Defending the Loop

Following my posting of Russia’s Sisyphean Loop, the influential East-Central Europe expert, Vlad Sobell, wrote up an interesting critique at the Untimely Thoughts Russia Discussion Group. It addresses what may be considered some weak, or at least not thoroughly explained, points from the original article, so I thought it would be useful to reproduce it in full along with the ensuing e-mail conversation.

I first give a very condensed version (inevitably a caricature) of what he has written, and then proceed to inform him what is wrong with it.

His thesis goes as follows:

In its effort to modernise and catch up with the West (mainly for reasons of defence) Russia has been going in circles, or historical cycles – a Sisyphean Loop. Anatoly has developed a useful model (his Belief Matrix TM) which illustrates the parameters in which this cycle is set.

He concludes that Russia is currently at a crossroads: it could either continue the cycle, with the current authoritarianism strengthening (even metamorphosing into totalitarianism) or it could break out from its cycle and embrace genuine liberalism.

What is wrong with it:

While this is a very useful analytical framework, it is too deterministic. Anatoly is very good at sticking his neck out on the side of the NEGATIVE outcome, based on his tendency to see History as an endless repetition, rather than progress to something new. Thus he predicts a reversion to totalitarianism and neo-imperialism.

(Incidentally when earlier analysing Europe, he raised the prospect of a rising Germany eventually drawing Europe to another war – a daring prediction indeed!) [see The Return of the Reich?]

However, Anatoly should realize that while history does to some extent repeat itself (and there are structural/geographical causes of this), things ALSO DO CHANGE and evolve. Indeed, change and evolution is a more potent force than eternal repetition. This is why there are different species, for example, and why there is such as a thing as Russia in the first place!

(And I do not want to remind Anatoly of the hackneyed statement – usually (but most likely mistakenly) – attributed to Karl Marx, that although history does repeat itself, the first time around it is a tragedy, but the second time a farce).

I believe that this time around the odds are stuck firmly in favor of
fundamental change and a break out from the cycle. Russia cannot revert to the past because its economy would not be able to take it. Without modernization the Federation would disintegrate, and modernization cannot be carried out on the basis of autarchy. In today’s globalized environment (and in the era of the Internet) autarchy is simply a non-starter.

Anatoly makes the mistake of taking the indisputable signs of repetition (e.g. Putin’s strong rule) as a proof of reversion to kind. The evidence for this so far is meager. This is not authoritarianism for authoritarianism’s sake, this is largely a democracy’s defense against oligarchy and demagogy driven chaos.

I would also argue that we are witnessing Perestroika mark 2. The system that Putin built has been shown to be seriously wanting by the depth of the economic crisis. Just like in the 1980s this is fueling pressures towards liberal reforms.

Best regards,
Vlad Sobell

My response.

Thanks for the critique, Vlad.

Re-my view of history as cyclical and pessimism. First, I would note that I didn’t really give predictions as much as different possible scenarios. The reason that pessimistic ones figure much more prominently in my work than in some (most) others is because my worldview is fundamentally shaped by the concept of Limits to Growth – the theory that the world system is coming under increasing ecological and resource stress and may collapse in a few decades. Whenever you’ve had strains, you also had popular disillusionment, more support for strongman rule, retreat of globalization and of commercial values in favor of militarism and nationalism, etc. Even though Russia itself is pretty well endowed with resources, the shrinking of the world system may encourage it to move to a more autarkic and militarized form of government (e.g., note that the Great Crash and the Soviet “Great Break” [that marked the genesis of Stalinism] both took place in 1929). In the end, industrialism may just be a passing phase in human history, just one really big cycle [enabled by humanity’s discovery of and exploitation of the fossil fuel windfall], and will centuries later be remembered as some kind of “Age of Myths”.

Re-“Russia cannot revert to the past because its economy would not be able to take it. Without modernisation the Federation would disintegrate, and modernisation cannot be carried out on the basis of autarchy. In today’s globalised environment (and in the era of the Internet) autarchy is simply a non-starter.”

