WWII Key Initiatives 5: General Zhukov Helped Save USSR By Mastering The Pincers Counterattack

This is the fifth in a series of occasional blog posts on individual initiatives that made a strategic (not just tactical) difference in the course of the second world war. There were many good generals in WWII, but for the most part they were good just by not being bad. Eisenhower, for instance, did a fine job as the supreme commander in the European theater, but that involved mainly being diplomatic and avoiding dumb mistakes, not strategic brilliance. Also, for the most part, no general was so good or bad that his conduct swayed the ultimate outcome of war.

I see Soviet general Georgy Zhukov as an exception here. The Soviet Union came very close to collapse under the weight of German assault in 1941-42. If the Nazis had won there and consolidated their hold over Russian resources, I doubt whether the Western Allies could have successfully liberated Europe; they barely hung on for the first few weeks of the 1944 Normandy invasion, and that was with most of the German forces off fighting the Russians. Zhukov is seen as the strategic mastermind behind four key Soviet victories in 1939-1942 that allowed the Soviet Union to survive, and then go on the offensive.

The first of these victories was a battle that no one remembers much anymore, but it had enormous strategic ramifications. In 1938-39, the Japanese kept expanding their occupation of territory at the border of China, towards Mongolia (a Soviet satellite). The Japanese had beaten the Russians in 1905, and trounced, massacred and occupied the Chinese all through the 1930s. So, they were pretty cocky. There were several inconclusive battles between Japanese and Soviet forces at the border. Finally, in August 1939, the newly-arrived General Zhukov decided to put an end to it at the Khalgin Gol river, which is otherwise in the middle of nowhere. The usual approach to achieving victory was to mass a huge number of your troops and hurl them at the enemy position. Sure, half your guys would die during the attack, but the rest might break through.

But Zhukov did something very different. Over the course of weeks, he stealthily built up highly mobile forces on the far left and right flanks, hiding the tanks under camouflage.  Then he opened the attack with an assault on the middle, aided by enormous artillery and air bombardment, while laying low on the flanks. After the Japanese had pulled their forces in to reinforce the center, he unleashed his armored columns, which raced around behind the Japanese force to cut it off. Since the Japanese declined to surrender, they were annihilated. Such is the power of a well-executed pincers attack, also known as double envelopment.

The magnitude of this defeat led Japan to totally abandon plans to further expand to the north, with two key consequences. First, the cessation of a threat from Japan allowed the Soviets to transfer troops from the Far East just in time to stop the Germans in the west. Also, Japan decided to expand instead to the south, which led to their fateful decision to attack Pearl Harbor in an effort to prevent America from interfering there.

An early objective of the Germans when they invaded the Soviet Union in June, 1941 was Leningrad, the second-largest Soviet city. The city was nearly surrounded by Axis forces by the time Zhukov arrived to take over in September. Zhukov restored discipline (threatening execution for unauthorized withdrawal), fortified defenses, and launched counter-attacks that stabilized the front lines, preventing an immediate German assault.  He oversaw the evacuation of 1.5 million civilians, the relocation of critical industry, and opening a critical lifeline for supplies. This allowed Leningrad to hang on by a thread for some 900 days of siege, and kept a significant number of German soldiers tied up there.

The Germans then refocused on taking Moscow, far to the east of Leningrad. They almost succeeded, getting to within 10 miles of the Kremlin. Zhukov was rushed to Moscow in October, 1941 to organize the defense there, which he did with his characteristic energy. He mobilized some 250,000 women and teenagers to dig three rings of defensive fortifications. After months of costly back and forth fighting, in the depth the coldest winter of the twentieth century, Zhukov unleashed a pincers counterattack, which forced the Germans back over 100 miles to avoid encirclement. One result of this victorious counterattack was that Moscow was saved. The other result was also extremely important – – in the wake of this major German defeat, Hitler dismissed the top German general and assumed direct operational command over the German army. This was a complete disaster. The centralization of command negated the German army’s greatest strengths: its flexible command structure and the professional competence of its General Staff.  Hitler’s refusal to allow tactical withdrawals led to the encirclement and destruction of entire Axis armies

