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Greenpeace meets Wolverines in this new Norwegian TV series.

Much as Russians would appreciate this, are there really no other hotbutton issues in Norway worthy of being explored in TV series and documentaries?

 
• Category: Race/Ethnicity • Tags: Norway, RealWorld 
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Is 21 years in prison, with the rarely mentioned (but real) addendum that it may be indefinitely extended if he is assessed as a risk to society. Which he no doubt will be.

If I were the judge I’d put him up against the wall and be done with it. On this I actually agree with Breivik himself:

Breivik derided a jail term as ‘pathetic’, and said acquittal or execution were the only reasonable outcomes, although the country does not have the death penalty.

As it is, he is going to live in fairly luxurious conditions (for a prisoner) featuring three rooms, each 8 square meters: A bedroom; his own private gym; and a computer, from where he will continue writing his opuses. (At least they won’t take recent moves to have Internet access declared a fundamental human right to apply to Breivik).

Don’t really have much more to say on this that hasn’t been said elsewhere. One thing that hasn’t been mentioned much is that Breivik is yet another quintessential example of beta male rage as in George Sodini, James Holmes, etc (though the driving causes in his case were quite different from what motivated most of the American mass shooters). Breivik was very beta: World of Warcraft junkie, no girlfriend, etc.

Another fun thing to consider is what Breivik will observe from his prison as the decades go by. There will be no uprising against “Eurabia” of the type he dreams about and hopes to foment. On the other hand the predictions of “Eurabia experts” about dhimmitude won’t pan out either. What will actually happen is that Norway’s population will continue diversifying, bolstered by millions of climate refugees – only a modest fraction of which will be from the Islamic world – ushering in a caste society by the time as the century goes on. In these new conditions I fully expect ethnic Norwegians to remain generally on top like the Kshatriya and Brahmans in India.

I wonder what Breivik would think about that?

(Republished from AKarlin.com by permission of author or representative)
 
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Editorial note: This article was first published at Arctic Progress in February 2011. In the next few weeks I will be reposting the best material from there.

The Arctic to become a pole of global economic growth? Image credit – Scenic Reflections.

Behold! Far north along the shores of the Arctic a quiver of upspringing settlements fringes the coast. Boats swarm around canning factories, smoke flutters above smelters, herds of reindeer dot the prairies… And here or there, on every street-corner, glimmer out the lights of theaters where moving-pictures entertain white people through the sunless weeks of the midwinter dancing-time, the singing-time, the laughing-time of Eskimo Land.

- Northward ho!: An account of the far North and its people.

In 2003, Goldman Sachs economist Jim O’Neill wrote the now famous paper Dreaming with BRIC’s, predicting that Brazil, Russia, India and China would overtake the developed G8 nations within a few decades and make astounding returns for faithful investors. The BRIC’s concept entered the conventional wisdom, spawning a host of related acronyms (BASIC, BRICSA, etc) – and if anything, realizing its promise well ahead of schedule. Last year, China’s real GDP possibly overtook America’s, and Russia’s approached Germany’s.

Yet for all their successes, the BRIC’s may not fulfill their expected roles as the stars of the global economy in the 21st century. The level of education is horrid in Brazil and atrocious in India; without the requisite human capital, these two countries will find it difficult to rapidly “converge” to developed world standards. China is much better off in this respect, but its high growth trajectory may in turn be disturbed by energy shortages and environmental degradation. China produces half the world’s coal, which is patently unsustainable given its limited reserves. But since coal accounts for 75% of China’s primary energy consumption and fuels the factories that keep its workforce employed, there is little it can do to mitigate this dependence. Meanwhile, China’s overpopulation, pollution and climate change predicament is so well known as to not require elaboration. Many other countries flirting around the edges of BRIC status – Indonesia, South Africa, Vietnam, etc. – face serious challenges in the form of low human capital, uncertain energy and food supplies and a rising incidence of AGW-induced droughts, floods and heatwaves.

There is one global region that may hold the key to resolving these intertwined problems – and even to become a major pole of global growth in its own right. For the most part, it is now an empty wilderness, but climate change is opening it up as potential living space. Its exploitation has the potential to halve the length of global freight transport routes while increasing their security, uncover sizable to gigantic new sources of hydrocarbons and minerals, and stabilize global food prices through the expansion of arable land. Its experience of management and conflict resolution may inspire a global model of cooperation – or it may degenerate into an economic, legal, or even military battlefield over shipping routes and sub-sea resources.

