The horizon is not so far as we can see, but as far as we can imagine

The Decline & Fall of the Soviet Union

Our society seems fascinated by the decline and fall of empires and nations. You rarely see a book on the “birth” of Rome, say. It’s the collapse we care about. In this respect, I’m a bit odd. I prefer the creation period, the early years when everything goes right, to the fall, but it’s important to see that death precedes birth. The Czars fall, the Soviets rise…the Soviets fall, and after some birth pangs, Russia rises.

But when considering the fall, one should also remember the rise. We act as if the late period, which is almost inevitably full of corruption, stupidity, and foolishness is all there was. It rarely is.

In the early days, the Soviets were startlingly effective. The Soviet economy did much better during the Great Depression than most Western economies, and even after the war, the Soviet system seemed to create superior growth. American textbooks from the early fifties note the challenge of this faster growth, and that if it continued, the USSR would overtake the US.

Nothing is more inevitable than what has already happened: We look back and say that the USSR was destined to fall, it had to fail, and that our system was superior because it outlasted the Soviet system. We “won,” they “lost,” and that means our ideology and our way of doing things was the better one.

I would suggest this is a misunderstanding. I’ve written two articles before on the collapse of the USSR. One is “well, a command economy has specific pathologies which can develop.” It was based on the book Power and Prosperity, by Mancur Olson (which I recommend highly), and its thesis was that the late USSR lost control of production because the people who were sending them numbers from all the factories, shops, mines, farms, and so on were systematically lying. At the start of the Soviet system, this wasn’t possible, but over time, they organized local networks which allowed them to do so.

Faced with false production numbers, central control over the economy failed. Central planners didn’t know the real supply of anything — inputs or outputs — and couldn’t control it. Workers bunked off, managers got rewards for production totals they had falsified, and everything became false.

This argument is elegant because it also explains the early and middle successes of the system: It takes time to create local networks capable of deceiving the center, and until that happens, central control is actually very effective at certain types of economic activity. Roughly anything can be “tailorized”; if you know what inputs should produce what outputs, and you know what inputs exist, you can hold people accountable and you have a system which can directly allocate resources (i.e., people, capital goods, and inputs like minerals, fuel, and so on). There’s actually less waste and more efficiency in such a system than in a more decentralized system like western “capitalism.”

So the Soviets industrialized with what was, at the time, startling speed. But then they lost control of inputs and outputs (due to falsified information being fed to the center) and then the decisions feeding back out to the productive parts of the economy caused everything in the system to go to hell.

Now, before you get too smug about the superiority of capitalism, let me point out that incorrect feedback has been increasingly overwhelming the capitalist system, with the result that it produces the wrong things in the wrong places. This has been going on for a long time; you can see it as far back as the 60s (and obviously this is one lens through which to look at the Great Depression). This sped up when Reagan/Volcker took over and, since 2008, it’s been in overdrive, as the feedback mechanisms which drive decision making have been deliberately broken by quantitative easing and other similar policies. When you won’t let companies go bankrupt which have made bad decisions and have mis-allocated resources, you produce the wrong stuff at a massive scale.

The point of trying to understand what went wrong in various societies isn’t to pat ourselves on the back about how great we are, but to learn, so we can avoid, postpone, or maybe even fix such problems in our own societies.

The Soviets did much better during the Great Depression in part because they had a centralized system which was able to avoid all the bad feedback crippling most Western economies. They did worse near the end in part because they had more bad feedback than we did, but only in part.

Which leads us to the second article I wrote on the fall of the USSR, based largely on the work on Randall Collins (a summary article of his theories can be found in his book, MacroHistory. He predicted, in advance, the fall of the USSR, not based on any self-congratulatory notion of “our system is more wonderful than their system,” but on old-fashioned position and resource comparison.

  1. The Soviet union had a central position; it had more borders than the West, especially after China became hostile.
  2. It had fewer resources and people, even if you compare the alliances vs. alliances.
  3. It thus had to devote a larger percentage of its resources to the military and so on, and, eventually, it collapsed because it was under increased and protracted strain.

This situation was even explicitly part of Reagan’s “Star Wars” initiative to create defenses against nuclear war. The idea was to make the Soviets spend more and more to keep up, as the US and the West could more easily afford such escalation. Add in Afghanistan, along with some other issues, and the strain helped lead to Soviet collapse.

