[THS] Paul Craig Roberts: The Year America Dissolved

[The Harder Stuff in news and commentary]

http://www.informationclearinghouse.info/article26029.htm

[compare with Orlov's predicitions following]

The Year America Dissolved

By Paul Craig Roberts

July 27, 2010 "Information Clearing House" -- It was 2017. Clans were governing
America.

The first clans organized around local police forces. The conservatives’ war on crime
during the late 20th century and the Bush/Obama war on terror during the first
decade of the 21st century had resulted in the police becoming militarized and
unaccountable.

As society broke down, the police became warlords. The state police broke apart, and
the officers were subsumed into the local forces of their communities. The newly
formed tribes expanded to encompass the relatives and friends of the police.

The dollar had collapsed as world reserve currency in 2012 when the worsening
economic depression made it clear to Washington’s creditors that the federal budget
deficit was too large to be financed except by the printing of money.

With the dollar’s demise, import prices skyrocketed. As Americans were unable to
afford foreign-made goods, the transnational corporations that were producing
offshore for US markets were bankrupted, further eroding the government’s revenue
base.

The government was forced to print money in order to pay its bills, causing domestic
prices to rise rapidly. Faced with hyperinflation, Washington took recourse in
terminating Social Security and Medicare and followed up by confiscating the
remnants of private pensions. This provided a one-year respite, but with no more
resources to confiscate, money creation and hyperinflation resumed.

Organized food deliveries broke down when the government fought hyperinflation
with fixed prices and the mandate that all purchases and sales had to be in US paper
currency. Unwilling to trade appreciating goods for depreciating paper, goods
disappeared from stores.

Washington responded as Lenin had done during the “war communism” period of
Soviet history. The government sent troops to confiscate goods for distribution in kind
to the population. This was a temporary stop-gap until existing stocks were depleted,
as future production was discouraged. Much of the confiscated stocks became the
property of the troops who seized the goods.

Goods reappeared in markets under the protection of local warlords. Transactions
were conducted in barter and in gold, silver, and copper coins.

Other clans organized around families and individuals who possessed stocks of food,
bullion, guns and ammunition. Uneasy alliances formed to balance differences in clan
strengths. Betrayals quickly made loyalty a necessary trait for survival.

Large-scale food and other production broke down as local militias taxed distribution
as goods moved across local territories. Washington seized domestic oil production
and refineries, but much of the government’s gasoline was paid for safe passage
across clan territories.

Most of the troops in Washington’s overseas bases were abandoned. As their
resource stocks were drawn down, the abandoned soldiers were forced into alliances
with those with whom they had been fighting.

