14 ms·

Optimizing things in the USSR (2016)

153 points by yoloswagins 9y ago

exratione 9y ago
There are a factions in the strong AI community whose members espouse the idea that a planned economy would become feasible given greater computational capacity and better software. I have to think that the major objection to this is that the complexity of a socioeconomy also scales with computational capacity. Planning an economy is quite likely always beyond the capacity of any portion of entities within that economy, for the same knowledge problem. Running up a rigorous approach to proof/disproof of that would be an interesting exercise, of course. But it is an interesting example of the point that AI has a way of being all things to all people, when rigorous testing of ideas is not applied. For the would-be communists and socialists it is a road to a perfect planned technocracy, regardless of the fact that this looks less than feasible.
- dragonwriter 9y ago
  > There are a factions in the strong AI community whose members espouse the idea that a planned economy would become feasible given greater computational capacity and better software. The calculation problem with central planning isn't really a calculation problem, it's a missing input problem. You can't optimize utility without a good input on utility. Capitalism has significant problems by being forced to treat money as equivalent to utility, when it manifestly suffers decreasing marginal utility like everything else. This means people with access to more of it are likely to give up more for the same utility, which means capitalism overweights the preferences of the rich, and this gets worse the more effective capitalism is at optimizing by the one utility measure it has. But centrally-planned systems have even worse utility inputs, which no measure of computational power can correct; it's a GIGO problem. The experiences derived from that basic problem are (one of several reasons) why market socialism is much more common in socialist circles than state socialism these days (market socialism has been competing with state socialism—which many market socialists have referred to as state capitalism on the view that, in it, the state becomes one big capitalist enterprise—the whole time, but the Bolsheviks managed to fix most popular attention on their particular form of state socialism, and capitalists found it convenient to ignore other socialist viewpoints in their attempts to demonize socialism.)
  - utexaspunk 9y ago
    >The calculation problem with central planning isn't really a calculation problem, it's a missing input problem. You can't optimize utility without a good input on utility. Historically that has been true, but couldn't technology help? Like, issuing everyone a smartphone and having them register all demand and make all purchases through it. The rest is a problem of keeping capital from aggregating at the top.
    - dragonwriter 9y ago
      > Historically that has been true, but couldn't technology help? No, it's a fundamental structure problem, not a technology (aside from the sense in which an economic system is itself a social technology) problem. > Like, issuing everyone a smartphone and having them register all demand and make all purchases through it. From a utility signalling perspective, that's not significantly different in the information it provides than just retaining currency for consumer purchases, which state socialism generally has.
      - AstralStorm 9y ago
        Or shouldn't be impossible to devise a robust decision and optimization algorithm against missing, wrong or inaccurate input. That said, linear programming is not it and the problem is extremely slippery. The trouble with governments as it is is that they make decisions In an extremely non-robust way... The robust way is supposed to work like a many-worlds predictor- corrector pattern and that's just one way. It is an order of magnitude or two more computationally intensive. (Think robust weather predictions and modelling.)
        utexaspunk 9y ago
        I think it would pretty much require taking humans out of the decision-making process as much as possible, and maximal transparency where they are involved. Humans provide input as far as what they want and what they are willing to pay for it, and everything else is algorithms.
    - 9y ago
pm90 9y ago
Excellent post! Very well written an detailed in its analysis. Loved every part of it, especially in the end when the author speculates whether Central Planning could possibly work with the advances in technology in the future (TLDR: maybe). This is actually pretty fascinating. If we reach a level of automation such that factories are completely automated, I wonder if the data that is gathered from all those factories, along with more powerful computers and algorithms in the future, would allow central planning to work better than no planning. Some of the problems mentioned by the author are caused simply by the data being wrong, because of lying factory managers: automated factories would eliminate that problem at least. At the very least, I hope that in the future there will be a centrally planned economy managed by the government to provide a decent living standard to most citizens, while minimizing environmental impact. More productive or talented citizens would/could choose to opt to earn more wealth and purchase from an open market.