More simply, this is a “guns and butter” question. Ever since the introduction of capitalism, the smart, longer term money has been to not engage in military over-spending, in favor of growing the economy, because “guns,” understood broadly, are unproductive. An economy which grows faster eventually leads to a significant military advantage. Adam Smith makes this argument in The Wealth of Nations. This idea is not new, and it includes things like foreign aid, subsidies, and so on, that aren’t productive for the home economy, but are necessary as part of the Great Power competition.

So, we have the “breakdown of feedback” argument, and we have the “worse position and fewer resources” argument as the two basic threads. I think both have truth to them, but I think the resources/position argument is a LOT stronger and more important.

The systems argument is weaker because every system rots and goes through cycles. There are times when the system works well, and times when the system works badly, and many of empires, nations, and societies go through cycles, with periods of rejuvenation.

If your system is under added pressure during a period when it needs rejuvenation, its odds of collapse increase if there’s a strong, high-prestige alternative, and one can simply look at the collapse of the USSR and the release of the Warsaw pact through that lens.

All that said, however, systems can take longer to decay and there are methods of rejuvenation which can make the troughs less dangerous and less likely bring down the entire system. The Chinese Communist Party, we know, has studied the collapse of the USSR intensively, because they don’t want to lose power.

Which leads us to mistakes, stupidity, and historic specificity. In the Soviet situation, there were a few more factors.

The first is the failure of collective agriculture. Unlike in industry, which worked well for multiple generations, collective agriculture was never effective — either for the Chinese or the Soviets. It’s easy to see how true this is by looking at the fact that the USSR had chronic food shortages, whereas post-USSR Russia has massive food surpluses.

No one’s quite sure why collective agriculture doesn’t work. The standard argument is that, here, the profit motive works better. In the West, up until about the 70s, smaller farmers were as or more productive than large corporate outfits. Since then, the corporate outfits have done better, but it’s odd that factories worked and farming didn’t, as corporate mega-farms are now working well — if one ignores certain environmental costs and problems with monocrops and so on (which are also affecting small farmers).

But whatever the reason, no one’s made collective farming work at scale, including the Israelis, who made a hard run at it for a few decades.

Essentially, the first thing the Chinese communists did when they started moving towards a mixed (not market, but mixed) economy was to progressively dismantle the cooperative farms. This led to higher agricultural outputs, including per person, and allowed them to move people into factories, service jobs, and into cities. This allowed them to industrialize and also helped increase the level of consumer consumption, which is necessary for creating a consumer society, which is further necessary as part of industrialization for large nations. (The other usual trick is to conquer places and force the natives to buy your goods. See British capitalism and imperialism.)

Regimes also tend to have prestige based on their foreign affairs. Winning wars and imposing themselves on foreigners non-violently increase prestige internally, as well as externally, and losing wars and being otherwise humiliated reduces prestige. Lose foreign wars and domestic legitimacy collapses. Russia became Communist after the Czars were humiliated in WWI, as the most obvious example, and losing in Afghanistan cost Communism a lot of legitimacy, on top of the drain on resources.

One can also bring up the consumer goods issue: jeans and rock and roll. The USSR was bad at producing consumer goods. It’s hard to disentangle this issue: How much was based on “guns and butter,” and how much was based on markets actually being good at producing many different goods? Combined with constant food shortages, late-stage USSR simply couldn’t argue that the West wasn’t better at providing material benefits to its population.

Because the argument of Communism’s legitimacy lay in the argument that it was a better way to provide for ordinary people, for workers, its failure at doing so was devastating. As one anecdote, there came a point where Soviet computer scientists were told to just copy Western designs and stop working on Soviet alternatives. This was devastating to morale in the Soviet computer industry.

But let’s move to more specific problems — to fuckups and dysfunction caused by history and specific decisions. Much is based on an article by Georgi Derluguian in the book, Does Capitalism Have A Future?

The USSR had three main institutional tiers: the Party, the Secret Police (KGB), and the Red Army. All three had significant problems, which increased as time went by.

The biggest issue was with the Party, the main control organism. It was a gerontocracy, corrupt, and unwilling to take action. The modern CCP is full of technocrats of various varieties, but the Soviet Party was in conflict with its technocrats, specialists and was full of hacks who didn’t want to change anything.

