Guest Post: Welcome to Soviet America

Comrade “Molotov,” whose cocktail game is actually quite weak, returns with his usual slanders to deliver an important history lesson that bears on our summer of possibly widespread electricity shortages and soaring utility rates. When it comes to energy, not only has our ruling class learned nothing from the example of Soviet planning, but their lies to us begin with lies to themselves:

Vyacheslav Mikhailovich Molotov, Order of Lenin, reporting for duty. Always in Readiness to Defend the Motherland against kulak-loving Trotskyites, enemies of the people, subversives, wreckers, and hoarders of western-quality toilet paper. Among the most prominent of the last — unsurprisingly, given his diet of bacon, bacon, bacon, ribeyes, bacon-wrapped bacon, bacon pie, and bourbon aged to perfection in a vat of bacon grease [Steve comments: You forgot bacon-wrapped tater-tots — one of my specialties — and bacon-wrapped onion rings] — is The Great Comrade Steven Fredricovich Haywardov, or Великий Товарищ Стивен Фредерикович Хайвардов, codenamed in his KGB file as “Charmin.”

Do not think for a moment that it has escaped the attention of the KGB that Великий Товарищ Стивен Фредерикович Хайвардов ostensibly is spending his vacation frolicking at whisky distilleries in the Scottish Highlands. This is a lot of hooey. His real mission is enjoying Britain’s record-breaking heat this week, the better to bask in the hysteria about a new “climate change” tipping point.

But I digress. There’s a lesson in the glorious record of the late beloved Soviet Union staring us in the face this summer. I refer of course to the great Uzbekistan Cotton Scandal in which Великий Товарищ Стивен Фредерикович Хайвардов was up to his eyebrows, along with the Immortal Brezhnev’s son-in-law, the clownish Yuri MikhailovichChurbanov, truly a comic opera character straight out of Soviet central casting, whose photo is the first thousand links that come up when one googles “Soviet corruption.”

In a nutshell, the Soviet central planners — the best and the brightest — decided that there was a lot of hard currency available in the international market for cotton, and how hard could it be? After all, the goddamn Egyptians produce it, and they’re so backward that their tanks couldn’t deal with Israeli water balloons. (Oh, wait; those were T-55s. Oops. It had to have been bad training. Oh, right: We trained them. Oops again.) Anyway, there was a lot of empty space in Soviet Central Asia perfect for growing cotton, and all that was missing was a little water.

“No problem,” said the geniuses at Gosplan. We’ll just divert the two rivers — the Syr Darya and the Amu Darya — that flow into the Sea of Aral, which in the 1960s was the fourth largest (if I recall correctly) inland body of water in the world. What will happen to the Sea of Aral? Ah, we now arrive at the genius of central planning: We’re preparing the latest five-year plan, and what happens after that is not our problem; it will have to be confronted by the next group of Gosplan inebriates preparing the following five-year plan. But by that time, the Sea of Aral will be no more; it matters not now and it won’t matter then.

So the rivers were diverted into the central Asian deserts, and the Sea of Aral began to shrink; no longer the fourth largest inland body of water in the world, by 2010 it was only about 10 percent of its size fifty years earlier. Because there can be no unemployment under socialism, the fish preparation plants that previously had been on the shore — by the 1980s they were at least thirty miles inland — were supplied with frozen fish from other Soviet regions, flown in weekly in a classic manifestation of the kind of absurdity that only socialism and Big Government can create.

And what about all that cotton that was supposed to bring in gobs of hard currency for the benefit of the Soviet people? Well, here’s where Великий Товарищ Стивен Фредерикович Хайвардов and Yuri Mikhailovich Churbanov and a small army of bureaucrats, thieves, and communist party salamanders enter the story. Most of the machinery and fertilizers and lumber and concrete and vast array of other resources allocated to the production of cotton in Soviet Central Asia were stolen and sold on the black market. This simultaneously is an ordinary example of Soviet corruption, however extraordinary in magnitude, and also a special case extraordinary in impact.

It is ordinary in that it exhibits the central characteristic of government planning: The leaders at the top know the least about what is actually going on, because everyone — everyone — below them has powerful incentives to lie about the achievement of their assigned functions. From the lowest guys in the fields and on the factory floors, to the directors of the collective farms and the industrial plants, to the organizers of rail and shipping transport, to the bureaucrats in the ministries, to the division heads at Gosplan, to the planners at the Central Committee: No one could take the risk of admitting that they had failed The Plan. So the numbers simply were falsified and the leadership on a permanent basis was clueless about the actual state of affairs. Cotton production in Soviet Central Asia? The official statistics said it was huge, that hard currency earnings were robust, and the glorious Soviet Union was becoming a player in the international cotton scene. Until someone at Gosplan noticed that the numbers didn’t quite add up, and so a satellite was sent over the cotton fields to see the what the hell was going on, and you’ll just have to guess about what the photos failed to show about the glory of Soviet central planning.

As an aside, you would not believe the degree to which the CIA Soviet analysis office depended upon the official Soviet statistics as they prepared their reports and prospectives. It was not only the Soviet leadership that operated in the dark.

As for the saga of the Sea of Aral as extraordinary even in the context of the horrors of government planning: It is one of the greatest environmental disasters of the 20th century on record. Most of the land previously submerged under the Sea of Aral now is desert, contaminated with massive amounts of chemicals, lifeless, and frightening to behold.

Alright: Великий Товарищ Стивен Фредерикович Хайвардов was not involved in the Uzbekistan Cotton Scandal. But I suspect that he wishes that he had been. I kid: He and I have been close friends for a very long time. Together with the ghost of Churbanov and various right-wing pundits and others, we have had a grand time over the decades chasing each other around a room with whipped-cream pies and seltzer bottles, but the saga of the Sea of Aral carries with it lessons ignored by the likes of such arrogant ignoramuses as Elizabeth Warren and various stupid Republicans exhibiting infinite myopia: The bigger government becomes, the more perverse must be the outcomes it engenders, from the disastrous to the amusing.

This summer various regions of the United States face the real prospect of electricity shortages, in a nation that has vast energy resources and used to know how to generate electrons in sufficient quantity that the real price kept falling. But like the Soviet dream of profiting from the cotton trade, American energy Gosplaners have been subsidizing wind and solar power on the view that it would be cheap to build, easy to scale, and never you mind about the small matter that, often enough, the wind dies down and the sun fails to shine through the clouds. And even that ignores the problem of synchronizing the generators in the grid at 60 Hertz; only conventional technologies can do that, while wind and solar power cannot. More blackouts will be the inexorable result, regardless of the glowing propaganda about steady increases in wind and solar capacity. As with the self-applause inherent in the Soviet statistics, the wind and solar input data look great on our reports to the various Central Committees of the state and federal Politburos.

Back in the day when I was doing a lot of analytic work on the Soviet economy, I became something of an amateur repository of communism jokes. Like the one about the guy who went to the local office of the KGB to report that his parrot was missing. KGB Guy behind the desk: “Why are you bothering me with this? Go tell the militia (the local police).” Parrot Guy: “Yes, I’ve already done that. But I want the KGB to know that I do not agree with a single thing that parrot says.” Anyway, I ran across an unclassified CIA statistic to the effect that around one-third of the glass produced in the Soviet Union shattered before it was delivered to the intended recipients. Why would that be? After all, the production of glass is simple. And then it dawned on me: The production quotas were defined in square meters, so the managers of the glass factories had an incentive to make it as thin as possible, just to get it out the door so that it would count against their production quotas. Voila!

Even Великий Товарищ Стивен Фредерикович Хайвардов can extrapolate the lesson from these kind of perverse incentives to our energy supply: The more poorly they perform, the more the political support for additional subsidies increases. This perverse dynamic is not helped by the fact that there are several Republican senators from wind states. Did Soviet-style planning go out in 1991? Uh, no.

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