Shock over Ukraine

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Pawel Kuczyński

[Update: I am pushing this live a few days early, because the Ukrainian situation is evolving so rapidly. One political corpse (Yanukovych) is out; apparently he has fled to Russia. Another political corpse (Tymoshenko) has been hastily rehabilitated and is ready to be put on the ballot for elections in May. Question is, Will there still be a country for her to (pretend to) run? Financial reserves are down to a few days, federal structures are being dismantled throughout the country, regional governors are fleeing, and a default on some €60 billion of Ukrainian bonds, many held by Russian banks, seems likely. Could this be just the kind of financial contagion needed to finally pop the ridiculous US equities bubble? At least two Ukrainian provinces are openly talking secession; one (Crimea) wants to immediately join Russian Federation. A question for US State Dept. flunkies and EU functionaries: What does that do to your geopolitical calculus? At risk are five nuclear power plants and a lot of Russian gas that transits Ukraine on its way west. Ukraine is shaping up to be a lot like Yugoslavia, except with more than twice as many people, lots of crazed street fighters who think they now own the place, and a role critical to European energy security. If you aren\’t in shock about this, then you haven\’t been paying attention.]

I\’ve been receiving a lot of emails asking me what I thought was happening in Ukraine. It took me a while to formulate an opinion, but what I now think is happening is this: a complete and utter failure of politics on every level.

Everyone has failed: the EU representatives, the US State Department with its Victoria “Fuck the EU” Nuland, the Yanukovych government, its political opponents, and the Kremin. And now they are all in shock and nobody knows what to do. Except for the protesters, who do know what to do: continue to protest. P { margin-bottom: 0.08in; } Most of them don\’t even know what it is they are protesting, but, in essence, they are protesting the very existence of their country, which is made up of two parts: Eastern Poland, which is Ukrainian-speaking and predominantly Catholic, and Western Russia, which is Russian-speaking and predominantly Orthodox. The “Russians” outnumber the “Ukrainians” two to one. The ultimate resolution to the crisis lies in partitioning the country. Nobody has the stomach to even talk about it—yet. But until that happens we will continue being subjected to this strange spectacle, where every single actor in Ukraine does everything possible to undermine the country\’s political system. Deep down, the Ukrainians don\’t want there to be a different government in Kiev—they don\’t want there to be a government in Kiev at all.

I now turn it over to Andrey Tymofeiuk, a Kiev resident who posted the following on his Facebook page, in obscenity-riddled Russian. (The Russian language is remarkably rich in obscenities, which pack tremendous expressive power but don\’t translate into English with its paltry collection of four-letter words.) I think he provided a good, information-rich summary of the situation from all the angles, his graduate-level potty-mouth notwithstanding, so please give him props. Translation and clean-up are mine.

I think that the current situation is such that everyone is in terrible shock over what\’s happening.

The EU representatives are shocked most of all. They were playing at being skillful diplomats, who stooped to work with the barbarous dictator of a third-world country. He was supposed to quiver with anticipation over his handout, in the form of an EU-Ukraine Association Agreement, which would have allowed him to don the mantle of the great Euro-integrator and win the 2015 elections.

Gazing down from their lofty diplomatic perch, these experts were blindsided when the barbarous dictator suddenly decided to do a bit of arithmetic, spotted a flaw in the deal (Ukrainian national bankruptcy) and swiftly decided to take his 46 million slaves away from the EU and give them to Moscow instead. And then, due to their ridiculous bureaucracy and complete lack of understanding of Ukrainian reality, they allowed an initially peaceful protest to develop into something like civil war.

The EU representatives really don\’t need a bloody quagmire with a humanitarian crisis, hundreds of thousands of refugees, terrorist attacks, tanks on the streets and other such joys, and they will try to do all they can to prevent it, even if this means that the thick-headed barbarous dictator has to stay in power. But the problem is that the barbarous dictator seems to have lost his mind.

Now the EU representatives will have to answer some very difficult questions from television viewers back home. Such as: “Why are the people waving EU flags wearing Nazi emblems? Are we supporting Nazis?” or “If they are peaceful, then why are they throwing Molotov cocktails at policemen and taking them hostage?” That\’s just for starters. Here is a more serious question: “Do we really want 46 million of these violent barbarians to join the EU?” And how about this one: “What makes you think that the five Ukrainian nuclear power plants will remain safe if the country falls into chaos?” Just one more, but it\’s a doosie: “If Ukraine becomes ungovernable, how are we going to get our fix of Russian natural gas next winter? Are we going to freeze to death?” But the EU representatives may not have to field such questions much longer because their diplomatic careers may be at an end. After all, they haven\’t been too effective, have they? To transform a perfectly peaceful protest into a bloody mess is not exactly the pinnacle of European diplomacy. A few mid-level al Qaeda operatives could have managed the job just as well.

Ukrainian opposition leaders are in shock as well. They were all ready to use the energy of the demonstrators to advance their own political ambitions—but now these ambitions seem rather beside the point. They are politicians, not field commanders, and now they don\’t know what to do. Their task is an immensely intricate one: on the one hand, they must act like ardent revolutionaries, or the crowd will turn against them, haul them off the podium and string them up; on the other hand, they have to placate the Europeans and somehow make them believe that they still have influence, that this is still a peaceful protest, and that they are not leading illegal combatants to overthrow lawful authority, but legitimate, peaceful protesters. They still hope that the Europeans will give them jobs in the new puppet government once this is all over. So far, this is not working, and they themselves no longer believe that they are in control of anything. They sign agreements to end hostilities, and hostilities continue.