- thehardsphere 9y ago
  Sorry to burst your bubble, but this idea is something that economists have already discussed to death: google "the Socialist Calculation Debate". A very brief summary of its conclusions is: central planning can only perform as well as or better than the market when the economy is completely stagnant. Also, "centrally planned economy managed by the government" by definition leaves no space for "an open market" for "more productive or talented citizens" to "choose to earn more wealth and purchase from." Unless you're talking about a black market.
  - baursak 9y ago
    > google "the Socialist Calculation Debate" I can't seem to find the document you're referring to and its conclusions, Wikipedia page? Is there a balanced discussion on the subject somewhere that is not from Mises Institute or some other libertarian ideologically-driven piece?
    - mattnewport 9y ago
      https://en.m.wikipedia.org/wiki/Socialist_calculation_debate https://en.m.wikipedia.org/wiki/Socialist_calculation_debate Has references to many of the original essays by Mises and Hayek that brought the problem to broader attention in economics.
flavio81 9y ago
This is one of the best articles i've read!! The article makes me think that the failure of the planned economy system would probably not have happened if they had modern computers (and computing tools we take for granted today). The author thinks this would only be possible in about 100 years because he considers that everything needs to be considered in the model. However, one could make the case for doing central planning of a limited set of goods which are interdependent, of course. AI being all the rage in the news these days, and pretty much in fashion, who knows, perhaps automatic optimization of a country's economy will start to be talked about as a Good Thing To Have? <start dancing, comrade...>
- tomcam 9y ago
  Your optimized is my nightmare.
- Scea91 9y ago
  It's much more a people problem than a technical one. Uless you eliminate people from the equation, this utopia will never work.
philipkglass 9y ago
As described above and in Cosma Shalizi’s post, the number of steps required to solve a linear programming problem with nn products and mm constraints is proportional to (m+n)3/2n2(m+n)3/2n2. The USSR had about 12 million types of goods. If you cross them over about 1000 possible locations, that gives you 12 billion variables, which according to Cosma would correspond to an optimization problem that would take a thousand years to solve on a modern desktop computer. However, if Moore’s Law holds up, it would be possible in 100 years to solve this problem reasonably quickly. I found Red Plenty fascinating and I enjoyed the Crooked Timber seminar that Chris Said links to, particularly Shalizi’s post. I'm still wondering: why is the compute-unit "a modern desktop computer?" Is parallel scaling poor for this kind of problem? If parallel scaling is poor, might better speedups be available with ASICs? Or are there heuristics that run faster and produce usually-close-to-optimal solutions on this type of problem? I'm just running through some common ways to accelerate solutions for compute-intensive tasks that run slowly on a single-socket of general purpose CPUs. For all I know, none of these avenues are promising.
Pamar 9y ago
This is indeed an excellent article, I just want to add that Red Plenty is an amazing example of "Scientist Fiction" (http://bactra.org/notebooks/scientist-fiction.html http://bactra.org/notebooks/scientist-fiction.html - see also - https://www.librarything.com/tag/scientist+fiction https://www.librarything.com/tag/scientist+fiction) and definitely deserves to be read if you have any interest in technology, data, economics. Spufford also wrote The Backroom Boys (https://www.amazon.com/Backroom-Boys-Secret-Return-British/dp/0571214967 https://www.amazon.com/Backroom-Boys-Secret-Return-British/d...) about British tech after WWII, definitely worth a read even if Red Plenty remains unsurpassed. I'll also add the Wayback Machine for the (now defunct) website created by the author for Red Plenty: https://web.archive.org/web/20160713031430/http://www.redplenty.com:80/Red_Plenty/Front_page.html https://web.archive.org/web/20160713031430/http://www.redple...
ryandrake 9y ago
It's funny how the vast majority of capitalist corporations consider capitalism as a sacrosanct principle, yet when you look at how they operate it's basically Soviet-style central planning. The senior executive [nomenklatura] who, often, are treated More Equal Than Others, centrally plan who works on what and what resources they are allocated: a bureaucratic elite picking and choosing how the wealth of the company is redistributed and used among teams, as opposed to letting a market decide which projects live and die. As Ronald Coase pointed out, companies tend to be "islands of central planning in a sea of market relationships." Another parallel to the Soviets: Things like good-ol-boy networks and elite school alumni [membership in The Party] are largely what drives promotion within the higher ranks.
