China is pretty much a damning counter example to your whole rant, as was the Soviet Union. Two countries that were previously economic backwaters that became world powers because of directed government action.
Second, Russia is doing better now than it was at the tail end of the Soviet Union, but technologically it progressed far more during Soviet rule than it has since. Before the Soviet Union Russia was a total, agrarian, rural backwater. Chronically a hundred years behind the rest of Europe. The Soviets built all the technology and infrastructure that is keeping the country going to this day.