This global region is the Arctic Rim, and its adjoining ARCS: Alaska, Russia, Canada, and Scandinavia. The ARCS of Progress in the 21st century.

Arctic sea ice extent on September 1, 2010 – both the Northern Sea Route and the Northwest Passage are clearly open. Image credit – The University of Illinois Cryosphere Today.

From North Pole to Growth Pole

The core reasons behind the Arctic Rim’s bright prospects are global macro-trends: climate change; peak oil and resource nationalism; overpopulation in the South. These “push” and “pull” factors will induce a decades-long Arctic boom, starting with shipping, energy and mining, and culminating in a fundamental northwards shift of the center of the world economy. Let’s examine each of these in turn.

Breaking Ice For Shipping

Ah, for just one time I would take the Northwest Passage
To find the hand of Franklin reaching for the Beaufort Sea
Tracing one warm line through a land so wild and savage
And make a northwest passage to the sea.

- Northwest Passage song, Stan Rogers, 1981.

Typically, the cryosphere – the frozen part of the world – remains stable, because its snow and ice reflect much of the Sun’s heat, thus cooling itself. This process is called the ice-albedo feedback.

However, when the high-albedo ice melts, it leaves behind darker-hued earth, flora or sea that absorb far more heat. Local air temperatures soar and inhibit the reformation of the ice during cold seasons. From working to keep the system stable, beyond a critical threshold the ice-albedo feedback begins to reinforce a runaway dynamic of melting and warming.

The ice-albedo feedback largely explains why the Arctic is warming about twice faster than in the world as a whole.

In summer 2007, Arctic sea ice extent fell 38% below average since records began – an area the size of six Californias. The next year saw both the Northwest Passage and the Northern Sea Route clear of ice for a short period in late summer. As of December 2010, sea ice extent was the lowest for the month on satellite record, even surpassing the 2007 melt.

While the relentless fall in sea ice extent over the past three decades is remarkable enough, what’s stunning is the 55% decline in summer sea ice volume. Once the thick, multi-year ice is gone, then it’s really gone – the low albedo of the ocean water will raise local temperatures, preventing all but a thin film of sea ice from reforming during the cold winters. It is thus a near certainty that Arctic sea ice is already deep in its death spiral.

Inland, earlier snowmelts enable the ground to absorb more heat, while dark-hued shrubs and boreal forests encroach on the tundra.

Many of the effects will be negative. The polar bears will probably go extinct, either drowning for lack of sea ice, or starving, or migrating south and merging with their grizzly cousins. Invasive species from the south will drive out Arctic flora and fauna off the top of the world. Global ocean and air currents will be interrupted as the temperature differential between the Arctic and the tropics shrinks.

But the new Arctic merchants will be making a killing.

Shipping routes during ice-free Arctic summer . Image credit – Laurence C. Smith.

In 2010, the Baltica became the first high-tonnage tanker to sail with petroleum products by the Northern Sea Route, steaming from Murmansk to China. This was followed by the voyage of the MV Nordic Barents, the the first vessel to sail from one non-Russian port to another through the Arctic, cutting 5,000km off the traditional Suez route. It carried 41,000 tons of iron ore from Kirkenes, Norway to feed the steel mills of China. One upping them all, the year ended with the first round-trip voyage without icebreaker assistance via the Northern Sea Route. The Norilsk Nickel-owned ship Monchegorsk carried the metal from the north Siberian port of Dudinka to Shanghai, taking just 41 days of steaming (the Suez route would have lasted as long as four months).

The opening of the Northern Sea Route and rising demand for metals and petroleum products from China and other emerging markets is set to continue spurring the development of Arctic shipping. In January 2011, a Sovcomflot executive said the Russian shipping company has already received 15 requests for icebreaker assistance in the Arctic for this year, compared to just four in 2010*. The governor of Murmansk, Dmitry Dmitriyenko, predicts that cargo transport through the Northern Sea Route will increase tenfold by 2020. This expansion will be sustained with private investment funding: both Sovcomflot and the Port of Murmansk are to be partially privatized in the coming years.

