why your analysis doesn't take into account these critical elements.

  4. Thanks for all these thoughts Sean. In the short term, it may be possible to scale back energy consumption dramatically. The US would be an oil exporter if it consumed fossil fuels at the average rate of Europeans, one third of gluttonous Americans. The next economy will take serving each other to a new level. So even if we regress back to monasteries and medieval villages, we will be helping each other solve problems, adapt to changes, cope with challenges, etc. All the mutually supportive content added to the web each day is a preview of those coming attractions. I'm optimistic that the climate will come back from the brink of the slippery slope if we make a rapid back off from dumping so much carbon into the atmosphere.

    The ever-present gangs of marauders have closed minds. It takes an open mind and a sealed cauldron to break up their patterns of desperation, vengeance and violence. Prisons and handcuffs are very primitive versions of how to captivate people about options that they cannot conceive of on their own. Storytellers understand cuffless captivity far better than prison guards. I suspect the handling of criminals on the loose will experience a significant upgrade in the next economy as well.

  5. Certainly energy conservation is the "lowest hanging fruit" in terms of rapid reduction in our reliance on cheap fossil fuels, but how confident are you that we can "scale back energy consumption dramatically."? Most of the reports I've read (the ones coming from scientists, not politicians who have to say encouraging things) are pretty pessimistic.

    Do you think that "monasteries and medieval villages" are the only sustainable level of society? If we slip back into the dark ages how will we maintain the global communication and information technology infrastructure you place so much faith in?

    As for reducing our carbon output - as predicted individuals, business and government are having none of it. Here in Australia our government has decided on a reduction of greenhouse gas emissions of only 5% by the year 2020, less than the 25% cut sought be environmentalists, and even less than the 10% recommended by the conservative scientist who was commissioned to do a report for the government. If the scientists are right then this is not enough to prevent the 2 degree rise in global temperatures that will result in runaway climate change.

    And what about China and India? Sure the economic downturn has restricted growth rate, but they are still growing, and growth rates are likely to go up again.

    I know I'm sounding like a doom-and-gloomer again, but I'd really like to know where you get your optimism from.

    Back to the question of the new economy you describe... are you saying it will evolve irrespective of what challenges and crises are experienced?

  6. Thanks for all the questions, Sean. It took my writing a new blog post to respond adequately. Analysis of problems can cause paralysis of creative alternatives. Innovations come about by a healthy kind of disregard that differs from denial of the real problem. All these pending crises invite us to function differently as inhabitants of the planet, members of communities and contributors to mutual support systems that include our environments.