Washington found it increasingly difficult to maintain itself. As it lost control over the
country, Washington was less able to secure supplies from abroad as tribute from
those Washington threatened with nuclear attack. Gradually other nuclear powers
realized that the only target in America was Washington. The more astute saw the
writing on the wall and slipped away from the former capital city.
~~~~~~~~~~~~~~~~~~~~

Getting Prepared for the Great Collapse

Saturday 14 February 2009

by: Dmitri Orlov, Culture Change

    The following talk was given on February 13, 2009, at Cowell Theatre in Fort
Mason Center, San Francisco, to an audience of 550 people. Audio and video of the
talk will be available on Long Now Foundation web site.


    Good evening, ladies and gentlemen. Thank you for showing up. It's certainly nice
to travel all the way across the North American continent and have a few people
come to see you, even if the occasion isn't a happy one. You are here to listen to me
talk about social collapse and the various ways we can avoid screwing that up along
with everything else that's gone wrong. I know it's a lot to ask of you, because why
wouldn't you instead want to go and eat, drink, and be merry? Well, perhaps there
will still be time left for that after my talk.

    I would like to thank the Long Now Foundation for inviting me, and I feel very
honored to appear in the same venue as many serious, professional people, such as
Michael Pollan, who will be here in May, or some of the previous speakers, such as
Nassim Taleb, or Brian Eno - some of my favorite people, really. I am just a tourist. I
flew over here to give this talk and to take in the sights, and then I'll fly back to
Boston and go back to my day job. Well, I am also a blogger. And I also wrote a
book. But then everyone has a book, or so it would seem.

    You might ask yourself, then, Why on earth did he get invited to speak here
tonight? It seems that I am enjoying my moment in the limelight, because I am one
of the very few people who several years ago unequivocally predicted the demise of
the United States as a global superpower. The idea that the USA will go the way of
the USSR seemed preposterous at the time. It doesn't seem so preposterous any
more. I take it some of you are still hedging your bets. How is that hedge fund doing,
by the way?

    I think I prefer remaining just a tourist, because I have learned from experience
- luckily, from other people's experience - that being a superpower collapse
predictor is not a good career choice. I learned that by observing what happened to
the people who successfully predicted the collapse of the USSR. Do you know who
Andrei Amalrik is? See, my point exactly. He successfully predicted the collapse of the
USSR. He was off by just half a decade. That was another valuable lesson for me,
which is why I will not give you an exact date when USA will turn into FUSA ("F" is for
"Former"). But even if someone could choreograph the whole event, it still wouldn't
make for much of a career, because once it all starts falling apart, people have far
more important things to attend to than marveling at the wonderful predictive
abilities of some Cassandra-like person.

    I hope that I have made it clear that I am not here in any sort of professional
capacity. I consider what I am doing a kind of community service. So, if you don't like
my talk, don't worry about me. There are plenty of other things I can do. But I would
like my insights to be of help during these difficult and confusing times, for altruistic
reasons, mostly, although not entirely. This is because when times get really bad, as
they did when the Soviet Union collapsed, lots of people just completely lose it. Men,
especially. Successful, middle-aged men, breadwinners, bastions of society, turn out
to be especially vulnerable. And when they just completely lose it, they become very
tedious company. My hope is that some amount of preparation, psychological and
otherwise, can make them a lot less fragile, and a bit more useful, and generally less
of a burden.

    Women seem much more able to cope. Perhaps it is because they have less of
their ego invested in the whole dubious enterprise, or perhaps their sense of personal
responsibility is tied to those around them and not some nebulous grand enterprise.
In any case, the women always seem far more able to just put on their gardening
gloves and go do something useful, while the men tend to sit around groaning about
the Empire, or the Republic, or whatever it is that they lost. And when they do that,
they become very tedious company. And so, without a bit of mental preparation, the
men are all liable to end up very lonely and very drunk. So that's my little
intervention.

    If there is one thing that I would like to claim as my own, it is the comparative
theory of superpower collapse. For now, it remains just a theory, although it is
currently being quite thoroughly tested. The theory states that the United States and
the Soviet Union will have collapsed for the same reasons, namely: a severe and
chronic shortfall in the production of crude oil (that magic addictive elixir of industrial
economies), a severe and worsening foreign trade deficit, a runaway military budget,
and ballooning foreign debt. I call this particular list of ingredients "The Superpower
Collapse Soup." Other factors, such as the inability to provide an acceptable quality of
life for its citizens, or a systemically corrupt political system incapable of reform, are
certainly not helpful, but they do not automatically lead to collapse, because they do
not put the country on a collision course with reality. Please don't be too concerned,
though, because, as I mentioned, this is just a theory. My theory.

    I've been working on this theory since about 1995, when it occurred to me that
the US is retracing the same trajectory as the USSR. As so often is the case, having
this realization was largely a matter of being in the right place at the right time. The
two most important methods of solving problems are: 1. by knowing the solution
ahead of time, and 2. by guessing it correctly. I learned this in engineering school 
from a certain professor. I am not that good at guesswork, but I do sometimes know
the answer ahead of time.

    I was very well positioned to have this realization because I grew up straddling the
two worlds - the USSR and the US. I grew up in Russia, and moved to the US when I
was twelve, and so I am fluent in Russian, and I understand Russian history and
Russian culture the way only a native Russian can. But I went through high school
and university in the US . I had careers in several industries here, I traveled widely
around the country, and so I also have a very good understanding of the US with all
of its quirks and idiosyncrasies. I traveled back to Russia in 1989, when things there
still seemed more or less in line with the Soviet norm, and again in 1990, when the
economy was at a standstill, and big changes were clearly on the way. I went back
there 3 more times in the 1990s, and observed the various stages of Soviet collapse
first-hand.

    By the mid-1990s I started to see Soviet/American Superpowerdom as a sort of
disease that strives for world dominance but in effect eviscerates its host country,
eventually leaving behind an empty shell: an impoverished population, an economy
in ruins, a legacy of social problems, and a tremendous burden of debt. The
symmetries between the two global superpowers were then already too numerous to
mention, and they have been growing more obvious ever since.

    The superpower symmetries may be of interest to policy wonks and history buffs
and various skeptics, but they tell us nothing that would be useful in our daily lives. It
is the asymmetries, the differences between the two superpowers, that I believe to
be most instructive. When the Soviet system went away, many people lost their jobs,
everyone lost their savings, wages and pensions were held back for months, their
value was wiped out by hyperinflation, there were shortages of food, gasoline, medicine,
consumer goods, there was a large increase in crime and violence, and yet Russian
society did not collapse. Somehow, the Russians found ways to muddle through. How
was that possible? It turns out that many aspects of the Soviet system were
