A government with a permanent deficit and a bloated military. A bogus ideology pushed by elites. Poor health among ordinary people. Senescent leaders. Sound familiar?
By Niall Ferguson - June 18, 2024
The witty phrase “late Soviet America” was coined by the Princeton historian Harold James back in 2020. It has only become more apposite since then as the cold war we’re in—the second one—heats up.
I first pointed out that we’re in Cold War II back in 2018. In articles for The New York Times and National Review, I tried to show how the People’s Republic of China now occupies the space vacated by the Soviet Union when it collapsed in 1991.
This view is less controversial now than it was then. China is clearly not only an ideological rival, firmly committed to Marxism-Leninism and one-party rule. It’s also a technological competitor—the only one the U.S. confronts in fields such as artificial intelligence and quantum computing. It’s a military rival, with a navy that is already larger than ours and a nuclear arsenal that is catching up fast. And it’s a geopolitical rival, asserting itself not only in the Indo-Pacific but also through proxies in Eastern Europe and elsewhere.
But it only recently struck me that in this new Cold War, we—and not the Chinese—might be the Soviets. It’s a bit like that moment when the British comedians David Mitchell and Robert Webb, playing Waffen-SS officers toward the end of World War II, ask the immortal question: “Are we the baddies?”
I imagine two American sailors asking themselves one day—perhaps as their aircraft carrier is sinking beneath their feet somewhere near the Taiwan Strait: Are we the Soviets?
Yes, I know what you are going to say.
There is a world of difference between the dysfunctional planned economy that Stalin built and bequeathed his heirs, which collapsed as soon as Mikhail Gorbachev tried to reform it, and the dynamic market economy that we Americans take pride in.
The Soviet system squandered resources and all but guaranteed shortages of consumer goods. The Soviet healthcare system was crippled by dilapidated hospitals and chronic shortages of equipment. There was grinding poverty, hunger, and child labor.
A drunken man lies down at the Kazansky train station buffet in Moscow on January 6, 1992
In America today, such conditions exist only in the bottom quintile of the economic distribution—though the extent to which they do exist is truly appalling. Infant mortality in the late Soviet Union was around 25 per 1,000. The figure for the U.S. in 2021 was 5.4, but for single mothers in the Mississippi Delta or Appalachia it is 13 per 1,000.
The comparison to the Soviet Union, you might argue, is nevertheless risible.
Take a closer look.
A chronic “soft budget constraint” in the public sector, which was a key weakness of the Soviet system? I see a version of that in the U.S. deficits forecast by the Congressional Budget Office to exceed 5 percent of GDP for the foreseeable future, and to rise inexorably to 8.5 percent by 2054. The insertion of the central government into the investment decision-making process? I see that too, despite the hype around the Biden administration’s “industrial policy.”
Economists keep promising us a productivity miracle from information technology, most recently AI. But the annual average growth rate of productivity in the U.S. nonfarm business sector has been stuck at just 1.5 percent since 2007, only marginally better than the dismal years 1973–1980.
The U.S. economy might be the envy of the rest of the world today, but recall how American experts overrated the Soviet economy in the 1970s and 1980s.
And yet, you insist, the Soviet Union was a sick man more than it was a superpower, whereas the United States has no equal in the realm of military technology and firepower.
Actually, no.
We have a military that is simultaneously expensive and unequal to the tasks it confronts, as Senator Roger Wicker’s newly published report makes clear. As I read Wicker’s report—and I recommend you do the same—I kept thinking of what successive Soviet leaders said until the bitter end: that the Red Army was the biggest and therefore most lethal military in the world.
On paper, it was. But paper was what the Soviet bear turned out to be made of. It could not even win a war in Afghanistan, despite ten years of death and destruction. (Now, why does that sound familiar?)
On paper, the U.S. defense budget does indeed exceed those of all the other members of NATO put together. But what does that defense budget actually buy us? As Wicker argues, not nearly enough to contend with the “Coalition Against Democracy” that China, Russia, Iran, and North Korea have been aggressively building.
In Wicker’s words, “America’s military has a lack of modern equipment, a paucity of training and maintenance funding, and a massive infrastructure backlog. . . . it is stretched too thin and outfitted too poorly to meet all the missions assigned to it at a reasonable level of risk. Our adversaries recognize this, and it makes them more adventurous and aggressive.”
And, as I have pointed out elsewhere, the federal government will almost certainly spend more on debt service than on defense this year.
It gets worse.
According to the CBO, the share of gross domestic product going on interest payments on the federal debt will be double what we spend on national security by 2041, thanks partly to the fact that the rising cost of the debt will squeeze defense spending down from 3 percent of GDP this year to a projected 2.3 percent in 30 years’ time. This decline makes no sense at a time when the threats posed by the new Chinese-led Axis are manifestly growing.
Even more striking to me are the political, social, and cultural resemblances I detect between the U.S. and the USSR. Gerontocratic leadership was one of the hallmarks of late Soviet leadership, personified by . . .
[SNIP]
