This is assuming things go as in OTL, which is a big assumption considering a Yom Kippur war type scenario is extremely unlikely. There is no Israel for all the major ME oil producers to rally against, and without that conflict the chance of them doing the kind of oil cartel shenanigans they did in the 70s is just not that likely. Blackstar has mentioned that an oil crisis could happen as late as the 90s, if something like Shell lying about its oils reserves happens. So this is a world flooded with cheap ME oil, a USSR with modern oil extraction (we just need to start drilling more) and no Yom Kippur war. I don't think its likely we will have an oil shock until the 80s.
The Yom Kippur war was the spark that lit the tinder pile. It did not cause the tinder pile to accumulate.
Had OPEC existed during the Suez crisis, the effects of an embargo would have been minimal, since the United States dominated world oil production and the fall of oil supplies from OPEC suppliers would have been easily offset by an intensification of American production. Prices would have risen, but a crisis would not have occurred.
But US conventional oil production peaked in 1970 and it would be decades before unconventional production would improve to the point it would bring the US close to its previous peak (last I checked the shale boom did not see the US out-producing its 1970 self). That meant that other oil producers had leverage in the 1970s, so if Saudi Arabia or Venezuela cut production, the US
couldn't offset that fall, meaning prices would then rise ALOT and there would be a crisis.
And exponential economic growth (which in the 20th Century is pretty much synonymous with exponential growth in oil demand) means that there's not much the US can do to avoid becoming vulnerable at some point between about 1965 to 1975. If growth is a few % higher, the date of vulnerability draws nearer, if the US falls into a new great depression next turn and growth is at or below the rate of population growth, that date of vulnerability comes further in the future. But the US and its highly industrialized oil-importing allies will inevitably come to a point where they have reduced bargaining power relative to 3rd world oil producers by the mid 70s at the latest.
Finite resources meeting an exponentially growing demand means that even if the rate of the exponential changes by a bit or you suddenly develop technology that allows you to double the accessible resource reserve, you only stave off the peak of resource extraction by a year or two.
Now, world oil production peaked shortly before 2010 in OTL (yes, even including shale oil numbers), so sure, it is theoretically possible that the US could realize that their bargaining power was weakening and use superior cleverness and humility to adapt to shifting expectations of rising oil export powers. But... That's juggling angry cobras in a hurricane while dancing between raindrops. Just because they MIGHT pull off the trick for close to a generation after their own oil production peaked doesn't mean that's remotely likely.
It's overwhelmingly more likely that the Western World will be hit by a severe energy crunch in the next 5-15 years.
The issue with this, besides us not knowing when an oil shock will happen besides that it will be probably later, is that we are in a world in which China is unhindered by the GLF. I don't think waiting around for China to be able to leverage its massive low wage workforce with much more initial capital than they did OTL is a winning strategy. The US is doing well right now, the welfare regime hasn't been cut to pieces and they are still by far the strongest economy of the world, and Western Europe at this point has already rebounded, this isn't a bad time to start selling them cheap toys and consumer eletronics (which are another reason to do an LCI focus, much more options to play around with in that field). We should take advantage of this moment to leverage our own low wage labor to leapfrog in development before that option is closed to us.
Anyway, I think this is also an opportunity for the State to pre-empt the growth of private industry in the consumer goods sector as well, which I know some think is important, and it will help absorb the incoming labor wave that will be the biggest we have faced so far.
So, here's the thing, China is importing our machines, so if China beats the USSR to the punch of flooding Western markets with cheap do-dads, they'll need to import more machines from us to keep up with demand and climb the value chain. And we WANT a strong China. Oh, sure, the foreign office will have to handle a rising China with humility, but living in a world where Litvinov knocked it out of the park far harder than anyone in our ministry ever did, I have confidence that Soviet diplomats are a professional and capable bunch. If we can be this timeline's Germany, supplying China with high technology machinery for its factories, we'll be fine.
And if we did fail to keep improving our machine tools fast enough to keep up with Chinese needs, well, we're most likely to lose out to our German allies, who import our oil, metals and consumer goods and will be importing more of those things if they are struggling to keep up with Chinese demand.