- aqsalose 9y ago
  Some leftists critical of the USSR described the Soviet system as "state capitalism": the state is the only capitalist in the system.
- adekok 9y ago
  Which largely parallels one of my recent comments: https://news.ycombinator.com/item?id=14513718 https://news.ycombinator.com/item?id=14513718 Downvoted for no apparent reason... In short, managers often don't pay attention to how the products are created. They instead rely on checklists to "prove" that processes were followed. Nothing beats "feet on the ground". If you know what's going on, you know how to manage it. If you're managing based on summaries of summaries of summaries... it will go badly. See Jim Sinegal for a real-world example of this success story: https://www.usnews.com/news/best-leaders/articles/2009/10/22/jim-sinegal-costco-ceo-focuses-on-employees https://www.usnews.com/news/best-leaders/articles/2009/10/22...
  - macspoofing 9y ago
    You don't know what you're talking about. >Nothing beats "feet on the ground". Except if you're managing a huge global supply chain.
    - 9y ago
CharlesDodgson 9y ago
I too highly recommend Red Plenty, it's one of my favourite books, I'd also recommend Cultural Babbage by the same author, it's a compilation of essays on the topics of culture and technology, It's wrote in the 90s and very interesting to read, to understand the relevance and the thinking of the day.
merraksh 9y ago
The USSR had about 12 million types of goods. If you cross them over about 1000 possible locations, that gives you 12 billion variables, which according to Cosma would correspond to an optimization problem that would take a thousand years to solve on a modern desktop computer. Modern (commercial and open-source) solvers of linear programming (LP) tackle problems of millions of variables in minutes. Most of those 12 billion variables would be cleared out (e.g. fixed to their lower bound, zero) in a pre-processing step. Problems with variables that are constrained to be integer can take much longer, but they are orders of magnitude more efficient today than a few years ago.
- Scea91 9y ago
  > Problems with variables that are constrained to be integer can take much longer, but they are orders of magnitude more efficient today than a few years ago. Yet, they are still NP-complete.
  - lorenzhs 9y ago
    Doesn't mean that you can't write efficient heuristics that find close-to-optimal or even optimal solutions for a wide variety of practical instances.
  - merraksh 9y ago
    Indeed. Unless we prove P=NP, technology will only help re-define what "practically solvable" problems are.
arcbyte 9y ago
Very interesting article. > It is likely that many recommendations for the broader economy would have been ignored as well. For example, if a computer recommended that the price of heating oil should be doubled in the winter, how many politicians would let that happen? The heating oil required to maintain temperatures in so many cubic feet of air space in the country, given some quantity of heaters at various levels of efficiency, themselves producable by the same giant calculation. The problem is the dimensions/variables are endless and subject to change based on the uncalculable whims of people. Stopping at any one point is arbitrary
flavio81 9y ago
"In soviet union, optimization problem solves YOU!" (The article includes a link to an article with such name, a good read for an in-depth discussion / comment trail regarding optimization in the USSR / CCCP:) http://crookedtimber.org/2012/05/30/in-soviet-union-optimization-problem-solves-you http://crookedtimber.org/2012/05/30/in-soviet-union-optimiza...
