Hacker News Reader

Comment by philwelch | Hacker News Reader

Russia, according to famed Russian dissident Garry Kasparov, operates this way more as a mafia syndicate. Corruption allows the “oligarchs” to enrich themselves with the nation’s mineral resources so long as some of their power (and even money) remains at the beck and call of the don: Putin.

China is different. It’s not an oil and gas oligarchy like Russia or the Gulf states. It is somewhat like the US was during the Second World War—somewhat capitalist in form but almost entirely geared toward the strategic goals of the country, as dictated by the government. The main exceptions are that the US had elections intermittently and that the US was in the midst of total war. China isn’t at war though—it’s just a totalitarian society.

View on HN

Or as Bill Browser described it:

"This whole exercise was teaching me that Russian business culture is closer to that of a prison yard than anything else. In prison, all you have is your reputation. Your position is hard-earned and it is not relinquished easily. When someone is crossing the yard coming for you, you cannot stand idly by. You have to kill him before he kills you. If you don’t, and if you manage to survive the attack, you’ll be deemed weak"

In Russia a theft of a company comes immediately after the initial start-up phase is over and company starts to post profits. Immediately noticed by tax office, groups of lawyers zero in and simply take it away from the owner. I was told about such an example from one high-profile Russian who escaped to keep his company alive. US entrepreneurs in China had similar experience; once company took off, they had to "share the technology" with some state companies that then produced the same thing cheaper and knocked the original company out. Kleptocracy is a proper term for both.

> once company took off, they had to "share the technology" with some state companies that then produced the same thing cheaper and knocked the original company out.

Without knowing the details, this sounds more efficient and potentially fairer for the society. It allows for information and innovation to flow in the industry, rather than a single company making absurd amount of money only because they can keep it secret.

It doesn't mean wealth is automatically better distributed, but it could help.

In general, this tends to kill innovation as nobody bothers starting anything new (no rewards, instead punishment for success).

I’d say there are pros and cons. One consequence of lax IP laws is that competitors will rapidly converge on the same set of popular product features. When everyone has the same set of features, innovation and the ability to distinguish oneself from the competition becomes a matter of life and death. Resting on one's laurels behind a warchest of patents is not an option.

This is particularly true of a playing field as large and as cutthroat as China, where at any given time there are thousands of competitors jostling for dominance of even the most minuscule of niches.

On Russia, Bill Browder's book Red Notice does an exceptional job of going into detail describing what you mention. It is really quite special.

You're dead on in your assessment of them.

> China isn’t at war though

Yet.

Maybe they’ve been at Cold War for decades but nobody else noticed.

Considering the constant attacks and theft over the last 50 years, wars have been fought over less.

Reply on news.ycombinator.com