Similar trends are in play with the opening of the Northwest Passage across Canada. It has been conquered by cruise ship in 2006 and the commercial ship MV Camilla Desgagnés in 2008. Exploitation of the Northwest Passage will likely go slower than of its north Eurasian counterpart, because of lower demand and the (relative) underdevelopment of Canada’s icebreaker fleet. But there is still a wealth of opportunities there.

Black Gold or Fool’s Gold at the Top of the World?

Use it or lose it is the first principle of Arctic sovereignty.

- Speech by Canadian Prime Minister Stephen Harper, 2007.

Our first and main task is to turn the Arctic into a resource base for Russia in the 21st century.

- Speech by Russian President Medvedev in September 2008.

Global oil production has now either peaked or is close to peaking, and will now either continue on its present “undulating plateau” – or begin to decline at an accelerating pace. The specifics are intensely argued over and the debate is far too extensive to detail here. But suffice to say, the “cornucopian” position that technological ingenuity and market forces will always conjure more and more resources out of a finite planet is untenable.

Any number of factors – global production exceeding new discoveries since the mid-1980′s; the world’s inability to significantly ramp up oil production despite soaring prices for the commodity; the rising costs of oil production due to the falling EROEI of the remaining oil sources; massively inflated reserves numbers from OPEC members; growing resource nationalism – militate against a business-as-usual future of increasing production in the oil industry.

These mounting challenges are the reason the big oil majors are pushing into the deepwater drilling that produced the Horizon blowout in the Gulf of Mexico, and partnering with Russian state oil companies to develop offshore gas deposits in the Kara Sea, and sinking millions of US dollars on prospecting off Greenland despite no returns to date. They need to maintain their reserves numbers to prevent their stocks from tanking – but to do so, the oil majors are forced into taking escalating financial, environmental and political risks.

The Arctic’s natural resources. Image credit – Global Research.

In 2008, the US Geological Survey estimated that the Arctic may hold as much as 13% of the world’s undiscovered oil (90 billion barrels) and 30% of its undiscovered natural gas. Unsurprisingly, the Arctic is rapidly becoming central to oil exploration. That said, capitalizing on these resources – even assuming they are as big as estimated above – will be exceptionally difficult. For a start, some 84% of these sources are likely to be offshore. Second, according to more recent USGS calculations, developing them will be prohibitively expensive: “Assuming production costs of up to $100 per barrel, only 2.5 billion barrels of oil could be lifted… and only with a 50% probability.” For perspective, an average oil price of $92 per barrel broke the world economy in 2008.

Talk of the Arctic becoming the next Saudi Arabia is unrealistic. Its oil reserves are smaller, more dispersed, more remote, of worse quality, and far more challenging to exploit. But this isn’t to say that its black gold is fool’s gold. Technological progress on Arctic drilling, as well as a lack of better options elsewhere, will draw Western oil majors and National Oil Companies north.

The Arctic isn’t only of interest to shippers and oilmen. Confronted with inexorable rises in demand from China, the global mining industry is rushing to add metals and minerals production capacity wherever they can. Just to take a few Arctic examples, there are plans to start or expand iron ore production on Canada’s Baffin Island, Norway’s Kirkenes and the Kola Peninsula. Coal production is resuming at Svalbard. Just in case the whole oil thing doesn’t work out, Greenland is looking to exploit its potentially vast mineral resources. The Coeur d`Alene Mines Corporation recently opened a gold mine near Juneau, Alaska ahead of schedule. Though volumes remain small, this will change as depletion becomes as evident for minerals as it is now for oil.

Towards an Arctic Civilization?

… Before this century is over billions of us will die and the few breeding pairs of people that survive will be in the Arctic where the climate remains tolerable.

- James Lovelock, inventor of the Gaia hypothesis.

Beginning with the shipping and energy industries, the influence of the Arctic will eventually come to encompass the entire world. Assuming that efforts to quickly cut greenhouse gas emissions are unsuccessful, and that geoengineering is either not attempted or doesn’t work, then many of the middle regions will become too hot and dry for sustained agriculture (and maybe human survival), and masses of climate refugees will try to migrate north. The center of global economic growth, politics, and perhaps – in the far future – population, will come to rest within the Arctic Circle.

