[orionblastar]

I think Communism broke itself. There is the myth that Reagan created the SDI program that didn't really exist to make the USSR spend more on research for space based defense to catch up, but I think that is a red herring.

Communism would pay janitors more money than it paid scientists and engineers, simply because that janitor was a member of the Communist party. Many scientists and engineers defected from Russia to other countries to earn more money. Russia had some great products AK-47, Soyuz rocket and capsule, and sold the MIG to many nations as well.

Look at Greece right now, they had major socialist programs and they got into deep debt. The USSR got into deep debt as well with their socialist programs, and their military was expensive to maintain. Nations that owed them money like Afghanistan they invaded and the USA countered by training Osama bin Laden and the Taliban to fight then guerrilla style, on 9/11/2001 we wish we hadn't trained them.

The USA didn't outspend the USSR it out innovated it with science and technology. Apple, Microsoft, IBM, Intel, AMD, Dell, HP, Sun, etc all developed better hardware and software and the PC Industry with MS-DOS had programs that automated tasks and saved money. It wasn't Reaganomics that boosted the economy it was the tech industry that did so. US companies sold the technology to other nations and money started to flow into the US economy. This was back when technology was made in the USA, now it is made in China mostly.

[chipsy]

A hole in the "USA out innovated" premise is that Silicon Valley was based on military spending. See Steve Blank's "Secret History" series for examples.

And, speaking more generally, the U.S. Department of Defense is the world's largest employer, 3.2 million strong. When taking into account benefits, pensions, etc., it may also be called the largest socialist program.

That statistic paints a big picture; it's not that having a market economy was sufficient to become the sole superpower of the 1990's. It was that the U.S. had a lot of centralized spending in "the right places at the right times" and then allowed the marketplace to pick up the results and run with them wherever convenient. However, it's very difficult to backpedal and reallocate now that this has been done, and the status quo probably won't change until a crisis motivates it.

The pattern of every emerging market - Japan, Korea, China - is that state power still entangles itself somehow, even if there is a marketplace at the low level. We have never had a "purely ideological" state anywhere.

[reality_czech]

To be honest, I find it frustrating when people trot out the old "sillicon valley was created by central planning" meme. If it were that easy to create a sillicon valley, there would be dozens of them by now. Believe me, Chinese bureacurats have tried. There are whole "ghost cities" in China that the government ordered built, but that people never moved into. http://www.forbes.com/sites/kenrapoza/2015/07/20/what-will-b...

The great entrepreneurs who built Sillicon Valley-- Shockley, Ellison, Jobs, and the rest-- were people who were driven to find funding wherever they could get it. If the government had said no, they would have gone (and often did go) to someone else. Similarly, the academics who are getting funding from DARPA or the DOD now would gladly accept funding from private sources as well. The money is just as green.

The military certainly jump-started many technologies by putting money into the hands of engineers and scientists-- in some cases, possibly even by years or decades. But those technologies would have been invented anyway, just on a slower timescale.

It wasn't inventing the technologies that gave the West an edge-- it was commercializing them. And for that you need businessmen, not bureaucrats. If the USSR could have produced a competitive semiconductor industry, the 1980s and 1990s would have looked much different. Instead, they couldn't even keep loaves of bread on the shelves.

[nosuchthing]

Attributing bad economic decisions as inherently a fault of social service programs in the case of Greece or the USSR is a red herring.

Canada, Switzerland, Neatherlands, Norway seem to be successfully managed countries with large social service programs.

[orionblastar]

The difference being in how those social programs were implemented and the taxes raised to cover the costs of them.

The USSR had a high cost in the military and suffered from economic stagnation. Unable to grow enough wheat they had to buy from the USA to feed their people.

Greece didn't raise taxes enough to cover their debts from social programs. As their economy grew worse the cost of health insurance rose and costed more.

A lot of European nations can afford socialist programs because they don't spend a lot on their military due to the USA protecting the European coasts after WW2.

Canada also does not spend a lot on their military due to a partnership with the USA to protect their coasts as well. So they have more money for socialist programs.

[Gibbon1]

Japan and Britain haven't really been able to feed themselves for a 100 years. The Soviet Union before 1965 had high growth rates.

My thoughts are that when a countries central powers make good bets on human capital, infrastructure, and technology, then market economies can feed off of those and produce high rates of growth.

Brezhnev and his compatriots in the soviet union never let a vibrant consumer economy develop. And growth stagnated. Faced with the same problem in the early 80's the Chinese Communists implemented market reforms. That combined with previous investments in human capital, plus sometimes heavy handed restrictions on population growth appears to have been successful. (Also the Chinese were able to cut a deal with the US and Europe to allow mostly unfettered access to developed world markets, which the Soviets didn't have)