There are two assumptions here: that globalization is permanent, and that autarchy won’t survive in a globalized age. For the former, see above [or my article Shifting Winds]. For the latter, see Brezhnev’s Soviet Union – impoverished, but still a superpower, and one that endured for a generation after the onset of zastoi (and could have theoretically endured for much longer – see North Korea). The Federation itself can’t really fall apart any more, I think, (with the exception of a few S. Caucasian Muslim states) because it is now 80% Russian, whereas in the USSR the figure was 50%.

Re-“The system that Putin built has been shown to be seriously wanting by the depth of the economic crisis. Just like in the 1980s this is fuelling pressures towards liberal reforms.”

But… one of the biggest reasons, probably the main one, why Russia’s economy fell so hard was because of its loss of access to the cheap Western credit its corporations had come to rely upon, and the primitive nature of its own domestic financial system. To the contrary, this may be interpreted as a lesson to become *less* reliant on outsiders.

In sum, you think we’re in the 1980’s, I think we’re in the 1920’s. 😉

Vlad replies.


I cannot take seriously this theory of the limits to growth. I understand the reasoning and there is no doubt that the growth of population is vastly out of line with the availability of all manner of resources (plus the environment damage etc).

But instinctively (apart from rationally) I do not like any apocalyptic theories (the same goes for conspiracies). Something always happens, things ALWAYS turn out different, in both positive and negative sense.

I also do not accept the global warming – yes there is a lot of evidence and yes it is caused by human activity, but I do not believe that shutting down on industrialisation is the answer, and we do not (cannot) know now what we will know in 10 years from now, never mind 100 years from now.

So as you can see I am very sceptical.

The market will likely solve these problems – as resources get more scarce, they will get more expensive. This will generate money for the alternatives and will make previously expensive alternatives look cheap. This is how it works. Population growth will slow down – as it does when nations get richer. etc.

I am aware of the problem of the Russian economy – it was the inability of the system to provide long-term finance, and hence its foolhardy reliance on external finance.

But when they start building a proper financial system, that system will need to be properly integrated within the global financial system. There can be no such thing as financial autarchy these days – hence the same applies to the rest of the economy. Diversification of production, financial flows and hence diversification of risk is the answer.

I am not saying that you are completely wrong. There are (will continue to be) forces in Russia pulling in the direction you describe. But they cannot prevail in the long run.

As I said, I do not believe that History repeats itself – there are similarities and analogies, but there always are also huge (and material) differences. Every situation is always novel.

Best regards,


By the way, I think are one of the most interesting writers on these topics around. I like the way you put together the big picture and your ability to draw your ideas to their logical ends, regardless of how “outrageous” or unpalatable these ends may be. Your stuff always makes me think and look at things in a different way.

And here I basically think we can agree to disagree, since otherwise the debate will spiral far beyond the more limited subject matter of Russia’s Sisyphean Loop. Just to conclude, however:

  • The markets-and-technology will solve our problems, or a latter day form of cargoism. The problem with rising costs is that they, in essence, translate to higher energy costs – or in other words, a lower EROEI. The minimum EROEI needed to sustain industrial civilization happens to be 5:1, which is probably somewhat equivalent to the overall values for wind (not enough of it to power the world anyway) and solar (can power the entire world, but is still very underdeveloped – even in 2008, photovoltaics supplied less than 0.02% of the world’s total energy supply).
  • There has been no significant action on global warming at all, with emissions increasing at a record breaking rate during the 2000’s as China continued its breakneck industrialization; furthermore, public acceptance of anthropogenic global warming is actually falling, despite the overwhelming evidence for it.
  • The subjective factor – I like apocalyptic theories, which may bias my judgment. 😉
  • Russia will have to do with financial autarky if global finance collapses. It won’t be that difficult, since that has been the norm for most of Russia’s history, with the exception of late Tsarism and the post-Soviet era till now.

Readers, please feel free to continue the discussion in the comments below.


  1. Alexey Goldin says:

    Re: low carbon energy

    IMHO there is ample evidence that global warming is real and threatening and you are right that wind and solar look doubtful. OTOH it seems that nuclear is quite capable of supplying all electrical energy we currently need for quite a long time (we still would need something for industrial processes requiring a lot of heat but switching electricity production from coal to nuclear will give us a breezing space of 50 to 100 years and we can do a lot in this time). An example of France shows that this solution is possible and quite effective (see ). At some point we will have to do it.