paradoxically resilient in the face of system-wide collapse, many institutions continued
to function, and the living arrangement was such that people did not lose access to
food, shelter or transportation, and could survive even without an income. The Soviet
economic system failed to thrive, and the Communist experiment at constructing a
worker's paradise on earth was, in the end, a failure. But as a side effect it
inadvertently achieved a high level of collapse-preparedness. In comparison, the
American system could produce significantly better results, for a time, but at the cost of
creating and perpetuating a living arrangement that is very fragile, and not at all
capable of holding together through the inevitable crash. Even after the Soviet
economy evaporated and the government largely shut down, Russians still had plenty
left for them to work with. And so there is a wealth of useful information and insight
that we can extract from the Russian experience, which we can then turn around
and put to good use in helping us improvise a new living arrangement here in the
United States - one that is more likely to be survivable.

    The mid-1990s did not seem to me as the right time to voice such ideas. The
United States was celebrating its so-called Cold War victory, getting over its Vietnam
syndrome by bombing Iraq back to the Stone Age, and the foreign policy wonks
coined the term "hyperpower" and were jabbering on about full-spectrum
dominance. All sorts of silly things were happening. Professor Fukuyama told us that
history had ended, and so we were building a brave new world where the Chinese
made things out of plastic for us, the Indians provided customer support when these
Chinese-made things broke, and we paid for it all just by flipping houses, pretending
that they were worth a lot of money whereas they are really just useless bits of ticky-
tacky. Alan Greenspan chided us about "irrational exuberance" while consistently low-
balling interest rates. It was the "Goldilocks economy" - not to hot, not too cold.
Remember that? And now it turns out that it was actually more of a "Tinker-bell"
economy, because the last five or so years of economic growth was more or less a
hallucination, based on various debt pyramids, the "whole house of cards" as
President Bush once referred to it during one of his lucid moments. And now we can
look back on all of that with a funny, queasy feeling, or we can look forward and feel
nothing but vertigo.

    While all of these silly things were going on, I thought it best to keep my
comparative theory of superpower collapse to myself. During that time, I was
watching the action in the oil industry, because I understood that oil imports are the
Achilles' heel of the US economy. In the mid-1990s the all-time peak in global oil
production was scheduled for the turn of the century. But then a lot of things
happened that delayed it by at least half a decade. Perhaps you've noticed this too,
there is a sort of refrain here: people who try to predict big historical shifts always
turn to be off by about half a decade. Unsuccessful predictions, on the other hand
are always spot on as far as timing: the world as we know it failed to end precisely at
midnight on January 1, 2000. Perhaps there is a physical principal involved:
information spreads at the speed of light, while ignorance is instantaneous at all
points in the known universe. So please make a mental note: whenever it seems to
you that I am making a specific prediction as to when I think something is likely to
happen, just silently add "plus or minus half a decade."

    In any case, about half a decade ago, I finally thought that the time was ripe,
and, as it has turned out, I wasn't too far off. In June of 2005 I published an article
on the subject, titled "Post-Soviet Lessons for a Post-American Century," which was
quite popular, even to the extent that I got paid for it. It is available at various places
on the Internet. A little while later I formalized my thinking somewhat into the
"Collapse Gap" concept, which I presented at a conference in Manhattan in April of
2006. The slide show from that presentation, titled "Closing the Collapse Gap," was
posted on the Internet and has been downloaded a few million times since then.
Then, in January of 2008, when it became apparent to me that financial collapse was
well underway, and that other stages of collapse were to follow, I published a short
article titled "The Five Stages of Collapse," which I later expanded into a talk I gave
at a conference in Michigan in October of 2008. Finally, at the end of 2008, I
announced on my blog that I am getting out of the prognosticating business. I have
made enough predictions, they all seem very well on track (give or take half a
decade, please remember that), collapse is well underway, and now I am just an
observer.

    But this talk is about something else, something other than making dire predictions
and then acting all smug when they come true. You see, there is nothing more
useless than predictions, once they have come true. It's like looking at last year's
amazingly successful stock picks: what are you going to do about them this year?
What we need are examples of things that have been shown to work in the strange,
unfamiliar, post-collapse environment that we are all likely to have to confront. Stuart
Brand proposed the title for the talk - "Social Collapse Best Practices" - and I thought
that it was an excellent idea. Although the term "best practices" has been diluted
over time to sometimes mean little more than "good ideas," initially it stood for the
process of abstracting useful techniques from examples of what has worked in the
past and applying them to new situations, in order to control risk and to increase the
chances of securing a positive outcome. It's a way of skipping a lot of trial and error
and deliberation and experimentation, and to just go with what works.

    In organizations, especially large organizations, "best practices" also offer a good
way to avoid painful episodes of watching colleagues trying to "think outside the box"
whenever they are confronted with a new problem. If your colleagues were any good
at thinking outside the box, they probably wouldn't feel so compelled to spend their
whole working lives sitting in a box keeping an office chair warm. If they were any
good at thinking outside the box, they would have by now thought of a way to
escape from that box. So perhaps what would make them feel happy and productive
again is if someone came along and gave them a different box inside of which to
think - a box better suited to the post-collapse environment.

    Here is the key insight: you might think that when collapse happens, nothing
works. That's just not the case. The old ways of doing things don't work any more,
the old assumptions are all invalidated, conventional goals and measures of success
become irrelevant. But a different set of goals, techniques, and measures of success
can be brought to bear immediately, and the sooner the better. But enough
generalities, let's go through some specifics. We'll start with some generalities, and,
as you will see, it will all become very, very specific rather quickly.

    Here is another key insight: there are very few things that are positives or
negatives per se. Just about everything is a matter of context. Now, it just so
happens that most things that are positives prior to collapse turn out to be negatives
once collapse occurs, and vice versa. For instance, prior to collapse having high
inventory in a business is bad, because the businesses have to store it and finance it,
so they try to have just-in-time inventory. After collapse, high inventory turns out to
be very useful, because they can barter it for the things they need, and they can't
easily get more because they don't have any credit. Prior to collapse, it's good for
a business to have the right level of staffing and an efficient organization. After
collapse, what you want is a gigantic, sluggish bureaucracy that can't unwind
operations or lay people off fast enough through sheer bureaucratic foot-dragging.
Prior to collapse, what you want is an effective retail segment and good customer
service. After collapse, you regret not having an unreliable retail segment, with
shortages and long bread lines, because then people would have been forced to
