Russia and China's blended economic systems are working for them.

 COPYING U.S. SUCCESSES, PLUS INOVATION

U.S. PROVED THE VALUE OF ECONOMIC FREEDOM

I believe the U.S. constitution and the freedom it provided to its citizens is the time tested best system, if it is strictly followed. The reality is the U.S. system has been plagued with top down government control and central planning by bureaucratic and regulatory control. American cars may be built by independent companies but regulations severely regulate design and stifle innovation. Small business and entrepreneurship is almost made impossible by zoning and regulatory costs. The small foundries and machine shops have almost become extinct in this country. These were the business's that made rapid shifts to increased production possible in former times.

I don't fully understand all the polices of Russia's economic system, but it seems to be a 3 tiered system. At the top is government control of natural resources which provide capital to 2nd tier manufacturing companies which many are privately controlled. The 3rd tier is small business, retail and other individually owned business which it seems to be free to innovate and make their own decisions. It was interesting that many of these small business were able to quickly repurpose to make components for Russia's drone production. One making wooden propellers, others making the frames or wiring harnesses, often small business's with a handful of workers, very similar to what was possible in the U.S. in former times.  

In China, the Chinese Communist party is very much in control, but many of the businesses are free to innovate, make profits and their owners and workers to prosper. The party rule seems to be, you can make as much money as you want, but do not attempt to become involved in politics, the consequences can be severe. The party has copied the system of the U.S. in former times where originally the branches of the federal reserve were free to set interest rates and provide capital to business in their areas. That system in the U.S. has morphed into primarily funding the national debt. In China funding is available for innovative and growing companies.

While many believe that the Chinese are working at slave labor rates, the reality is this system, has in a short time, brought a huge number of its citizens out of poverty. The savings rate of Chinese average near 30%. While the U.S. has always been an example for many around the world, many third world countries are now looking at the progress and opportunities that are displayed by China and others.

While both countries have moved away from totalitarian communism, it has been evolutionary process that one can expect has not yet been completed. Much of what happens in these countries is also influenced by the real or perceived threats brought against them by outside forces.

In many ways western capitalism has moved more toward central planning by regulation and a blending of big business and government that traditionally was labelled fascist.  Big Government regulation requires big business to lobby to protect their interests with money and influence. Legislation can promote some business and eradicate others. I suspect the cost of government in the west is far higher than either of the former communist countries. When government is the biggest player in the country it never ends well.

While the internet has bypassed many of the costs and regulations in the U.S., it has been bright spot, allowing entrepreneurs to conduct business from their homes and garages in a fashion reminiscent of former times. I suspect that this is a world wide phenomenon. 

The reality is that economies of countries around the world are evolving at a quick pace and those who are hindered from innovation and adapting will fall along the wayside.