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November 19, 2010 6:28 AM   Subscribe

The Soviet Collapse "The document which effectively concluded the history of the Soviet Union was a letter from the Vneshekonombank in November 1991 to the Soviet leadership, informing them that the Soviet state had not a cent in its coffers."
posted by bitmage (28 comments total) 34 users marked this as a favorite

 
That's a fascinating article, thanks.

It's (in part) a wise warning to the "peak oil" crowd: No one can accurately predict the fluctuations of oil prices. The collapse of the Soviet Union should serve as a lesson to those who construct policy based on the assumption that oil prices will remain perpetually high.

You might be right in the long run. In the short run you might be toast.
posted by chavenet at 6:50 AM on November 19, 2010


Comforting to reflect that the American state has -$13 trillion in its coffers.
posted by Rykey at 6:59 AM on November 19, 2010 [3 favorites]


Fascinating. Really shows how much of the Reagan myth of the soviet collapse is flawed. Imagine how much defense spending we could have saved. Also makes you realize why the North Koreans behave as they do.
posted by humanfont at 7:06 AM on November 19, 2010


I read this article years ago: I'm surprised it hasn't been on metafilter before. My problem with it is that it comes from the AEI, which is hardly the most trustworthy of sources. It's like getting your news from the CIA: you know there's a huge agenda, so nothing it says can ever be regarded as objective.

On the other hand, it's a fascinating look at history through the lens of macroeconomics. Assuming the basic facts are true, the Russians were very lucky to have rulers who were not as ideologically blind as those in North Korea; the likely outcome in that case would have been mass starvation on a scale not seen since the Mao years in China.
posted by pharm at 7:09 AM on November 19, 2010 [1 favorite]


"Comforting to reflect that the American state has -$13 trillion in its coffers."

Have you never had a bank account and a credit card? You can have money in the bank, but still owe debt. In fact, that's the point of debt. To allow you to pay things off based on the money you will have, over time.
posted by Eideteker at 7:11 AM on November 19, 2010


My problem with it is that it comes from the AEI, which is hardly the most trustworthy of sources. It's like getting your news from the CIA: you know there's a huge agenda, so nothing it says can ever be regarded as objective.

I had similar thoughts, but if you think about it the whole thing can be construed as a warning to the US as well. We have an economic system dependent upon oil prices remaining stable (high for the USSR, low for the US); disastrously expensive wars in the Middle East/central Asia, which leads the oil producing countries to regard the country warily; an enormous military-industrial complex that many cities depend upon and that constrains the ability to cut costs; and a government ultimately financed by unsustainable debt as a result.

That's hardly the usual CIA line.
posted by jedicus at 7:16 AM on November 19, 2010 [1 favorite]


My problem with it is that it comes from the AEI

It's on the AEI site but the article is written by Yegor Gaidar, who was formerly the acting prime minister, minister of economy, and first deputy prime minister of Russia.
posted by bitmage at 7:21 AM on November 19, 2010 [1 favorite]


Yet one of the Soviet leadership's biggest blunders was to spend a significant amount of additional oil revenues to start the war in Afghanistan.

At least they used revenues. We borrowed from China.
posted by Joe Beese at 7:36 AM on November 19, 2010 [1 favorite]


Really shows how much of the Reagan myth of the soviet collapse is flawed. Imagine how much defense spending we could have saved.

Why must it be one or the other? Couldn't both factors have contributed?
posted by ZenMasterThis at 7:37 AM on November 19, 2010 [2 favorites]


It is a historical fact that the Reagan administration influenced the Saudis to lower oil prices in the mid-1980s for the purpose of cutting down Soviet oil revenue - their main source of hard currency. This was highlighted by a dispute between Reagan and VP GHW Bush when Bush, on a trip to Saudi Arabia, tried to push for higher oil prices to increase the profitability of US independent oil producers. The rebuke from the White House emphasized the policy of lowering world oil prices as a means of putting pressure on the Soviets.

So AEI or no, the facts hang together on this narrative and analysis.

The Reagan mythology about the late Soviet empire is duplicitous: on one hand, the Committee on the Present Danger crowd (later misleadingly rebranded as neo-cons during the Bush II fiasco) was shrieking about how powerful and dangerous the Soviets were while on the other hand, the same crowd is claiming credit for bringing the Soviets down.