learn to shift for themselves instead of standing around waiting for somebody to
come and feed them.

    If you notice, none of these things that I mentioned have any bearing on what is
commonly understood as "economic health." Prior to collapse, the overall
macroeconomic positive is an expanding economy. After collapse, economic
contraction is a given, and the overall macroeconomic positive becomes something of
an imponderable, so we are forced to listen to a lot of nonsense. The situation is
either slightly better than expected or slightly worse than expected. We are always
either months or years away from economic recovery. Business as usual will resume
sooner or later, because some television bobble-head said so.

    But let's take it apart. Starting from the very general, what are the current
macroeconomic objectives, if you listen to the hot air coming out of Washington at
the moment? First: growth, of course! Getting the economy going. We learned
nothing from the last huge spike in commodity prices, so let's just try it again. That
calls for economic stimulus, a.k.a. printing money. Let's see how high the prices go
up this time. Maybe this time around we will achieve hyperinflation. Second:
Stabilizing financial institutions: getting banks lending - that's important too. You see,
we are just not in enough debt yet, that's our problem. We need more debt, and
quickly! Third: jobs! We need to create jobs. Low-wage jobs, of course, to replace all
the high-wage manufacturing jobs we've been shedding for decades now, and
replacing them with low-wage service sector jobs, mainly ones without any job
security or benefits. Right now, a lot of people could slow down the rate at which
they are sinking further into debt if they quit their jobs. That is, their job is a net loss
for them as individuals as well as for the economy as a whole. But, of course, we
need much more of that, and quickly!

    So that's what we have now. The ship is on the rocks, water is rising, and the
captain is shouting "Full steam ahead! We are sailing to Afghanistan!" Do you listen
to Ahab up on the bridge, or do you desert your post in the engine room and go help
deploy the lifeboats? If you thought that the previous episode of uncontrolled debt
expansion, globalized Ponzi schemes, and economic hollowing-out was silly, then I
predict that you will find this next episode of feckless grasping at macroeconomic
straws even sillier. Except that it won't be funny: what is crashing now is our life
support system: all the systems and institutions that are keeping us alive. And so I
don't recommend passively standing around and watching the show - unless you
happen to have a death wish.

    Right now the Washington economic stimulus team is putting on their Scuba gear
and diving down to the engine room to try to invent a way to get a diesel engine to
run on seawater. They spoke of change, but in reality they are terrified of change
and want to cling with all their might to the status quo. But this game will soon be
over, and they don't have any idea what to do next.

    So, what is there for them to do? Forget "growth," forget "jobs," forget "financial
stability." What should their realistic new objectives be? Well, here they are: food,
shelter, transportation, and security. Their task is to find a way to provide all of these
necessities on an emergency basis, in absence of a functioning economy, with
commerce at a standstill, with little or no access to imports, and to make them
available to a population that is largely penniless. If successful, society will remain
largely intact, and will be able to begin a slow and painful process of cultural
transition, and eventually develop a new economy, a gradually de-industrializing
economy, at a much lower level of resource expenditure, characterized by a quite a
lot of austerity and even poverty, but in conditions that are safe, decent, and
dignified. If unsuccessful, society will be gradually destroyed in a series of convulsions
that will leave a defunct nation composed of many wretched little fiefdoms. Given its
largely depleted resource base, a dysfunctional, collapsing infrastructure, and its
history of unresolved social conflicts, the territory of the Former United States will
undergo a process of steady degeneration punctuated by natural and man-made
cataclysms.

    Food. Shelter. Transportation. Security. When it comes to supplying these survival
necessities, the Soviet example offers many valuable lessons. As I already mentioned,
in a collapse many economic negatives become positives, and vice versa. Let us
consider each one of these in turn.

    The Soviet agricultural sector was plagued by consistent underperformance. In
many ways, this was the legacy of the disastrous collectivization experiment carried
out in the 1930s, which destroyed many of the more prosperous farming households
and herded people into collective farms. Collectivization undermined the ancient
village-based agricultural traditions that had made pre-revolutionary Russia a well-fed
place that was also the breadbasket of Western Europe. A great deal of further
damage was caused by the introduction of industrial agriculture. The heavy farm
machinery alternately compacted and tore up the topsoil while dosing it with
chemicals, depleting it and killing the biota. Eventually, the Soviet government had to
turn to importing grain from countries hostile to its interests - United States and
Canada - and eventually expanded this to include other foodstuffs. The USSR
experienced a permanent shortage of meat and other high-protein foods, and much
of the imported grain was used to raise livestock to try to address this problem.

    Although it was generally possible to survive on the foods available at the
government stores, the resulting diet would have been rather poor, and so people
tried to supplement it with food they gathered, raised, or caught, or purchased at
farmers' markets. Kitchen gardens were always common, and, once the economy
collapsed, a lot of families took to growing food in earnest. The kitchen gardens, by
themselves, were never sufficient, but they made a huge difference.

    The year 1990 was particularly tough when it came to trying to score something
edible. I remember one particular joke from that period. Black humor has always
been one of Russia's main psychological coping mechanisms. A man walks into a food
store, goes to the meat counter, and he sees that it is completely empty. So he asks
the butcher: "Don't you have any fish?" And the butcher answers: "No, here is where
we don't have any meat. Fish is what they don't have over at the seafood counter."

    Poor though it was, the Soviet food distribution system never collapsed completely.
In particular, the deliveries of bread continued even during the worst of times, partly
because it has always been such an important part of the Russian diet, and partly
because access to bread symbolized the pact between the people and the
Communist government, enshrined in oft-repeated revolutionary slogans. Also, it is
important to remember that in Russia most people have lived within walking distance
of food shops, and used public transportation to get out to their kitchen gardens,
which were often located in the countryside immediately surrounding the relatively
dense, compact cities. This combination of factors made for some lean times, but
very little malnutrition and no starvation.

    In the United States, the agricultural system is heavily industrialized, and relies on
inputs such as diesel, chemical fertilizers and pesticides, and, perhaps most
importantly, financing. In the current financial climate, the farmers' access to
financing is not at all assured. This agricultural system is efficient, but only if you
regard fossil fuel energy as free. In fact, it is a way to transform fossil fuel energy
into food with a bit of help from sunlight, to the tune of 10 calories of fossil fuel
energy being embodied in each calorie that is consumed as food. The food
distribution system makes heavy use of refrigerated diesel trucks, transforming food
over hundreds of miles to resupply supermarkets. The food pipeline is long and thin,
and it takes only a couple of days of interruptions for supermarket shelves to be
stripped bare. Many people live in places that are not within walking distance of
stores, not served by public transportation, and will be cut off from food sources once