The barbarous dictator, Yanukovych, is in shock too. His luck has been quite good until now, but has suddenly run out. He rose from low ranks, became one of the kingpins of the Donbass region, survived the collapse of 2004 and then got rich and built himself a palatial estate complete with a Solid Gold Toilet. Up until now he had several different ways of winning the elections in 2015. After that, he could have borrowed a page from Lukashenko\’s playbook and fashioned himself into Ukraine\’s president-for-life. But now that dream is gone.

He had a couple of chances to resolve the situation, but he made missteps, constantly listening to the hard-liners in his administration, and now the situation is serious and his options quite limited. After the events of February 18 there is no way for him to even claim to be a caretaker president, in power until the 2015 elections. His special forces can\’t disperse the protesters. He was counting on Putin\’s help, but Putin is less than pleased with his avarice and stupidity, and is noncommittal even about granting him asylum should he need to escape from Kiev. Plus, he\’d be leaving behind the Solid Gold Toilet. But if he sticks around the people might hang him. He has gone from trying to survive the next election to trying to survive until the next election.

The administration\’s hard-liners are in shock too. They sincerely believed that all they have to do is wave some night-sticks and the crowds will disperse. They trucked in special forces, traffic cops, criminals under their control, assorted zombie idiots, and ordered them all to attack the protesters. They tried it once—nothing; tried it again—still nothing. Protesters aren\’t dispersing. Just the opposite: the more they beat on the protesters, the more their numbers grow and the more violent their tactics become. Once they saw an armored personnel carrier —a symbol of their invincibility—engulfed in flames, their hands started to shake. They don\’t think that Yanukovych will abandon them, but what can he do? Order in the army? But the army people haven\’t been placated with special privileges like the special forces and the police, don\’t have much to lose, and could easily cross over to the other side.

The special forces are in even greater shock. A lot of them also worked as policemen, happily beating up football hooligans and collecting bribes from businessmen. And now they are confronted with a most unwelcome situation: the hooligans and the businessmen are united against them. In the beginning it was fun for them—beat on defenseless people in the center of Kiev, receive medals and money, and go home. But things have dragged on and on. The the stupider ones (the majority) are now furious, can\’t understand why they haven\’t been ordered to just shoot everyone, and think that Yanukovych is a sissy. The smarter ones (the minority) understand full well how dangerous that would be. First of all, success is not guaranteed and losses are likely to be high on both sides—but they have no desire to lay down their lives in defence of the Solid Gold Toilet. Second, even if they manage to suppress and disperse the protesters, the day after that they would start getting killed off one by one, because there exists a database with their names and addresses. Unlike the higher-ups in the administration, they won\’t have the chance to flee abroad, and will stay to experience popular anger firsthand. They really want Yanukovych to magically return the situation to the way it was before, but the probability of this happening is dropping every day.

The Kremlin is in a bit of shock as well. They were carefully masterminding the situation, supporting the Donbass thugs, gradually ramping up their influence in Ukraine and buying up key stocks. They were methodically planning to annex half of Ukraine as a “voluntary incorporation.” But then this idiot Yanukovych started giving them a hard time trying to extort money in return for joining the Customs Union, and then he made a series of mistakes leading to the current disaster—in the middle of the Winter Olympics in Sochi, no less! The right thing to do would be to send tank columns into Donbass and Crimea, but that would put a damper on the Olympics. Plus, nothing is ready—Ukraine is not tiny Georgia, and a beautiful textbook military operation would not be possible without preparation. And a less-than-stylish military operation could lead to visa problems and international banking difficulties for the Russian leadership at a minimum, and World War III at a maximum.

The Kremlin\’s propaganda people are observing the formation of the contemporary Ukrainian nation right on the streets of Kiev, and they are crying bloody tears. How are they going to be able to explain to these people that their country is not Ukraine but “Little Russia,” that their national language is made up, and that they should come home to Mother Russia and start sending their taxes to Moscow? More importantly, what about the average Russian, who is used to thinking that “nothing can be done” but is now seeing right on his television screen how for three months now special forces, armed to the teeth, haven\’t been able to do much of anything to put down a ragtag mob of provincials? Thoughts are starting to course through his brain—dangerous thoughts. And the average Belarussian is even further ahead in his thinking. He has stopped looking at the television screen, has walked over to the window, and is looking at the door of the nearest government office, where local officials recently beat a bribe out of him.

The Americans and the Brits are also in shock. They couldn\’t possibly care any less about the sufferings of the Ukrainian aborigines. All they care about is that Russia doesn\’t grow stronger. Until recently Yanukovych seemed like a pleasant sort of dictator—not too accommodating toward the Russians, and willing to talk business with the West, about shale gas and other natural resources in particular. But now there\’s a bloody mess, with Molotov cocktails, troop carriers on fire, catapults, snipers… They could dismiss Yanukovych, but then who would honor all the agreements and contracts he has signed? And who will they talk business with? The guerilla warrior nationalists from The Right Sector? The club-wielding Cossacks? And what if the Russians achieve some kind of breakthrough, absorb Russian-speaking Eastern Ukraine into the Russian Federation, and grow even stronger?

