Belmont Club

Unconventional Wisdom

Unconventional Wisdom
Russian President Vladimir Putin applauds during a signing ceremony with Slovenian President Borut Pahor at the Kremlin in Moscow on Feb. 10, 2017. (AP Photo/Alexander Zemlianichenko, pool)

During the Cold War, the Soviets were contained by physically surrounding them with allies (NATO) while pelting their firewall with messages from the Voice of America, Newsweek and CNN. Precious little got through. Just how total this exclusion in the pre-Internet and BC (Before Cellphone) days was is illustrated by the story of defector Viktor Belenko and the American supermarket. Traveling through suburban Virginia he noted the vast array of goods and absence of rotten smells in these establishments and suspected fake news.

“I congratulate you,” Belenko said en route back to the mansion.”That was a spectacular show you put on for me.”

“What do you mean?’

“I mean that place; it’s like one of our show kolkhozes where [our government] takes foreigners.”

Nick laughed, but not Peter. [“Belenko], I give you my word that what you’ve just seen is a common, typical shopping center. There are tens of thousands of them all over [the U.S.A.]. Anywhere you go in the United States, north, south, east, west, you will see pretty much the same. Many of the shopping centers in the suburbs of our cities are bigger and fancier and nicer.”

But it wasn’t fake; just that Belenko’s mind couldn’t take in the new paradigm. Forty years later the Internet, cellphones, and a shift “from a centrally planned economy to a globally integrated market economy” made the sight of consumer goods familiar in Russia. But finding the money to buy these goodies depended on oil.  Oil is the lifeblood of Putin’s ambitions and his Achilles heel. Obama’s reset with Russia may have failed to slow Putin, but the lack of money caused by sanctions and the collapse of oil prices worked just as advertised.

The Russian economy experienced two major shocks in 2014 … the first shock was the sharp decline in oil prices during the third and fourth quarter of 2014, exposing Russia’s extreme dependence on global commodity cycles. … The second shock was the economic sanctions resulting from geopolitical tensions, which negatively affected investor appetite for Russian investments.

Lack of money was a powerful restraint. The oil crash collapsed the ruble and forced a 27 percent reduction in the Kremlin’s military budget in 2016. With oil prices set to stay flat, the Russians have to keep drilling and investing simply to stay level, as the Oxford Institute for Energy Studies notes. The Kremlin doesn’t make any real spending money until the world oil price gets above levels before the great oil crash of 2014, which may not happen anytime soon. As the Oxford study explains:

The correlation between upstream spending in ruble terms and oil production is … an R-square of 0.96. However, companies would not spend their money on increasing output without some commercial incentive, no matter how much the Kremlin might urge it [without] … the Russian tax system …these taxes … are also calculated relative to the oil price and have a sliding scale. The rate of export tax, for example, changes when the oil price goes above $15, $20 and $25/barrel. As a result, as the oil price rises the government take increases significantly, but when it falls it is government revenues that take the largest hit.

You would think this a Eureka moment: to contain oil prices is to contain Russia (and Islamism). But cheap fossil fuels are not everyone’s cup of tea. “Drill, baby, drill” is not popular on the left. Even though liberals understand the power of cheap energy — one of Hillary’s supposedly hacked emails even alleged anti-fracking and environmental causes were a Russian plot to depress oil production — to advocate it is bad progressive politics. This probably led the Saudis to Hillary’s camp in 2016. “According to Bob McNally, president of consulting firm Rapidan Group, countries in the oil-producing Middle East, including Saudi Arabia, are hoping for Hillary Clinton to become president.”

“It is no secret that the Saudis and other Gulf Sunni powers are rooting for Mrs. Clinton,” McNally told CNBC from Vienna ahead of Thursday’s widely eyed OPEC meeting.

“(There is) a lot of concern and anxiety about what Donald Trump would mean,” he said.

