Monday, August 24, 2015

The Limits to Growth in the Soviet Union and in Russia: the story of a failure




Above, you can see the full recording of a 2012 lecture given in Moscow by Dennis Meadows; one of the authors of "The Limits to Growth" report of 1972. It is long, more than an hour, but - if you don't have the time to watch all of it - I suggest that you go to minute 21 and watch Dennis Meadows showing this book.



It is titled "Soviet Union and Russia in the global system." According to Meadows, in the 1980s, Viktor Gelovani, first author of the book, adapted to the Soviet Union the world model used for "The Limits to Growth" and he ran it; finding that the Soviet Union was going to collapse. Then, Meadows says "he went to the leadership of the country and he said, 'my forecast shows that you don't have any possibility. You have to change your policies.' And the leader said, 'no, we have another possibility: you can change your forecast'"

Meadows' anecdote is basically confirmed by Rindzevičiūtė, who wrote an excellent article that tells the whole story. It turns out that it is not true that "The Limits to Growth" was ignored in the Soviet Union, as it could be the impression from the documents available in the West. The "Limits" study was translated into Russian, although it was distributed only to very limited circles (generating, by the way, a brisk black market, as Rindzeviciute describes at p. 6). Several Soviet scientists knew very well the study, they had contacts with its authors and a number of them made a considerable effort to warn the Union's leadership that the system was going to collapse. They didn't have much success, as Meadows says in his talk.

Theoretically, you could think that the Soviet leaders could have seen "The Limits to Growth" as a useful planning tool. In principle, they had ways to put into practice the recommendations obtainable from the models in order to avoid collapse. But that wasn't the case. The reaction of the Soviet leadership was the same as it was in the West. Both the Soviet and the Western leaders were completely tied to the concept of "growth at all costs" and refractory to changes. So, the warning was ignored on both sides of the iron curtain.

Another, hugely interesting element of this story is how it shows that the Soviet Collapse was a systemic one; it was caused by the huge military and bureaucratic expenses that the production sector of the economy was becoming unable to bear. In other words, it seems clear that it wasn't caused by Mishka Mecheny, (Gorbachev the madman) or by an evil plot of the Western secret services (although both may have played a role). On the whole, we have here a remarkable confirmation of the predictive power of world modeling: in the 1980s, it succeeded in predicting the collapse of a large chunk of the world's economy. Another, even larger, chunk is collapsing right now.

One more interesting point comes from examining whether the present Russian leadership learned something from the experience of the old Soviet Union. Apparently not; because today there doesn't seem to exist a serious debate on mineral depletion in Russia. Most Russians seem to be convinced that their mineral resources are abundant and that they can tap them at will for the foreseeable future. Hence, depletion is not a problem they should be worried about.

Meadows' talk confirms this impression. Even without paying attention to what Meadows says, do look at the faces and the body postures of the young people in the audience - they are occasionally shown in the movie. I can tell you that, over the years I have developed a certain degree of telepathic capabilities in understanding the feelings of my audience. And I can tell you that most of the students listening to Meadows completely disbelieve him - or so it seems to me (also a Russian friend of mine said that this was "the most boring talk she had ever heard"). Note also the silly and marginal questions the students asked Meadows at the end of the talk. He told them about the upcoming end of the world and they ask him if it is convenient to invest in water producing companies... Come on!

But the lack of understanding about the limits to growth in Russia is really nothing special. It is the rule all over the world. In addition, Russia, right now, is in full emergency mode and the main priority for the Russians is to save their economy from external attacks. They can't be blamed if they don't have (and, possibly, they don't need), the group of Cassandras we have in the West, white haired people who keep telling of dark and dire things to come and whom no one listens to.

With or without Cassandras, the situation in Russia may not be so bad. Dmitry Orlov has described  how the Soviet economy was much better suited than the Western market economy to adapt and survive to the kind of systemic collapse described by "The Limits to Growth." The same considerations may apply to the present Russian system. So, the future is, as always opaque, but, if you ask me which will be the next economy to collapse, I wouldn't bet it will be Russia.



h/t Michael Hebenstreit and Tatiana Yugay. 