they are no longer able to drive.

    Besides the supermarket chains, much of the nation's nutrition needs are being
met by an assortment of fast food joints and convenience stores. In fact, in many of
the less fashionable parts of cities and towns, fast food and convenience store food is
all that is available. In the near future, this trend is likely to extend to the more
prosperous parts of town and the suburbs.

    Fast food outfits such as McDonalds have more ways to cut costs, and so may
prove a bit more resilient in the face of economic collapse than supermarket chains,
but they are no substitute for food security, because they too depend on industrial
agribusiness. Their food inputs, such as high-fructose corn syrup, genetically
modified potatoes, various soy-based fillers, factory-farmed beef, pork and chicken,
and so forth, are derived from oil, two-thirds of which is imported, as well as fertilizer
made from natural gas. They may be able to stay in business longer, supplying food-
that-isn't-really-food, but eventually they will run out of inputs along with the rest of
the supply chain. Before they do, they may for a time sell burgers that aren't really
burgers, like the bread that wasn't really bread that the Soviet government
distributed in Leningrad during the Nazi blockade. It was mostly sawdust, with a bit
of rye flour added for flavor.

    Can we think of any ways to avoid this dismal scenario? The Russian example may
give us a clue. Many Russian families could gauge how fast the economy was
crashing, and, based on that, decide how many rows of potatoes to plant. Could we
perhaps do something similar? There is already a healthy gardening movement in the
United States; can it be scaled up? The trick is to make small patches of farmland
available for non-mechanical cultivation by individuals and families, in increments as
small as 1000 square feet. The ideal spots would be fertile bits of land with access to
rivers and streams for irrigation. Provisions would have to be made for campsites and
for transportation, allowing people to undertake seasonal migrations out to the land
to grow food during the growing season, and haul the produce back to the
population centers after taking in the harvest.

    An even simpler approach has been successfully used in Cuba: converting urban
parking lots and other empty bits of land to raised-bed agriculture. Instead of
continually trucking in vegetables and other food, it is much easier to truck in soil,
compost, and mulch just once a season. Raised highways can be closed to traffic
(since there is unlikely to be much traffic in any case) and used to catch rainwater for
irrigation. Rooftops and balconies can be used for hothouses, henhouses, and a
variety of other agricultural uses.

    How difficult would this be to organize? Well, Cubans were actually helped by their
government, but the Russians managed to do it in more or less in spite of the Soviet
bureaucrats, and so we might be able to do it in spite of the American ones. The
government could theoretically head up such an effort, purely hypothetically
speaking, of course, because I see no evidence that such an effort is being
considered. For our fearless national leaders, such initiatives are too low-level: if they
stimulate the economy and get the banks lending again, the potatoes will simply
grow themselves. All they need to do is print some more money, right?

    Moving on to shelter. Again, let's look at how the Russians managed to muddle
through. In the Soviet Union, people did not own their place of residence. Everyone
was assigned a place to live, which was recorded in a person's internal passport.
People could not be dislodged from their place of residence for as long as they drew
oxygen. Since most people in Russia live in cities, the place of residence was usually
an apartment, or a room in a communal apartment, with shared bathroom and
kitchen. There was a permanent housing shortage, and so people often doubled up,
with three generations living together. The apartments were often crowded,
sometimes bordering on squalid. If people wanted to move, they had to find
somebody else who wanted to move, who would want to exchange rooms or
apartments with them. There were always long waiting lists for apartments, and
children often grew up, got married, and had children before receiving a place of
their own.

    These all seem like negatives, but consider the flip side of all this: the high
population density made this living arrangement quite affordable. With several
generations living together, families were on hand to help each other. Grandparents
provided day care, freeing up their children's time to do other things. The apartment
buildings were always built near public transportation, so they did not have to rely on
private cars to get around. Apartment buildings are relatively cheap to heat, and
municipal services easy to provide and maintain because of the short runs of pipe
and cable. Perhaps most importantly, after the economy collapsed, people lost their
savings, many people lost their jobs, even those that still had jobs often did not get
paid for months, and when they were the value of their wages was destroyed by
hyperinflation, but there were no foreclosures, no evictions, municipal services such
as heat, water, and sometimes even hot water continued to be provided, and
everyone had their families close by. Also, because it was so difficult to relocate,
people generally stayed in one place for generations, and so they tended to know all
the people around them. After the economic collapse, there was a large spike in the
crime rate, which made it very helpful to be surrounded by people who weren't
strangers, and who could keep an eye on things. Lastly, in an interesting twist, the
Soviet housing arrangement delivered an amazing final windfall: in the 1990s all of
these apartments were privatized, and the people who lived in them suddenly
became owners of some very valuable real estate, free and clear.

    Switching back to the situation in the US: in recent months, many people here
have reconciled themselves to the idea that their house is not an ATM machine, nor is
it a nest egg. They already know that they will not be able to comfortably retire by
selling it, or get rich by fixing it up and flipping it, and quite a few people have
acquiesced to the fact that real estate prices are going to continue heading lower.
The question is, How much lower? A lot of people still think that there must be a
lower limit, a "realistic" price. This thought is connected to the notion that housing is
a necessity. After all, everybody needs a place to live.

    Well, it is certainly true that some sort of shelter is a necessity, be it an apartment,
or a dorm room, a bunk in a barrack, a boat, a camper, or a tent, a teepee, a
wigwam, a shipping container... The list is virtually endless. But there is no reason at
all to think that a suburban single-family house is in any sense a requirement. It is
little more than a cultural preference, and a very shortsighted one at that. Most
suburban houses are expensive to heat and cool, inaccessible by public
transportation, expensive to hook up to public utilities because of the long runs of
pipe and cable, and require a great deal of additional public expenditure on road,
bridge and highway maintenance, school buses, traffic enforcement, and other
nonsense. They often take up what was once valuable agricultural land. They
promote a car-centric culture that is destructive of urban environments, causing a
proliferation of dead downtowns. Many families that live in suburban houses can no
longer afford to live in them, and expect others to bail them out.

    As this living arrangement becomes unaffordable for all concerned, it will also
become unlivable. Municipalities and public utilities will not have the funds to lavish
on sewer, water, electricity, road and bridge repair, and police. Without cheap and
plentiful gasoline, natural gas, and heating oil, many suburban dwellings will become
both inaccessible and unlivable. The inevitable result will be a mass migration of
suburban refugees toward the more survivable, more densely settled towns and
cities. The luckier ones will find friends or family to stay with; for the rest, it would be
very helpful to improvise some solution.

