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The entire set-up of the Soviet economy proves the opposite. No matter how many tractors, coal mines or capital-intensive megaprojects you had, the inherent inefficiency of the planned economy wrecked productivity entirely.

That's not actually true. The Soviet economy performed more or less as a Solow model of capital accumulation would predict. When you calibrate your model to the whole world, the Soviet Union overperforms during the interbellum (usually ascribed to the Soviet Union being part of an international trade system that was shielded from the Depression) and slightly underperforms during the postwar period (usually ascribed to Russia being part of a smallish international trade system - larger international trade systems tend to perform better, which is why you have international trade systems in the first place).

But Russia was a third-world country in 1918. And Germany, well, wasn't.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Dec 14th, 2011 at 10:48:03 AM EST
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