29 comments:

  1. "Most Russians seem to be convinced that their mineral resources are abundant and that they can tap them at will for the foreseeable future. Hence, depletion is not a problem they should be worried about"

    - u r right here. Two most common positions (excepting those who doesn't care or think about this at all) r
    a) natural resources will be so abundant soon that the export prices will collaps and stay there for decades if not centuries
    b) natural resources r scarce all over the world except Russia

    both positions r quite ideological in origin (which is a common place among homo species)


    "the situation in Russia may not be so bad. Dmitry Orlov has described how the Soviet economy was much better suited than the Western market economy to adapt and survive to the kind of systemic collapse described by "The Limits to Growth." The same considerations may apply to the present Russian economy"

    - the present RF economy is very(!) different from the soviet one...

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    1. Well, I used the term "economy" when I should have used the term "system" (corrected now in the text). The Russian economy is much different today than what it was at the time of the Soviet Union, but Russia maintains several structures (including economic ones) that are not so different than they were.

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    2. Which structures do u mean here?

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    3. Orlov discusses this subject in some detail in his book. But, even without having a deep knowledge of Russia, it is clear to me that they may have several elements that make them better suited to face hard times; not the least that they have already faced extremely hard times in the past. So, they have a higher reliance on public transportation, on local food production, on large buildings easier to keep warm in winter, and more....

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    4. "that make them better suited to face hard times; not the least that they have already faced extremely hard times in the past"

      - well, 1990's meant many millions had died of malnutrition, hunger, rising alcohol&other harmful addictions, rising rate of crimes, and more. And back then there was a) very solid public infrusutructure b) very low if not free costs of public services c) industry and agriculture which were almost self-sufficient, not requiring imports 2 function d) I can go on and on e) and back then there was a global economy in quite a good health which served as a goal: yeah, we suffer now, but we'll live like the Americans and West Europeans soon, we just need a bit more market reforms and a bit more time

      Since then costs of public services have scyrocketed, public infrastructure is much older (except some big cities), industry and agriculture are totally dependent on imports and without imports just cannot function at all (not to mention many industry sectors are completely destroyed), and there will not much hope for the better during coming global economic crash...
      No, Ugo, I don't think the 90's mean the Russian Federation is in a good form to meet coming hard times...

      "a higher reliance on public transportation, on local food production, on large buildings easier to keep warm in winter, and more"

      a higher than where? In the USA? Yes. In the Europe or Asia? I do doubt that...

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    5. I make gentle suggestion to improve your credibility:

      "- u r right here."

      Is considered the language of a teenager. Please always use "you" instead of "u" and "are/our/hour/" for "r".

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  2. "On the whole we have here a remarkable confirmation of the predictive power of world modeling: in the 1980's it succeeded in predicting the collapse of a large chunk of the world economy. Another even larger chunk, is collapsing right now". I certainly believe in the predictive power of world modeling. But based just on other things said in this post I don't think it can reasonably be said that it "predicted" the collapse of the Soviet Union, which collapsed for various reasons only one of which is that related to world modeling variables. I think the case for world modeling and Limits to Growth is very strong. I don't think there is any need, nor does it help, to overplay it. If we keep growing, eventually we will collapse. World Modeling helps us to understand it. A significant enough accomplishment.

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    1. Yes.. I want to ask Ugo whether the model of the Soviet system was the same as the MIT (Meadows') LTG model, perhaps using a sub-set of global data, and whether it produced scenarios suggesting a similar time-scale for what was then a relatively closed system ( a sub-set of the world economy - apart from exported oil and imports paid from hard currency); that is whether the model for the Soviet system showed a set of scenarios with likely 'collapse' in the 21st century? Or did it predict something much closer in time?

      To put it another way, did the Soviet system 'collapse' because it could no longer grow given the way it was constructed? It is 'growth' that must end in 'non-growth' that 'does it'; or am I wrong?