Looking at this, Gorbachev did something foolish: He tried to work around the Party instead of fixing it. He created councils and groups with authority that circumvented the Party and took power away from the Party. He deliberately put people in charge who were not dedicated to Communism and whose continued power relied on Communist Party weakness. This undercut the system, and because Gorbachev’s power was based on his position in the Party, it appears to have undercut his personal power, as he doesn’t seem to have been good at picking people who were loyal to him. (Even if he had been, if his desire was to keep Communism strong, he needed to fight and win the battles inside the Party. See what Xi in China has done. Deng did the same in different ways.)

The second issue was the Communist Party’s (CP) fear of the KGB. If you have a massive problem with people lying to you, with the periphery acting against the center, the solution is to have the secret police find out the truth and get rid of the people and groups who have been conspiring against you.

But the CP apparatchniks were terrified of using the KGB. Remember they were a gerontocracy. They remembered the Stalin years, and the terror Stalin had unleashed using the secret police. The lesson that should have been learned wasn’t, “never use the secret police,” it was how you should use the secret police. But paralyzed by fear, the CP kept the one institution which could have solved their information problem, and thus a large chunk of their production problem, on a leash. Scared to use it against themselves at all, they couldn’t get the information they needed to fix the Party’s own internal issues.

The third pillar was the army. It was damaged by the Afghan war, but the generals and colonels were also deliberately kept weak, and popular (and often effective) leaders were also sidelined and kept ineffective. The army, as a whole, was kept weak, so it could not challenge the CP. Authoritarian states are always scared of the military taking over — and for good reason. But when the Warsaw Pact and the USSR started collapsing, part of the reason why the military wasn’t used is that no one trusted it, and it wasn’t trusted in part because treating it badly had made it untrustworthy. (Another reason why the army wasn’t used was also ideological collapse. Gorbachev and other CP leaders no longer believed in the USSR enough to feel they should use military force. That hadn’t been the case even two decades earlier.)

Looked at dispassionately, from outside and with the distance of time, its clear that Gorbachev’s particular reforms and other policies actually weakened Communism. Gorbachev may or may not have sincerely wanted to fix Communism to save it, but he undermined the sources of its institutional power. Previous leaders had done the same, but it was Gorbachev specifically who damaged the Communist Party itself by going around it, a strategy which both further de-legitimized and weakened the Party in formal terms.

So when push came to shove, none of the three pillars, the Party, the Secret Police, or the Army could (or in the case of the Army and the Party) would save the USSR.

Much of this debacle seems to have been driven by fear. Rather than seeing the KGB and the Red Army as sources of strength, they were viewed primarily as threats. The Party needed to learn how to use them in ways that were safe, because both institutions had genuine functions required for the system to work. But the Party itself was dysfunctional, and none of the late Soviet leaders were able to fix that either.

Late in any cycle, systems become sclerotic; most of the people in charge are incompetent, corrupt, and so on. Successful systems renew themselves, and another cycle ensues until eventually a renewal cycle fails. Renewal cycles lead to sub-ideological changes: The US after FDR is different from the US before FDR in real ideological and systemic ways. The US after Reagan is very different from the US before Reagan.

But the Soviet system didn’t manage this. As with the US, it had “original sins”: For the US, one was slavery; in the USSR it was purges and gulags. The US has gone through at least two crises related to slavery, the most significant of which was the Civil War. The USSR failed to deal with its legacy of purges, which effected all three tiers and civil society in different ways. Its failure to find a new equilibrium which allowed for the efficacy of all three tiers meant it couldn’t deal with its production problems, its weak geopolitical situation, and it ultimately failed to survive an end of cycle through renewal.

And so it fell.

Don’t be smug, and don’t take this as vindication of our system. One bitter Russian joke of the 90s was, “Everything the Communists told us about Communism was a lie. Unfortunately, everything they told us about capitalism was true.”

We simply survived longer, but we are in a period in which we must either renew the system and transform it into something quite different, or the system will fall. Our original sin, in this case, is treating the natural world as a resource which does not need renewal, as though it is inexhaustible. This sin is not unique to capitalism, but our system has taken it to extremes.

We have not managed even one renewal cycle which deals with this problem. Meanwhile, the Western system is now close to the position in which the Soviets found themselves; we have an opponent with more resources and a higher population, and our system has a massive feedback and information problem, in which we’ve lost control of production to the extent that we are producing too much of what is bad for us and too little of what we really need, while simultaneously destroying the very basis of both our existence and economic model. As for our elites, they are easily as corrupt and incompetent as the late Soviet party bosses.

