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Comment by vidarh | Hacker News Reader

One of my pet theories is that economic growth is surprisingly poorly correlated to economic or social systems except for one thing: Stability.

Bring stability, and people learn the mechanisms that works for their society, and overcome surprisingly large differences in type of obstacles. Be it dealing with the vagaries of the free market, or how to maneuver a Soviet-style bureaucracy.

It's in fact almost depressing how little effect even quiet massive political changes appears to have on growth on "just" national level relative to the effects of larger global trends; but an alternative view is that it shows humans abilities to work around messed up political limitations.

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The 70s and early 80s is the USSR were universally regarded as the period of stability. So much stability that the official name of the period is "stagnation": https://en.wikipedia.org/wiki/Era_of_Stagnation

This era ended by the USSR assuming the most stable position possible, i.e. dead. So I wouldn't over-promote the value of "stability" as such. Being stable is good if you're in a good place, otherwise it's deadly.

GDP per capita in the Soviet Union continued growing until the end with a couple of minor drops - the collapse in Russian GDP per capita first accelerated with the collapse of the Soviet Union.

The 70s and 80s provided slower growth, sure, but still growth. As far as I can tell there was no drastic decline in GDP per capita growth for the Soviet Union until towards the very end of that period, when the rapid changes from Brezhnev to Andropov, to Chernenko, to Gorbachev disrupted the already weak growth.

It's not that I'm suggesting everything will grow the same irrespective of regime or system, but that the correlations are much weaker than most people will assume.

> to Gorbachev disrupted the already weak growth.

"Disrupted" is a bad word to use here, it's like saying a surgeon "disrupted" a body of a dying patient. Gorbachev had no choice - the Soviet economics was dying. There are many books and doctoral theses written by now about how exactly and why it happened, but what you describe as "slower but still growth" was the process of slow economic collapse. Nothing worked properly by the time he took over, basically. He tried to deliver some CPR and defibrillation by introducing sort of NEP 2.0 (hey, it worked for Lenin!), and "acceleration", and "perestroyka" - but it was way too late. By then, the collapse was inevitable.

And it's not like the top Party functionaries didn't know that - they were aware of it in the early 80s (in 1984 they started introducing kinda sorta markets between state enterprises - see Khozraschyot) and by the late 80s they were in panic - that's why Gorbachev had to "disrupt". Because they had to do something to try and save the collapsing economy. Unfortunately for them it was impossible.

“In Italy for thirty years under the Borgias they had warfare, terror, murder and bloodshed but they produced Michelangelo, Leonardo da Vinci and the Renaissance. In Switzerland, they had brotherly love; they had five hundred years of democracy and peace and what did that produce? The cuckoo clock.”

- Orson Welles, The Third Man, 1949

Ancient Greece was also exceptionally politically unstable and yet produced the foundations of Western civilization.

Meanwhile, Switzerland got a three-peat of Nobel Prizes in Medicine in 1948, 1949, and 1950.

It makes sense that a guy like Welles would value art and throw scorn on technology. Stability is necessary for investment and the build-up of capital; it isn't necessary to make a painting.

It may be useful to distinguish between Orson Welles, the man, and Harry Lime, the antagonist of the movie, played by Welles. I don't think it's terribly reasonable to make an assertion about what a person thinks by the lines of their character. Especially when their character is hardly to be considered a model of anything good or reasonable.

Renaissance Italy was also a hotspot for the development of technology, far more than Switzerland at the time. A lot of this development was driven by warfare and enabled by achievements in the arts: perspective, for example, enabled far more detailed schematic drawings. Or, the numerous architectural innovations which enabled buildings like the Duomo to be constructed. Most of the best-known Italian renaissance artists were also engineers.

There’s something missing in our appreciation of the Renaissance, says Paolo Galluzzi, professor of the history of science at the University of Florence-something very important. While we rightly glorify this period as an extraordinary flowering of humanism and the arts, most of us have overlooked the engineering accomplishments that were just as much a part of the Renaissance as the “Mona Lisa.”

https://www.technologyreview.com/1998/01/01/237121/the-art-o...

Renaissance Italy also invented double-entry accounting, effectively creating a new discipline. And then, of course, gave us Galileo Galilei.

Meanwhile, Switzerland got a three-peat of Nobel Prizes in Medicine in 1948, 1949, and 1950.

Assuming Nobel prize work is likely a decade or more in the making, I'm thinking all their European competition was busy trying to stay alive?

He's also wrong about the cuckoo clock. They're from the Schwarzwald.

Switzerland faced similar warfare, terror, murder and bloodshed -- it's only in 1848 that Switzerland came to peace.

The intricate mechanisms inside seemingly-frivolous curiosities such as the cuckoo clock, or more precisely the techniques used to manufacture them, led more-or-less directly to the industrial revolution. But then again, the cuckoo clock was probably developed in Germany, not Switzerland.

You now Orson Welles was a child murderer in that movie right?? I wouldn't trust his words.

> The cuckoo clock.

At least that's something I could hang on my wall.

I think your oversimplifying here. I think economic growth is strongly tied to stability but it's also strongly tied to mechanisms. Pricing as a vehicle for measuring supply and demand simply outstrips everything else we've tried. Even this article mentions how difficult it is to centrally plan supply and demand and how large the bureaucracy needs to be. Perhaps some technocratic socialism could create a computerized bureaucracy large enough to solve this problem somewhat well, but I still think computer models are going to be inferior to actual markets. While markets do have plenty of imperfections they are kind of like democracy, the worst system for supply and demand except for all the other ones. As for why having good systems of supply and demand affects innovation dramatically the short answer is that it forces innovation to conform to an approximation of useful (creating demand) rather than just novel (which is what happens in a lot of purely academic projects). Non-capitalist systems have also done poorly at creating competition and competition seems to be a central force in generating quality (in fact the biggest failure mode of capitalism seems to be anti-competitive monopolies).

Of course I'm oversimplifying, but there are plenty of examples.

E.g. compare the UK and France over the last 20 years, and try to spot when France cut working hours.

Or look at China under Mao, with the frequent political changes, vs. under Deng. It's tempting to think the growth under Deng happened because of his economic reforms, but the growth started before the reforms. Just like growth started every time things settled down under Mao too, only to be severely disrupted again and again.

Look at Africa, and match GDP growth against peace vs. war in different countries.

Also, I did not speak about innovation. I spoke specifically about economic growth. Economic growth is affected by innovation, but it can go very far with little innovation.

[EDIT: Also to your mention of 'technocratic socialism' vs' markets, the two are not contradictory; many socialist ideologies favour markets as the primary resource allocation mechanism over planning]

North Korea seems like a pretty stable country that hasn't seen much economic growth. On the other hand, they are perhaps the very poorest of stable countries, and still wealthier than some less stable countries like the Congo.

I also suspect that rather being merely inefficient, their leadership might be actively opposed to economic growth and could be suppressing it deliberately to keep their population poor and hungry.

Markets are democracy for the rich. They are only democratic when everyone has roughly equal purchasing power, a condition which is nearly immediately undone by a market. The whole idea that founded the Soviet Union is that markets are deeply undemocratic and they were trying something different. You can criticize their attempt, but it's important to at least understand that.

There were plenty of markets and black markets in USSR. Most of the time the only reliable source of meat and poultry for ordinary citizen was a "Farmer's Market" (Колхозный Рынок).

Econometric data show higher caloric intake in the USSR than the USA during long periods of time.

That's why Soviets lost millions to several famines?

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