The North Pole may become the spatial center of the world. Image source – Trausti Valsson.

This process will likely be accompanied by mass upheavals, societal collapses, famines, border conflicts, maybe even bigger wars. But as usual misery contains the seeds of opportunity. It is not impossible that the farsighted individuals who are now buying up Hudson Bay territories or Siberian riverside lands are positioning themselves or their heirs for lordships and kingdoms in 2200.

But let’s focus on just the next three decades. The opening of the Arctic by various “push” factors (overpopulation, global warming) and “pull” factors (shipping routes, resources) will create demand for infrastructure, housing, associated services, etc. Buying up strategic lands, routes and infrastructure in the Arctic region offers one of the best, and most overlooked, rates of return in the world today. Take inspiration from OmniTRAX, a Colorado-based company that bought the derelict Port of Churchill and its railway from the Manitoba government for a bargain basement price of $10 in 1998. Now that Hudson Bay has become clear of sea ice during the summer, these assets are receiving tens of millions of dollars of investment from the Canadian government.

How can you benefit from the coming Arctic boom? In the coming years, Russia is going to partially privatize lucrative state assets, such as shipping company Sovcomflot and the Port of Murmansk (which handles 60% of shipping across the Northern Sea Route). New ports, roads, railways, pipelines, mines, dams, oil and gas fields, aluminium smelters, LNG plants, etc. are springing up over the entire region.

Enter the ARCS of Progress: Why Alaska, Russia, Canada, and Scandinavia are Positioned to Dominate the Polar-Centric World

Идут на Север срока огромные,
Кого ни спросишь – у всех указ…
Взгляни, взгляни
В глаза мои суровые,
Взгляни, быть может, в последний раз.

- Soviet GULAG song, 1947.

O Canada!

Our home and native land!
True patriot love in all thy sons command.
With glowing hearts we see thee rise,
The True North strong and free!

- National Anthem of Canada.

Watching the economic news these days is a sure path route to depression. Anywhere you seem to look in the developed world there are awning budget deficits, soaring debts, depressed output, and stagnation. We’ve established that putting your money into the PIGS (Portugal, Italy, Greece, Spain) isn’t such a good idea. But the US is the “safe haven,” right? Unfortunately, its fiscal sustainability indicators are actually worse than the PIGS average. In 2009, the US got $0.6 in tax revenue for every $1 of outlays, or a receipt-to-outlay ratio of 0.6; the equivalent ratio for the PIGS was 0.78. Maybe Japan? With a 0.52 receipt-to-outlay ratio, it makes the US look like a paragon of fiscal discipline.

But within all that mess there’s a few, sparkling gems. Not only are they at the heart of the opening Arctic, but they are all excellent investment destinations on their own merits. They are the ARCS countries: Alaska, Russia, Canada, and Scandinavia.

Alaska

In contrast to the rest of the US, Alaska was barely dented by the economic crisis, its GDP declining by just 0.3% in 2009 and recovering 0.6% in 2010. Employment is lower than the US average. While states like California and Illinois flirt with state bankruptcy, Alaska has accumulated $40 billion in its Permanent Fund. Finally, it is – along with Greenland – the most demographically vigorous of the Arctic states, with a total fertility rate of 2.32 children per woman in 2006. It won’t be afflicted by the First World’s looming aging crises any time soon. Alaska is well set to fulfill its motto: “North to the Future!”

Russia

Though the poorest of the ARCS, Russia is also its fastest growing one, with 5% annual GDP growth during 2001-2010. Its high level of human capital (around 70% of Russians continue to higher education, a First World rate), vast resource wealth and decent macroeconomic management set it on a promising path to convergence with developed countries.

Additionally, Russia has a predominant population, economic and military presence in the Arctic. The Murmansk region by itself has more people than all of Alaska, while the Russian Northern Fleet is by far the strongest Arctic force. State policy is to transform the Arctic into Russia’s “strategic resource base” within the next decade.