Plus Ca Change.



Week-end Wrap – Political Economy – November 27, 2022


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  1. bruce wilder

    I love the end of The Big Short

    Renewal cycles come at regular intervals because the passing of generations continues relentlessly and the U.S. came upon an opportunity for renewal in 2006-9 and ruined itself as elites absolutely refused to reverse any thing they were doing wrong even at the moment when the country was near consensus on reversing course.

    The failure to end the Iraq War or admit that it was a crime; the failure to break up the big banks or prosecute en masse the banksters — there is no coming back from those kinds of mistakes. And, that does not even account for the environmental / ecological catastrophe building from fossil fuel industrialization and population growth engulfing the whole world.

    As the U.S. runs past the cliff edge like Wiley Coyote — its foreign policy establishment madly threatening war simultaneously against Russia, China and Iran, while its economic elite ignores the poverty of half the population and learned incapacity of what were once great enterprises and industries — decline is an option, collapse possible, defeat economic and/or military a probability, but the resources for renewal wait in a distant future as we wait on generational cycles.

    Cycles continue for all the powers, for whom internal factors dominate external forces. China is in the midst of a great, reorganizing “crisis” — Russia with Putin’s retirement pending even as that “great man” attempts a monumental shift in the global order and Russia’s place in it, is well along in a “renewal” cycle.

    The European Union appears to be well along on the way to collapse as dysfunction and structural barriers to adjustment and adaptation aggravate everything: Brexit, Italian banking dysfunction, Poland wanting a do-over on WWII, German de-industrialization.

    Interesting times.

  2. Mark Pontin

    Ian: ‘…the Western system is now close to the position the Soviets were in: we have an opponent with more resources and population.’

    In 1998, the G7 represented 70 percent of global GDP (for what that metric is worth).

    In 2022, it’s 43 percent. Earlier this year, more than a dozen countries formally applied to join the BRICS grouping, after its decision to allow new members. If accepted, those new BRICS members would create an entity with a GDP 30 percent larger than the United States, over 50 percent of the global population and in control of 60 percent of global gas reserves.

    US elites’ failure to get their minds around the staggeringly obvious fact that it’s 2022 not 1998, and so they should practice parsimony of enemies, suggests that the downfall of US hegemony may be quicker than people think.

    Overall, if one compares the extreme strategic advantage that the US possessed in 1991 with what it has now in 2022, it’s hard to think of a similar example in history of a hegemonic power that through extreme arrogance and incompetence so rapidly and so profoundly pissed away its hegemony.

    This may simply be my lack of historical knowledge, of course. If anybody has any comparisons, please educate me.

  3. marku52

    “interesting times” indeed. I suppose it’s always interesting to live through the end of empire, for that is surely what is happening in the US.

    My first thought as Ian was commenting on the loss of feedback in the USSR was the corresponding loss of feedback in the US’ (and west, in general) financial systems. It used to be that the financial statements that corporations issued contained verifiable information on the performance of those corporations. Now they pretty much are just made up out of thin air. And share buybacks, which used to be illegal as share price manipulation, allow anyone’s share price to rise, so long as they can access cheap capital to do the buybacks. Share price completely divorced from performance. So, as Keynes pointed out “When the capital allocation of a country is done at a casino, it is likely to be done poorly” Dean Baker recently pointed out that if the financial system could be reduced by 10%, that would free up about $2500 to give to each and every US household. Parasites.

    For another example of the command economy outperforming the capitalist one, look at the performance of the Russian arms operations, VS the US. Simple, effective and reliable weapons produced en masse VS boutique ones pretty much designed to maximize the stock price of the makers.

    Couple these with the hubris of the US’ neocon foreign policy nuts, and there is a real recipe for disaster.

  4. Astrid

    Unfortunately, as Dimitri Orlov’s one big idea reminds us, collapse in the neoliberal West will likely be far more chaotic and painful than it was for the peoples of the former USSR and more traditionalist societies. Westerners, especially Anglos, have such high overhead costs and individualist/selfish outlooks that we’re all one catastrophe from the streets at the “best of times”.

    What happens when rent/mortgage is too high for 95% of the population? When grocery store shelves are empty for weeks at a time? When the hospitals are abandoned by their staff? I think of the horrors endured by the people of Gaza and Donbas, but they still appear to have each other. People in digitally important positions such as teachers and doctors still showed up for work even though it was dangerous and unremunerative. Will our HRCs and educators do so in time?

