I don't think [the Soviet system] was a good system, I am not an advocate. But it had good scientists and engineers (equal to the US), an excellent education system (the best I think), reasonable heavy-industry (although out of date by the end in everything except oil), and you didn't worry about dying of homelessness (but on the other hand, you did worry about getting arrested for speaking, and this is just as terrible).
The main problem with the USSR was the lack of innovation. The terrible leadership was a symptom of a much larger disease in the system, which made the whole economy and politics basically frozen in time. You couldn't do ANYTHING, it was a nightmare to start anything new, you would need to rub elbows with lots of people, and the only thing that ever got done (outside of science and engineering--- where they were world leaders) was copying the West badly, always about eight to ten years behind. Yugoslavia was ahead in this regard, as Yugoslavian industry was managed locally, you can read Dilas for criticism of the USSR system from a Yugoslavian viewpoint somewhat more libertarian than Tito's.
The lesson of the USSR for me is that you can't have a "vanguard" deciding things for other people, the only proper way to do socialism is not by top-down imposition, but bottom-up, by voluntary association, without anyone coercing others. Since I don't believe in coercion, I am not going to coerce you to agree on this. I do agree with you that the problems in the USSR were deep rooted in the system itself. If you want to see what the "good socialism" looks like, look at Linux development, which is similar to open science.
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The Nobel committee is not how you evaluate the level of the science, that's a political judgement. You need to look at the published papers themselves.
In physics, which is the only field I am qualified to judge, the USSR was arguably the best, and if not the best, it was a close second to the US, in any case it is a very tight race. If you ignore the 1960s, where you have Landau's school leading the research on He4 and Superconductivity (although the Americans had Feynman's theory and BCS theory, just to be fair), and just go to the 1970s and 1980s, the Russians were first with Gribov's Reggeon perturbation theory, Polyakov's conformal bootstrap, inflation theory, they had the remarkable Gribov domains, the Shifman Vainshtein Zakharov QCD sum rules, the BPZ revolution in critical phenomena, the Polyakov string, 2d gravity, incredible stuff. It is highly technical (so highly technical that it is not appreciated by non-specialists), and it wasn't flashy enough to get the attention of the Nobel committee, which was somewhat biased against the USSR, not by conspiracy, but just due to Sweden being a Western nation. Soviet science was rather insular due to travel restrictions and no-need for publicity by their scientists. But everyone who reads the technical literature of the 1960s-1980s knows that the USSR was the powerhouse, and you couldn't get by without JETP in your library. It's not just physics of course, they were strong in most technical and engineering fields, with the exception of biological engineering, where they were somewhat behind.
But the US folks were much better in computational stuff, like Renormalization group theory, and Western Europeans and Californians developed string theory, so it's not like the US was slacking off. Like the space race, it was a tight, tight race, that benefited all of humanity. Just the Russians, in my opinion, produced more sophisticated baroque work. Compare the BPZ paper (a masterpiece) with, say, great American papers like those of Edward Witten. They are both great, but the Russians are more "out there" and more technically dense, the ideas come from outer space and it's HARD stuff, I mean, hard for even specialists. It's a total judgement call, and I'm not going to argue this for too long, because it's silly, but there is no doubt that Russia had the strongest or at least second strongest physics in the world in the 1980s (it's gone to hell since the collapse).
Although the Russians were somewhat ahead of the US in analytical tools like dispersion relations and conformal theory, in parts of condensed matter physics, in analytical tools for high energy physics, the Americans were definitely ahead in computational physics, other parts of condensed matter physics like sophisticated materials science, and in string theory. You don't understand what a beautiful thing Soviet physics is, it is like the lost Greek science of the Hellenistic period. It's a pity it is gone, looking at it makes you cry.
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You don't understand why the USSR had the largest oil production in the world. It's not like it had a large amount of oil in 1945. This worried Stalin, as he knew the West would control the Middle-East oil. So in 1950, he set up an all-union conference on the origin and exploration of petroleum. This was like a Soviet "Manhattan project", it was enormous, and by 1955, Kudryavtsev had proposed the abiogenic hypothesis as a plausible theory.
By 1975, the USSR had demonstrated the basic principles of abiogenic petroleum, and rejected the voodoo Westerners use to dig for oil, opting instead to dig extremely deep boreholes in a grid, all over Siberia. The deepest holes in the world are a byproduct of this exploration. They found a ton of oil by digging where Westerners won't simply because the Western science failed to discover that petroleum is abiogenic (we're catching up now, due to the internet).
This is in every way a failure of Western science, and it can be attributed to Capitalism. The oil scientists are working for large oil companies, and they are not able to reevaluate the fundamentals of their field, no matter how much the data disagrees with their theory.
The modern kleptocracy has no relation to the USSR oil exploration, which was just fine in Soviet times, actually, much healthier than it is now. The state-run oil and gas industry was perfectly competitive with the West, actually, because they understood oil much better, they took the West to lunch.
As I said, I am not a fan of Soviet communism, just being fair to their successes. This was one of them.
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You can assert all you like, but the unequalled contributions of Russia to physics are mostly freely downloadable online today, and you just make yourself look foolish. There is no dispute that the best physics papers of the 1970s and 1980s are Russian, this is true just by citation counting (SVZ and BPZ are some of the heaviest cited papers of the era, along with the American Weinberg paper for the standard model). The Nobel committee is not my problem, they have been out of touch for decades. That's why the Dirac medal was established, and if you look at the Dirac medalists, the Russians are fairly recognized (and Europeans too, especially Italians, who are also regularly slighted by the Swedes).