Ladder Award: Dmitry Orlov – lessons of the Soviet economic collapse

22nd November 2009

A Ladder is awarded to Dmitry Orlov for sharing insights gained from his first-hand observation of the Collapse of the Soviet Union in the 1990s: namely, the cause of the Soviet collapse, and how so many people survived without income when the formal economy ceased to function.

He is also given this Award for putting a wider level of analysis up for public debate in warning of a second collapse, this time in the United States – and by implication, many other places. He also describes lessons which he believes can be drawn from the Soviet case that could enable those affected to be able to survive such a collapse.

Orlov has experienced living in two worlds, the Soviet Union and the United States. He has written a book Reinventing Collapse: The Soviet Example and American Prospects

Orlov was interviewed by Chris Laidlaw on Radio New Zealand's Sunday programme (15 November, 2009).

I think Orlov raises some very useful questions. We so often hear about disasters and crises, but not much about what gets people through them. For instance, why didn’t the Soviet collapse result in massive starvation? How did people survive without an income?

Orlov explains that people were able to muddle through, precisely because the centralized system had been so heavy handed and inefficient.  He argues that as a result, people learned not to depend on the Soviet system and did not take the ideology too seriously. Its very inefficiencies caused people to develop practices of helping one other and generally becoming more resourceful and self-sufficient.

He mentions as major reasons for the Soviet Union’s collapse, a shortfall in the production of oil, worsening debt, trade deficits and runaway military budget, and argues that the United States is also heading for a similar major collapse. However, he adds that because the United States has more efficient systems, its people are more vulnerable when it comes to coping.

For instance, in the Soviet Union, a failed housing policy resulted in housing shortages, forcing extended families to live together in state-owned housing, close to major public transport. In the crisis, they had a roof over their heads and were better able to help each other meet needs, such as for food.

In contrast, Olov points out that in the United States, many families and friends are widely scattered, and used to reaching one another by the automobile. As a result, people would be stranded and not able to help each other as petrol became less accessible.

Orlov points to the strong correlation between a diminished supply of oil, the consequent increased costs of finding and accessing it, and a diminishing number of investors interested in investing in looking for more. He points out the spike in price of crude oil ($147 a barrel in 2008) did not lead to greater investment in the oil industry to take advantage of the increased price - quite the reverse.

When asked about investment in alternatives to hydrocarbons, Olov’s argument is basically, if we haven’t been able to make the investments needed to recover sufficient oil and natural gas, what makes it likely that money will be found to develop the more  costly alternatives?

I think Orlov raises very important matters for public discussion and I’d be interested in what you think?

I’d also be interested in why you think there is not more attention given to planning for a post-carbon economy? Is it because people don’t believe it will be needed, or that they can’t bare too much reality?

For material by Dmitry Orlov read: Our Village, Closing the 'Collapse Gap': the USSR was better prepared for collapse than the US (Energy Bulletin), Reinventing Collapse: The Soviet Example and American Prospects (The Oil Drum), and Social Collapse Best Practices (Fora TV), or watch from video selection @ YouTube.

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Tags: care, Dmitry Orlov, economy, future, innovation, investment, ladder, local, network, network locality, oil, subsidiarity, sustainable, village

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