Even China has something to think about. China has its own interests in Crimea, and is not so much shocked as perplexed: why can\’t the local barbarian put down his opponents? There was a similar problem in China in 1989 on Tiananmen square, but there they mowed down hundreds of unarmed students without any undue excess of emotion and it was all over quickly. The West grumbled for a bit, but then resumed economic cooperation as if nothing happened. The Chinese can\’t grasp why this dictator can\’t do the totally obvious thing, but in general they don\’t care. Ukraine is far away, and they have no desire to play a part in Eastern European conflicts. They have more important things to think about, like winning every single medal at the Olympic games in 2016 and putting a red flag on Mars.

The active population of Kiev has been in shock for a few months now, continuously, more and more every day. But at some point shock was replaced with active enthusiasm: it is better to go carry medicine to the wounded and to hurl shingles at police on Independence Square than to watch horrors unfold on television.

The passive population of Kiev is still quietly drinking beer and poking around with social networking apps. They don\’t understand what\’s happening yet. But if the unofficial state of emergency (including limitations on access to the city) last a few more days—and food and drink running out—then they will end up in a state of shock more serious than anything they have ever experienced.

So, who isn\’t in shock? I saw him today on Independence Square: a Cossack dressed in national garb, who, with a smile on his face, was marching off to skirmish with the special forces. In one hand he held a shield with “Glory to Ukraine” written on it, and in the other a frighteningly big club. He was singing a patriotic song. It occurred to me that this man isn\’t bothered by questions such as “How will I get home tonight?” or “What if something happens to me?” or “What is going to happen to us all?”

He isn\’t in shock. He no longer gives a damn, bless him.

The Good Life: Mobility, Anonymity, Freedom

AK3D

P { margin-bottom: 0.08in; }A:link { }The recent advanced in networked mobile computing has made it rather unnecessary for a large class of people—ones who use computers for work—to maintain a fixed abode: it is now possible to do all the same things, via the Internet, from any place in the world that has a wifi signal.

If your work involves designing, writing and testing, or simply running software, then all you really need is a laptop, with a way to charge it. (In a sunny place, 200W of solar panels plus a couple of 6V golf cart batteries, a charge controller, and an inverter are all you need.) If you are doing research, then it turns out that a lot of libraries have gone electronic too, and that there is less and less reason to clamber around the dusty stacks, looking for a call number that of course isn\’t there because the book is either checked out, misplaced, or lost altogether. In short, showing up is no longer important; all that matters is being able to get online.

What\’s more, such mobility has become a definite plus, as more and more businesses have become virtual, relying on contractors that do their work remotely. Most such employers hardly ever have reason to see you in person; however, most of them really, truly, deeply care where you are physically. They want you to be nearby, just in case. In case of what, exactly? Nobody can tell you that, except that it is important. I only mention this because it\’s true: it\’s something I know from experience.

Suppose you have a job that involve banging away at a laptop for 8-10 hours a day for some company whose offices are located in a major urban center. You could, of course, rent an apartment in that urban center, buy a car, brave the traffic morning and evening, and spend your days sitting in an empty cube behind your laptop (which you carry back and forth with you), overhearing inane conversations from people who aren\’t really your coworkers (inevitably, your real coworkers/contractors/clients/support people are on the Internet, and you communicate with them using email and videoconferencing). You have to pay rent, make payments on the car, pay for gasoline, pay for lunches from the cafeteria or from some fast food joint nearby. All the while, you would constantly encounter stressed-out, money-obsessed people compulsively poking at various electronic devices while ignoring each other.

All of these things are draining, both financially and psychologically, and so your productivity and morale suffers, and you spend more and more of your workday wasting time on Internet newsgroups and blogs. Your employer has no idea, or doesn\’t care, as long as you are in your cube and staring and the screen for at least eight ours a day. But demoralization can become so profound that it gives rise to passive-aggressive behavior and in due course produces something like a secret work-to-rules strike, for any endeavor can be brought to a halt simply by following rules meticulously and refusing to stray outside one\’s job description. After breathing the same air with such colleagues, you come home every night too drained to do much beyond warming up a pre-manufactured meal and taking in a dose of television, although more often than not you end up checking and responding to emails and answering phone calls even while at home, once again driving home the point that it doesn\’t matter where you are. If your employer is even slightly enlightened, then you will be allows to work remotely. Of course, you\’d be expected to stay in town, in order to show up on a moment\’s notice (for what?).

Now, you could also do the same work from an undisclosed tropical location where rent is tiny, if you choose to rent, or where you can buy a house with a few of months\’ wages. In the mornings, you could go for a run on the beach and a swim, and then settle down with the laptop in a chaise longue in the shade by the pool, listening to exotic birds and watching neighborhood kids and pets run around unattended. You would do your shopping by bicycle. In your spare time you could go surfing, or scuba-diving, or go hike through the jungle and admire the wildlife, or party with the motley crew of international backpackers that happen to be filtering through the area. Since everyone around you would be happy and relaxed, you would be happy and relaxed too, and your productivity would soar, allowing you to finish the usual daily workload in half the time, and to deliver stunning results. Of course, if your employer ever finds out your secret, then you are in big trouble.

But how would your employer find out? Your laptop can connect to the company servers (which are not even where the company has its offices but in the cloud somewhere) from anywhere in the world. If security is an issue, the connection can be via an encrypted tunnel. Your phone is on wifi and you can make and receive calls that look like they are coming from the local area code. A friend of yours, who happens to live in the area where you are supposed to physically reside, has agreed put your name on her mailbox, so that official correspondence has a place to go. You provided her with a signature stamp, so that she can stamp checks and letters that you periodically email to her to print out and send off. This more or less completes your virtual façade.

