4 ms·
I've been wondering if stuff like this was the reason for initial growth spur of soviet union. It was easy for Lenin to see in 1923 that the country needed stee
by vlehto 11y ago
I've been wondering if stuff like this was the reason for initial growth spur of soviet union. It was easy for Lenin to see in 1923 that the country needed steel, food, housing and railroads. If you just churn out that stuff, you can't go wrong too much. But once those markets we're saturated in the 70's, you had no data provided by the markets about what to do. So the soviet union was pretty much doomed to that level of GDP.
Now I imagine it would be still relatively easy to take a country like Peru, turn communist and simply churn out steel, food, housing, install internet cables and improve roads. But you would hit a wall in decade or two.
- tdaltonc 11y agoToday that's called "The State Development Capitalism Model" as opposed to the market-led capitalism model in "The Washington Consensus" and I think it has a lot to recommend it. But the hand-off to a first world economy and governance style is really really tricky (see the "middle income trap").
- vlehto 11y agoAh the good old "national socialism". It worked good for Nazis for a short while. But I don't think we have no long term data? Francoist Spain suffered from trade restrictions and Baathist countries used to benefit "unfairly" from oil. I suspect the problem is the same. Your indicators get skewed if you accept them as goals. Bit like if you go to school, not for learning, but for getting good grades. It's going to kick you sooner or later, but at latest in academia.