>Furthermore, he has a system of volunteer spies in which children report on their parents, and neighbours on each other. This cannot possibly work well since eventually everyone reports everyone else and it all has to be abandoned.
Asimov was mistaken here. The East German Stasi did implement a system in which many, many people (not literally everyone, but a staggering percentage) reported on each other.
This also happened heavily under the Romanian communist regime. My parents were first hand witness to that.
And North Korea maintains a system of neighborhood surveillance, mandatory self-criticism sessions, and hereditary social classes which are perhaps closer to “1984” because they are so well established now.
When it collapsed, East Germany was still led by the same people who had created it. The Berlin Wall only existed for 28 years. North Korea is a multi-generational prison.