What could go wrong? Well, most people couldn\’t possibly pull this off, for the simple reason that they are hopeless when it comes to maintaining their anonymity. They use Facebook, Google+ and Twitter, which specifically destroy their anonymity and lay their lives out there for all to see—their employers, the cops who pull them over, border patrol, IRS agents—anyone who cares to look. They load up their smartphone with apps that track their location. If they blog, they blog in their own name. In short, instead of being savvy users of modern technology, turning it to their advantage, they act like cattle for the slaughter, making it trivial for corporations and the government to examine and control, to tax and to monetize, and generally manipulate and control every aspect of their existence. They volunteer to be slaves.

In a very direct, simple way,

Freedom = Mobility + Anonymity

It seems uncontroversial that if you can\’t move, you are more or less in jail. It doesn\’t have to be a physical jail: you could be wearing an ankle bracelet, or just fulfill the requirement that you show up at the same place every weekday morning. Just being able to move, in a theoretical I-could-if-I-wanted-to sort of way, doesn\’t count as mobility. Anybody can catch a flight somewhere… and then two weeks later catch a flight back to where they started. Anybody can “travel”—for pleasure or for business. True mobility is in being able to go from place to place to place, keeping your base of operations virtual, limited to a name on a mailbox and a cell phone with an area code that matches the postal code of the mailbox. The two hallmarks of mobility are that your “public location”—where prying eyes think you are—is mostly fictional, and that your “physical location”—where your physical body resides—is arbitrary, irrelevant, and secret. The best choice for a “public location” is a US state with no income taxes but with high property taxes—but in which you don\’t own any property.

Of course, anonymity is what makes it all possible and here it is possible to go very far. The first step is to delete all the social networking accounts. Next is to start using email using any number of services that reside in countries that are not subject to US or EU law, do not maintain logs, and do not respond to official requests for information. Next is to encrypt all your communications. Clearly, you do not want your physical being to be associated with any electronic representation of you. If there is a public profile photo of you, it should be of someone else (more attractive) who looks like you. If you publish, do so under a pseudonym, or, better yet, a group pseudonym, because it is amazing how much the simple shift from “anonymous person” to “anonymous persons” does to frustrate efforts to identify you. “Tyler Durden” of Zerohedge is a good example of that strategy, and illustrates the close connection between anonymity and freedom of expression. Of course, if you stay in one place for too long people will eventually find out who you are (there are always enough busybodies around for that). If you are abroad, then eventually your visa will expire; if you are in a country for which you have a passport, the local authorities will eventually become inquisitive. And so it\’s best to stay on the move.

Thus, mobility requires anonymity, and anonymity requires mobility, and both equate with not just freedom, but with nomadism. And nomadism, in turn, requires that your status as a nomad be kept secret, for, as James C. Scott wrote in the introduction to his book Seeing like a State, “the state has always seemed to be the enemy of ‘people who move around’ … [g]ypsies, vagrants, homeless people, itinerants, run-away slaves and serfs [emphasis mine] have always been a thorn in the side of states. Efforts to permanently settle these mobile peoples (sedentarization) seemed to be a perennial state project-perennial, in part, because it so seldom succeeded.” And so you should be a “resident” in the place where you don\’t live, and a “tourist” in any number of places where you do (sometimes) live. These are simple, uncontroversial, popular categories that require very little in the way of confirmation.

There is another potential benefit to this sort of virtual existence, but its importance depends on your estimate of the likelihood of a zombie apocalypse breaking out: it allows you to relocate to a place, or places, that are far away from the ground zero of zombie apocalypse (which is what every major city is) and to hide out in some calm backwater where your chances of riding out the transition period, when the zombies all eat each others\’ brains, in relative comfort.

“American” exceptionalism

Olivia Locher

P { margin-bottom: 0.08in; }A:link { }The term “American exceptionalism” has been receiving more than its fair share of play recently. It was pressed into service in the vapid banter that passes for political discourse in the US, with the Republicans accusing Obama of not believing in it. More recently, it surfaced as a term in international relations, when Russian president V. Putin chastised the US for believing it in a NY Times editorial, equating it with chauvinism and lack of respect for the rule of international law. It seems that it is Putin\’s dream to extend his cherished concept of “dictatorship of the law” to encompass even the US.

I feel that “American exceptionalism” does exist, and is, in fact, quite pervasive, but not in the way politicians and politicos in the US wish to think. This term, as those in the US are currently attempting to use it, is yet another of their attempts to mangle the language, along with “Libertarianism” that isn\’t libertarian (i.e., socialist) and “football” that isn\’t football (the entire planet\’s favorite team sport). This sort of mangling of international terminology is rather exceptionally obnoxious.

The term “American exceptionalism” was born during a meeting which took place in the spring of 1929 between Joseph Stalin and the US Communist Party leader Jay Lovestone, during which Lovestone argued that workers in the US weren\’t interested in socialist revolution. In response, Stalin the seminary drop-out demanded to put an end to this “heresy of American exceptionalism.” Stalin used the term in a mocking way, and something important was lost in translation from Russian “исключительность”, which is closer to “abnormality,” to English “exceptionalism” which has a few positive connotations, whereas in Russian, with the verb “исключить” (to expel) as its base, it is altogether non-aspirational.

