The Five Stages of Collapse

A great essay found at energybulletin.com by Dmitry Orlov. He was an observer of the collapse of the Soviet economy, and now an observer of ours.

Orlov identifies five stages of collapse: financial, commercial, political, social, cultural. In the financial collapse phase, credit dries up, savings are wiped out, and frantic efforts to save solvency with liquidity cause hyperinflation. He takes for granted, reasonably enough, that the United States is well into this first stage already.

In the next two stages, which Orlov asserts are totally unavoidable, supplies dry up (from lack of money, comes lack of products) and political corruption runs more rampant than ever. Both stages driven by financial collapse, Orlov says, they will overlap, and it isn't clear which will begin sooner. On commercial collapse:

With the disappearance of the free and open market, even the items that still are available for sale come to be offered in a way that is neither free nor open, but only at certain times and to certain people. Whatever wealth still exists is hidden, because flaunting it or exposing it just increases the security risk, and the amount of effort required to guard it.

On political collapse:

One thing that makes political collapse particularly hard to spot is that the worse things get, the more noise the politicians emit. The substance to noise ratio in political discourse is pretty low even in good times, making it hard to spot the transition when it actually drops to zero. The variable that's easier to monitor is the level of political embarrassment. For instance, when Mr. Nazdratenko, the governor of the far-east Russian region of Primorye, stole large amounts of coal, made strides in the direction of establishing an independent foreign policy toward China, and yet Moscow could do nothing to reign him in, you could be sure that Russia's political system was pretty much defunct.

Orlov argues elsewhere that Russians, who housed three generations accustomed to hardship under one roof, were actually better prepared for collapse than Americans, who live alone or in nuclear families, spread out geographically. Where the Russian attitude was "life goes ever on," we will find ourselves stranded among strangers. In this newer essay, he states that to prevent this social collapse,

[The] only reasonable approach, it seems to me, is to form communities that are strong and cohesive enough to provide for the well-being of all of their members, that are large enough to be resourceful, yet small enough so that people can relate to each other directly, and to take direct responsibility for each other's well-being.

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