Stakhanov — Made in U.S.A.

Do you think U.S. President George W. Bush models his energy policy on Stalin?

May 23, 2001

Do you think U.S. President George W. Bush models his energy policy on Stalin?

In light of the present energy crisis gripping the United States, President Bush had the opportunity to develop a comprehensive, sustainable energy policy for the United States in the 21st century. But instead, Mr. Bush seems determined to revive one of the worst abuses of Soviet economics.

Beyond all the rhetoric on energy conservation, the task force convened under the leadership of Vice President Cheney to assess options for the future course of U.S. energy policy is rooted in the unwavering belief that America has a birthright to cheap energy.

The clear implication of the recommendations — that energy supplies are limitless — is hardly capitalist in spirit. Capitalism, we are all taught in school, is a system of managing finite resources efficiently. In contrast, communism — in its economic guise — is all about limitless possibilities.

Communists also believe that, under certain conditions, society could produce enough to satisfy everybody. Then, buying and selling would become unnecessary. Goods and services would be distributed based on individual needs, not the availability of money.

Under the Bush Administration’s energy plan, measures such as demand management, conservation and renewable energy sources have been purposefully relegated to the back burner. This, together with the peculiar fascination with coal, makes it seem as though the Bush administration is hellbent on reviving the memory of none other than Alexei Stakhanov.

According to Soviet folklore, Mr. Stakhanov, an obscure Ukrainian miner, in 1935 single-handedly produced 14 times his daily quota of coal in just one shift. He was hailed as a hero, and the Soviet government instituted the “Stakhanovite movement” to boost production at all costs.

For a noble goal? As a consequence, enormous human, economic and environmental costs were completely disregarded for the noble goal of increasing output. This case seems eerily consistent with the underlying logic of the Bush energy plan. Nothing, the administration believes, should stand in the way of America increasing its production of energy.

Yet, President Bush and his advisers might want to learn from the ultimate outcome of the Stakhanovite movement. Long before the demise of the Soviet Union, the inefficiencies of its state-controlled industries became painfully clear.

And nowhere was this evident more than in the area of energy. Even today, after a decade of economic reform, Russia still consumes more energy for every dollar of GDP than any other country of the G8. But that prodigious level of energy consumption is a sign of weakness, not strength.

And, believe it or not, in terms of economic strategy, another key feature of the U.S. administration’s energy policy echoes the concepts of Stalin and Mao — and, more recently, North Korea. It is the oft-repeated need for America’s energy independence.

Throughout history, communist rulers everywhere have traditionally been ignorant of David Ricardo, the 19th century economic philosopher, and his classical theory of international trade. As his opponents did at the time, they regarded all imports — and the very idea of importing critical goods — with great suspicion.

As things stand, President Bush has now joined them — at least as far as energy is concerned. The fact that America imports more than 50% of its oil is suddenly seen as a great evil and a source of strategic vulnerability.

But the solution to this dependency turns out to be boosting domestic production. If the strategic need is so pressing, one wonders, why is not every method — including conservation — being exploited to the utmost?

The Soviet Union’s Stakhanov movement was a sham, of course. Production figures of the much glorified top producers were routinely padded. Moreover, Stakhanovites appropriated the best machinery and equipment, and entire mine operations were geared to support their record-setting efforts. Other workers’ results invariably suffered, and those production losses more than offset a few headline-grabbing achievements.

But the United States faces more fundamental problems. No boost in production can keep up with estimated growth in U.S. demand over the next 20 years. The U.S. Energy Information Administration estimates that U.S. demand for natural gas will rise by 62%, for electricity by 45% and for oil by 33% over that period.

World demand for energy will also expand, since China and India, the world’s two most populous nations, are expected to maintain economic growth rates of around five to 10% per year, consuming more and more energy as they develop.

In an era when the costs of runaway consumption have become painfully obvious, there is a reason why the communist economic system, with its belief in limitless possibilities, has gone bankrupt. In that sense, the Bush Administration’s energy plan seems to pull the country back to an entirely different place — and to a mode of thought that the United States has long opposed.