In simple truth, the Reagan team (and their reincarnation under the Bush II/ Cheney regime) was a mish-mash of fools, crooks and opportunists. They blazed away with their eyes shut and anything that fell was a tribute to their marksmanship.
posted by warbaby at 7:41 AM on November 19, 2010 [7 favorites]


Great article. By co-incidence Newsnight has had a couple of interesting (if depressing) pieces on contemporary Russia:

What life is like in Vladmir Putin's 'modern autocracy'

Why Russians find it so difficult to embrace change
posted by fearfulsymmetry at 7:42 AM on November 19, 2010


Have you never had a bank account and a credit card? You can have money in the bank, but still owe debt. In fact, that's the point of debt. To allow you to pay things off based on the money you will have, over time.

I was making a joke, but since you mention it, have you not noticed that our nation's "bank account" has been overdrawn for years, and our "credit card" debt is piling up faster than we can afford to repay it?
posted by Rykey at 8:18 AM on November 19, 2010 [1 favorite]


Rich Hall, the comedian with the "sniglets" act, used to have a bit about what killed the Soviet Union.

Snacks.

Ding-Dongs, Doritos, Ho-Hos, Snickers, Tastee Cakes.

Capitalism has 'em. Communism doesn't. Once millions of Soviets heard about the Twinkie ... and the fact that you could get them everywhere for essentially the chump change you find beneath the couch cushions ... it was pretty much all over.
posted by Cool Papa Bell at 8:46 AM on November 19, 2010


So, it will be ironic when price shocks in oil bring down the government of the world's largest exporter of grain (and largest importer of oil,) which coincidentally is also engaged in a fruitless war in Afghanistan launched in no small part due to imbecility in the elite political class?
posted by ennui.bz at 9:16 AM on November 19, 2010 [4 favorites]


Yes, but we have snacks.
posted by Cool Papa Bell at 9:32 AM on November 19, 2010 [1 favorite]


Great article; thanks for posting it.
posted by languagehat at 12:15 PM on November 19, 2010


Why must it be one or the other? Couldn't both factors have contributed?

Because the Reagan myth is particularly ridiculous. We are supposed to believe that the Saint Ronald had some secret plan to overturn the Soviet Union and using his masterful orchestration of commodities markets, the Vatican and defense spending along with the Mujahadeen in Afghanistan we were able to collapse the whole evil empire. The Reagan won the cold war myth has been masterfully built up by sympathetic biographers; but its a myth. These were the guys who brought us Iran-Contra, Lebanon, Grenada,etc. Foreign policy failure upon failure, yet we are supposed to believe they magically got this one right. Or is it more likely that they got lucky and later claimed it was their strategy.
posted by humanfont at 1:37 PM on November 19, 2010 [3 favorites]


"that's the point of debt. To allow you to pay things off based on the money you will have, over time."

Assuming your banks aren't run by blinkered pirates who'll deliberately bet anything and everything to line their pockets as deeply as possible, regardless of its effect on their fellow citizens.

I wouldn't make such an assumption blithely. Put "housing prices" in place of "oil prices" into that speech, change "Soviet" to "US" and there is much food for thought. The "good faith and credit" of our government is already (guardedly) deeply in question throughout the world. One more fuck-up and they'd be glad to settle for all the pieces. Guess who owns the parking meters in Chicago?
posted by Twang at 4:06 PM on November 19, 2010


If the American economy collapses, I can guarantee you parking meter revenue will go down over the length of that lease.
posted by furiousxgeorge at 5:11 PM on November 19, 2010


These were the guys who brought us Iran-Contra, Lebanon, Grenada,etc. Foreign policy failure upon failure, yet we are supposed to believe they magically got this one right. Or is it more likely that they got lucky and later claimed it was their strategy.

So ... Republicans are incapable of getting anything right, even by accident. Got it.

But my QUESTION was whether Regan-era defense spending, intentionally or otherwise, could have been a CONTRIBUTING FACTOR in the collapse of the Soviet Union.
posted by ZenMasterThis at 5:43 PM on November 19, 2010


Reagan-era.
posted by ZenMasterThis at 5:43 PM on November 19, 2010


Guess it might be time to elect better people. Otherwise you're going to have Glenn Beck as President.
posted by five fresh fish at 8:54 PM on November 19, 2010


Where is the data that the Russians increased their military spending to match the US? According to this article soviet spending increased by 4-7%/year. That isn't a huge buildup, more like inflation. Reagan justified his military expansion as catchig up to the Russians.
posted by humanfont at 4:00 AM on November 20, 2010 [1 favorite]


Wow. I don't think I've ever favorited so many opposing arguments before.