    One obvious answer is to repurpose the ever-plentiful vacant office buildings for
residential use. Converting offices to dormitories is quite straightforward. Many of
them already have kitchens and bathrooms, plenty of partitions and other furniture,
and all they are really missing is beds. Putting in beds is just not that difficult. The
new, subsistence economy is unlikely to generate the large surpluses that are
necessary for sustaining the current large population of office plankton. The
businesses that once occupied these offices are not coming back, so we might as well
find new and better uses for them.

    Another category of real estate that is likely to go unused and that can be
repurposed for new communities is college campuses. The American 4-year college is
an institution of dubious merit. It exists because American public schools fail to teach
in 12 years what Russian public schools manage to teach in 8. As fewer and fewer
people become able to afford college, which is likely to happen, because meager
career prospects after graduation will make them bad risks for student loans, perhaps
this will provide the impetus to do something about the public education system. One
idea would be to scrap it, then start small, but eventually build something a bit more
on par with world standards.

    College campuses make perfect community centers: there are dormitories for
newcomers, fraternities and sororities for the more settled residents, and plenty of
grand public buildings that can be put to a variety of uses. A college campus
normally contains the usual wasteland of mowed turf that can be repurposed to grow
food, or, at the very least, hay, and to graze cattle. Perhaps some enlightened
administrators, trustees and faculty members will fall upon this idea once they see
admissions flat-lining and endowments dropping to zero, without any need for
government involvement. So here we have a ray of hope, don't we.

    Moving on to transportation. Here, we need to make sure that people don't get
stranded in places that are not survivable. Then we have to provide for seasonal
migrations to places where people can grow, catch, or gather their own food, and
then back to places where they can survive the winter without freezing to death or
going stir-crazy from cabin fever. Lastly, some amount of freight will have to be
moved, to transport food to population centers, as well as enough coal and firewood
to keep the pipes from freezing in the remaining habitable dwellings.

    All of this is going to be a bit of a challenge, because it all hinges on the availability
of transportation fuels, and it seems very probable that transportation fuels will be
both too expensive and in short supply before too long. From about 2005 and until
the middle of 2008 the global oil has been holding steady, unable to grow materially
beyond a level that has been characterized as a "bumpy plateau." An all-time record
was set in 2005, and then, after a period of record-high oil prices, again only in 2008.
Then, as the financial collapse gathered speed, oil and other commodity prices
crashed, along with oil production. More recently, the oil markets have come to rest
on an altogether different "bumpy plateau": the oil prices are bumping along at
around $40 a barrel and can't seem to go any lower. It would appear that oil
production costs have risen to a point where it does not make economic sense to sell
oil at below this price.

    Now, $40 a barrel is a good price for US consumers at the moment, but there is
hyperinflation on the horizon, thanks to the money-printing extravaganza currently
underway in Washington, and $40 could easily become $400 and then $4000 a
barrel, swiftly pricing US consumers out of the international oil market. On top of
that, exporting countries would balk at the idea of trading their oil for an increasingly
worthless currency, and would start insisting on payment in kind - in some sort of
tangible export commodity, which the US, in its current economic state, would be
hard-pressed to provide in any great quantity. Domestic oil production is in
permanent decline, and can provide only about a third of current needs. This is still
quite a lot of oil, but it will be very difficult to avoid the knock-on effects of
widespread oil shortages. There will be widespread hoarding, quite a lot of gasoline
will simply evaporate into the atmosphere, vented from various jerricans and
improvised storage containers, the rest will disappear into the black market, and
much fuel will be wasted driving around looking for someone willing to part with a bit
of gas that's needed for some small but critical mission.

    I am quite familiar with this scenario, because I happened to be in Russia during a
time of gasoline shortages. On one occasion, I found out by word of mouth that a
certain gas station was open and distributing 10 liters apiece. I brought along my
uncle's wife, who at the time was 8 months pregnant, and we tried use her huge
belly to convince the gas station attendant to give us an extra 10 liters with which to
drive her to the hospital when the time came. No dice. The pat answer was:
'Everybody is 8 months pregnant!' How can you argue with that logic? So 10 liters
was it for us too, belly or no belly.

    So, what can we do to get our little critical missions accomplished in spite of
chronic fuel shortages? The most obvious idea, of course, is to not use any fuel.
Bicycles, and cargo bikes in particular, are an excellent adaptation. Sailboats are a
good idea too: not only do they hold large amounts of cargo, but they can cover
huge distances, all without the use of fossil fuels. Of course, they are restricted to the
coastlines and the navigable waterways. They will be hampered by the lack of
dredging due to the inevitable budget shortfalls, and by bridges that refuse to open,
again, due to lack of maintenance funds, but here ancient maritime techniques and
improvisations can be brought to bear to solve such problems, all very low-tech and
reasonably priced.

    Of course, cars and trucks will not disappear entirely. Here, again, some
reasonable adaptations can be brought to bear. In my book, I advocated banning
the sale of new cars, as was done in the US during World War II. The benefits are
numerous. First, older cars are overall more energy-efficient than new cars, because
the massive amount of energy that went into manufacturing them is more highly
amortized. Second, large energy savings accrue from the shutdown of an entire
industry devoted to designing, building, marketing, and financing new cars. Third,
older cars require more maintenance, reinvigorating the local economy at the
expense of mainly foreign car manufacturers, and helping reduce the trade deficit.
Fourth, this will create a shortage of cars, translating automatically into fewer, shorter
car trips, higher passenger occupancy per trip, and more bicycling and use of public
transportation, saving even more energy. Lastly, this would allow the car to be made
obsolete on the about the same time scale as the oil industry that made it possible.
We will run out of cars just as we run out of gas.

    Here we are, only a year or so later, and I am most heartened to see that the US
auto industry has taken my advice and is in the process of shutting down. On the
other hand, the government's actions continue to disappoint. Instead of trying to
solve problems, they would rather continue to create boondoggles. The latest one is
the idea of subsidizing the sales of new cars. The idea of making cars more efficient
by making more efficient cars is sheer folly. I can take any pick-up truck and increase
its fuel efficiency one or two thousand percent just by breaking a few laws. First, you
pack about a dozen people into the bed, standing shoulder to shoulder like sardines.
Second, you drive about 25 mph, down the highway, because going any faster
would waste fuel and wouldn't be safe with so many people in the back. And there
you are, per passenger fuel efficiency increased by a factor of 20 or so. I believe the
Mexicans have done extensive research in this area, with excellent results.

    Another excellent idea pioneered in Cuba is making it illegal not to pick up
hitchhikers. Cars with vacant seats are flagged down and matched up with people
who need a lift. Yet another idea: since passenger rail service is in such a sad shape,
