A thing that really strikes me as extraordinary is how there used to be two almost entirely independent technological supply chains. Americans and soviets both built extremely advanced equipment, with radar and sonar and computers and all that and literally from "digging ore out of the mountain" to making a computer there was almost no overlap in supply chain.
The titanium for the SR-71, all came from Russia, which the US acquired by mounting lots of shell companies across the world. When there is overlap between supply chains of countries at war, I have to say I find it quite comical. https://history.stackexchange.com/questions/21105/how-was-ti...
It is similar to the legend that says the Germans supplied the red ink for the bright army pants of French soldiers on the field in 1914 « for a good price » (you bet!), although I think this one is rather a legend, as it is true that French costumes were too fancy for war, I think the traditional red pants were not in widespread application at the time.
The French were aware that their traditional (mid-19th century) red trousers were not appropriate for modern warfare. Unfortunately, getting them replaced was not an easy task due to political difficulties.
This article (in French) is a good summary of the French army's efforts from 1903 to find a uniform more suited to modern warfare:
http://rosalielebel75.franceserv.com/reforme-uniforme.html
It does mention the importing of red dye from Germany, in the context of the planned future uniform being a patriotic mix of red, white and blue, and the red being omitted due to the supply being curtailed.
You're thinking of the US Springfield 1903. It used a Mauser style bolt-action that was protected by a patent. Mausesr sued and won. The US gov had to pay license fees for it. I think actual payment was delayed until after the war was over.
It went far father than firearms, later - in WWII you had a shared military-industrial-complex supplying both sides, with entities like GM and Ford supplying huge quantities of armaments to both sides - Ford went so far as to enslave most of the population of Rostov-na-Donu.
I wonder if at some point there will be unified suppliers and supply chains for all armaments for all actors, acting entirely independently of any nation state. Corporations are more or less there in terms of their ability to hop jurisdictions and work around international law.
In fact, maybe we do already have this, but it’s non-obvious.
It's worth remembering that international subsidiaries inside Germany were entirely cut off from their parent companies. There were no executives from the parent corporation present in Germany, all the other employees were Germans, no money could be transferred out of Germany, and after a while they even had to get special permission to send telegrams in or out. They still called themselves Ford Germany or IBM Germany or whatever, but the reality is that this was just a name that they used; there were no real ties of ownership or control left. Naturally when France fell, the French subsidies suffered the same fate, or even worse.
ITT was another conglomerate that got fat selling to both the Allies and the Axis; radar sets made by ITT subsidiary Federal Telephone and Radio were used to shoot down planes built by ITT subsidiary Focke-Wulf (partially owned by radio manufacturer and ITT subsidiary Lorenz).
Well it's unlikely that has complete control over the supply chain and so it's corporations doing business with each other. They'll find a rapidly decreasing number of people willing to do business if they ride roughshod over others IP.
One interesting supply chain is the EF50 vacuum tube, which was manufactured in Holland and was vital for radar in World War II. Hours before the Germans took over Holland, the British trucked out 25,000 tubes and key manufacturing equipment so they could start manufacturing the tubes in England.
Not only were the supply chains different but the US and USSR also had very different design and procurement philosophies that tied back to military doctrine. There's an interesting summary on Reddit related to Soviet aviation that outlines some of the differences. [1]
This seems to be an example of defense strategy driving economics. In the US we tend to think of market forces driving defense policy but in fact there's a feedback loop between defense technology and how societies organize themselves.
In the video I have linked below, in third lecture Jonathan Parshall compares industrial doctrines of tank manufacturing by Nazi Germamy, Soviet Union and USA during WW2. Very enlightening.
Three different systems, three different manufacturing philosophies.
- Germany - pre-industrial artisan manufacture (250 modifications during 2-year production run of 1347 units, 300 thousand man-hours per tank vs American 10 thousand man-hours)
- USA - Detroit style horizontal mass production (US scaled down tanks production in 1944 due to overproduction in 1943)
- Soviet Union - cost-optimized, vertical mass production (the average tank lasted only 14 hours in battle anyway)
It looks exactly like the Dialog (manufactured by Ericsson, or probably L. M. Ericsson at the time) that were ubiquitous in Sweden in the 70s and 80s: https://en.wikipedia.org/wiki/Ericsson_Dialog .