    Yet, the alternative of the current regime continuing is even more unthinkable and awful.

  5. GrimJim

    I’d say decline is here, collapse has begun, and economic defeat a fait accompli.

    Military defeat of the largest Third World country with the most nukes? Now that’s an issue. How that plays out depends on how intact those systems are and who holds the keys when the time comes.

    There might be men or women of substance still at those controls when everything starts spinning apart. If so, there might be a chance for renewal, with whatever successor states survive…

    Otherwise, the rats and roaches will get their chance to rule.

    I think the2024 presidential election will determine who holds those keys when the time comes, as it is far sooner and will come up on us far faster than most people imagine.

  6. Ian Welsh


    in 1991 the Soviets were fallen, though.

    The question is what bloc has more. Once the USSR fell, we had no real opposition. Pretending we did is a joke. Iran? North Korea?

    The Nixon to China moment really mattered. China was weak economically, but having it as an ally secured one flank for the USSR, when they had to move significant forces to to the Chinese front was a huge problem and before then if you considered China/Warsaw Pact together it was very formidable. Remember how China fought the West to a standstill in North Korea conventionally, even with inferior tech.

    But yes, in the larger context I agree and I’ve made the same point repeatedly. This isn’t 1991 or even 1950, we sold our patrimony to China and offshored much of it elsewhere.

    The question then becomes, beyond China/Russia/Iran/Venezuela — who is in the other bloc?

    I’ve argued in other pieces that most of Africa and most of South America prefers China, for example, but the West does still have naval dominance.

    Still, who has access to more resources?

  7. Mark Level

    I appreciate and agree with Bruce’s comments above & additionally (as usual) appreciate Ian’s insight and thoroughness regarding poli-sci, economics, etc. I will disagree with one point Ian made however. I certainly don’t credit Reagan’s SDI, primarily or alone, with causing the collapse of the Soviet Union. As you cover, many inter-institutional symptoms of rot and dysfunction led to the collapse. As far as SDI went, its stated intentions may’ve been one thing but let’s be honest, it was dumb & unworkable and the real reasons it went forward were 2-fold: 1. It provided massive income to the MIC corporate sector, Raytheon, McDonnell Douglas and the rest, & thus profit$ and income to them and the DC political classes invested in and paid-off by those forces. 2. Reagan, like “Dubya” later, was a stupid knuckle-dragger who believed he (not his surrogates who actually do the disinfo, torture and killing, etc.) was a Hammer, & every problem caused by those not in his club (rich, White, Republican, chauvinistic etc.) is the Nail. . . .Now as to the overall essay, I believe that I share the perspective Willie’s comments also display, seeing the late Imperial U$A in clear collapse, Crash-N-Burn mode I naturally want to apply your insights to what we are seeing unfold now. So our dysfunction comes from a Hydra that dominates US politricks to the extent that even the dumbest members of the public now have a sense that voting makes NO difference in policies & certain sectors are locked in to Rent-Gather and profit while everyone else is slowly bled dry . . . I think we all know who these Special Interests are, I may forget some here but obviously the top tier is a) the Banking Center, Gold-Sacks, Larry Summers, etc., b) the FIRE sector generally, not just Finance but Insurance (my family’s fortune was tied to this years ago) & Real Estate, who owns the shreds of every local newspaper still standing, c) Big Pharma and the Health “Care” Scam industry that Obama’s ACA consolidated nicely, per the Republican (Romney and I believe AEI-designed) plan; d) the MIC thugs who stir up wars and coups non-stop worldwide on behalf of the “Defense” (sic) Masters of War, Raytheon etc. already mentioned– these are basically a 2-headed entity; e) the Media Elites tied mostly to the PMC and thus to the Democrat party (the “friendly” face of Fascism, as far as they see it); f) the duopoly parties wherein the Dimmies play abused spouse and perpetual loser to the Daddy ReThugs while they abuse the population and tell the victims to settle down, it’s all okay, this is just how it works etc., when not sHitting on the fake Lefties (ok, AOC might’ve “meant it” for a New York minute but she got in line and now does what Mama Bear and the leaders tell her) who occasionally get elected by the former, neglected (now dying off) Dem base, who are despised by the DNC leadership since the Clinton I era; f) the MSM stenographers and distraction-creators and their pals in big Tech and (anti) “social media”; g) the Educational scam industry which is slowly being 100% privatized and turned into another rent-seeker creating debt for (a) to harvest among the young people and deliberately propagandizing people to accept an absurd and predatory order, undermining even the ability to think critically and creating learned helplessness worse than what any lab rat would accept; lastly h) the Prison Industrial and exterminate-the-minorities Cop Industry of entitled, angry crybabies with guns (see Uvalde) who keep the Serfs in line, strike-break and evict for (b), etc. . . . There are lesser players on the margins of course to reinforce the system like dumb religious fanatics & pedophile-control the wimmens Catholic cults (SCOTUS), also assorted authoritarian, salute-the-flag morons, the NRA and men (mostly I would assume, though Ms. Boebert may fit here) with sexual dysfunction who worship guns as a surrogate for lost potency, Incels & LARPers, etc. . . . these latter are again, merely side players used in the MSM and Repub–driven “Culture War” since the 0.1% have total grasp on the reins of Power and the dumb consumers need to believe they can win a fight somewhere (even if it makes no difference whatsoever). Anyway I see very few bonded social groups that will survive the collapse, I imagine the real Players think they will follow the Roman model and survive in gated communities with lots of stolen land and serfs they have impressed (so to speak) into some form of bonded servitude to survive . . . (In closing, very hard to proof-read my own writing so if letters skipped, please forgive, this could’ve used outside editing!)