      Despite the present Russian Federation having low or perhaps zero population growth and slow economic growth, it is depleting its most precious reserve (oil) very fast and is apparently now much more connected to the global economy. Fast depletion rates eventually drag down the amount that can be extracted per year. Does the global LTG approach have more or less power nowadays for the Russian situation?
      best
      Phil

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    2. I am sorry that I did not first read the link that Ugo pointed to: https://www.academia.edu/8584394/Toward_a_Joint_Future_beyond_the_Iron_Curtain_The_East-West_Politics_of_Global_Modelling

      Global modelling in the Soviet Union in the 1980s was quite a complex scene and although scientists had borrowed heavily from Western contacts, it appears to me from my reading of the chapter that they developed independent models for the USSR. A significant problem was obtaining relevant data. Apparently at least one model of interconnections between economically relevant parameters showed a scenario of Soviet economic growth rate declining from the orthodox assumption of 5% to 2% by the year 2000, and this result was presented to leadership circles.

      The author of the chapter, Rindzeviciute, (link) writes: [having already concluded that Moiseev was suggesting that the Soviet system was stuck in solving its old problems] " … Instead, he [Moiseev ] suggested turning to new problems, ones of global and long-term character. The attempt to solve these new problems could and did transform the Soviet system."

      An interesting conclusion: thanks to Ugo for introducing this topic.

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    3. Yes, Rindzeviciute's article is extremely interesting. But, even so, the whole story must be much more complex and interesting. It would be nice to be able to study the book by Gelovani, unfortunately it is available only in Russian and it costs more than 100 Eur..... A bit steep for me for both reasons!

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  3. Russia encourage small scale farming = family farmers. In the west we are increasingly encouraging larger and larger scale farming, presently we are killing the family farm companies as the global market prices on food is not sufficient for them. Italy and France seems to be more supportive to the family farms, at least compared to other western countries. Maybe you know more about that?

    A link about russian agro policy:

    http://rbth.co.uk/business/2015/08/10/grants_worth_23000_to_give_russian_farmers_a_boost_48393.html

    I suspect that from a food security perspective family farming is more reliable than the big agro companies. In case of crisis the agro companies will simply not work. This can be a clever move by the russians.

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  4. As Max12345 comments, there is no magic in world modelling, it is basically a more complex version of when you model a yeast population in a finite suger solution. In our case the suger is swaped by raw materials. My issue with world modelling is the assumption on the size of the raw materials available. This size is only guess work. How sure is the club of rome that their assumption concerning this variable is correct. Couldn't it differ in orders of magnitude? Are there any good references concerning this question?

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    1. On the whole, I'd say that the record of system dynamic modeling is impressively good, supposing that you don't expect the models to be perfect. Over long term predictions, clearly the uncertainty is defined in the range of years, even decades. A good example is worldwide peak oil. In 1971, Hubbert saw it for around the year 2000. In 1998, Campbell and Laherrere saw it around 2005. The peaking of conventional production was probably in 2008; but the peak of all liquids was postponed of a decade or so by using unconventional sources, which were not taken into account in the models. So, if you look at this record, you could say, "Haha! Hubbert was wrong" or, "Wow! Hubbert was almost right." And, if you compare with conventional economic modeling, there is no comparison!

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    2. Well, that's the problem. In ten years time we might have superunconvcentional oil ans so on. The earth is yet to big to say anything definitive about the resources.

      Don't get me wrong, I think you are mainly right. But if you want to convince the nonbelievers this is the kind of questions you meet.

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    3. This is the usual problem: when you find someone who ends the discussion by saying, "they'll find something." You can't fight faith with reason

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    4. Would be interesting if you could write a blogg post about the successes and failures of system dynamics. Hubbert's prediction is not really based on system dynamics, is it? It is more curve fitting than making a system of ODE's and solve them.

      I would like to learn more about system dynamics. Do you recommend any particular literature?

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    5. Well, it is a long story, but if you look at it in some detail, you see that dynamic models have good predictive capabilities, much better than other kind of models. Maybe one of these days it would be worth to write a post on this matter. About Hubbert, you are right, it was not based on SD, but it can be seen as equivalent to a simplified two-stock SD model

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  5. " So, the future is, as always opaque, but, if you ask me which will be the next economy to collapse, I wouldn't bet it will be Russia."

    The Japanese go down before the Russians.

