The Soviet Union is presented as both a source of rapid economic growth and a model of extractive rule whose institutions persisted beyond its collapse. Its centralized system could direct resources into industrial expansion, but political power remained concentrated in the Communist Party, and the economic gains did not establish secure rights or broad political participation. The contrast between early growth and later stagnation, and between formal independence for successor republics and the survival of authoritarian practices, makes the Soviet case central to the book’s account of how prosperity and poverty are shaped by institutions.

Centralized Power and Extractive Institutions

The book characterizes Soviet communism as a twentieth-century form of absolutism. In its account of the Bolshevik Revolution, the new regime did not produce the humane equality envisioned by Marx. Lenin and the Communist Party established a new ruling elite, purged and killed political opponents as well as potential rivals within the communist movement, and consolidated power at the top. The subsequent Civil War and Stalin’s collectivization and purges extended the violence of the system; the book notes that the purges may have killed as many as forty million people.

The political structure supported economic institutions designed to extract resources from the population. Communist governments concentrated power in their parties and imposed no effective constraints on its exercise. Their economic arrangements rejected secure property rights and could therefore create poverty even when they were organized around state direction rather than markets. The Soviet system’s form differed from extractive regimes in other countries, but the book stresses a recurring consequence: ordinary people had little protection from concentrated political power.

Industrial Growth and Its Limits

The Soviet Union nevertheless achieved rapid growth, especially in the 1950s and 1960s. The state forcibly allocated resources toward industry through centralized command, with particular emphasis on armaments and heavy industry. This strategy could produce growth because the country had substantial scope for catching up, and because early expansion did not depend on the continual innovation and disruption associated with creative destruction.

That record makes the Soviet Union a key counterexample to the claim that growth itself demonstrates inclusive institutions. The book distinguishes economic expansion under extractive institutions from development in which people can participate broadly and exercise secure rights. In the Soviet case, centralized allocation could accelerate industrialization, but the system later faltered and led to economic stagnation. Growth was possible; its institutional basis also placed limits on its durability.

A Comparative Model of Authoritarian Growth

The Soviet experience serves as a comparison for China’s later growth. Both cases show how extractive political institutions can accompany rapid economic expansion when growth relies on adopting existing technologies and directing investment, rather than on creative destruction. In the Soviet Union, centralized command allocated resources to heavy industry and armaments. In China, economic institutions became more inclusive than the Soviet system’s, but political power remained concentrated in the Communist Party, which controlled the state bureaucracy, armed forces, media, and large parts of the economy.

The comparison clarifies both a resemblance and a difference. The Soviet Union’s political and economic institutions were extractive, while China’s economic arrangements became more inclusive without a corresponding transition to pluralistic politics. In each case, catching up made growth possible without the sustained institutional conditions required for broad participation. The Soviet example thus serves not as a blueprint for lasting prosperity but as evidence that growth can occur under concentrated power, with outcomes that differ from those produced by inclusive institutions.

Institutional Continuity After the Soviet Period

The book links the Soviet Union’s legacy to the development of Uzbekistan after independence. Rather than establishing a market economy and democracy, President Islam Karimov—whose political career began in the old Soviet Communist Party—used the security forces to suppress opposition and built an authoritarian system. The country retained extractive institutions, and the book describes these as Soviet arrangements that Uzbekistan took over and modified into crony capitalism. The transition in national status therefore did not, by itself, ensure a transition in the distribution of political or economic power.

This continuity is placed in a longer historical pattern. The Soviet Union’s own extractive institutions are described as, in important respects, a continuation of those of the tsarist regime, an example of the iron law of oligarchy: changes in political form can leave concentrated power intact. In Uzbekistan, former Communist cadres reappeared as the new political and economic elite. The case shows how inherited institutions can be adapted to a new setting rather than displaced by formal independence.

Historical Significance and the Possibility of Change

Across the book’s comparisons, the Soviet Union illustrates both the reach and the limits of centralized state power. Command could mobilize resources, build industry, and produce a period of rapid growth. But concentrated political authority, weak constraints, and insecure property rights prevented that growth from amounting to broad economic and political inclusion. The eventual stagnation gives the contrast its force: the capacity to direct an economy is not the same as an institutional foundation for sustained prosperity.

The Soviet legacy is significant not because the book treats institutional outcomes as inevitable, but because it shows how they can persist through political change. The Soviet order drew on an earlier tsarist inheritance and, after the Union’s collapse, parts of that extractive inheritance continued in successor states. Yet the book argues that vicious circles can be broken by inclusive institutional elements, broad coalitions, or historical contingency. The Soviet case consequently functions as a warning about institutional persistence, not a claim that the path from concentrated power to poverty cannot be changed.