Why was the "American Experiment" more successful then the "USSR Experiment"?

by Bullock165

After the war of Independence the USA slowly became a global super power and still is to this day. However while the USSR did become a super power it's rise and fall happened quite rapidly. What major differences outside of Communisiusm and Capitalism caused the big difference in success?

ReaperReader

The key other factor that comes to mind is the failure of Tsarist Russia to industrialise in the 19th century like France, Germany or the USA were doing. If Russia had industrialised earlier, with its population, it would have been a superpower, and quite possibly the Communist Revolution would never have happened.

Russia only emancipated its serfs in 1861. Even after that, serfs' land was generally held communally, and reformist leaders like Count Sergei lul'evich Witte failed to address this. What's more, depending on the type of village commune, exit might be limited, by requiring the peasant to obtain the commune's consent or limiting the sale of land to another person or persons in the commune. Imagine if you could only sell your house to your neighbours! This limited agricultural productivity and peasants moving to the cities.

Tsarist Russia was anti-capitalist in other ways, for example registering a joint stock company required a special concession from the Tsar. There were numerous subsidies for industrialists, with resulting distortions, and preferential state orders, and, from the 1890s, a significant increase in industrial cartels.

The legacy of the famous reformer Count Witte (apologies if this is not the right title) is disputed in economic history. He was finance minister from 1892 to 1903 and then premier from 1905-06. He arranged for the Tsarist state to take out major foreign loans to finance industrialisation, and converted Russian railways to state-ownership, and nearly doubled their track length (following on from already rapid expansion). However, Witte maintained his predecessors' steep protectionist tariffs against foreign imports, provoking retaliatory tariffs on Russian grain exports and of course limiting their ability to purchase Russian exports, and Russians' ability to import industrial products as inputs into their own production, including agricultural capital like tractors. Witte also took Russia onto the gold standard in 1897, limiting exchange rate flexibility, which is important for a commodity exporter.

Witte also failed to carry out agricultural reforms, Russia didn't see consumer credit or other forms of small-scale finance, land ccontinued to be held communally, Paul du Quenoy reports that in 1911 only 166 tractors were in European Russia, compared with 14,000 in the USA. Modernisation of agriculture could have supported greater Russian exports and thus financed more development. This could have meant less reliance on foreign loans from France and Belgium and thus more state resilience to shocks like WWI, and therefore perhaps Russia could have peacefully democraticised and avoided the political costs of Communism and post-Communism, Communism being notoriously corrupt and corrosive to societal trust.

That said, Russia also had a handicap relative to the UK or the USA in a shortage of seaports that were open all year round, relative to the interior land mass. This would have limited Russia's ability to project its power to far away lands and its gain from sea-borne trade.

Cheremukhin, Anton, et al. "The Industrialization and Economic Development of Russia through the Lens of a Neoclassical Growth Model." The Review of Economic Studies (2016): rdw026.

Witte and Industrialisation in Revolutionary Russia, http://portalus.ru/modules/english_russia/rus_readme.php?subaction=showfull&id=1188905401&archive=&start_from=&ucat=&