    RE

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  6. Io sono uno studente universitario di Informatica e non so cosa fare nella mia vita. Più passa il tempo più mi rendo conto che il pezzo di carta fra le mie mani sarà a breve inutile per via della prossima crisi energetica.
    Ma io non so fare nient'altro di pratico. Che utilità avrò in un sempre più vicino mondo collassato (o quasi)?

    Penserei di provare a studiare altro una volta conclusa la triennale, magari una laurea medico-sanitaria, ma non otterrei il sostegno dei miei genitori. Ho fatto l'errore di parlargli delle mie paure legate alla situazione futura e ora quasi credono che stia impazzendo. Ci ho litigato molto.

    Lei ha consigli? Pensa che dovrei semplicemente smettere di leggere queste cose e pensare al mio futuro prossimo, accettare la mia impotenza a lungo termine?

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    1. Mi permetto di darti un consiglio, anche se non sono il prof. Bardi.
      Mi sembra di capire che ti manca poco per finire; dunque finisci quello che hai cominciato.
      Questo genere di impotenza va accettata come un fatto della vita. Se al momento non si può fare nulla per quello che preoccupa di più, non significa che si debba perdere tempo a rimunginare. Se sei preoccupato significa che hai riflettuto su questi temi. Per il momento ci hai pensato abbastanza, senza intravedere soluzione. Allora smetti di pensarci, riservandoti di riesaminare la situazione più in là. Il futuro è incerto, non è detto non si possa avere domani un qualche ruolo utile.


      The secret of happiness is to face the fact that the world is horrible, horrible, horrible." (Source: Alan Wood, Bertrand Russell, the Passionate Sceptic, 1957)

      <>
      J.R.R. Tolkien,
      Il Silmarillion

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    2. La citazione dal silmarillion che è andata perduta nell'inserire il messaggio era:
      <>

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    3. Di fronte alla realtà dei sistemi complessi, tendiamo spesso a semplificare e a tagliar via un romanzo che ci piace (o che ci affascina per il suo orrore). Data la situazione, non c'è ragione di farsi prendere dalla depressione. Tutto quello che succede è un processo di adattamento, quello che spetta a noi, è adattarci al meglio possibile. Se rimaniamo rigidi, saremo travolti. Se nuotiamo bene, seguiremo lo tsunami, atterrando da qualche parte. Ed è comunque meglio finire le cose che uno ha cominciato. Se ti stai per laureare in matematica, come dice Sergio, insisti e finisci. Poi, tutti troveremo un ruolo nel futuro che ti aspetta.

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    4. Provo ancora una volta a inserire la citazione (che non so perché viene tagliata)

      in ogni epoca si manifestano cose che sono
      nuove e imprevedibili, poiché non procedono dal passato.

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    5. La mia paura è di trovarmi in mano un pezzo di carta inutile. Certamente non c'è informatica, o non c'è mercato per essa, se non ci sono computer o l'energia per accenderli.

      Comunque io concluderò la triennale fra 2 anni, questo ormai è sicuro. Dopo, chissà.
      È vero che sono come in depressione, ma non posso farci niente: questo è il mio futuro. Un futuro di lento declino - peraltro già iniziato - se siamo fortunati, e una crisi catastrofica se non lo siamo.

      Almeno se fossi un medico o un infermiere sarei sempre utile a qualcuno. Avrei chances migliori di sopravvivenza.
      Ma neanche questo è sicuro. Una laurea in Medicina è costosa e dura sei anni. Graverei ancora sulla mia famiglia. E non ne ho voglia e forse nemmeno potrò - soprattutto se business-as-usual finisce troppo presto. Prendo in considerazione questa idea di cambiare percorso solo per il rischio ben peggiore all'orizzonte.
      Sono o mi sento intrappolato.

      All'inizio della mia carriera universitaria affrontai pure il test di Medicina su consiglio dei miei genitori, lo superai, ma rifiutai il posto perchè volevo fare quello che mi piaceva ed era l'informatica. Allora avevo una idea molto ottimistica del futuro.
      Adesso io e i miei genitori ci siamo scambiati i ruoli, perchè adesso io so cose che 2 anni fa non sapevo. Ma loro pensano che io sia pazzo. Giustamente. Cosa faccio, torno indietro dopo cento peripezie? Blatero della fine della ricchezza come un Testimone di Geova o un complottista paragrillino.
      Mi sento io stesso un fallimento. Quindi le miserie globali si mischiano alle mie miserie personali.