Criticisms of Russia’s prospects typically center on allusions to its “Zaire with permafrost”-like corruption levels, plummeting population, crumbling infrastructure, “legal nihilism” and Putinist authoritarianism. While each of these has a grain of truth, taking them as gospel fundamentally misrepresents the country. For a start, if Russia really was more corrupt than Nigeria or Zimbabwe – as implied by Transparency International’s Corruption Perceptions Index – then it would still be deep in debt as in the late 1990′s, and its $480 billion foreign currency reserves would be in Cayman Islands accounts instead of the Central Bank’s vaults.

What about Russia’s demographic “death spiral”? A quick glance at Rosstat will show that its population grew in 2009, and that its total fertility rate, at 1.6 children per woman, is now higher than the European average.

One can spend pages upon pages unraveling the double standards, misrepresentations and outright lies which the Western media and political class use to attack Russia. But if you’re unconvinced, and refuse to buy into Russia’s undervalued market on principle, it’s your loss.

As t he professional Russia investor Eric Kraus wrote in Business Week in July 2010, “Russian markets are fashion victims, and are currently both unfashionable and cheap. You can own them now, or wait and buy the next time they surge back into vogue. And I will be selling out just about then.” I’d trust him – that’s exactly what he did in 2008!

Canada

Canada combines the American spirit of free enterprise, with a greater safety net and social mobility. It is also on far better fiscal footing. In 2010, its cyclically adjusted primary budget deficit was -2.7% of GDP (US: -7.0%), and its net debt was 32.7% of GDP (US: 65.2%; Japan: 104.6%). Possessing huge energy, mineral and freshwater reserves, as well as a well-educated and growing population, it is surely one of the better investment bets in the developed world.

Scandinavia (and Nordic)

The Nordic region is one of the richest, most educated and socially cohesive on Earth, frequently coming at or near the top in any global index of freedom, social mobility, environmental sustainability, and technological modernity.

In 2010, Sweden’s GDP grew the fastest in Europe at a blistering 5.2%, while maintaining a balanced budget throughout the crisis. Norway’s fortunes are far more directly tied to its oil industry, but peak oil, excellent state management of reserves and a low population make for bright prospects. Norway is the second richest European country after the banking center of Luxembourg.

Even apparent basketcases like Iceland may be a good investment to buy up on the cheap. While its international banking career might be over, it still has massive freshwater and geothermal energy reserves, that make it an attractive center for energy-intensive industries such as aluminium smelters.

Finally, contrary to right-wing depictions of social democracies as retirement homes full of effete, aging liberals, all the Nordic states have fertility rates that preclude major aging crises (they range from 1.8 children per woman in Finland to 2.2 in Greenland).

The Arctic when all the ice melts.

From an Ultimate Dim Thule…

By a route obscure and lonely,
Haunted by ill angels only,
Where an Eidolon, named Night,
On a black throne reigns upright,
I have reached these lands but newly
From an ultimate dim Thule —
From a wild weird clime, that lieth, sublime,
Out of Space — out of Time.

- Dreamland by Edgar Allen Poe.

Even in our day, science suspects beyond the Polar seas, at the very circle of the Arctic Pole, the existence of a sea which never freezes and a continent which is ever green.

- The mystic H. P. Blavatsky.

Before the rise of the world economy, spatial perspectives were local, at most extending to the boundaries of their cultural sphere or world-empire: The Ecumene for the Ancient Greeks and Romans; Dar al-Islam for the Muslims; Christendom for the Franks; the Great Wall for the Chinese. Medieval European geographers referred to any lands beyond the borders of the known world as Ultima Thule.

Globalization from the 19th century bound the entire world together, for the first time in history, but its flows and links of labor, capital and commodities passed the Arctic by. Unattractive to sustained private investment, the region’s development was always fitful and unbalanced, from the Yukon Gold Rush that petered out almost as suddenly as it flared up; to the penal camps, subsidized settlements and military bases of the Soviet Arctic, now decaying away except where hydrocarbons extraction has thrown them a lifeline.

But now the world is changing. No longer will opening the Arctic have to be a hubristic project, as with the chiliastic visions of Soviet planners; or a costly and unprofitable strategic necessity, as with the Cold War submarine patrols beneath the Arctic sea ice or the bomber flights over it. Today, it is global macro-trends such as global warming, resource depletion and overpopulation that will ensure the rapid but organic development of the Arctic.