The Germans in 1942 decided to focus their efforts in southern Russia, to seize control of vital oil fields in the Caucasus region. The city of Stalingrad, with its considerable industrial and armaments industry and its prestigious name lay along the way, so the Germans aimed to occupy it. The Soviets kept up a desperate defense in the city ruins, but the elite German Sixth Army kept advancing until they had taken some 90% of the city. But their almost-victory was turned into a stunning defeat. Zhukov, now in charge of the defense of Stalingrad, stealthily built up enormous forces on the far flanks of the Stalingrad front, where the Axis lines were thinly held by poorly-equipped Romanian and Hungarian troops. In a reprise of his Khalgin Gol maneuver, Zhukov sent his two flanking forces smashing through these lines, and meeting to seal off the 330,000 Axis troops in or near Stalingrad. The Germans tried to relieve this pocket, but the Russian winter and resources were against them. Soviet victory was complete, an entire German army was eliminated (killed/captured), and the initiative on the Eastern Front passed to the Soviets for the rest of the war.

A Few Caveats

What I wrote above was been gleaned from various tertiary sources, including Wikipedia, which reflect the common consensus in the West. In the interest of accuracy, however, I note that some of this brilliant, heroic story is a self-serving myth promulgated by the Soviets as a morale booster, and by Zhukov himself in his not-quite-truthful memoir.  There is good reason to believe that he takes credit for what was actually the work of others, especially in the planning of the Stalingrad counter-offensive.


Zhukov was mainly responsible for the planning and execution of the disastrous 1942-43 Rzhev offensive, where he threw division after division into fruitless attacks. This exercise cost the Red Army some 1 million casualties, while accomplishing almost nothing. This campaign was largely written out of Soviet history, and Zhukov carefully downplayed his role in it.
That campaign highlighted Zhukov’s famous utter disregard for human lives. Another window into that disregard comes from Dwight Eisenhower’s memoirs. Eisenhower records his surprise during a conversation with Zhukov, when the Soviet general explained matter-of-factly how he sometimes cleared a path through a minefield by making some of his soldiers run through the minefield in a line to get the pesky mines blown up. Soviet soldiers faced a 100% chance of being executed for disobeying orders, versus some small chance of making it through the minefield without getting their legs blown off. As Stalin once quipped, “It does not take much courage to be a hero in the Soviet army.”


Finally, the regime Zhukov defended was arguably as horrible as the regime he fought against. Nevertheless, I suspect the world that would have resulted had Georgy Zhukov failed would have been worse than the actual world of say 1945.


Marshal Georgy Zhukov at a post-war parade in Moscow. (Image source: WikiMedia Commons)

Read Grant’s Memoirs

I heard so many recommendations to read Julius Caesar on the Conquest of Gaul and Winston Churchill on the Second World War– and the recommendations were right. We’re incredibly lucky that some great wartime leaders also happened to be great writers who chose to take the time to share their perspective on the history they helped make.

I rarely heard Ulysses S Grant mentioned as being in the same class of writer- but after reading his memoirs I think he should be. He was obviously a central wartime leader like they were, the highest-ranking general in the victorious Union army by the end of the US Civil War. But I’d never heard how he was also a great writer. He makes history like the campaigns of the Mexican and Civil wars feel understandable, while also sharing funny human stories. Some of these asides feel like they could have been written by Mark Twain, who did in fact help Grant edit and publish his memoirs.

It’s the rare doorstopper book that I wish were much longer- Grant was a two-term US President but his memoirs don’t cover those years at all. I don’t know how much of this is because he wanted to avoid the topic (he’s usually considered a much better general than president) and how much is that he simply ran out of time by dying of cancer.

A few highlights to give you an idea of what Grant was like. Certainly more like a modern economist than I expected:

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The Joke is on Humorless Brutalism

A good joke that went around this week:

Some people (surely none of our regular readers) don’t know what “brutalism” is. Quick primer: Brutalist architecture is a mid-20th century style (1950s–1970s) defined by raw concrete, massive blocky forms, and structural transparency. It often features rough, unadorned surfaces.

