Dwarkesh Patel

Yeah.

Speaking of the empire, you know, Russia's economy just has this terrible period after the collapse of the Soviet Union.

A lot of the Eastern European satellites seem to recover in this gangbusters way.

Obviously, East Germany, but even Poland today is such a big success story.

What's going wrong with the mainland itself that these other countries are able to recover from communism much better?

Okay, so I should ask, before we get to the period of Russian collapse, let's go back to the end of the Soviet period.

Gorbachev starts instituting these economic reforms along with Glasnost and Perestroika.

But what I find mysterious is those economic reforms not only...

fail to prevent the stagnation that the Soviet Union is experiencing, but they in fact make things worse.

So you would think that reform, even if it's handled badly, would have some sort of positive impact.

And if you do it badly, then it'll have a smaller positive impact.

But here it just like causes this huge hyperinflation, causes all these problems.

So why did reform have this backwards impact?

One theory I heard of that is complementary to your theory is that Gorbachev is instituting forums because he thinks there should be decentralized eastern democratization, but he doesn't fundamentally believe in the market system.

So he's delegating power to these quasi-firms.

At the same time, he thinks the price system is immoral, private property is immoral.

So

They can't intermediate between themselves using real prices.

So then how do these firms intermediate?

Well, there's corruption, right?