  8. Ian Welsh

    No worries Mark. The main thing would actually be to put in paragraphs (putting on editor/teacher’s hat.)

    It really does improve readability and thus how many people will read something.

  9. Jessica

    “No one’s quite sure why collective agriculture doesn’t work. ”
    Collective agriculture didn’t work in the Soviet Union because it wasn’t done for the sake of economic efficiency, but to crush the resistance of the peasantry by eliminating it as a class.

  10. Ian Welsh

    Collective agriculture didn’t really work in China, either, though and the peasantry had been pretty supportive of the Chinese Communists.

  11. GrimJim

    I don’t have any numbers to back this up, but my gut feeling on why collective agriculture doesn’t work is that, essentially, pre-modern levels of agricultural output… That is, levels before very recently, the last two or three decades… Were far too work intensive to support collective efforts without destroying the morale of not the lives of the farm workers.

    With classic agriculture on average about 20 farm workers could support one non-farm worker, i.e., urbanite specialized in non farm labor. Today, with our massive modern combines, internationally sourced fertilizers, bioengineering, etc., that ratio is more like 1 farm worker can support 200 non-farm workers, or something even more ridiculous than that.

    But when the Soviets tried collective farming, up to the time when Israel and China still tried it, that ratio was nowhere near that level. The technology just was not there, even if they wanted it.

    And that’s just regarding massive monoculture grain farms. Even today, with many fruits and vegetables, the only way our modern system works is through minimally paid migrant and essentially unpaid prison labor.

    When they tried that pseudo-industrial collective farming, the numbers just did not work. The ROI was not there to strip from the farmers without them starving or going bankrupt. We see that here in the US with the collapse of “family” farms. The cost of doing business at that level of corporatist “collective” farming is cost prohibitive for all but the largest corporations.

    And even these only survive through massive subsidies. Were they stripped of subsidies, modern agriculture in the US would also fail…

  12. Ché Pasa

    Now we’ve been yakking about and predicting the immanent fall of the US Empire for decades — “tis a consumation devoutly to be wished…” and it hasn’t happened, not even close. Doesn’t mean it won’t. Empires’ fall is much like Revolution: unlikely until it happens.

    Soviet Union’s collapse was actually quite sudden and unexpected by the intelligence community — such as it is. The response by the West was an unprecedented level of looting and cackling at the Brilliance of US Foreign Policy — which had almost nothing to do with the internal rot and disabilities of the final Soviet politburos and nomenklaturas.

    Red baiting Putin and the Russian Federation has been going on for decades. It didn’t begin with 2016’s election. “Russia, Russia, Russia!” was only a Thing to those who were making bank on it; but Red Baiting — which was at its root — has been a constant propaganda effort at least since the tenure of Maddy Albright at State and probably before.

    It’s silly but it works, especially on Westerners of a Certain Age who remember — and maybe reveled in — the Red Baiting of the Cold War. Good times, right?

    Ignore the noise and focus on what the Russian Federation is and could become. An enemy of the West? If forced into it, sure. An ally? Sure, why not? A resource for conquest and more loot? Not bloody likely.

