Hacker News Reader

Comment by CryptoPunk | Hacker News Reader

The Soviet economy borrowed technology from the market economies of the West, because it generally could not compete with the market-driven sectors of the Western economies in innovation. It had almost no ability to advance its own semiconductor sector for example.

Without a larger market-driven world to borrow from, it's doubtful it would have acquired fertilizer, factories, automobiles, etc.

The Soviet economy collapsed in the end, with millions dying in the early 1990s as the support network it administered broke down.

That it was able to last as long as it did is because it also did have a massive black market, that supplied people with much of their necessities:

https://blogs.commons.georgetown.edu/rees-577-fall2016/2016/...

The corruption in Russia today is a legacy of that Soviet-era black market.

View on HN

> The corruption in Russia today is a legacy of that Soviet-era black market.

Not just of black market, the centrally-ran economy was corrupted to the core. Most decisions (who gets the job, who gets the apartment etc.) were routinely made based on bribes or favors.

Indeed, the latter corrupt ness is kind of a natural state of humanity in large enough groups that direct accountability isn’t feasible. Capitalism, including the rule of law that upholds it, is one fairly proven mechanism for addressing it (but it probably also relies on some culture of honesty to keep from collapsing back to corruption). Nonetheless, the Soviet Union lasted an extremely long time and I think people underestimate the effectiveness of industrialization. Industrialization meant the Soviet Union could last the better part of a century in spite of the problems you pointed out.

(Also, I think it’s a mistake to talk about the Soviet Union’s economy as purely parasitic on the market economies of the West... tons of science and engineering was done there and technology was developed. The Soviet Union’s system was super bad and shouldn’t be emulated but I think sometimes people go too far in saying how ineffective it was. It was effective enough to last a long time and provided a real scare to the West in terms of what system was more or less effective, at least for a decade or two... think the space race.)

The Soviet system was clearly inferior (say it was running at 10-30% efficiency of a market system), but wasn't completely dysfunctional.

Combine this with large population population of the Soviet block, the fact that that population was effectively used as slaves at many times and also had very little consumption goods available (most output went into building out further industrializationn to catch up to the West as well as into military and propaganda projects, such as space race) and you can see how it still managed to cough up some respectable output, at the cost of misery of the people working behind it. However, as industrial processes became more complex and reliant on specialized high-level skills (such as in semiconductors or software), it was clear that the system has reached its limits and just cannot do these things well at scale. The rampant incompetence and nepotism were just not incompatible with things like modern chip factory.

Reply on news.ycombinator.com