My grandmother (92) still uses an identical rotary phone here in Italy, in late 2020. It works, she’s comfortable with it. To be pedantic, however, it isn’t made of Bakelite... it’s not that brittle. It’s some other kind of (archaic, by now) plastic with plenty of bromide fire inhibitors because it’s turning darker by the month. I’m told it was originally an off-white; now it’s a very rich beige.
It's fascinating to see the difference in consumer goods. Soviet Union seemed to build things to last forever, vs. the planned obsolescence for American stuff (although this is really only true after the outsourcing began).
Things in Soviet Union lasted forever not because they were purposely built that way, but because you either fix things or don't have them - it was almost impossible to get a new replacements. For example you would need to wait more than 10 years in a queue to get new car. Very few domestic made things were considered more desirable than foreign, and usually reliability was terrible.
Old cars after the war were terrible and only lasted for short distances, no matter if they were from the east bloc or west. But longevity rapidly improved in western cars, while eastern ones didn't really develop that much. Early Japanese cars were also bad but got better. Soviet and eastern block technology just developed much more slowly than western Europe or Japan, and the difference grew larger every year.
Things that happened in cars in the eighties:
electronic ignition (no distributor), fuel injection (no carburetor), full body zinc coating (much less rust).
I find this also quite fascinating as well considering that this was a non market economy. While not a complete refutation, I think the technological success of the USSR pokes holes in the economic calculation arguments of Von Mises (https://en.wikipedia.org/wiki/Economic_Calculation_in_the_So...).
Mises doesn’t say that they can’t produce things of value or innovate technologically. Mises says that what they produce is not going to be what consumers want as much as things they would have chosen themselves, and more importantly that price controls prevent the signaling that allows them to correctly allocate capital. The eventual collapse of the USSR is the evidence for this.
The eventual collapse of the soviet union is attributable to dozens of causes, including an oppressive government which lost the support and confidence of it's people, a military budget in excess of 30% of GDP, an expensive and pointless foreign war, widespread censorship, and a crippling bureaucracy.
I'd be skeptical that price controls had a larger affect on the distribution of information than censorship and the threat of imprisonment in the gulag.
> oppressive government which lost the support and confidence of it's people
The oppression was in order to control the economy and the support and confidence was lost because in part because of their inability to provide basic goods and services in a command economy.
> I'd be skeptical that price controls had a larger affect on the distribution of information than censorship and the threat of imprisonment in the gulag.
Its not about the size of the effect but about the effect on specific information that is needed for capital allocation.
USSR was outcompeted by market-driven economies and collapsed due to the unsustainability of the system.
Uhm, no. No single factor, but the USA going into an arms race with the USSR combined with the USA in association with Saudia Arabia tanking world oil prices played significant roles in the demise of the USSR and the Eastern Bloc.
Ok, why was the mixed economy of the US able to produce all those weapons and all those consumer goods and feed and clothe their people while the command economy of the USSR couldn't compete on any one of those fronts?
Oil prices is a distraction from the issue because if the USSR had been able to sell petroleum at a premium then they would have been able to purchase raw materials and finished products from market economies elsewhere and perhaps sustained the system for longer but it doesn't explain why they were reliant on an extraction industry and market-produced goods.
I think you're looking at this from a consumerism point of view.
The US started a huge build up of arms. eg missiles and destroyers specifically, but also the US had significant advances with tank and aircraft weaponry.
The US consumerist system had a positive feedback into the US industrial military complex where advances in manufacturing and information technology lead to huge efficiency gains for arms production even though Western arms production supply chains almost completely isolated.
So, the US had a massive technology and manufacturing advantage, then the US tanked world oil prices and other commodities that the USSR required from world markets. Significantly the USSR was buying more grain and food from the world market, so while the USSR was able to keep up with technology, it was not able to keep up with efficiency gains that the US was realising.