With the growing human presence, the Arctic will inevitably begin to lose its luster of mysticism, foreboding and darkness. As the years turn into decades, and 2050 approaches, the polar-centric view of the world will become increasingly central to human spatial consciousness. The world’s trade, energy and capital flows will have been largely rerouted north.

The ARCS of Progress, their numbers swelled by climate refugees, and their economies bolstered by a flood of capital investment, will be amongst the leading Powers in the world. This assumes they retain their present political configurations. For instance, could an independent Greenland, with just 56,000 people today, retain its own national identity? Facing resource shortages and droughts in the south, would China encroach on the Russian Far East? Would the US try to assimilate Canada?

Whatever the answers to these questions, one thing is near certain. The vision of a northern Ultima Thule is dissipating, and will soon dissolve altogether (thought teh concept may be resurrected to describe a desolate, uninhabitable South many hundreds of years into an extreme AGW future). In its place there will emerge a polar world-economy of open seas, farms and growing cities by 2050.

There will arise an Arctic ecumene.

* According to more recent data, there were 34 transits of the Northern Sea Route in 2011, up from just 4 in 2010; with 820,000 tons of goods transported relative to 111,000 tons in 2010. Volumes are predicted to double again this year. This goes in tandem with record breaking sea ice melt in 2012.

Edit Jan 28, 2013: There were a record-breaking 46 vessels making the transit through the NSR this year.

(Republished from AKarlin.com by permission of author or representative)
 
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This is one of those stereotypes that is totally correct. Take a casual stroll about any Russian town and the typical woman you see would be considered “very cute” or “pretty” in places like the Germany, the UK or the US. And one or two of them will have supermodel looks. That kind of talent you will only get in a few select places in the US like Santa Barbara, parts of LA, etc. You also see unremarkable lanky, unkempt dudes with solid 8′s whereas in the US they will either be with a fat white chick or a 5/6 Asian.

I recall some studies been done about this which basically came to the same conclusion. Women from Eastern Europe (Russia, Ukraine, Poles, etc) being rated as the most attractive among whites. In my experience I’d also add Norwegians (Swedes are too Germanic-plain) and Bulgarians to the list.

Why is this the case? The eXile theory of “dyevolution” posits that this stemmed from the USSR’s huge manpower losses in WW2. The theory goes that in the postwar period, with sex ratios absurdly skewed, only the hotter part of the beauty bell curve was able to find husbands. While under other circumstances we could have expected some degree of “soft polygamy” in which alpha males develop harems (or formal polygamy, as practiced by traditional Islamic societies with lots of inter-tribal warfare) this was not the case in the USSR what with strict Stalinist social mores and controls.

The theory is superficially attractive but false. This pussy paradise was only actual for a single generation i.e. 1945-65, i.e. not enough time to make any substantial genetic level impact given reversion to the mean. Besides it wouldn’t explain countries like Bulgaria or the Czech Republic, where demographic wartime losses were minimal, or even Poland, where half the 6mn deaths were of Jews and the other 3mn were of civilians (i.e., not as overwhelmingly skewed towards young males as military deaths). On the other hand, German military deaths relative to their male population were no lower than those of the Russians, and in addition many of their POW’s were in prison until the mid-1950′s. But German chicks haven’t become particularly beautiful. They remain much the same as they always have: Plain and stolid Gretchen. In addition, the high reputations of Slavic women precedes the 20th century anyway. Napoleon’s mistresses were Polish. The Ottoman Sultans filled their harems with East Slavic women. One of them, Roxelana, became very politically influential.

Of course there are plenty of other possible explanations. For a start Eastern Europe, and Ukraine in particular, was always pretty violent. Then again was it exceptionally so by medieval standards? After the Viking period, Scandinavia was very peaceful, and their women are considered very beautiful and desirable too (I for one fully agree with Norway’s inclusion in that group). I think Chinese and Korean women are prettier than average too and these have consistently been very peaceful and “beta” societies. Maybe Slavic EE women just dress better and take more effort to look more feminine? That is certainly part of the equation, but even if Anglo/Germanic women started (re)adopting these same habits, the difference would not be bridged. So this must remain an open question…

(Republished from AKarlin.com by permission of author or representative)
 
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Many Communists, leftists, and even patriots (I’m sorry to say) have a pronounced tendency to make out the Soviet economy as not quite the resounding failure it really was – or even to paint it as a success story that was only brought down by perestroika and liberal reforms.