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WW II Key Initiatives 4: Building Hundreds of Small, Slow, But Cheap Ships to Counter the U-Boat Threat

This is the fourth in a series of occasional blog posts on individual initiatives that made a strategic (not just tactical) difference in the course of the second world war. World War II was not only the biggest, bloodiest conflict, in human history. It played a definitive role in giving us the world we have today. Everyone can find something to complain about in the current state of affairs, but think for a moment what the world would be like if the Axis powers had prevailed.

Winston Churchill’s biggest single worry in WWII was that German submarines (U-boats) would sink enough cargo and troop ships to cut Britain off from America and other allied countries. The standard anti-submarine weapon for the stormy Atlantic was the full-sized destroyer. Destroyers were fast, largely weather-proof, and bristled with guns and depth charge launchers. Unfortunately, building a destroyer took a lot of resources and time, particularly for the state-of-the-art steam turbine engine. There was just no way in 1939-1942 to produce enough destroyers to cover all sides of every convoy in the Atlantic.

The British Admiralty knew they needed some sort of small ship that could be readily produced by civilian shipyards, but they did not know what exactly that would look like. It fell to William Reed, a naval architect at Smith’s Dock Company, to propose a workable design. He based his design on a successful whaling ship, which was just large enough to survive the Atlantic weather. It was powered by a low-tech triple expansion steam piston engine. This Victorian-era sort of engine could be built by even small shipyards. The resulting boat, called a corvette, was small (200 ft long), slow (16 knots), rolled horribly in the waves, and was lightly armed (one forward 4-inch deck gun for surface duels, and simple roll-off racks for depth charges at the stern). But it was good enough for its one mission, which was to sink or pin down U-boats trying to attack a convey.

By the end of January 1940, 116 ships were building or on order to this initial design. Over 200 were eventually built in UK and Canadian shipyards. Twenty-two of these Flower-class corvettes were sunk by enemy action, and the conditions for their crews were miserable, but they are credited with tipping the balance of the Battle of the Atlantic, which was a crucial phase of WWII.

For his contributions, Reed was appointed an Officer of the Order of the British Empire.

The Declining Cost of Adam Smith

Last week I had the opportunity to see (and touch!) some first edition copies of Adam Smith’s books, including The Wealth of Nations and The Theory of Moral Sentiments.

For an economist, of course this was a very cool experience. The books from the Remnant Trust were still in great condition, despite people like me handling these copies from time-to-time. The books were also beautiful editions, which got me thinking: how much did these cost to purchase when originally published?

According to John Rae’s Life of Adam Smith, the original price for The Wealth of Nations was 1 pound, 16 shillings. Average wages per day in England were somewhere around 15 pence per day (1 pence is 1/12 of a shilling), it would take close to 30 days of labor to purchase the book. But that’s assuming you spent all of your wage on books, which of course would have been impossible: a common laborer would have been spending 80-90% of their wages on food, beer, and rent. And that’s assuming no unexpected expenses or sickness. In reality, it might take a common laborer months, years, or maybe his entire life to save up for that book.

Today, of course we can read this book online for free, but what if you want a nice hardcover version? Amazon has several nice hardback versions available for just under $30. These are not quite as beautiful as the 1776 edition, but they would look nice in any library. Given that the average wage in the US today is close to $32, it would take less than one hour of labor to purchase the book. And thankfully the cost of necessities today is much lower than 1776, indeed much lower than 1900, so it would be much easier to set aside that one hour of wages relative to the past, and purchase yourself a little treat like a book written 250 years ago.

Regulatory Burden By Presidential Administration

During president Trump’s first term in office, he made a bunch of waves (as he’s wont to do). His more educated supporters said that he engaged in substantial deregulation of telecommunications, which got a lot of press. There was a quiet contingent of educated voters who were relatively silently supportive on Trump’s regulatory policy, even if his character was indefensible or his other policy was less desirable.