Corruption was also a huge problem for the USSR, and it still is to this day in Russia.
The Americans bankrupted the USSR on multiple fronts. Capital allocation is a capitalist system notion, but, more generally, the US was able to allocate deploy its available resources in a way that out-competed the USSR. The USA was able to organise its society and economy in a more efficient and productive way than the USSR, and that is a Macro Economic argument.
Until the 80's the USA had second most equitable distribution of wealth next to the USSR. The USA imposed significant taxes on everybody up to a marginal rate of 80%. If you want to "Make America Great Again", you need to restore taxation to the levels seen between 1945 and 1981; maybe even to the end of the 80's. American government funding through the DARPA project lead to numerous technological advances that most people, worldwide, now depend upon.
> I think you're looking at this from a consumerism point of view.
Not really, more like a “capitalist” p.o.v. but not in the pejorative context or the crony corporatist context that it holds today; my view is that prices are the mechanism by which information is shared by all participants in a market and that profit (from uncoerced transactions) is the wage for correctly allocating capital. This process occurs regardless of state intervention but it is distorted by state intervention, which is why authoritarians seek to mandate that profit be taken from people in order to fund their failing projects. Left unchecked this process strangles the productive machinery of society because the unproductive coercively funded portion captures more and more of the value in society and continues to squander it on their own values that are not viable in a free and open society. If this process is restrained then the market can drive growth and the parasitic aspect grows with it because of the continued increase in surplus value generated by the market and the fact that the parasitic coercive aspect can simply claim more of the surplus value.
You mention advantages that the US had but that doesn’t explain why the USSR collapsed. Lots of places besides the US didn’t have all of those same advantages but they didn’t descend into the same type of failures that command economies did. And its not as though the USSR didn’t innovate technologically. They were just had less surplus value available to their parasitic endeavors because they had a command economy and that system is not able to coordinate the actions of millions of people to the degree that a market is.
> Corruption was also a huge problem for the USSR, and it still is to this day in Russia.
There may or may not be a cultural element to this but surely you agree that corruption is more of a problem when the corrupt entity has more power and control?
> The Americans bankrupted the USSR on multiple fronts. Capital allocation is a capitalist system notion, but, more generally, the US was able to allocate deploy its available resources in a way that out-competed the USSR. The USA was able to organise its society and economy in a more efficient and productive way than the USSR, and that is a Macro Economic argument.
Capitalists may have studied the way that markets allocate capital in more detail but the entire concept of communism is that the workers “should” control the capital assets they use at their profession. If it is true that they haven’t even considered how workers would choose what capital assets to build and maintain, which capital assets to leave idle for the time being, and which capital assets to abandon, disassemble, and reallocate, then that is an argument in my favor.
> Until the 80's the USA had second most equitable distribution of wealth next to the USSR. The USA imposed significant taxes on everybody up to a marginal rate of 80%. If you want to "Make America Great Again", you need to restore taxation to the levels seen between 1945 and 1981; maybe even to the end of the 80's. American government funding through the DARPA project lead to numerous technological advances that most people, worldwide, now depend upon.
This is an ideological issue and beyond the scope of our discussion about prices, command economies, and capital assets.
> I'd be skeptical that price controls had a larger affect on the distribution of information
I don’t think you’re understanding what information is being talked about here. If you don’t let a market of buyers and sellers determine the price of something you can’t discover the supply and demand curves nor the price floor, etc.
If the government comes out and just dictates that the price for gas is capped at $2/gal, you just end up with a bunch of shortages, rations, and lost potential oil industries because a ton of market information has bene destroyed. That is entirely independent of censorship.
How are you able to draw this distinction? If price controls are ineffective allocation of capital then surely GDP was depressed? How can you isolate and ignore price controls in such a complex system as the Soviet economy?
I wouldn't ignore them, but I'd suggest that there were other more potent mechanisms for information control which resulted in ineffective capital allocation.