Houshalter 9y ago
Another review on this book I liked http://slatestarcodex.com/2014/09/24/book-review-red-plenty/ http://slatestarcodex.com/2014/09/24/book-review-red-plenty/
adekok 9y ago
Even local optimizations are useful: https://books.google.ca/books?id=NLRVWaNw76MC&pg=PT28&lpg=PT28&dq=GM+paint+robot+bidding&source=bl&ots=AANDJ_pZ8D&sig=eKJC_1NCjo27fPKexVc1y3aTIkw&hl=en&sa=X&ved=0ahUKEwih-KvA6a7UAhXG64MKHRlwBuIQ6AEILjAB#v=onepage&q=GM%20paint%20robot%20bidding&f=false https://books.google.ca/books?id=NLRVWaNw76MC&pg=PT28&lpg=PT... GM updated their paint robots to "bid" on new jobs (i.e. cars). They ended up saving 1.5M a year. Not much, but multiple similar things add up. i.e. when the price of the product accurately reflects the costs, the markets can be more efficient.
cmrdporcupine 9y ago
A good book on this topic (from a sympathetic, Marxian-economics POV) is http://www.palgrave.com/us/book/9780333495490 http://www.palgrave.com/us/book/9780333495490 "Problems of the Planned Economy"
- deleted 9y ago
  [deleted]
Houshalter 9y ago
The computational complexity thing seems solvable. For one, it mentions today it would require 1,000 desktop computers to find the optimal solution. 1,000 computers is a pretty affordable thing for the benefit of managing an entire economy. But most importantly you don't need to find an optimal solution. Things like gradient descent and hillclimbing will very quickly find locally optimal solutions. That's basically what capitalism is, prices and business demands propagate and sort of do gradient descent (but often very slowly and inefficiently.) Algorithms like scatter search and novelty search can be used to explore the wider search space and find the global optimum. E.g. "what would the locally optimal solution be if we shut down this factory and built a new factory here, and would it be better?"
azernik 9y ago
I also highly recommend this blog post, which this article references and links to frequently: http://crookedtimber.org/2012/05/30/in-soviet-union-optimization-problem-solves-you/ http://crookedtimber.org/2012/05/30/in-soviet-union-optimiza...
Animats 9y ago
Gosplan never had anywhere near enough compute power or good data to do that job. The data problem could have been solved with bar-coding. That's how WalMart got tight control over their inventory. Master Control in Bentonville, Arkansas can see pallet 2345235 leaving warehouse 242 on truck 24343 headed for store 2514. If store 2514 doesn't report arrival of that pallet, questions will be asked and the pallet will be found or somebody will be in big trouble. When the pallet is found, broken down, and product placed on shelves, the items will eventually show up in cash register data. If shelf inventory minus sales is not very close to incoming shipments, the "shrinkage" security people are informed and start looking for theft. Gosplan had an annual planning cycle and monthly reporting. WalMart has a weekly planning cycle and daily reporting. A year was far too much lag for the system to work well. Although it did for heavy industry, where things take months anyway. The huge linear programming problem isn't insoluble. It's a sparse matrix; potato chips don't affect steel tubing much. There's probably some way to come close to an optimal solution.[1] Sparse matrix techniques were in their infancy when the USSR was active, though. [1] http://www.gurobi.com/resources/getting-started/lp-basics http://www.gurobi.com/resources/getting-started/lp-basics
- sdrothrock 9y ago
  > The data problem could have been solved with bar-coding. That's how WalMart got tight control over their inventory. Master Control in Bentonville, Arkansas can see pallet 2345235 leaving warehouse 242 on truck 24343 headed for store 2514. If store 2514 doesn't report arrival of that pallet, questions will be asked and the pallet will be found or somebody will be in big trouble. When the pallet is found, broken down, and product placed on shelves, the items will eventually show up in cash register data. If shelf inventory minus sales is not very close to incoming shipments, the "shrinkage" security people are informed and start looking for theft. This is really interesting -- I'd never found much on pre-SAAS/internet Wal-Mart's asset tracking system, which I assume this must be a part of. Do you have any links to articles or books I could read to learn more about this?