We don't need - or even want - to win all the economic pie for ourselves.
Also, you say that things are booming and we should be prioritizing exports to take advantage of the boom... The investments we make at the start of the next 5 year plan would, in the real world, start to pay themselves off
11 years in the future. In the quest when our actions bear fruit is... Fudged a little. So maybe we can get a serious increase in exports in the next 5 year plan (in the real world most of the factories would still be being built and the new workers would be learning their jobs), but probably it would come at the cost of an over-production crisis in the early 70s. An over-production crisis that may coincide with an oil crisis.
I think a more middle of the road path is much better. Especially as the Soviet Union is not a small agile economy - we will be the second largest economy on the planet! Big economies always have to be more interested in internal development.
When that fanaticism seems less plausible, and both sides know the other as an actual collection of humans rather than as an obsessive clique of deranged maniacs who exist only in the fantasies of their own side's propagandists, both sides are less likely to expect or believe that a nuclear attack could be launched without provocation and without warning.
Yes, that's a good point.
Economic sanctions as a diplomatic tool are also dependent on consensus building, since trade sanctions without the cooperation of your economic partners are less effective. This necessity for consensus makes it more difficult for any single cold war power to escalate under one aggressive leader and makes actions which create a enemy block consensus against you more costly. It also makes the public less supportive of aggressive moves against the other, since they risk a direct hit to their income from sanctions caused by high tensions. The USA occasionally raising tariffs against the soviets by 5% for a few months, and the soviets doing so in return, is better for humanity than both sides being armed to teeth and looking for any insurgent group to flood with weapons. I think for those reasons increasing economic ties to the USA and keeping economic interdependence at a medium level is a desirable policy in our quest.
Mm, now that's a very interesting point. I've never considered the idea of intensifying world trade and the rise of sanctions as an acceptable way of bringing pressure would interact to encourage coalition-shepherding.
Though I still don't think there's evidence to say that trade either reduces war or makes war more likely.
Well that's another 26 dice right there, for just the core transportation and making sure Central Asia doesn't totally collapse its water supply. But let's look at the rest of the list, just for funsies...
There comes a point where increasing production isn't viable and we need to switch to a conservation focus. If we downsize cotton production in Central Asia and instead import it (India could easily supply all of our cotton needs) or push synthetic fibers more we can free up water in Central Asia for more economically efficient uses.
The answer is simple: Obtain more dice. How? Buy them. Buy the entire CMEA labor army, using our LCI profits.
We quite literally cannot afford our core infrastructure needs otherwise.
I mean... A higher population does improve production efficiency. One of the reasons China is such a successful exporter in the modern day is because they have a high enough population that they can specialize at scale. When you have a city of a couple million people that specializes in sock production, you can get really good at making socks.
[] Plan Social Development
-[]Defend Relevant Efforts
-[]Social Development Priority
Anyway, for a vote I think we should make sure the economy doesn't choke on garbage (which we've just learned is not going well) and providing clean water. Fresh running water on demand is SO damn good for economic growth. These sorts of boring basics might not be as sexy as transistor production, but whenever people crunch the numbers, clean water is up there with universal education as far as driving economic growth.
Well educated kids who aren't carrying heavy parasite loads and who aren't poisoned by all the garbage accumulating on the streets are what make for strong transistor production.
Not sure about the wisdom of defending relevant efforts (EDIT: yeah, I don't think playing defense is a good idea in fact). It kinda sounds like fostering a good ol' boy's network in the construction industry and the OTL Soviet Union did have a problem with managers failing to upgrade the production methods of their enterprises. For now I will vote to be defensive simply because Voz seems to need to shore up his internal position a bit more and large water and road projects are going to need lots of cheap construction material.
Also, another reason to avoid an LCI focus in the next plan is that recent political ructions have shown that the petrochemical sector (which is part of LCI) is an unfortunately anti-Voz pro-Aristov sector. No need to give more power to those guys beyond the necessary (and we DO absolutely need to keep growing oil and gas production).
Regards,
fasquardon
