I do not know Hayek very well, but someone who does once explained to me that what mattered the most in his thought was a distinction between external, institutional markets (i.e. market economy) and "markets inside people's heads" i.e. people internalizing market behavior and thinking in its terms.
If this is the case, this basically a very similar argument to that proposed by Max Weber (whom I do know) who distinguished between pre-modern and modern mentality, the latter basically being internalized market behavior. I like Weber's concept better because it places it in a historical context, which in turn allows making causal arguments about its origins.
>From that pov, Russia had labor-repressive agrarian economy much
longer than Western Europe - it nominally ended in 1861 with the
reforms introduced by Tsar Alexander II, wheral in Western Europe it
effectively ended some 400 years earlier. So the 400 years of knout
had a profound effect on the Russian collective psyche - the fact that
is conveniently forgotten by thatcherites and bourgeois critics of the
Soviet system.
With that in mind, it is amazing what the USSR accomplished despite this legacy, not that it ultimately failed to surpass the West that had a 400 year of headstart.
As to the borrowing of technology argument - I think it reflects another fetish of bourgeois/neolioberal thinking about the problem, which fetishizes creativity and property rights legitimated by it. In reality, technological borrowing was the engine of civilizational development since people left caves and started agriculture. Societies that did not borrow stagnated and ultimately failed. Everyone borrows heavily from others and adopts their technologies to their own needs. That is the quintessence of progress. A lone Atlas gushing inventions for the benefit of stupid masses is a wet dream fantasy invented by a third rate ex-Soviet writer in the employ of Hollywood. There is as much truth in it as historical reality in Western movies.
In other words, everyone borrowed technology: Americans, Russians, Japanese, Koreans, and so on, but only some get criticized by it by bourgeois flacks. The actual grounds for this criticism is not the fact of borrowing itself, but a racist prejudice that "those people" are too stupid to invent anything, so they had to steal it form the white man.
As to the absence of markets in EE - this is another myth. There were numerous efforts to introduce market / price mechanisms in EE (Poland, Hungary, Czechoslovakia) since 1956 and one can think of NEP (initiated in 1921) as such an effort. So there were market mechanisms, contrary to the bullshit broadcast by thatcherites and bourgeois flacks. What failed was the social structures that incubated under knout for the past 400+ years and were not ready to think in terms of the market - as Weber or perhaps even Hayek (if my acquaintance is to be believed) argued.
An interesting insights into the popularity of thatcherism among EE intellectuals can be found in the book by Konrad and Szelenyi "Intellectuals to the Road of Class Power" in which they argue that EE managerial technostructure is a new socio-economic class created by planned economy. For these guys, thatcherism was what Protestant ethic was to the Western European bourgeoisie (according to Weber) - an ideology that symbolically separated them from the forces that created them and provided them with a new legitimation of their class power. I know that from experience, I was groomed to be a part of this class before I left Poland.
-- Wojtek
"An anarchist is a neoliberal without money."