      Io non biasimo i miei genitori. Sono programmati dagli apparati dell'ideologia dominante - e lo dico senza alcun complottismo, è semplicemente quello che è successo in ogni epoca storica per ogni sistema socioeconomico: esiste un'ideologia egemonica che serve a favorire e giustificare le azioni e l'esistenza della classe egemone - a credere in una prosperità e stabilità eterna, come sono programmati d'altra parte tutti gli altri uomini del Primo Mondo incluso me, e tanto quanto me sono dipendenti dal sistema in cui sono inseriti - quindi crederci è perfettamente nel loro interesse. Nessuno vuole pensare a un futuro drammatico, sia esso fra 10 mesi o 10 anni.

      E quindi resterò a fare quello che faccio adesso. E dopo avrò un ruolo nel futuro, probabilmente di concime per la terra (magari dopo due o tre anni di occupazione a basso stipendio). Sì, è vero, io come tanti altri.
      Mal comune mezzo gaudio? Per me no.

      Ho fatto una scelta da coglione, o in verità diverse scelte da coglione, ma al tempo non potevo saperlo.

      Forse semplifico troppo - sarà un processo di adattamento... Vero. Ma io sono effettivamente rigido, mentalmente come avete capito e fisicamente, e ben poco in grado di adattarmi. Non ho abilità pratiche al di fuori di quello che studio. Cambierò sicuramente ma non so fino a quanto posso cambiare.

      E in ultimo, io lo so che dovrei prendere tutte queste mie letture con distacco, e ciò che avverrà è sempre incerto e probabilmente sarà un processo lungo e tutto il resto... non ce la faccio. Non ce la faccio e basta. Non è nel mio carattere di fottermene. E tutto il sostegno psicologico che posso avere non cambierà questa situazione di merda in cui mi trovo, e tanti insieme a me.

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    6. Compra un biglietto per qualche destinazione esotica. Un viaggio avventuroso, di quelli in cui si osa un po' di più, perché se uno deve diventare concime per la terra, vuole almeno togliersi qualche soddisfazione. Non occorrono molti soldi. Anzi meno soldi = più avventura.
      Magari si ritorna più motivati e più fiduciosi e si impara che la realtà è piena di imprevisti ma anche piacevoli sorprese. Controllare e pianificare tutto come si programma un calcolatore non è possibile.
      Altro non saprei consigliarti, il resto sta a te. Mi pare di ricordare che un guru dell'informatica predicava “stay hungry, stay foolish”. Certo, a lungo termine, pure lui è divenuto concime. Ma vuoi mettere?

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  7. Ciao Furvietto, le diverse cose che hai detto mi hanno fatto pensare abbastanza e ti ho poi scritto un commento il quale pian pianino e' diventato lunghissimo ma che (forse) potrebbe esserti utile. Ma mi scoccia metterlo sul blog perche' e' troppo lungo ed anche perche' racconto diverse cose della mia vita che magari ad altri non interessano affatto. Se vuoi che te lo mandi fammi avere il tuo indirizzo e mail attraverso Ugo Bardi...(l suo e mail e qui sul blog) (non credo gli darebbe troppo fastidio fare da tramite) e poi te lo mandero'...saluti cordiali, Max

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  8. Ciao Furvietto, vorrei mandarti direttamente un mio lungo commento troppo lungo da includere come commento sul blog. Se te la senti di farlo metti il tuo indirizzo e mail come risposta a questo mio commento, e te lo mandero'....ed in ogni caso buona fortuna con le problematiche personali che hai avuto il coraggio (ed a mio parere anche l'intelligenza) di descrivere pubblicamente....Saluti Cordiali....Max

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  9. Actually Russia will be one of the last countries standing. They still have abundant resources compared to most of the world and they also have the means to defend it.

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  10. Save the environment. Read latest news on pollution created by factory near lake in Russia.
    truth out

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Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014)