americanaffairsjournal | The book really comes into its own in the long sections on the American economy. These chapters seem especially prescient after Western sanctions against Russia failed to stop the invasion or decisively cripple the Russian economy, while causing increasing strains in the West. In a word, Martyanov views American prosperity as largely fake, a shiny wrapping distracting from an increasingly hollow interior.
Martyanov, reflecting his Soviet materialist education, starts by discussing the food supply. He recalls the limited food options available in the old Soviet Union and how impressed émigrés were by the “overflowing abundance” of the American convenience store. But Martyanov notes that today such abundance is only the preserve of the rich and powerful. He references a 2020 study by the Brookings Institution which found that “40.9 percent of mothers with children ages 12 and under reported household food insecurity since the onset of the Covid-19 pandemic.” And while some of this was driven by the pandemic, the number was 15.1 percent in 2018. Martyanov makes the case that these numbers reflect an economy that is poorly organized and teetering on the edge. In the summer of 2022, when the food component of the CPI is increasing at over 10 percent a year and rising fast, Martyanov’s chapter looks prophetic.
Martyanov then moves on to other consumer goods. He recalls the so-called kitchen debate in 1959 when Vice President Richard Nixon showed Soviet premier Nikita Khrushchev a modern American kitchen. During this debate, Nixon explained to Khrushchev that the house they were in, with all its modern luxuries, could be bought by “any steel worker.” Nixon explained that the average American steel worker earned about $3 an hour—or $480 per month—and that the house could be obtained on a thirty-year mortgage for the cost of $100 a month. Martyanov points out that this is impossible in the contemporary American economy. As vital goods have become less and less affordable for the average American, debt of all types has exploded. He notes that the flip side of this growing debt has been a decline in domestic industrial production, which has been stagnant in nominal terms and falling as a percent of U.S. GDP since 2008. “The scale of this catastrophe is not understood,” he writes, “until one considers the fact that a single manufacturing job on average generates 3.4 employees elsewhere in non-manufacturing sectors.”
Needless to say, Martyanov does not believe that America has the most powerful economy on earth. Deploying his old school materialist toolkit, he surveys core heavy industries—including the automotive industry, the commercial shipbuilding industry, and later the aerospace industry—and finds U.S. capacity wanting. He points out that in steel production “China outproduces the United States by a factor of 11, while Russia, which has a population less than half the size of that of the United States, produces around 81% of US steel output.”
Martyanov is particularly critical of GDP metrics as a basis for determining the wealth of a country or the power of its economy, because they assign spending on services the same weight as spending on primary products and manufactured goods. He believes that the postindustrial economy is a “figment of the imagination of Wall Street financial strategists” and that GDP metrics merely provide America with a fig leaf to cover its economic weaknesses. In a separate podcast that Martyanov posted to his YouTube channel, he explains why these metrics are particularly misleading from the point of view of military production. He compares the U.S. Navy’s Virginia-class fast-attack submarine and the Russian Yasen-class equivalent. He argues that these are comparable in terms of their platform capabilities, but that the Yasen-class has superior armaments. Crucially, however, he notes that the cost of a Virginia-class submarine is around $3.2 billion while the cost of the Yasen-class submarine is only around $1 billion. Since GDP measures quantify economic output (including military output) in dollar terms, it would appear that, when it comes to submarine output, Russia is producing less than a third of what it is actually producing. Using a purchasing-power-parity-adjusted measure might help somewhat here, but it would still not capture the extra bang for their buck that the Russians are getting.
A few years ago, it would have been fashionable to dismiss this sort of materialist analysis as old fashioned. Pundits argued that the growing weight of the service sector in the American economy was a good thing, not a bad thing, a sign of progress, not decline. But today, with supply chains collapsing and inflation raging, these fashionable arguments look more and more like self-serving bromides every day.
Next, Martyanov looks at energy. While many American pundits believed that the emergence of fracking technology would make Russian oil and gas less and less important, Martyanov views the shale oil boom as “a story of technology winning over common economic sense.” He believes that America’s shale boom was a speculative mania driven by vague promises and cheap credit. He quotes the financial analyst David Deckelbaum, who noted that “This is an industry that for every dollar that they brought in, they would spend two.” Ultimately, Martyanov argues, the U.S. shale industry is a paper tiger whose viability is heavily dependent on high oil prices.