    I recommend this source: (especially )

    See you on “Untimely Thoughts” group.

  2. I do not subscribe to all of Anatoly’s thoughts, however I think he hits upon a thought that is, in many ways the necessary thought, that is a corrective to the current faith in perpetual progress. While there are certainly no exact analogies in history, there are typically enough similarities to make useful comparisons.

    Globalization is not guaranteed. I think it highly likely there will be a retrenchment. While its benefits have largely been for the good (at least materially, if spiritually the jury is still out if not yielding a less than sanguine conclusion), there is a deep unease amongst many. It is definitely not outside the realm of possibility that this unease, combined with resource challenges will combine to unravel much of the current architecture that is taken for granted. I actually wrote an op-ed recently on this subject, “Beyond the Great Illusion” (

    A few snippets I think relevant to this debate (I will admit up front it is American-centric, whether that is mere prejudice or, as I prefer to think, a reflection of power relations and potentialities, can be debated):

    “Is the world careening to a new world disorder? There are numerous analysts who think that this view is anachronistic and merely doom and gloom pessimism that recalls Spenglerian decline while ignoring the rise of new centers of power amidst the overall positive benefits of a globalized economy. To some, once the economic and credit crisis ends and a new global financial architecture is erected, we will be able to move forward into a world of grand, “social justice.” Some even dream of a world of “Global Zero” and no nuclear weapons…

    Perhaps, this is true. Perhaps, civilized man has reached a point where we can be sanguine about the future. Yet, we’ve been here before. Only a mere century ago man thought the world would never devolve into catastrophic warfare because economic interdependence would make it too costly. Famous books were written to bring home that point. Books like Norman Angell’s “Great Illusion” clearly made the elite opinion of the day swoon, just as today we have “The World is Flat.”

    A single day in June 1914 put an end to that “Great Illusion…

    It is time to move beyond rhetoric and realize that we are always teetering on an abyss. Statesmanship and wisdom are the necessary means to avoid tipping over. However, before addressing this, Americans need to understand the full context of the world we live in and understand the threats we face without hyperbole, but also without naivety.

    Every generation thinks itself the one to “end war” for all time and create a “just” world order. Each generation is disabused of these notions as reality stares them in the face.

    The current American generation needs to become disabused sooner than previous ones for the storms brewing beneath the surface of our false tranquility (even after the economic crisis) are real and will not be tamed by rhetoric, resolutions, and vague concepts of hopeful cooperation. They will be tamed by eternal vigilance and recognition that even as the world undergoes profound transformations, fundamentally, man is still man. The old emotions, so well described by Thucydides’ History of the Peloponnesian War, of envy, fear, and greed are just as present now as love, respect, and humility.”

    Despite the post-Enlightenment view of rationality ruling over irrationality, there appears to be a permanence to the human condition that is tragic and does not seem conquerable by anything except, perhaps, transcendent faith (ie. religion).

    This is why I think Anatoly is on to something, he is on to the reality that hides beneath the superficiality many prefer to truth. While this “hiding” is probably unavoidable, and is probably needed in order to make the world bearable, it can’t be entirely forgotten by wise leadership.

    Indeed prudence and wisdom should work in concert to appreciate progress, but not bow down before it.

  3. I actually agree with you that there are limits to growth, but I don’t primarily attribute them to lack of natural resources, or even peak oil in what have historically been politically stable countries like the North Sea nations, the U.S. or Canada. I share your pessimism, but for cultural loss of faith in institutions being preceded by loss of Christian faith with a capital F.

    I certainly do not think that oil sands/shale can substitute for all the liquid crude that used flow from more shallow land wells not in extreme arctic conditions, but in my mind, measures like cap and trade are foundering precisely because the haste with which they are being pursued, combined with the revealations about insider angling for bailouts by some of the same people, leads even non-conservatives outside the U.S. to suspect a huge con.