The above chart – based on historical GDP per capita (Geary-Khamis 1990 Int$) by Angus Maddison, compiled by liberal economist Illarionov, popularized online by Lopatnikov, and Starikov – purports to destroy two “myths”: That of (1) Prosperous Tsarism, and (2) The ineffectiveness of the Soviet economy. After all, the average Russian went from being 40% as rich as the average American in 1885, to only 23% by 1917; whereas during the Soviet period, despite the turmoil of two major wars, Russian incomes reaches a relative peak at 40% of American levels during Brezhnev’s “stagnation” period.

These is however a glaring hole in this logic, namely that (1) relatively slow growth under late Tsarism reflected a permanent state of affairs, as opposed to the heavy but temporary burden of a large rural, illiterate population; and (2) that a level of per capita GDP that is a mere 40% of what Americans enjoy was in any way a fulfillment of Russia’s potential during the 20th century. In fact, graphical comparison with other countries shows this to be almost certainly false.

I replicated the graph comparing Russia’s historical performance relative to the US, but adding in another reference – those south European countries that were broadly comparable to Tsarist Russia in terms of economic development at the turn of the century (i.e. both were backward), but were spared from the distortions of central planning. (I could only find figures for the Russian Empire/the USSR as a whole, not Russia specifically, hence the slight disparity from the first graph; but the trends would remain the same). You can click on the graph to view it in higher detail.

On examination, several things became clear:

(1) While it is true that Russia was losing ground relative to the US under late Tsarism, or at least until 1905 (see first graph) – the same was true for all other backward European economies. In fact, the Russian Empire tracked Portugal almost exactly. But bear in mind that Russia in 1870 was 90% rural and illiterate, a state of affairs utterly nonconductive to industrial development; and agriculture’s potential for productivity gains is extremely limited, especially in the context of the system at that time. In contrast, the US was almost universally literate and embarking on its great industrial boom. It is no wonder then that the relative gap between the US and Russia increased from 1870 to 1905 (why the gap existed in the first place can be traced back centuries and is far beyond the scope of this post). Notice that the same thing was happening in all the other similarly backward countries: Portugal, Spain, Ireland, to a lesser extent (but more developed) Italy also all lost ground to the US from 1870-1913.

(2) The Soviets inherited Tsarist infrastructure, hence the period until 1925 was simply one of restoration. It should also be noted that the literacy rate by 1916 was around 50%, i.e. in terms of human capital development, much of the legwork had already been done; that is, the country was ALREADY ripe for a faster rate of industrialization, that would have happened regardless under any political regime. Nonetheless growth began to flag by the late 1920′s, as Tsarist-era production levels were restored. It was only further turbocharged from 1930 on by forced savings via collectivization and consumption repression, and German and American investment. But even so note that the sharp rise in the early 1930′s was in large part an artifact of the Great Depression that wracked the US, and that in that period ALL countries rose upwards, and that the USSR failed to make substantial gains on the US standard of living following the mid-1930′s; indeed, Soviet GDP actually fell in 1940. Needless to say this growth was also achieved at much higher human cost than elsewhere.

(3) Everybody suffered from the wars and the collapse of trade during the 1940′s. The USSR did start recovering earlier, showing strong growth relative to the US during the 1950′s and to a lesser extent during the 1960′s; it also held its own against what were still the weakest West European economies, that is Portugal, Greece, Spain, and Ireland – although Italy sprinted far ahead. The fast growth during this period was structurally similar to the US some fifty years prior: The large-scale shift from agriculture to industry, which is a one-off in historical terms.