Consider that talking about a superior suspension system present in Western cars would have been problematic to the censors. Engineers who pushed such systems could find themselves in trouble, and ultimately cozy insiders could get competitors blackballed for pushing competing programs e.g. Censorship and Corruption did the most damage to the efficient allocation of capital.
The corruption of nominating a supplier or a design as the only approved design is equivalent to not using price as information - or rather, not being allowed to use price as information.
For example, if a supplier is inefficient in a free market, then the prices they charge are significantly higher than the inputs - i.e. profit is high. High profits attract competition; competitors look at the price of the output and the prices of the input and see that they can do better by building something cheaper. This competition drives efficiency and reduces prices.
Whether competition is banned, or improvements are banned, or prices are exogenously set, it's all approximately equivalent to mucking with price as information.
Certainly the USSR made other mistakes besides price controls, the point is that without market-generated prices, they had no way of knowing which goods were in higher demand relative to their supply in order to invest capital resources in producing those. Many Soviet goods were of high quality but the planners still sought pricing information from their western rivals in order to allocate capital.
the most important immediate causes were a) that it could not feed itself and had to buy food imports with hard currency, and b) that it acquired its hard currency by selling oil, which became unsustainable during the 1980s
Often omitted part of the reason for that was that it had to build itself up, in rather hostile conditions, from much worse state than "the west". Even former Russian partition of Poland, to this day considered (for a reason) a backwards place, was one of the most modern areas of the Russian Empire.
Then when post-WW2 the expected disarmament didn't come... well
There were many problems with the Soviet system but the collapse was not really related to it not being a market economy. In fact the enormous economic collapse that happened was due to privatization shock doctrine promoted by free market fundamentalists. Ironically free market reforms killed Russia not their command economy.
Thats an interesting perspective. Why don’t you agree that the privatization was a reaction to a failing system? Surely if command economics had been successful they wouldn’t have felt the need to privatize?
The people who pushed privatization were the ones who personally benefited the most from it. It went from semi-incompetent central command to completely incompetent private cronies with baked in government support in the form of contracts, outright thuggery, and geopolitical might. Sure they got cleaner pricing signals, but they lost everything that made them competitive. At this point, most of the privatized industry that remains is largely rent seeking (telecom et all), resource extraction, and the military industrial complex.
The argument is that what the USSR experienced is an accelerated version of what we're seeing in the US, since it didn't have the other social institutions to make the transition. The free market didn't win, it just paused its ambitions to cannibalize the only competition before continuing on the same destructive path that the USSR economy speed ran in the 80s.
> semi-incompetent central command to completely incompetent private cronies with baked in government support in the form of contracts, outright thuggery, and geopolitical might.
this doesn't exactly make sense when the people you call semi-incompetent were unable to meet basic standards of the modern world with their dictatorial powers and the crony economy that replaced them was able to rebuild the capital assets and replace them.
> they lost everything that made them competitive.
they were not competitive at the time according to practically everyone.
> most of the privatized industry that remains is largely rent seeking (telecom et all), resource extraction, and the military industrial complex.
why was a command economy unable to make extractive and rent-seeking enterprises work? why was a market economy able to sustain a military industrial complex (which is wholly parasitical) when a command economy was not?
> The argument is that what the USSR experienced is an accelerated version of what we're seeing in the US,
this is because the US is a mixed economy, not a market economy. the same process of parasitic institutions strangling the productive institutions is at play, it only takes longer because there are more productive institutions and fewer parasitic institutions in a mixed system than a command system.
> The free market didn't win, it just paused its ambitions to cannibalize the only competition before continuing on the same destructive path that the USSR economy speed ran in the 80s.
of course the free market didn't win because there was no free market competing. the mixed economy outcompeted the command economy because the market portion produced more value and the command economy choked on its own inability to effectively allocate capital. It is true that people who had the money came from market institutions and purchased formerly public assets in the former USSR. This suggests the question: Why were they able to purchase these assets and why didn't representatives of the command economy purchase the (private) capital assets in the west?
