Had the opportunity to attend a presentation by Dmitry Orlov (author of the excellent book Reinventing Collapse) last night, with my friend Steve Wardell. Dmitry makes a compelling case that the US empire will suffer the same fate as its most hated rival, the Soviet empire, for many of the same reasons:
- Extreme dependence on the price of oil. The Soviet's over reliance on oil was as a source of income (which collapsed in the early 80's due to a confluence of factors, hence the bankruptcy). The US depends on it due our profligacy in its use. As oil availability dries up (export land model, peak oil production, etc.) the US will suffer disproportionately.
- Extreme levels of spending on national security. The paranoia that led the Soviets to overspend on national security was legendary. The same is true with the US. The US now spends more than the rest of the world combined on national security. In a hyper competitive global economy it isn't absolute or historical levels of spending that matter - it's relative spending levels.
- A runaway foreign trade deficit and ballooning debt.
- Extreme levels of corruption and a gross misallocation of economic resources. The Soviets had insular bureaucrats and the US has bankers and financiers.
- A ballooning welfare state that it can't support (in the US's case, it's mostly ballooning health care costs -- the US's crony capitalist health care system costs 2-4x per unit of health care as compared to the rest of the developed world, while delivering health stats only rivaled by the developing world).
While Dmitry's top level analysis is great, it's the details (from his experience with how people dealt with the economic/political/social collapse of the Soviet Union) on how Americans will cope with daily life after a collapse, that are the most entertaining/sobering. In a nutshell, life in a US Banana Republic means: we're going to grow lots of our own food, make our own energy, and buy most our products at flea markets.
Here's his presentation: The Five Stages of Collapse. Here's a quick summary:
- Financial Collapse. Already in motion.
- Commercial Collapse. Just started.
- Political Collapse (a loss of faith in the political process). First part is over (the recent election in the US). Second part is going to be nasty.
- Social Collapse. Potentially the end state or stable equilibrium point for most of the world. Everyone against everyone with points awarded by the global marketplace.
- Cultural Collapse. Full meltdown. Global market breaks.