Stalin\’s taking an exception to “American exceptionalism” aside, Lovestone may at the time have had a valid point. At that time, the US could have been considered to stand a good chance of mitigating the negative effects of capitalism and advancing in the direction of a just and equitable society without resorting to brutal class struggle and violent revolution. The reasons for this had to do with luck: the US had the natural resources, the industrial capacity, a well-organized labor movement and an immigrant population that hadn\’t had the time to develop rigid class distinctions.

But just a year later, at the 1930 American Communist convention, it was proclaimed that “the storm of the economic crisis in the United States blew down the house of cards of American exceptionalism.” While the USSR surged forward, the US wallowed in the mire of the Great Depression and recovered economically only thanks to the gigantic windfall of Word War II, at the end of which it remained as the only industrial nation that hadn\’t been bombed to smithereens, flush with natural resources, and with a new-found egalitarian attitude borne of wartime patriotism and a newfound ability to understand each other thanks to the installation of Dayton, Ohio English as the nation\’s official dialect. The US reaped another, much smaller windfall with the peaceful collapse and dismantlement of the USSR in 1990, extending its life expectancy by perhaps a decade.

But now this period is well and truly over: the resource base is depleted, the industrial base is in shambles, and society is rapidly degenerating from a class society to a caste society, with a disappearing middle class, an unbridgeable chasm between the haves and the have-nots and the lowest social mobility of any developed nation. If and when the revolution finally comes, I imagine Stalin\’s embalmed corpse, resting in the Kremlin Wall Necropolis, smiling ever so sweetly.

So much for “exceptionalism” (in quotes); what about “American” (also in quotes)? I am currently working from an undisclosed location south of the US border, where temperatures hover around 85°F, the ocean is pleasantly warm, fresh fruit comes from a nearby jungle, the Internet is high-speed and rent is quite a lot cheaper than what it cost me to heat the boat in Boston. I am still very much in America (without the quotes)—as former Venezuelan president Hugo Chavez put it “We are all Americans.”

America, you see, is the term the entire world uses to describe the major land mass of the planet\’s western hemisphere comprising some 43 million km², grouped, for convenience, into North America and South America, and containing 36 countries. But then there is one country that controls well under a quarter of the total landmass and contains just over a third of the population, but which has the gall to call itself “The United States of America.” It is not the only “united states” in America; it is not even the only “united states” in North America because there is also Estados Unidos Mexicanos.

People south of the US border use a different intonation or roll their eyes ever so slightly to signal the difference between America the geographic term and “America” the country that had the impertinence to appropriate it. “Americans” themselves should probably use finger-quotes, to be polite, when they mean to say “America” rather than America.

Getting back to the subject of “American exceptionalism”: I believe that “America” (in quotes) is in some ways exceptional (in Stalin\’s original sense of “abnormal”). I will therefore move “exceptionalism” outside the quotes and say a few more things about “American” exceptionalism.

First, “America” has an exceptionally bad government. There is fervent insistence that “America” is a democracy, but a look into the details of the matter discloses a decrepit political structure whose sole purpose is to legitimize privilege, wealth and aggression.

Starting with Congress, its two houses are both founded on systemic corruption. The Senate has two members from each state, be it a huge state like California or a tiny one like North Dakota, making it rather cheap for lobbyists to purchase roughly half the Senate, the rest being somewhat more expensive but still affordable. The House of Representatives is formed by a process called “gerrymandering,” whereby electoral districts are formed in ways that disadvantage the groups which the ruling elite wishes to see underrepresented. The result of this is that, according to numerous opinion polls, members of US Congress are now less popular than lice, cockroaches, colonoscopies, Hitler or Genghis Khan. This august body has been essentially incapable of governing. Its main activity involves enacting legislation which runs into thousands of pages, most of them written by lobbyists, which none of the members can either read or understand.

As a result, President Obama has recently announced his intention to ignore Congress and to start ruling by decree (the local euphemism for “decree” being “executive order”). This is rather typical of presidential régimes that are burdened by a morbid legislature, and, as such, is a step in the right direction. Turning ever so briefly to the supposedly independent judiciary, the US Supreme Court has consistently decided that justice is a matter of wealth and privilege, judging that “free speech” amounts to the right to spend money, and that “corporate persons” have more rights and fewer responsibilities than human ones. And so “America” is no longer a democracy, and although one never hears it from corporate-owned or corporate-funded “American” media, the “Americans” themselves seem well aware of the fact, which is why so few of them bother to vote. Why should powerless people participate in a humiliating farce designed to legitimize the power of those who oppress them? Elsewhere this state of affairs might be called “political corruption” whereas in “America” that corruption is enshrined in the constitution and the system of law, which everyone is expected to uphold and venerate.

Second, “America” also has an exceptionally bad health care system. The rot started with a very bad mistake—the idea that health care should be tied to employment. It has now degenerated to a point where the medical system eats up a fifth of the country\’s economic output, and is drifting in the direction of socialized medicine administered by a powerful group of profit-seeking companies. It produces outcomes that are slightly worse than those of Cuba, where per capita expenditure on health care is just 5% of that in “America.”

Life at an “American” hospital is a non-stop macabre comedy where sleep-deprived interns compulsively poke away at computers while ignoring the patients, and where the hospital profits from their numerous mistakes. Every “American” should know the term nosocomial, which designates medical problems caused by medical care itself. While “American” truck drivers must by law pull over and rest after ten hours behind the wheel, “American” doctors are often required to work 24-hour shifts, not because the decisions they make are so much less important than those made by truck drivers, but because their mistakes drive up profits by causing complications that require additional treatment. The sine qua non of “American” health care is emergency medicine, much of it devoted to keeping elderly patients alive for no good reason, and often against their will—until the money runs out. How much money? Well, a great deal of it, but how much anything costs is kept as a great mystery which is disclosed to patients only after the fact, often as part of a legal effort to bankrupt them.