    The fact that the famous hack results were posted on a Russian server is being used to insinuate that Russia as the world’s largest hydrocarbon producer is attacking man-made global warming. Russian hackers are no doubt talented and some have government connections, but I think it just as easily could have been hackers from a Western country and the Russia thing is just misdirection. Good to see the “Streetwise Professor” not yet taking the bait on the Russian origin of the hack, or not mentioning it all to thank Russians for a public service?

    Maybe some major players in the energy industry finally got fed up with how the financiers speculated to create $144 oil than crashed the thing after they blew up the U.S. market, housing and then again the (emerging) markets, and THEN had the chutzpah to push cap and trade schemes as their next bubble. The fact that the Goldman Sachs and other big boys are all set to trade carbon credits doesn’t help the Copehagen case one bit.

    In other words, I agree with Exile-ex Matt Taibi (who might be less skeptical of AGW than me) writing in Rolling Stone that cap and trade is just the latest example of a global transnationalist financial class and the enviro lapdogs they fund squeezing the physical blood and guts of the world economy to death. It’s no coincidence that some of the biggest hedgies are some of the biggest donors to enviro-rast causes (to borrow your term for fake/authoritarian extremist Russian liberals, liberast).

    Predictions that the world may soon be awash in cheap gas from shale formations and thereby some artificial scarcities will need to be created to prevent huge losses for the financiers, commodity speculators and governments seem to me spot on. Although Western analysts have slanted every article about the North American unconventional gas boom and the sudden cheapness of global LNG to say that it’s going to hurt Russia, they don’t report the flip side that political projects hellbent on bypassing Russia at all costs like Nabuccco will become even more wildly uneconomical than they already are NOW. Seeing the Prof criticize Nabucco is about as likely as seeing the Wall Street Journal criticize the Russian Central Bank for buying TOO MUCH American debt securities/Fannie and Freddie paper — between slim and none.

    In my mind the real ‘limits to growth’ as you call them come from PEAK POPULATION/AGING and PEAK DEBT in the developed countries, not peak natural resources. There was only so much technological/bureaucratic overload plus leveraging companies, individuals and finally governments could take on before people simply lose faith that debts will ever be repaid and the whole system (Soviet style) begins to unravel. The rise of financial oligarchies prevented the developing world from catching up in terms of productivity with developed countries, really the only hope for the economy to maintain growth when most Germans and Japanese alive are over sixty. And that’s a tragedy nearly as great as the Depression of the 1930s though a global war is not an imminent outcome of this repeat.

    I guess the point I’m trying to make is that any system that treats human beings as infinitely malleable is not SUSTAINABLE — whether it’s Communism that puts armies of workers above the Arctic Circle in Norilsk or a hyper-Corporatism (notice I did not say Capitalism) which expects employees to relocate every six months with zero job security and women not to have babies in favor of careers. Man shall not live by bread or corporate paychecks alone.

  4. A few clarifications specifically re-Russia. Russia today is currently between the “natural state” / neo-Tsarism* (see Reading Russia Right by Trenin) and “sovereign democratization” (see The Great Transformation: How the Putin Plan Altered Russian Society by Petro), as well as strongly developmental (see Russia’s Development Path by Weafer). As pointed out, contrary Russophobe assertions it is still quite far from the “totalitarian reversion”, i.e. it is not 1937-Stalinism or 1938-Nazism, as alleged by some. The real struggle in Russia is, and will be, between the civiliki (economic technocrats) & “sovereign democrats” vs the siloviki & “natural statists”, at least for the next political generation (10-15 years).

    * This is how one commentator (and insider) characterized Russia’s current political economy @ Untimely Thoughts.

    Today’s state management system is based on the feudal system of vassal-king relationship, where a person is given a “nadel” to manage (it may be anything from a state company to a small district in a faraway oblast), essentially as he pleases, PROVIDED he regularly sends a “desiatina” (this includes both “white/taxes” and “black/envelope” cash) to the higher vassal (or a king if appointed by the king himself) and sends a “voisko” (again in modern times it may be anything from managing elections in a certain way to supporting certain federal programs locally) when and if required.