and since it is unlikely that funds will be found to improve it, why not bring back the
venerable institution of riding the rails by requiring rail freight companies to provide a
few empty box cars for the hobos. The energy cost of the additional weight is
negligible, the hobos don't require stops because they can jump on and off, and
only a couple of cars per train would ever be needed, because hobos are almost
infinitely compressible, and can even ride on the roof if needed. One final
transportation idea: start breeding donkeys. Horses are finicky and expensive, but
donkeys can be very cost-effective and make good pack animals. My grandfather had
a donkey while he was living in Tashkent in Central Asia during World War II. There
was nothing much for the donkey to eat, but, as a member of the Communist Party,
my grandfather had a subscription to Pravda, the Communist Party newspaper, and
so that's what the donkey ate. Apparently, donkeys can digest any kind of cellulose,
even when it's loaded with communist propaganda. If I had a donkey, I would feed
it the Wall Street Journal.

    And so we come to the subject of security. Post-collapse Russia suffered from a
serious crime wave. Ethnic mafias ran rampant, veterans who served in Afghanistan
went into business for themselves, there were numerous contract killings, muggings,
murders went unsolved left and right, and, in general, the place just wasn't safe.
Russians living in the US would hear that I am heading back there for a visit, and
would give me a wide-eyed stare: how could I think of doing such a thing. I came
through unscathed, somehow. I made a lot of interesting observations along the
way.

    One interesting observation is that once collapse occurs it becomes possible to rent
a policeman, either for a special occasion, or generally just to follow someone
around. It is even possible to hire a soldier or two, armed with AK-47s, to help you
run various errands. Not only is it possible to do such things, it's often a very good
idea, especially if you happen to have something valuable that you don't want to part
with. If you can't afford their services, then you should try to be friends with them,
and to be helpful to them in various ways. Although their demands might seem
exorbitant at times, it is still a good idea to do all you can to keep them on your side.
For instance, they might at some point insist that you and your family move out to
the garage so that they can live in your house. This may be upsetting at first, but
then is it really such a good idea for you to live in a big house all by yourselves, with
so many armed men running around. It may make sense to station some of them
right in your house, so that they have a base of operations from which to maintain a
watch and patrol the neighborhood.

    A couple of years ago I half-jokingly proposed a political solution to collapse
mitigation, and formulated a platform for the so-called Collapse Party. I published it
with the caveat that I didn't think there was much of a chance of my proposals
becoming part of the national agenda. Much to my surprise, I turned out to be
wrong. For instance, I proposed that we stop making new cars, and, lo and behold,
the auto industry shuts down. I also proposed that we start granting amnesties to
prisoners, because the US has the world's largest prison population, and will not be
able to afford to keep so many people locked up. It is better to release prisoners
gradually, over time, rather than in a single large general amnesty, the way Saddam
Hussein did it right before the US invaded. And, lo and behold, many states are
starting to implement my proposal. It looks like California in particular will be forced
to release some 60 thousand of the 170 thousand people it keeps locked up. That is a
good start. I also proposed that we dismantle all overseas military bases (there are
over a thousand of them) and repatriate all the troops. And it looks like that is
starting to happen as well, except for the currently planned little side-trip to
Afghanistan. I also proposed a Biblical jubilee - forgiveness of all debts, public and
private. Let's give that one half a decade?

    But if we look just at the changes that are already occurring, just the simple,
predictable lack of funds, as the federal government and the state governments all
go broke, will transform American society in rather predictable ways. As municipalities
run out of money, police protection will evaporate. But the police still have to eat, and
will find ways to use their skills to good use on a freelance basis. Similarly, as military
bases around the world are shut down, soldiers will return to a country that will be
unable to reintegrate them into civilian life. Paroled prisoners will find themselves in
much the same predicament.

    And so we will have former soldiers, former police, and former prisoners: a big
happy family, with a few bad apples and some violent tendencies. The end result will
be a country awash with various categories of armed men, most of them
unemployed, and many of them borderline psychotic. The police in the United States
are a troubled group. Many of them lose all touch with people who are not "on the
force" and most of them develop an us-versus-them mentality. The soldiers returning
from a tour of duty often suffer from post-traumatic stress disorder. The paroled
prisoners suffer from a variety of psychological ailments as well. All of them will
sooner or later realize that their problems are not medical but rather political. This will
make it impossible for society to continue to exercise control over them. All of them
will be making good use of their weapons training and other professional skills to
acquire whatever they need to survive. And the really important point to remember is
that they will do these things whether or not anyone thinks it legal for them to do be
doing them.

    I said it before and I will say it again: very few things are good or bad per se;
everything has to be considered within a context. And, in a post-collapse context, not
having to worry whether or not something is legal may be a very good thing. In the
midst of a collapse, we will not have time to deliberate, legislate, interpret, set
precedents and so on. Having to worry about pleasing a complex and expensive legal
system is the last thing we should have to worry about.

    Some legal impediments are really small and trivial, but they can be quite
annoying nevertheless. A homeowners' association might, say, want to give you a ticket
or seek a court order against you for not mowing your lawn, or for keeping livestock
in your garage, or for that nice windmill you erected on a hill that you don't own,
without first getting a building permit, or some municipal busy-body might try to get
you arrested for demolishing a certain derelict bridge because it was interfering with
boat traffic - you know, little things like that. Well, if the association is aware that you
have a large number of well armed, mentally unstable friends, some of whom still
wear military and police uniforms, for old time's sake, then they probably won't give
you that ticket or seek that court order.

    Or suppose you have a great new invention that you want to make and distribute,
a new agricultural implement. It's a sort of flail studded with sharp blades. It has a
hundred and one uses and is highly cost-effective, and reasonably safe provided you
don't lose your head while using it, although people have taken to calling the "flying
guillotine." You think that this is an acceptable risk, but you are concerned about the
issues of consumer safety and liability insurance and possibly even criminal liability.
Once again, it is very helpful to have a large number of influential, physically
impressive, mildly psychotic friends who, whenever some legal matter comes up, can
just can go and see the lawyers, have a friendly chat, demonstrate the proper use of
the flying guillotine, and generally do whatever they have to do to settle the matter
amicably, without any money changing hands, and without signing any legal
documents.

    Or, say, the government starts being difficult about moving things and people in
and out of the country, or it wants to take too much of a cut from commercial
transactions. Or perhaps your state or your town decides to conduct its own foreign
