Dwarkesh Patel

And this is just...

Quite surprising that they would have such high growth rates.

If you just think about how central planning works, people are going to tell you how much steel you can make and which company gets to use the cotton fabric and cement and et cetera.

And you have hundreds of millions of people living under the system.

And it's just actually quite shocking that they actually had notable growth rates after World War II for decades on end.

But my favorite example of this is, so there were top-down commands that you had to produce a certain amount of steel.

And a steel factory would then be incentivized to make thicker bars of steel rather than thinner bars because that would counter its greater production.

Except a lot of

inputs actually do require the thinner sheets.

So then the other factories have to thin down the steel, but that also counts towards GDP.

So producing the inefficient steel and then cutting it down to size is both being double-counted towards GDP.

I wonder if one thing that's going on is in the early and mid-20th century, you have economies where,

which are much simpler, at least compared to today.

So even then, obviously, command and control is less workable than capitalism.

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.