Most people in the West (both left and right-wing) thought the USSR was much more economically productive than it actually was, and that the populace was more supportive of the regime than was the case. The Chinese learned very valuable lessons from the USSR, namely that liberalization is very dangerous for a regime; North Korea has done much worse (economically) than the USSR, but is very politically stable.

I am not sure how earlier political liberalization could have saved the USSR, which was essentially a (communist) imperialist dictatorship.