(4) Once this process started exhausting itself by the 1970′s, relative growth flat-lined at a base only 35% of America’s (or slightly more than 40%, taking into account only the RSFSR). By 1990, it dipped below 30%. Note that it is a linear downslope from 1975, well before perestroika or “reforms”. From 1970 a sharp gap began to develop with Portugal, Greece, Spain, and Ireland; by 1990, for instance, the weakest of this group, Portugal, was at 50% of US GDP per capita. European nations that a century ago were overwhelmingly rural, undeveloped and superstitious just like the Russian Empire had now pulled decisively ahead of Soviet Russia; during the 2000′s, Ireland briefly almost converged with the US! While as we all know, during the 1990′s, the Russian economy fell into a precipitous collapse…

(5) Yes, on the one hand, this collapse wouldn’t have happened had the USSR retained political authority and central planning. On the other hand, there does not appear to be any good reason that the USSR should have experienced a productivity spurt relative to the US; if anything the reverse as demographic prospects were deteriorating by the 1980′s (especially the pool of surplus rural labor was drying up) and resources for higher investment rates were hard to find (due to the demands of the MIC, and falling oil prices). Indeed, Goskomstat planners in the late 1980′s assumed growth to the end of the millennium would be around 1.5% per annum, i.e. even further decline relative to the US. In the big picture, Russia exchanged a very punishing transitional depression for the prospect of normal market growth, which has predominated since 1998, and the longterm possibility of real convergence.

fennoscandia-russia-gdp-usa-compared

Another interesting set of countries Russia can be compared to are Fennoscania, though with a word of caution – Sweden, Norway, and to a lesser extent Finland were in literacy (human capital) terms far ahead of the late Russian Empire. Note that Finland, relatively backward nonetheless, declines more relative to the US than its Nordic neighbors; again, presumably a function of its initial backwardness (highly rural, can’t grow fast). Its performance in the 1930′s is every bit as impressive as Russia’s, and unlike the USSR, it continues to rapidly converge with US living standards from the 1960′s onwards. Note that Finland was only a modestly richer subject of the Russian Empire in 1913 than the national average.

russia-gdp-historical-compared

The final graph shows Russia’s historical performance relative to the US, Finland, Greece, and Portugal all in one. It is particularly telling that plotted against Finland, it is a story of almost inexorable decline during the Soviet period. While Russia did makes massive gains vis-a-vis Portugal and Greece under Stalinism, both the latter grew far more quickly during the 1950′s and 1960′s, with the result that they overtook the USSR in per capita terms at around 1970 and held a substantial lead by the 1980′s. This substantial gap became an awning abyss during the catastrophic nineties, however it is important to emphasize that the economy of the 1990′s was for the most part still a continuation of (well, the dissolution of) the stagnant Soviet command economy.

There are of course many caveats. Some might argue that what the USSR suffered from in inefficiency it made up for in more focus on developing human capital (which is the single most important factor for long-term productivity growth). I don’t see this as convincing. As mentioned above, literacy rates by the 1910′s were above 40%; the school enrollment figures of the mid-1910′s would only be reattained in 1925. It is simply wrong to say that the Tsarist regime neglected human capital, it was just developing it from a lower base and the Soviets merely took over that process.

The two biggest problems were that (1) the Soviet economy was seemingly unable to develop to more than 40% of the US per capita level, due to its inefficiency – that was its ceiling; and what’s worse, (2) it could not be dismantled without incurring a hyper-depression in the meantime. That second point is the reason why many Russian leftists continue to insist that the Soviet economy was a good thing, at least it held steady relative to the Americans under Brezhnev as opposed to collapsing in the 1990′s (which is in actuality the collapse of the Soviet economy), and being on the retreat throughout late Tsarism (for aforementioned structural reasons, but whose negative influence was weakened from the 1900′s); they also for some reason think that a GDP per capita at 40% of the US level is something to be proud of.

Addendum 6/22: I noticed Sergey Zhuravlev makes much the same arguments in his article Wily Lines

(Republished from Da Russophile by permission of author or representative)
 
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Anatoly Karlin
About Anatoly Karlin

I am a blogger, thinker, and businessman in the SF Bay Area. I’m originally from Russia, spent many years in Britain, and studied at U.C. Berkeley.

One of my tenets is that ideologies tend to suck. As such, I hesitate about attaching labels to myself. That said, if it’s really necessary, I suppose “liberal-conservative neoreactionary” would be close enough.

Though I consider myself part of the Orthodox Church, my philosophy and spiritual views are more influenced by digital physics, Gnosticism, and Russian cosmism than anything specifically Judeo-Christian.