But was Trump a great deregulator? Or was it one of those cases when we say that he regulated *less* than his fellow executives? The George Washington University Regulatory Studies Center can help shed some light with their data. Specifically, they have calculated the number of ‘economically significant’ regulations passed during each month of each president going back through Ronald Reagan’s term. What counts as ‘economically significant’? The definition has changed over time. But, generally, ‘economically significant’ regulations:

  1. “Have an annual [adverse] effect on the economy of $100 million or more
  2. Or, adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.”

The only exception to this is between April 6, 2023 and January 20, 2025 when the threshold was raised to $200 million.

The Data

The graph below-left shows the number of economically significant regulations for each president since the start of his term, through July of 2025. It’s reproduced from the link above except that I appended Trump’s second term onto his first term. What does the graph tell us? There doesn’t seem to be much of a difference between republicans and democrats. Rather, it seems that, generally, the number of economically significant regulations increases over time. Importantly, the below lines are cumulative by president. So each year’s regulations each cost $100m annually and that’s on top of the existing ones already in place. So, regulatory costs generally rise, with the caveat that we don’t see the relief provided by small or rescinded regulations (for that matter, we don’t see small regulatory burdens here either). Something else that the below graph tells us is that presidents tend to accelerate their economically significant regulations prior to leaving office. Reagan was the only exception to this pattern and he *slowed* the number of regulations as the end of his term approached.

Below-right is the same data, but the x-axis is months until leaving office. Every president since Bush-41 has accelerated their burdensome regulations during their final months in office. The timing of the acceleration corresponds to how close the preceding election was and whether the incumbent president lost. Whereas all presidents regulate more in their last 2-3 months in office, the presidents who were less likely to win re-election started regulating more starting around eight months prior to leaving office. Of course, they wouldn’t say that they expected to lose, but they sure regulated like there was no tomorrow.

What about Trump? Trump’s fewer regulations is caused by his single term. He definitely still added to the regulatory burden (among economically significant regulations, anyway). While Trump started with the fewest additional regulations since Reagan, and Biden started with the most ever initial regulations, together they earn the top prizes for most regulations added in their first term.

What if we append these regulations from end-to-end? That’s what the below chart does. We do have to be careful because the series is a measure of gross economically significant regulations and not net economically significant regulations. So, it’s possible that some rescissions dampened the below values, but this is the data that I have for the moment. While each presidential administrations increases regulation more than the prior, the good news is that the rate of change is not exponential. The line of best fit is quadratic. We’re experiencing growing regulations, but at least it’s not compound growth.

The Cost

We can estimate the costs of these economically significant regulations. It’s a rough cut, and definitely a lower bound since rescission is rare and $100 million is itself a lower bound, but we can multiply the number of regulations by $100m to get minimum annual cost. Like I said, the Biden criterion from April 2023 through January 20, 2025 changed, so those regulations get counted as $200 million instead. The change in definition means that the regulation counts underestimate the late-term Biden regulations relative to the other presidencies.

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Truth: The Strength and Weakness of AI Coding

There was a seismic shift in the AI world recently. In case you didn’t know, a Claude Code update was released just before the Christmas break. It could code awesomely and had a bigger context window, which is sort of like memory and attention span. Scott Cunningham wrote a series of posts demonstrating the power of Claude Code in ways that made economists take notice. Then, ChatGPT Codex was updated and released in January as if to say ‘we are still on the frontier’. The battle between Claude Code and Codex is active as we speak.

The differentiation is becoming clearer, depending on who you talk to. Claude Code feels architectural. It designs a project or system and thrives when you hand it the blueprint and say “Design this properly.” It’s your amazingly productive partner. Codex feels like it’s for the specialist. You tell it exactly what you want. No fluff. No ornamental abstraction unless you request it.

Codex flourishes with prompts like “Refactor this function to eliminate recursion”, or “ Take this response data and apply the Bayesian Dawid-Skene method. It does exactly that. It assumes competence on your part and does not attempt to decorate the output. It assumes that you know what you’re doing. It’s like your RA that can do amazing things if you tell it what task you want completed. Having said all of this, I’ve heard the inverse evaluations too. It probably matters a lot what the programmer brings to the table.