This is why many “Americans” are discovering that their favorite doctor is, as the saying goes, is “Dr. Blue—Jet Blue.” A quick flight to America proper takes you out of the hands of “American” medical establishment and puts you in the hands of proper American doctors, who tell you how much your treatment will cost beforehand, charge reasonable rates and achieve reasonable results with reasonable effort.

There are other areas in which “America” is exceptional. For the sake of brevity, I will only touch upon one of them, briefly.

“America” has an exceptionally bad foreign policy. A key aspect of “American” foreign policy is that “America” is a sore loser: once defeated and expelled, it goes into a passive-aggressive mode of trying to rewrite history using economic sanctions and covert activities. Cuba overthrew the “American” dictator Fulgencio Batista 55 years ago, but sanctions are still in effect. Similarly with Iran: 35 years after its “American” shah was overthrown, it is still being portrayed as the enemy. Another key aspect of “American” foreign policy is its complete lack of compunction in resorting to political assassination. Luckily, “America” seems to be losing its ability to project power beyond its borders. It ran roughshod over Serbia, Iraq and Afghanistan unopposed, it was checked in Libya, and, if all goes well, it will be checkmated in Syria and Iran.

I could go on and on and talk about exceptionally high prison population, exceptionally expensive and ineffective education, exceptionally weak national infrastructure, exceptionally high levels of surveillance, exceptionally high murder rate and so on and so forth, but I hope I have made it clear: “American” exceptionalism is not something for “Americans” to be proud of. How it came about is by no means the fault of the vast majority of “Americans.” If it is anyone\’s fault, it is the fault of their ruling class, with its faulty, self-serving, and ultimately self-defeating ideas. There are some impediments making the transition from being “Americans” in quotes to becoming Americans proper—and to accept their birthright as inhabitants of the American continent—but these impediments are mostly mental, cultural and organizational. All of them will have to make that journey sooner or later, as “America” breaks up and disappears in a maelstrom of national bankruptcy, repudiation of federal authority and open revolt.

How To Time Collapses

Douglas Smith Zeus

P { margin-bottom: 0.08in; }A:link { }[In italiano] [日本語で] Over the past half a decade I\’ve made a number of detailed predictions about collapse: how it is likely to unfold, what its various manifestations are likely to be, and how it will affect various groups and categories of people. But I have remained purposefully vague about the timing of collapse and its various stages, being careful to always append “give or take half a decade” to my dire prognostications. I wasn\’t withholding information or being coy; I really had no way of calculating when collapse will happen—until five days ago, when, out of the blue, I received the following email from Ugo Bardi:

Hi Dmitry,

You may be interested in this post of mine.

Starting from this post, I\’m trying to draw a parallel between the collapse of the Soviet Union and the impending collapse of Italy. There are, as always, similarities and differences. In particular, the Soviet Union collapsed almost immediately after that oil production flattened out and started declining. On the contrary, the Italian government survives despite a loss of 36% in oil consumption.

My impression is that it is all related to different taxation methods. I understand that the Soviet tax system was based mainly on commodity taxes and on taxes on production. When production stalled, people had nothing to buy and the government had nothing to tax because most people owned nothing and had little or no savings in banks. So, the government had no choice but to fold over and disappear.

Instead, the Italian system is based largely on income tax and property tax. The government is losing revenues on commodity taxes (e.g. on gasoline) but it can compensate with property taxes. Italians, on the average, are “rich,” in the sense that they have savings in banks and most of them own their homes. So, the government can tax their properties and their savings. As long as Italians still have something taxable, then the government will survive. It will disappear only when it has managed to strip citizens completely of everything they have.

Do you agree with this interpretation? (BTW, Italy as a state may be even more culturally diverse than the old Soviet Union was.)

Ugo

I wrote back:

Hi Ugo,

Very interesting article. Yes, the entire southern tier of the EU is in some early stage of collapse, but so far it hadn\’t occurred to me to draw parallels between it and USSR. Now that you mention it, the parallel is obvious: it is financial collapse triggered by something having to do with oil, but with polarities reversed, and delayed by a period of wealth destruction.

In the case of USSR, taxation wasn\’t really a source of government revenue. The national economy was based on government ownership of everything, central planning and budgets, and a system of assigning ministerial contracts to enterprises owned by the ministries. The external economy was a matter of exporting hydrocarbons in exchange for foreign currency, which was used to buy grain—mostly feed grain for cattle, without which the population would become protein-deprived and malnourished. Over the so-called “stagnation” period of the 1980s the Soviet economy became hollowed out because of several trends. Too much spending on defense was one of them. Another was that investment in capital goods (machinery, plant and equipment) reached the point of diminishing returns, which is very difficult to characterize but not so difficult to observe. Lastly, Solzhenitsyn and the dissident movement had done irreparable damage to Soviet prestige, destroying morale. The coup de grace, when it came, consisted of two pieces. One was the inability to expand oil production given the state of Soviet oil extraction technology of the era. The other was the fall in oil prices, down to $10/bbl at one point, because North Sea and Alaska both went on stream, and the Saudis pumped as much oil as they could based on a tacit agreement with the US to depress oil prices and thus crush the Soviets. In this they largely succeeded. The USSR became heavily indebted to the West, and, at the very end, needed Western credit to keep the lights on in the Kremlin. One of the final scenes featured Gorbachev on the phone with [West Germany\’s Chancellor] Helmut Kohl asking him to ask the Americans to release some funds.