Martyanov is even more critical of “green energy,” which he views as a self-destructive set of policies that will destroy the energy independence of all countries that pursue them. He also points out that China, Russia, and most non-Western nations know this and, despite lip service to fashionable green causes, avoid these policies.
Finally, Martyanov returns to the collapse of America’s ability to make things. He recites the now familiar numbers about falling manufacturing output and an increased reliance on imports from abroad. But he also points to the collapse in manufacturing expertise. Martyanov cites statistics showing that, on a per capita basis, Russia produces twice as many STEM graduates as America. He attributes this to a change in elite attitudes. STEM subjects are difficult and require serious intellectual exertion. They often yield jobs on factory floors that are not particularly glamorous. “In contemporary American culture dominated by poor taste and low quality ideological, agenda-driven art and entertainment, being a fashion designer or a disc jockey or a psychologist is by far a more attractive career goal,” he writes, “especially for America’s urban and college population, than foreseeing oneself on the manufacturing floor working as a CNC operator or mechanic on the assembly line.”
Rotting from the Head Down
Martyanov’s economic analysis may reflect his Soviet materialist education, but ultimately, he views America’s core problem as being a crisis of leadership. He traces this problem back to the election of Bill Clinton in 1993. Martyanov argues that Clinton represented a new type of American leader: an extreme meritocrat. These new meritocrats believed their personal capacities gave them the ability to do anything imaginable. This megalomaniacal tendency, Martyanov observes, has been latent in the American project since the founding. “Everything American,” he writes, “must be the largest, the fastest, the most efficient or, in general, simply the best.” Yet this character trait has not dominated the personality of either the American people or their leaders, he says. Rather, the American people remain today “very nice folks” that “are generally patriotic and have common sense and a good sense of humour.” Yet in recent times, he argues, something has happened in American elite circles that has let the more grandiose and delusional side of the American psyche run amok, and this has happened at the very time when America is most in need of good leadership.
Martyanov believes that America’s extreme meritocrats vastly overestimate their capabilities. This is because, rather than focusing on the strengths and weaknesses of the country they rule, they have been taught since birth to focus on themselves. They believe that they just need to maximize their own personal accomplishments and the good of the country will emerge as if by magic. This has led inevitably to the rise of what Martyanov characterizes as a classic oligarchy. Such an oligarchy, he argues, purports to be meritocratic but is actually the opposite. A proper meritocracy allows the best and the brightest to climb up its ranks. But an oligarchy with a meritocratic veneer simply allows those who best play the game to rise. Thus, the meritocratic claims become circular: you climb the ladder because you play the game; the game is meritocratic because those who play it are by definition the best and the brightest. Effectively, for Martyanov, the American elite does not select for intelligence and wisdom, but rather for self-assuredness and self-interestedness.
Winter is coming within mere weeks and no matter what else, surely the burden of finding warmth and power in Ukraine is soon to become intolerable. A human catastrophe is rising for certain. The question is, what does the West do now when Putin and Russia again offer to talk?
Shutting off the power in the rump Ukrainian state will cause a mass exodus to flee for refuge to Poland and Germany, this will be a disaster unparalleled in recent European history. Just the attendant collapse in telecommunications will make the place a madhouse. You can well imagine the rest. Already there are queues for water in Nikolaev, and who knows where else. How does queueing for water, if there is any, in temperatures of minus-20C to minus-40C sound?
Poland and Germany absorbing the cold freezing hungry Ukraine refugees sounds like a non-starter despite their energetic support to date. Of course the Ukrainians will need to be told how to shower by the Germans so as to save fuel.
Lots of commentators believe the time for talking is over, at least until Odessa is taken. They may be right. But Putin has been steadily measured and deliberate throughout, ratcheting up the pain, and that ratcheting is going to rise very very fast with the cold weather and lack of power. What happens when millions of people are freezing to death at the Polish border as US citizens go to the polls in November? Will Biden and Blinken and Nuland try to bring an anti-Russia hysteria into the polling booth, nuclear war be damned? Or will people begin to see the huge risks facing us all and publicly demand a stop to further madness?