The Soviet Union was doomed, and would (almost certainly, beyond a shadow of a doubt) have collapsed by now, even if Mondale was President instead of Reagan.

The arms race cost the Soviets billions of rubles, which they couldn't afford to spend, and therefore hastened their downfall.

Soviet generals have gone on record (post-Fall) as stating that the coming disaster was visible to those at the top before Reagan, and the defense spending wasn't the cause.

Ergo: while Reagan's policies hastened the Fall, he hardly "engineered" it. Instead of being the daring hero who planted the dynamite under the River Kwai bridge, a better analogy would be: he was more the guy who heaped more straw on the camel's back.
posted by IAmBroom at 7:53 AM on November 20, 2010


Reagan justified his military expansion as catchig up to the Russians.

humanfont, that seems to be a standard tactic for the military, and those supporting them. I once heard a retired Special Forces officer complaining that the rifles used by the Bad Guys in Afghanistan killed & incapacitated more effectively, because the lower-velocity bullets would bounce around in the body, while US M-16 bullets were more likely to pierce straight through.

If you're following along, he was complaining that our weapons were too good. High velocity implies higher accuracy, too, but he didn't bring that up.

His message was compelling, until you reflected that he was bemoaning that this was a sign that the Afghan rebels were better equipped than our soldiers were. Overall, that's pretty laughable conclusion to make.
posted by IAmBroom at 8:07 AM on November 20, 2010


IAmBroom: "humanfont, that seems to be a standard tactic for the military, and those supporting them. I once heard a retired Special Forces officer complaining that the rifles used by the Bad Guys in Afghanistan killed & incapacitated more effectively, because the lower-velocity bullets would bounce around in the body, while US M-16 bullets were more likely to pierce straight through.

If you're following along, he was complaining that our weapons were too good. High velocity implies higher accuracy, too, but he didn't bring that up.
"

Actually, IamBroom, that's not the argument he was making at all - you've stumbled upon an ongoing and pretty contentious argument in military circles about weapon calibers. The basic argument is that the decisions that led to adoption of the standard NATO 5.56mm calibre are not applicable in the kinds of low-intensity conflicts we find ourselves in.

Basically, it goes like this - the 5.56mm calibre was selected to allow NATO forces to standardise, so that they could carry more ammunition per soldier (5.56mm is 20% or so lighter per round than the older 7.62mm rounds) and so that the majority of their shots would wound rather than kill. This seems counter-intuitive, but the militaries of NATO in the 1960s and 1970s, when these decisions were being made, were considering how best to stop massed infantry attacks by the Warsaw Pact. The rationale was that the lighter, smaller 5.56mm round would either 'through and through' or tumble in the body of the enemy, likely wounding them rather than killing them outright. Every wounded soldier is a drain on your enemy's resources, which would have mattered when you're facing 50,000 conscripts coming through the Fulda Gap.

By contrast, many insurgent fighters in Iraq and Afghanistan are using weapons chambered for the older 7.62 rounds (or their Russian equivalent, I forget the precise caliber). These rounds tend to blow large holes in people and kill them outright. A corporal I worked with once referred to the old British SLR (replaced by the 5.56mm SA80 series of weapons) as 'the old elephant gun'.

In the kind of combat being seen in Afghanistan and Iraq, relatively small numbers of insurgents can do serious damage with these weapons, while also surviving being shot with the lighter calibre carried by US forces. So, the 7.62 calibre is being brought back by some armies to provide a counter capability - witness the recent introduction of the new British 'sharpshooter' weapons. Press coverage has focused on the range of these weapons, but serving soldiers I know in Afghanistan are rather more focused on their 'stopping power' - it's not uncommon to trade fire with insurgents for hours and then find nothing but blood trails. Heavier calibres change that.

Anyway, end of derail - the Russians couldn't win in Afghanistan despite heavy armour, heavier calibres, tens of thousands of troops and a far less restrained approach to combat (which is saying something, given the numbers of civilian casualties caused by NATO action). There's a reason it's called the Grave of Empires.
posted by Happy Dave at 2:08 AM on November 21, 2010


Excellent article, thank you for the link. I've been thinking about it all day.
posted by Meatbomb at 12:24 PM on November 21, 2010


Thanks for the explanation, Happy Dave.
posted by IAmBroom at 9:15 PM on November 22, 2010


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