Now, I can see parallels to this in what is happening now in the US and in the EU, but with all the polarities reversed: here oil flows in and money flows out, and the coup de grace [will be] high oil prices rather than low. Instead of failures of central planning, which failed to allocate production effectively, we have failures of the globalized market, where production is effectively globalized but consumption is ineffectively localized among the wealthy and the formerly wealthy, and has to be fueled by credit. Instead of diminishing returns from deployment of capital goods, we have diminishing returns from deployment of capital itself, where a unit of new debt now produces much less than a unit of economic growth. The damage to reputation and morale is mostly on the US side of the Atlantic, where in place of Solzhenitsyn and the dissident movement we have Abu Ghraib [scandal], [Wikileaks\’ Julian] Assange and [Edward] Snowden. With the EU, most of the damage has to do with [the] experience of economic disparities between the rich core and the increasingly impoverished periphery, and the recent move in Ukraine to walk away from the EU, and the ensuing Western-financed mayhem in Kiev, show that the bloom is off the EU rose as well. The runaway military spending is likewise mostly a US issue, although epic failures in Afghanistan, Libya and Syria, in which the EU is complicit, are likely to have some effect as well.

Comparing USSR to Italy is difficult because of the disparity of scale: 1/5 of the planet\’s dry surface versus a smallish peninsula; an economy that slowly decayed in isolation versus an integral part of the EU; a country where the choice is between burning hydrocarbons or dying of exposure versus one where the choice is between riding a scooter or taking the bus; a country with a ravaged agricultural sector unable to grow enough protein calories versus a nation of foodies where corner groceries make worthy subjects for oil paintings. But I think that when it comes to the actual collapse, when it finally comes, there will still be identifiable similarities. Financial collapse always comes first: all sorts of financial arrangements unravel as the center becomes unable to float the periphery, and in response the periphery starts to withhold economic cooperation. The result is a breakdown in supply chains, shutdown of production, and, shortly thereafter, shutdown of commerce. In the case of the USSR, this unfolded in 1989-91 as the various republics and regions refused to cooperate with Moscow. I suspect that this will also happen in the EU, at some point. But I think that you are exactly right that whereas the average Soviet citizen could not be fleeced, Italy, and much of the EU, still have plenty of fat sheep that the government can shear to keep things running. Thus we are looking at a few more years of steady decline before the lights start going out. This, then, is the key distinction: the USSR collapsed promptly because it was already skin and bones, whereas the US and the EU still have plenty of subcutaneous fat to burn through. But they are, in fact, burning through it. And so, the conclusion is, collapse will come, but here it will take a little longer.

-Dmitry

Ugo responded:

I agree with you, of course. It makes perfect sense to me and it is the main point I was making: the Soviet government couldn\’t tax Soviet citizens too much because they owned very little.

…

The Italian government instead has some luck in the sense that Italians have some savings and most of them own their homes. So, the government is progressively strangling their citizens to squeeze out of them all that they have—while they still have something.

The last round of tax increases in Italy is targeting homes and it is really, really hurting, especially the poor. You can be poor here, and still own a house that you inherited from your parents. Now the government asks you to pay as if that house were revenue! That is truly evil. People who don\’t have the money to pay this property tax can only indebt themselves with banks (or worse). Eventually, they\’ll have to sell their homes or give them to the bank (or to the Mafia)—the result is disaster for everybody, including for the banks, and even the government. But the whole thing has a perverse logic. It has the advantage that it generates some immediate cash which is badly needed, then the hell with the future.

The [next] phase will be to target bank accounts. Then, when there will be nothing left, the government will decamp and say bye to everybody. Hell, what a planet I landed in…..

All the best,

Ugo

And so here is the outline of the method for calculating the timing of collapses:

1. Find out when the collapse clock starts running by looking for a significant drop in energy consumption

2. Calculate how long the clock is going to run by dividing the total wealth of the citizenry by the economic shortfall of the shrinking economy

For any industrial economy the collapse clock starts running as soon as the consumption of fossil hydrocarbons starts dropping appreciably. It is sometimes difficult to tell whether this has already happened if the country in question is still a major hydrocarbon producer. Gross production numbers can still be holding steady or even seem to go up a bit, but once you subtract all the energy that is being expended on energy production itself, and on the unprofitable mitigation of its many undesirable consequences, you might be able see a decline sooner rather than later. Notably, the net energy yield, or EROEI, is very low for all the newer unconventional sources that have been trumpeted as panaceas in recent years, such as ones that require hydrofracturing and drilling in deep water, tar sands and so on. (The so-called “renewables,” such as wind, solar and biofuels, are an even bigger joke, because all of them with the exception of hydroelectric plants have net energy that is too low to sustain an industrial economy, plus they all depend on technologies that are “nonrenewable” unless the country maintains a vast industrial base which happens to run on fossil fuels.) And so the drop in net energy consumption is clear for Italy, which produces 7% of the oil it consumes and imports the rest, whereas the picture is somewhat less clear for the US, which still manages to supply around a third of its oil.

Since all industrial economies literally run on fossil fuels, lower energy consumption immediately translates into a lower level of economic activity and a shrinking economy. The gap between the expectations of economic growth that are dialed into all of the financial arrangements, and the reality of economic decline driven by lower energy availability, has to be plugged with the population\’s savings. There are a number of ways of expropriating wealth, generally proceeding from various kinds of stealth taxation measures, to more overt measures, to outright expropriation. Taking the US as the example (since I am most familiar with it) the expropriation cascade is proceeding as follows:

1. Central bank policy of zeroing out of interest rates on savings combined with massive money-printing. This forces money into speculative markets (stocks, real estate, etc.) creating huge financial bubbles; when these bubbles pop, savings are said to be destroyed, but in reality that money has already been spent by the government or used to fill the private coffers of those closely associated with the government.

2. Government policy of canceling retirements or short-changing retirees. The federal government has worked hard to make its official measure of inflation all but meaningless so that it can justify its policy of making cost of living adjustments to social security payments that are far less than the the real increases in the cost of living. Another federal expropriation scheme is via guaranteed student loans, which cannot be discharged through bankruptcy, and which have created an entire class of indentured servants. At the more local level, state and municipal governments are curtailing or canceling retirement programs by virtue of going bankrupt.

3. Ever more onerous reporting requirements for financial transactions, especially for those who try to leave the country and expatriate their savings. All foreign bank accounts must now be reported, and people who work abroad are now forced to file voluminous annual reports that cost thousands of dollars to prepare. Those who decide to repudiate their US citizenship are made to pay a hefty exit tax. Nevertheless, record numbers of US citizens have been doing just that. Just having a US passport often makes it impossible to set up accounts in foreign financial institutions, which have little desire to comply with US demands for financial disclosure.

These are the measures that are already in place. Looking at what\’s been tried before, here and elsewhere, we can see what other measures are in the works. Among them:

1. So-called “bail-ins” where insolvent financial institutions are rescued by confiscating depositor funds. We can expect the script to be similar to what happened in Cyprus: politically connected depositors get word ahead of time and yank out their money forthwith; everybody else gets shorn.

2. Limits on bank withdrawals. You might still “have” money in the bank, but that\’s the only place you can “have” it. The semantics of the verb “to have” can be quite tricky, you see…

3. Ever-increasing taxes on property resulting in property confiscation. It works like this: government prints money and hands it out to its friends; its friends use it to temporarily bid up property values; property taxes go up to a point where the property owners can\’t pay them; owners lose their properties. A staggering 63% of real estate purchases in Florida last December were cash purchases.

4. Various kinds of sudden, new, super-complex regulations, noncompliance with which results in very large fines. In turn, nonpayment of these fines results in forfeiture of assets. The US has some very curious laws according to which inanimate objects such as cars, boats and houses can be charged with a crime, seized and auctioned off. We can expect lots more of such property grabs in the future.

5. Gold confiscation, which happened once in the US already, so there is a precedent for it. Yes, I know that this will make a number of people upset, but I am yet to hear a convincing argument for why the US government would not resort to gold confiscation when that turns out to be one of the few remaining cards it can play.

This list is by no means comprehensive. If you feel that I have missed something major, please submit a comment, and I will consider it for inclusion.

Now, it would be nice if all of these measures worked like clockwork, always producing the right amount of wealth confiscation to levitate the government, and the financial scheme on which it is based, for a little while longer. Alas, as with most things, something is bound to go wrong at some point, most likely when you least expect it. And it seems like a dead certainty that something will in fact go wrong well before every last American citizen is relieved of every bit of their accumulated wealth and is living peacefully in a roadside ditch, wearing an attractive loincloth and a stylish mudpack for a hat, quietly perfecting a nouvelle cuisine that features snails au jus and dandelion salad au chaume. Maybe you can imagine it, but I can\’t. Beyond a certain point, I can only imagine reports of widespread “public disturbances” followed by “breakdown of law and order.”

Still, I hope that this framework will allow us to set an upper bound for how long collapse can be deferred for any given country. Once hydrocarbon consumption drops appreciably, the clock starts running. Then it is possible to estimate how long the clock can theoretically run by dividing the remaining net worth of the population by the size of the hole in the economy created by falling energy consumption.

But after that things get messy. Some countries will hollow themselves out quite peaceably, and go softly into the night, while others will explode and fast-forward though the financial-commercial-political collapse sequence. And so perhaps the most useful thing to know is whether the collapse clock is already running for any given country, because if it is already running, then it becomes a fool\’s game to wait around for the inevitable outcome.

One reasonable approach is to get another passport and quietly relocate to another country. It is important that this country be one for which the collapse clock is not running and won\’t be for a long time yet. Ideally this would be a financially secure, politically stable, energy independent, militarily invincible, underpopulated, non-extradition country which will be among the last to be severely disrupted by climate change and where you could have lunch with Edward Snowden. But this approach doesn\’t appeal to everyone, and I understand that.

And so another approach is to adapt to what\’s coming while remaining in the US, or in any other country for which the collapse clock is running, by making yourself, and your wealth, should you have any, illegible. Here is a very nice article by one smart cookie by the name of Venkatesh Rao on the concept of illegibility. And here is his very nice primer on being an illegible person. This kind of illegibility has nothing to do with bad handwriting; it is about hiding in plain sight. Please read these as homework, because I will have more to say on this topic in the near future. And I would love to see a list of countries for which the collapse clock is running, along with first-order estimates for how long it could possibly run for each one, based on their population\’s net worth and the country\’s economic shortfall. But since this post has just gone over 3000 words, I am leaving this as an exercise for the reader.