I'm far from an expert on this, but the reason could be that back then, "democracy" and free market without State intervention were presented as inseparable parts of the same package.
That just moves the question to why people would want a democracy if they had a state controlled economy that provided for their needs and prevented them from capitalist exploitation?
The point here is that soviet economic collapse as a historical event preceded the shock privatization* despite what command economy apologists might claim.
*free market proponents shouldn’t defend the sale of state assets to oligarchs when those assets were formerly expropriated. The title is encumbered by the previous misdeeds.
There is no dispute that the Soviet state-driven economy was totally inadequate in providing for the needs of its people and that led to its collapse.
I think there is also no dispute that the wave of privatizations that followed the end of USSR led to an even economically worse situation for the Russian state. The fact that said privatizations were merely a transfer of State assets to a small group of private individuals for pennies on the dollar is a signifiant factor of that.
What's less clear to me is why privatization was the chosen direction instead of a more dirigist approach, and I posit that the reason is the prevailing dogma back then (as promoted by such institutions as the IMF or the World Bank) was that democracy equals free market economy equals prosperity, so the Soviet people naturally believed democracy would be the solution to their economic problems. Had they been aware of an alternative way to prosperity (aka the Chinese way), I don't know if they would have adopted democracy (or what passed for democracy in Eltsine and Putin's Russia) or free market economy.
> I think there is also no dispute that the wave of privatizations that followed the end of USSR led to an even economically worse situation for the Russian state. The fact that said privatizations were merely a transfer of State assets to a small group of private individuals for pennies on the dollar is a signifiant factor of that.
I'm not sure how to parse this. Certainly I can agree that there is something morally wrong about the process of expropriating assets, mismanaging them, and then transferring them to politically connected people. However the economy now meets the needs of the people better than it did when it was state-owned, and the Russian state is made of people, it has no interests apart from the people who constitute it. If you're presenting a command economy that can't feed its people and a crony economy that does a better job feeding people, I think most people would choose the option where they get fed.
> What's less clear to me is why privatization was the chosen direction instead of a more dirigist approach, and I posit that the reason is the prevailing dogma back then (as promoted by such institutions as the IMF or the World Bank) was that democracy equals free market economy equals prosperity, so the Soviet people naturally believed democracy would be the solution to their economic problems.
I doubt the people had much say in the matter either way.
privatization shock doctrine occurred during the 1990s, after the collapse. the collapse occurred during a period of market and social liberalization, but was directly precipitated by an oil crash pushing over a deeply sclerotic economy that could not feed itself and a regime with severely diminished legitimacy
Free market fundamentalists? You should probably call it klepto privatization. Most of the resources were appropriated and sold by unscrupulous individuals in positions of power for their own profit. This is how oligarchs were born. There's always a shock when transitioning from a state centrally planned economy to a free market economy but special interests made it far worse.
Hah, I beg to differ here. I mean, a lot of people hated it, but, a lot of people did not. It is scary how well people bought the propaganda. Even now, in ex communist countries, we have people pining for the "good old days".
I can't agree with that or let it pass. The fundamental reason it failed was because there was no checks and balances which are inherent in a true free market system (or reasonably close ones like western economies). Autocratic Communism requires actual morals and concerns for the people at large by the "Party" and not just for their own advancement. While some of that may have existed in the early idealistic USSR, it certainly no longer existed by the 1980s, all that remained was an Autocratic government. It was a complete failure and was living on borrowed time. Autocratic Party Capitalist systems like the Chinese system can work because they generally leave the markets alone at the low to mid levels and attempt to weed out the worst corruption in the upper layers while they take the cream off the top of the economy, the market mostly takes care of itself with pricing, supply and demand as well as incentives. Similarly with Western style government economic systems but citizens actually also have personal freedom as well as economic freedom.
A very large amount of eastern "high tech" lagged behind by a couple of years, because stealing and reverse-engineering the Western designs in order to copy them took about that long.
Less so for military equipment. They definitely didn't copy their titanium submarines (which when US intelligence discovered them, the Navy believed to be a false report because they didn't think it would be possible to fabricate).