    If China has learned from the collapse of the Soviet Union — as surely they have — so has the Russian Federation. They aren’t about to let it happen again, despite the pressure from the West to implode the RF and take the remaining resources as booty. The more pressure from the West, the stronger and more successful the resistance. Nevertheless, I regard the invasion of Ukraine as stupid in the extreme. Well, Russia (in every iteration) has done similar things in the past with less than perfect results and somehow come out OK, so maybe this time won’t be a total failure, either.

    But even if it is, Russia could come out OK, and the West will pay the price.

    Funny, that.

  13. Adam Eran

    Great article. A few comments: Mancur Olson was a Koch-funded scholar when he wrote Power and Prosperity. One can see how the antigovernmental Kochs would embrace his thesis (governments are thieves who want to stay put with the people they’re robbing). Unfortunately a good part of the political right’s efforts now are not to correct the system, they’re to sabotage it. Enter Donald Trump.

    Agriculture: Michael Pollan reports farmers in the U.S. receive 40% of their income from government subsidies, and quotes one farmer as saying “It’s like laundering money for AMD and Cargill.” He also says we burn 10 calories of petroleum to produce one calorie of food. Oil shortages may change viable agricultural technologies dramatically. We certainly don’t have “solar” agriculture now.

  14. StewartM


    Thanks for the article. I always wondered what your critique of Gorbachev’s policies were.

    My question to you is–do you think that if the New Economic Policy of the 1920s had been continued, which in many ways anticipates China’s policies begun under Deng Xiaoping, the Soviet Union have followed China’s trajectory?

    Also, do you think that Stalin’s agricultural collectivization plans and 5-year industrial plans were necessary for the Soviet Union to win WWII? I’ve read both arguments that it wasn’t necessary and defenses of Stalin that it was.

  15. Ian Welsh

    I think the NEP was a good idea, yes, though it’s hard to say how it would have done in practice. There are reasons to avoid a full command economy.

    I think farm collectivization was a mistake: there were other ways to deal with agricultural production. Command control of heavy industry was probably necessary during the war, but some of it should be allowed to move semi-private after the war, I would think. But I’m no specialist in those periods.

    Stalin’s purges were obviously too large and he did too many. Some activity by the secret police was necessary to stop local elites from emerging and gaining enough power to challenge central control, but he went way, way too far. The problem with Stalin usually seems to have to been “too much”. Policies which might have made sense in moderation, were insane when done at scale.

  16. tony

    No mention of the socialist calculation problem?

    I agree of the thesis here, that bad information lead to a centrally planned economy failing, but i think there are some other factors here too.

    1. Even with 100% correct info, the compiling of all that info would need computerization. Of course you need computerization to get close to 100 % correct info to begin with. We are there now, but it’s utilized for monopoly capital see walmart and amazon.

    2. The decline of oil prices in the 80s, really really hurt the USSR since it was one of it’s sole sources of foreign capital.

    Have you read the short book The People’s Republic of Walmart? The idea is that large firms like walmart and amazon are massive ecnomies onto themselves, and that they in practice are centrally planned, which disproves the socialist calculation problem. Also that capitalism has always had a degree of central planning in it. Good book.

  17. Jessica

    Reading Chris Miller’s The Struggle to Save the Soviet Economy, the Soviet system could not be reformed without collapse because of the power that the ministries had built up. But that happened because after Stalin, the Soviets stopped murdering/imprisoning a large portion of their management strata. On the other hand, the much reviled Cultural Revolution in China had turned the bureaucracy upside down enough (even if in the end many of the same folks returned to power) that the ministries and provinces had not built up enough power to resist the orders of the top leaders at the center.
    So the good move by the Soviets to stop the purges lead to their downfall, but the Chinese escaped the same trap* because of bloody period of chaos.**
    *Easy to forget now just how similar the situations were in China and the Soviet Union in 1989.
    **Most of the killing was done by the security forces against the most revolutionary of the Chinese people, especially in the working class, not by the iconic fanatics waving Little Red Books. Even of the violence that was wielded by the students, the majority was wielded by the sons and daughters of precisely the bureaucrats Mao was trying to take away the power of and was done so in order to protect their bureaucrat parents. Something like 95% of the 2,000,000 or so deaths during the Cultural Revolution were committed by forces diametrically opposed to Mao’s goals.

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