policy, and the federal government sees it fit to interfere. Then it may turn out to be
a good thing if someone else has the firepower to bring the government, or what
remains of it, to its senses, and convince it to be reasonable and to play nice.

    Or perhaps you want to start a community health clinic, so that you can provide
some relief to people who wouldn't otherwise have any health care. You don't dare
call yourself a doctor, because these people are suspicious of doctors, because
doctors were always trying to rob them of their life's savings. But suppose you have
some medical training that you got in, say, Cuba, and you are quite able to handle a
Caesarean or an appendectomy, to suture wounds, to treat infections, to set bones
and so on. You also want to be able to distribute opiates that your friends in
Afghanistan periodically send you, to ease the pain of hard post-collapse life. Well,
going through the various licensing boards and getting the certifications and the
permits and the malpractice insurance is all completely unnecessary, provided you
can surround yourself with a lot of well-armed, well-trained, mentally unstable
friends.

    Food. Shelter. Transportation. Security. Security is very important. Maintaining
order and public safety requires discipline, and maintaining discipline, for a lot of
people, requires the threat of force. This means that people must be ready to come
to each other's defense, take responsibility for each other, and do what's right. Right
now, security is provided by a number of bloated, bureaucratic, ineffectual
institutions, which inspire more anger and despondency than discipline, and dispense
not so much violence as ill treatment. That is why we have the world's highest
prison population. They are supposedly there to protect people from each other, but
in reality their mission is not even to provide security; it is to safeguard property, and
those who own it. Once these institutions run out of resources, there will be a period
of upheaval, but in the end people will be forced to learn to deal with each other
face to face, and Justice will once again become a personal virtue rather than a
federal department.

    I've covered what I think are basics, based on what I saw work and what I think
might work reasonably well here. I assume that a lot of you are thinking that this is
all quite far into the future, if in fact it ever gets that bad. You should certainly feel
free to think that way. The danger there is that you will miss the opportunity to adapt
to the new reality ahead of time, and then you will get trapped. As I see it, there is a
choice to be made: you can accept the failure of the system now and change your
course accordingly, or you can decide that you must try to stay the course, and then
you will probably have to accept your own individual failure later.

    So how do you prepare? Lately, I've been hearing from a lot of high-powered,
successful people about their various high-powered, successful associates. Usually,
the story goes something like this: "My a. financial advisor, b. investment banker, or
c. commanding officer has recently a. put all his money in gold, b. bought a log
cabin up in the mountains, or c. built a bunker under his house stocked with six
months of food and water. Is this normal?" And I tell them, yes, of course, that's
perfectly harmless. He's just having a mid-collapse crisis. But that's not really
preparation. That's just someone being colorful in an offbeat, countercultural sort of
way.

    So, how do you prepare, really? Let's go through a list of questions that people
typically ask me, and I will try to briefly respond to each of them.

    OK, first question: How about all these financial boondoggles? What on earth is
going on? People are losing their jobs left and right, and if we calculate
unemployment the same way it was done during the Great Depression, instead of
looking at the cooked numbers the government is trying to feed us now, then we are
heading toward 20% unemployment. And is there any reason to think it'll stop there?
Do you happen to believe that prosperity is around the corner? Not only jobs and
housing equity, but retirement savings are also evaporating. The federal government
is broke, state governments are broke, some more than others, and the best they
can do is print money, which will quickly lose value. So, how can we get the basics if
we don't have any money? How is that done? Good question.

    As I briefly mentioned, the basics are food, shelter, transportation, and security.
Shelter poses a particularly interesting problem at the moment. It is still very much
overpriced, with many people paying mortgages and rents that they can no longer
afford while numerous properties stand vacant. The solution, of course, is to cut your
losses and stop paying. But then you might soon have to relocate. That is OK,
because, as I mentioned, there is no shortage of vacant properties around. Finding a
good place to live will become less and less of a problem as people stop paying their
rents and mortgages and get foreclosed or evicted, because the number of vacant
properties will only increase. The best course of action is to become a property
caretaker, legitimately occupying a vacant property rent-free, and keeping an eye on
things for the owner. What if you can't find a position as a property caretaker? Well,
then you might have to become a squatter, maintain a list of other vacant properties
that you can go to next, and keep your camping gear handy just in case. If you do
get tossed out, chances are, the people who tossed you out will then think about
hiring a property caretaker, to keep the squatters out. And what do you do if you
become property caretaker? Well, you take care of the property, but you also look out
for all the squatters, because they are the reason you have a legitimate place to live.
A squatter in hand is worth three absentee landlords in the bush. The absentee
landlord might eventually cut his losses and go away, but your squatter friends will
remain as your neighbors. Having some neighbors is so much better than living in a
ghost town.

    What if you still have a job? How do you prepare then? The obvious answer is, be
prepared to quit or to be laid off or fired at any moment. It really doesn't matter
which one of these it turns out to be; the point is to sustain zero psychological
damage in the process. Get your burn rate to as close to zero as you can, by
spending as little money as possible, so than when the job goes away, not much has
to change. While at work, do as little as possible, because all this economic activity is
just a terrible burden on the environment. Just gently ride it down to a stop and
jump off.

    If you still have a job, or if you still have some savings, what do you do with all the
money? The obvious answer is, build up inventory. The money will be worthless, but
a box of bronze nails will still be a box of bronze nails. Buy and stockpile useful stuff,
especially stuff that can be used to create various kinds of alternative systems for
growing food, providing shelter, and providing transportation. If you don't own a
patch of dirt free and clear where you can stockpile stuff, then you can rent a
storage container, pay it a few years forward, and just sit on it until reality kicks in
again and there is something useful for you to do with it. Some of you may be
frightened by the future I just described, and rightly so. There is nothing any of us
can do to change the path we are on: it is a huge system with tremendous inertia,
and trying to change its path is like trying to change the path of a hurricane. What
we can do is prepare ourselves, and each other, mostly by changing our
expectations, our preferences, and scaling down our needs. It may mean that you
will miss out on some last, uncertain bit of enjoyment. On the other hand, by
refashioning yourself into someone who might stand a better chance of adapting to
the new circumstances, you will be able to give to yourself, and to others, a great
deal of hope that would otherwise not exist.

    --------

     Dmitry Orlov is author of "Reinventing Collapse, New Society Publishers" (2007).
His website is cluborlov.blogspot.com, where the above article is also featured.

    His articles on Culture Change include The New Age of Sail, The Despotism of the
Image, and That Bastion of American Socialism.