Grid fins weren't copied western tech, either. Nor was Sputnik.
Buran is much less of a copy than it looks like. It's superficially similar as it has the same mission profile, which was basically because Soviet officials wanted to be able to keep up with whatever nefarious things the Americans might be doing in orbit with such a thing, even if they weren't sure what that would be. But it's far from being a copy in terms of technology, materials, construction, or even major things like the booster.
Agreed. If anything, the technologically interesting parts compare better to the titanium submarine example, as the RD-170 engine that powered the Energia rocket that lifted the Buran was at least in some ways more sophisticated than anything Americans had at the time, and in particular, used an oxygen-rich staged combustion fuel cycle that American engineers had considered but dismissed as being impossible. Aerojet engineers didn't actually believe the Russians had even built such an engine until they were able to examine one in person after the end of the Cold War.
One thing is that laws of physics don't have nationality nor borders.
Another is that the engineers designing Buran were told to "make it look like US Shuttle" - only look, mind you, as outside of common shape the design is completely different.
One of the reasons I've seen for this order was to make a point to USA, though I do not remember the details. MiG designers were reportedly annoyed at the requirement, but still made it look like Shuttle - and be several times more capable than Shuttle.
Did you only look at the pictures? One is made to be piloted by astronauts and the other is made from the bottom up to be remote controlled but with the option to pilot it manually. The USSR were lightyears ahead in remote control and robotics in space.
Not only that - it was simpler, probably easier to refurbish after flight and had, IIRC, twice the payload capacity (because it didn't need to carry the ascent engines along for the ride).
It wasn't as reusable as the American counterpart, but if we did that with today's reusable boosters the way SpaceX does it, it wouldn't be that bad.
Remember, of course, what drove both designs was the capability to bring large objects back from space in a single orbit
It's really no surprise Buran was abandoned and the shuttle was bad at everything else (except looking good in pictures).
It got to be a lot more than a couple of years as time went on and some things - like high precision manufacturing typical in the West is something they never quite pulled off at scale. Dual use (i.e. designing and making things/capacity so that could be repurposed for military use) was a core part of economic policy with predictable results.
Indeed. They had extensive surveillance and sabotage networks all throughout the world. Simple because it was easier (and cheaper) to just steal it than develop it domestically. With the soviet demise, that apparatus hasn't gone away. Russians and Chinese still work off that approach.
I believe everyone is playing the game of industrial espionage in the realm of defence, it's all 'fair game'. It's just that you have to have something worth stealing in order for it to be stolen. Surely 'The West' is analyzing and borrowing every possible concept they can.
The thing is, Westerners will have a different view of what 'Public v. Private' means, and 'Open Enterprise' is something completely distinct from 'Government' which is not the case in other parts of the world - hence a lot of ideological confusion.
It's hard to get ahead by stealing, because you end up under investing in domestic research capability. China probably has a large enough economy to do both theft and cutting-edge research, but the old USSR would never have pulled ahead.
Dropping support for domestic research&development and switching towards "just steal it" are considered part of why USSR failed - and a legacy of Brezhnev era.
Russian here. Unfortunately, our technological success was mostly limited to military production. And even there, quite a lot of technological processes and templates were simply stolen by our spies (starting from our nuclear weapons program). Granted, Americans used to do that too... USSR used to have a lot of independent discoveries and inventions. But nearly all of them were targeted to the military; Soviet cars, television sets, washing machines etc. were all truly awful.
I think it's still impressive. In 1917, Russia was one of the most backwards countries in Europe, practically a feudal agrarian society. The USA was already a fairly advanced industrial economy.
In 1957, only forty years later, and after suffering the revolution, the First and Second World War, Russia won an important steep in the space race.
Granted, those were very hard times for the Russian people, but, still, credit where it's due.
> In search of a way out of this difficult situation, the government made deliberate efforts that led to an unprecedented industrial boom that began in 1893. The years of this boom were a time of economic modernization of Russia under the auspices of the state.
> Also, in 1915–1917, a large-scale modernization of industry was carried out, and, unlike the pre-war period, most part of the equipment was produced by domestic enterprises
> On the eve of the revolution, the country's national income was 16.4 billion rubles (7.4% of the world total). According to this indicator, the Russian Empire ranked fourth after the United States, Germany and the British Empire.
Roberto is essentially correct, even by your own data. Russia has been 'behind' for literally centuries, even to this day.
In 1910 'Russian Empire' was 170 Million people, the US was 100 Million people. We're talking about 10x GDP per capita.
That would be like the US vs. Morocco today.
Today GDP per capita is $66K US vs. $12K Russia which is substantial.
Russia has, for a long time, hard 'fairly large, inefficient economic base'.
They have power mostly because of their size, and their 'acute' ability to produce things (they have very smart people), and of course their aggressive Imperial view of things.
Serfdom abolished in 1861, by 1917 forth country by GDP. Table I've cited shows increase of share in world production while shares of UK, Germany and France were decreasing. It occupied a leading position in world agriculture.
USSR reintroduced serfdom, peasants had no passports, they could not move into town without permissions [1]. USSR had famines in 1921–1923 and 1932–33, about ten of millions died. Total mismanagement. There was rebirth after Stalins death, if only they've introduced reforms like later in China.
Russia today is mostly resource-based economy [2].
1) Yes, 'Russian Empire' is different than 'Russia' is different than 'USSR' - but in 1910 it was 'The Russian Empire' so I used that as a basis of comparison.
2) It doesn't matter that much if 'Russia version X' share of world economy was 'growing' for some range of a few decades if it's literally 1/10th the per capita economic power of those other nations. It's still a 'way behind'.
In fact, the 'further behind' the quicker growth should be. Most of the 'very poor' nations of the world today are growing very quickly.
'Russia Version X' has always been quite far behind, it's been that way for centuries, since the dawn of what we might even call 'Russia'.
> In fact, the 'further behind' the quicker growth should be. Most of the 'very poor' nations of the world today are growing very quickly.
That's exactly my point. Apply "per capita" to China several decades ago, it does not translate to its status today. It started with 1978 reform [1], per capita would eventually catch up.
> 'Russia Version X' has always been quite far behind ...
That's hand wavy, I can apply same rhetoric to Japan and some periods of China. In parallel universe USSR took required reforms and PRC didn't. Russian Empire had fourth GDP in the world, that's not Morocco, that's economy of Japan or Germany plus pool of cheap labor and natural resources.
You might be interested in this [1] 'Rise and Fall of Great Powers' - they go through the industrial output numbers in great detail from 1500-1950 and articulate Russia's constant problems at length.
And yes, Japan and China were 'way behind' as well in most of the modern era.
Anyway, In 1917, it was the poorest country per capita of Europe except Portugal and suffered the revolution and the first and the second world war. I think is kind of surprising that, starting in that position, they could keep the pace in a race with the USA.
Dostoevsky, Crime and Punishment, a fascinating read, not an easy read either, but if any HN reader is looking for something... a masterpiece that is true to today across countries and cultures.
I can't see how per capita helps in comparison. I think there were a lot of non industrial states in US, industrial centers and workforce pool is all that matters.
French First Republic too suffered from revolution yet two decades later it (First Empire) conquered much of the Europe. There was no other choice for USSR. All wealth flooded into militaristic complex. System could effectively produce weapon but it could not solve citizens needs.
> In 1917, Russia was one of the most backwards countries in Europe
But the counterfactual isn't stasis. Russia of 1913 was busy on the same sort of government-driven upswing that Germany had ridden a few years earlier, there was lots of modernization going on and lots more planned. The soviet propaganda of course was very keen to downplay this, so they pushed "practically a feudal agrarian society" ideas hard.
At the same time as making Spitnik & submarines, and many many tractors, I think they also never equaled the 1913 harvest. At their peak, perhaps early 60s, they were still importing a lot of food from the prairies. In the 80s, without imports, the calculation was that they'd have been back to WWII levels of rationing.
All that is probably truth (even if serfdom was a thing until 1861 and so late like 1915 they were still dealing with the consequences), but there is a clear historical fact, whatever the soviet propaganda said: people well feed and happy don't start communist revolutions.
You mention Germany. The Bismark government (hardly a communist government) created the first social security program, probably because they were afraid of what could happen if they don't.
Yes there are lots of parallels to Germany, which also took a very state-driven development line in general, and this intensified during the war. I think Lenin's model was explicitly that of WWI germany. Of course the Prussian PR machine didn't sound much like the soviet one, but they were hardly polar opposites.
And the people eating the 1913 harvest didn't start a revolution. The empire fell apart after years of war (as did the Austrians, and the Turks) and then many factions duked it out. And then reconquered all the hungry people who hoped they'd seen the last of guys from Moscow, with guns.
>>"And the people eating the 1913 harvest didn't start a revolution. The empire fell apart after years of war [..]"
I don't think it's so simple. We have to account for the revolution in 1905. The Wikipedia article is a good one (1) and I think it shows the zeitgeist. In my view is the pressure of the system in the peasants and in the proletariat what creates the conditions for 1917, even if the wars were the trigger.
> In 1917, Russia was one of the most backwards countries in Europe, practically a feudal agrarian society.
That "feudal society" had built the Trans-Siberian railway. While it certainly was lagging behind the Western Europe in industrialization, it was a solid second-tier country, like Japan or AH.
No only suffering from the 2nd world war, but undoubtedly being the hardest hit nation.
It's like being a centralized economy really helps when you have to catch-up a competitor, and when the path to achieve that is very well understood. By contrast, market economies shine when innovation is the driver of growth.
Not sure about that. Japan caught up to the West twice and surpassed it in some ways without being a planned economy. Same thing with Germany vs England and France. I think the determiner here is a national will and pride that drives the hard work necessary to modernize. There are plenty of positive feedback loops in free societies as well since modernization brings a lot of everyday improvements that are available to everyone in a market economy. Planned economies lack that particular incentive and often have very negative side effects like famine and political purges that probably hinder modernization efforts.
There was no Marshall Plan for Russia, though. Never mind whether the economies of Japan and Germany were "planned" or not, it was the stated policy of the US and other victors of WWII that they would not be allowed to fail economically.
Russia was more or less devastated, having lost more soldiers and civilians than everyone else except China combined. With Communism, they chose to maintain an adversarial stance towards the West, and they're still paying dearly for it today. The entire history of Russia seems to consist of smart people making one bad decision after another.
People forget that both Germany and Japan did most of their catching up before the world wars. That was the period to which I was referring in the case of Germany.
Maybe Japan was not a planned economy, in the Soviet sense, but it was hardly a model of "laissez-faire" with their zaibatsus and keiretsus and a very clear industrial and protectionist policy implemented from the state.
Japan also had quite a bit of planning. Not at the level that the Soviets had, but much more state direction of which industries to pursue and how they would be funded than US/England ever had, and for most of a century.
For a timeline comparison, we're coming up quick on forty years after the collapse of the USSR and the adoption of a market economy. It's pretty incredible how time flies. I wonder if we'll see a similar transformation.
I wouldn't call this (excellent!) book "alternative-history" at all. It's more like novelized history - the portraits of what it actually took to get things done in the USSR are especially notable.
It could certainly poke holes in a straw man argument.
Mises didn't say a planned economy could produce nothing, but that it would lead to irrational and inefficient use of resources.
USSR military and overall production and eventual collapse demonstrates his argument pretty well.
You can also see that US military spending is another example of irrational and inefficient use of resources allowed by central planning rather than market forces.
You could get an equivalent of price signals by another means - rejection of products that were unfit for use. The Soviet military was able to do this, and so got equipment that was both of good quality and was of the correct mix of products. Civilian enterprises did not have this avenue available, and so ended up getting products of the minimum quality that would still skate by under the Plan's rules.