If second marriages are the “triumph of hope over experience,” perhaps environmental policy is the victory of lobbying over common sense. The Russians, stymied on the physical front, had to resort to the virtual world to equalize. Despite the depiction of Russians as uber-hackers, they actually saw themselves as coming from behind the West in cyberwarfare. The Russian General Staff was inspired by the role social media played in the Arab Spring to create a cyberwarfare capability. Nor had the Kremlin forgotten the traumatic role soft power played in the downfall of the Soviet Union:

In the wake of the collapse of the Soviet Union, many western nations continued to utilize soft power initiatives to consolidate the spread of western liberal ideas and culture … For Russia, this extensive dispersal of western liberal influence was viewed as a potential threat. Citing events like Color Revolutions, the Maiden Protest in the Ukraine and uprisings of the Arab Spring, Russia believed America was using soft power as a weapon in a new form of hybrid warfare.

So they tried a little soft power themselves. Little did they imagine how successful they would be against the former information-warfare gurus. The Russian hacks of the 2016 election are regarded as such epic victories that Keith Olbermann broadcast an online plea for help to the world’s intelligence agencies to prevent a Russian coup in Washington. Significantly more measured is former Secretary of State Madeleine Albright’s description of the shocking reversal of fortune.

In the 1970s, I wrote my dissertation on the role of the Czechoslovak press in the events of Prague Spring. In the early 1980s, I traveled to Poland to study the underground press of the Solidarity movement. I met with dozens of journalists, who told me that while they started out by delivering typed news sheets to workers in factories, they found they could increase their speed of communication and the reach of their messages by using what was then considered a cutting-edge technology — audiocassettes.

I remember thinking about those tapes in 2011, as I watched activists in Tunisia and Egypt use social media to organize, communicate, and ultimately topple two entrenched regimes. It was easy, in the immediate aftermath of the Arab Spring, to believe that these new tools of communication had only transformed politics for the better, and that the spread of @Twitter and @Facebook would inevitably lead to more open and democratic societies.

But as our agenda today attests, those views did turn out to be too optimistic — because like so many other things, technology is a double-edged sword. In recent years, democracy’s enemies have become adept at polluting social media platforms with rumors, disinformation, and anti-democratic propaganda. And has let some of the same people who once heralded the birth of the social media age to wonder whether democracy can survive it. …

The Oxford researchers also showed how authoritarian governments are using these tools on their own populations as a form of social control, with some 45 percent of twitter activity in Russia coming from automated accounts.

We are now Viktor Belenkos to be protected from the contagion of subversive thought. This amazing turnabout partly explains the media’s bitterness for Donald Trump. Their downfall seems so sudden it can only be due to some evil Trumpian witchcraft or infernal magic, for nothing else can explain it. But Albright, to her credit, understands that what changed since the day Viktor Belenko walked into a suburban Virginia supermarket wasn’t Trump: what changed was the implosion of the information hierarchy.

What is interesting to me is comparing this to how information got transmitted during communism.

In the days of the Soviet Union, people largely knew that official sources of information could not be trusted, so they built unofficial channels that were more reliable, for example talking to friends and family.

In the internet age, it is these unofficial channels that are becoming less reliable, as computational propaganda is able to more easily infiltrate these networks. At the same time, people do not seem to have yet developed a healthy skepticism about what others are sharing online.

Our trust hierarchies have collapsed. As with Soviet Russia, the “official” media sources are now distrusted as purveyors of “fake news.” To fill the gap, a peer-to-peer grapevine, similar to the “friends and family,” a samizdat is emerging to pick up the slack. Sonya Mann at Inc. uses a startup to illustrate the growing division of society into trust groups:

Pax Dickinson wants to fund the revolution. Not a blood-in-the-streets revolution, but one where hardcore right-wingers can economically secede from the parts of society they vehemently dislike. “We need parallel everything. I do not want to ever have to spend a single dollar at a non-movement business,” Dickinson, the former CTO of Business Insider and general startup veteran, declared on Twitter.