Both Claude Code and Codex are remarkably adept at catching code and syntax errors. That is not mysterious. Code is valid or invalid. The AI writes something, and the environment immediately reveals whether it conforms to the rules. Truth is embedded in the logical structure. When a single error appears, correction is often trivial.

When multiple errors appear, the problem becomes combinatorial. Fix A? Fix B? Change the type? Modify the loop? There are potentially infinite branching possibilities. Even then, the space is constrained. The code must run, or time out. That constraint disciplines the search. The reason these models code so well is that the code itself is the truth. So long as the logic isn’t violated, the axioms lead to the result. The AI anchors on the code to be internally consistent. The model can triangulate because the target is stable and verifiable.

AI struggles when the anchor disappears

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Drawbacks of Long Term Thinking

This post is just some thoughts about perspective. I apologize for any lack of organization.

My academic influences include North, Weingast, Coase, Hayek, the field of Public Choice, and others. I’m not an ‘adherent’ to any school of thought. Those guys just provided some insights that I find myself often using.

What lessons did they teach? Plenty. When I see the world of firms, governments, and other institutions, I maintain a sharp distinction between intention and outcome. Any given policy that’s enacted is probably not the welfare maximizing one, but rather must keep special interests relatively happy. So, the presence of special interests is a given and doesn’t get me riled up. When I see an imperfect policy outcome, I think about who had to be enticed to vote for it. We live in a world where ‘first bests’ aren’t usually on the table.

Historically, or in lower income countries, I think about violence. Their rules and laws are not operating in a vacuum of peaceful consent. There is always the threat of violence. Laws are enforced (or not) conditional on whether and what type of violence that may result. All of the ideal legislation is irrelevant if theft and fraud are the lay of the land.

I think about institutional evolution with both internal and external pressures. I’m a bit worried about the persistence of the US republic, or at least worried for its pro-growth policies. I’m not worried about China in the long run. I don’t think they have the institutions that get them to ‘high income’ status. I do think that they are a tactical concern in the short run and that the government does/will have access to great volumes of resources in the medium run. That’s a bit of a concern. But like I said, I’m not super worried in the long run.

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The US Homicide Rate in 2025 May Have Been the Lowest Ever

The following chart merges two data sources to create a long-run series on homicides in the US. Based on early estimates for 2025 from Jeff Asher, the homicide rate may be as low as 4.3 murders per 100,000 population. That would be the lowest since at least 1900, and possibly the lowest US homicide rate ever since the best evidence suggests it was even higher pre-1900. The current record low was 4.4 murders per 100,000, which the US saw in 1955, 1957, and 2014.

Is This the End of the Largest Refugee Crisis in the Americas?

Our 2024 post on the Venezuelan election provides context for this week’s dramatic events:

Venezuela held an election this week; President Maduro says he won, while the opposition and independent observers say he lost. Disputed elections like this are fairly common across the world, but where Venezuela really stands out is not how people vote at the ballot box- it is how they vote with their feet.

Reuters notes that “A Maduro win could spur more migration from Venezuela, once the continent’s wealthiest country, which in recent years has seen a third of its population leave.”

This makes Venezuela the largest refugee crisis in the history of the Americas, and depending on how you count the partition of India, perhaps the largest refugee crisis in human history that was not triggered by an invasion or civil war.

Instead, it has been triggered by the Maduro regime choosing terrible policies that have needlessly and dramatically impoverished the country

Plus some foreshadowing:

I hope that the Venezuelan government will soon come to represent the will of its people. I’m not sure how that is likely to happen, though I guess positive change is mostly likely to come from Venezuelans themselves (perhaps with help from Colombia and Brazil); when the US tries to play a bigger role we often make things worse. But what has happened in Venezuela for the past 10 years is clearly much worse than the “normal” bad economic policies and even democratic backsliding that we see elsewhere. 

Here’s an update on the chart I shared then, showing that the diaspora has continued to swell:

I hope that Venezuela will soon become the sort of country people don’t want to flee. I don’t necessarily expect that it will, but it’s not now a crazy hope: