Dwarkesh Patel

But if you just have heavy industry, you need a certain amount of cement, steel, concrete, fabrics, coal, that's much more workable than like, we got to essentially command what SaaS tools your enterprise is allowed to use.

Yeah.

There's also the fact that the centralized regime is building things according to the 30s plan.

And even after post-war reconstruction, they're still calling back on these plans from the 30s that call for heavy industry for a bygone era.

And in the 70s, 80s, we have our rust belt collapse of manufacturing.

And people complain about this as, look, the U.S.

has this hollowed out manufacturing base.

But it's much better to have industries which are left behind so that the whole economy as a whole

can be more dynamic and move on than the Soviet Union, where the entire thing became a rust belt, right?

Because they couldn't move on.

Speaking of plastics, I didn't realize before preparing for this lecture the overwhelming role that oil played in first explaining why the Soviet Union was able to sustain itself for so long and then why it collapsed.

So—

by the late 50s, Soviet growth rates are already starting to go down, especially compared to the post-war boom that America's experiencing.

And in 59, they discovered these massive oil fields in Siberia.

And then from 73 to 85, I think,

80% of Soviet Union's hard currency earnings are just from oil.

And they use this because essential planning can't produce even grain, let alone advanced technology.

They use this to import a bunch of stuff to sustain the Red Army, to sustain the population, to subsidize Eastern Europe.

And then, of course, prices collapsed in 1985.

Do you think that if the Siberian reserves aren't found in the late 50s, that it's possible that the Soviet Union would have collapsed 30 years prior?