In conversations with Inc., Dickinson explained that he sees CounterFund as the linchpin of a parallel far-right economy. The alt-right movement shouldn’t fund or depend on platforms that are hostile to their goals, he believes. CounterFund’s website sports endorsements from Richard Spencer, the suit-wearing white supremacist who went viral after being punched in the face, and comedian Sam Hyde, whose divisive show Million Dollar Extreme was kicked off the air by Adult Swim.

Dickinson is pitching CounterFund itself as a new kind of political party, one that cares for its community rather than pouring money into candidates’ campaigns. It’s hard to overstate the degree to which he’s willing to take this project beyond mainstream acceptability. Dickinson compared CounterFund to Hezbollah: “Hezbollah is a government within a government. They collect garbage, they operate hospitals, they’re an economy within an economy, and a government within a government.”

The Resistance is probably embarked on the same process of internal secession themselves. How long can this mutual escalation of mistrust continue without effect?  The challenge to hierarchy probably arose independently of Putin. He just happened to come along at the right time to ride the wave and take credit for it.

The Chinese government, less apoplectic than the humiliated Washington elite, is collected enough to realize they too are at risk from the forces of entropy engulfing the West and they are damping down on it. “China will completely block access to much of the global internet as part of a sweeping crackdown aimed at suppressing dissent and maintaining the Communist party’s grip on power. The government has ordered China’s three telecommunications companies to completely block access to virtual private networks, or VPNs.”

The Chinese aren’t afraid of Putin, but they are terrified of what they perceive as a chaotic process. In the West, it’s just the opposite. No one fears a chaotic process. They’re all afraid of a man.

Conventional wisdom posits the chief challenges facing the post-Cold War World are global warming and the decline of international institutions. But maybe that assurance is a species of fake news. Suppose the most pressing problem in the next decade is finding new energy supplies to 1) keep the price of oil low enough to contain Russia (and Islamism); and 2) adapt to a disruptive information revolution no one can seem to control. Who will hand you that unconventional wisdom unless you come to it yourself?

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Moonwalking with Einstein: The Art and Science of Remembering Everything, by Joshua Foer. This book recounts Foer’s year-long quest to improve his memory under the tutelage of top “mental athletes.” He draws on cutting-edge research, a surprising cultural history of remembering, and venerable tricks of the mentalist’s trade to transform our understanding of human memory. From the United States Memory Championship to deep within the author’s own mind, his journey reminds us that, in every way that matters, we are the sum of our memories.

Magnum! The Wild Weasels in Desert Storm: The Elimination of Iraq’s Air Defence, by Brick Eisel and James Schreiner. This book is based upon a journal Schreiner kept during his deployment to the Persian Gulf region for Operations Desert Shield and Desert Storm. Building on that record and the recollections of other F-4G Wild Weasel aircrew, the authors show a slice of what life and war was like during that time.

Rediscovering Americanism: And the Tyranny of Progressivism, Author Mark Levin revisits the founders’ warnings about the perils of overreach by the federal government and makes an impassioned plea for a return to America’s most sacred values. He analyzes the troubling question of America’s future, and reminds readers what they must restore for the sake of their children and their children’s children.

For a list of books most frequently purchased by readers, visit my homepage.

Did you know that you can purchase some of these books and pamphlets by Richard Fernandez and share them with your friends? They will receive a link in their email and it will automatically give them access to a Kindle reader on their smartphone, computer or even as a web-readable document.
The War of the Words, Understanding the crisis of the early 21st century in terms of information corruption in the financial, security and political spheres
Rebranding Christianity, or why the truth shall make you free
The Three Conjectures, reflections on terrorism and the nuclear age
Storming the Castle, why government should get small
No Way In at Amazon Kindle. Fiction. A flight into peril, flashbacks to underground action.
Storm Over the South China Sea, how China is restarting history in the Pacific
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