  - Animats 9y ago
    There's a PBS special on this: Wal-Mart and the Bar Code".[1] Wal-Mart has achieved a level of control over suppliers that Gosplan could only dream about. They're going for even more control.[2] [1] http://www.pbs.org/wgbh/pages/frontline/shows/walmart/secrets/barcode.html http://www.pbs.org/wgbh/pages/frontline/shows/walmart/secret... [2] http://www.supermarketnews.com/walmart/vendors-skeptical-walmart-changes-sourcing-roles http://www.supermarketnews.com/walmart/vendors-skeptical-wal...
azernik 9y ago
The computational complexity seems to depend on the desire to solve all the problems at once. But how about solving just the warped incentive structures of capitalism? Simulate perfectly rational economic actors that are only concerned with the next upstream and downstream hops in the market, have them take into account the "taxes" and "credits" of externalities without any of the pesky politics, and distribute in-simulation "purchasing power" to end consumers in whatever way you deem fit. You could even distribute this end-user power to actual consumers, in order to allow them the freedom to input their desires into the system. Basically, remove the capitalists from the capitalist system; or, just use the computational model of capitalism without actually giving power to the computational nodes.
- bcoates 9y ago
  But you're not getting rid of the warped incentive structures, you're just simulating them! Assuming you actually get your data and everything perfect you just get capitalism-world, warts and all. If you just want to be able to digitally assign more symbolic purchasing power to the agents dispossessed by the current system, the government already has the power and infrastructure to do that. Adding another level of computer abstraction to the already symbolic computerized money system doesn't do anything.
- tomcam 9y ago
  Brilliant. Now who decides what perfectly rational is?
Asooka 9y ago
One thing I don't see mentioned here is how miserable a centrally-planned economy is for the people living in it. My parents lived during the heyday of the Soviet Union and it was pretty awful. As an example, let's say you want to go and buy shoes. You go to the shoe store and you buy a pair in your number. You don't actually get to choose, the shoes you can buy have already been made for you, you just have to pay for them the planned price you're expected to pay for the pair of shoes. It's also planned when these will wear out and you'll need to go buy a new pair. In fact, all the pairs of shoes you'll need to buy for the next five years have been planned. You want something else than brown shoes? Fuck you (except if you're high enough the totem pole that you get a choice between brown and black). You want high-quality leather shoes? Fuck you. You want to start your own shoe factory? Fuck you, the state owns all the factories. You want to make your own shoes with leather? Fuck you, all the leather usage is planned centrally by the state using statistics. You want to raise your own cow on your own land to have your own leather? Fuck you, fuck you and fuck you - you don't get to own land, or have cows. The state owns all the land and all the cows. In fact, the state has already planned all the usage of the leather it will get from killing cows that are yet to even be born. And shoes are just one good among many. If the state determines only 10% of the population gets to ride a bicycle, it will produce exactly that amount of bicycles. Central planning never speculatively overproduces, or even innovates, because that hinges on thinking you can sway the market this way or that. You think "hey, I bet people will really want to buy wine-red shirts, instead of white striped shirts", so you try it out and you capture part of the market. Central planning can't account for people coming up with ideas in the middle of a 5-year planning cycle. Central planning is also a form of totalitarianism. Every single totalitarian system in history has always pivoted (if it didn't start as) to a form of serfdom, with all benefits going to the people on top. It doesn't matter if it's a king, or "The Party", C-level management always looks out for themselves first. A state with total power is a really shitty place to live in for most subjects. That said, you could probably have some sort of rationally chosen economy just for the state's own needs, i.e. the state takes care of the roads, so it needs this much asphalt, so taking a survey of the available factories, it should order from this and that factory for maximum quality at minimum price. Something like an alternative to public bids. But a fully centrally planned economy only works with robotic workers that never ever consume or buy anything unplanned. You want to know why corruption was so pervasive? Because people want something more than only being allowed to buy thin brown leather shoes, blue jeans and white striped shirts. Centrally planned economy is something like India's caste system on steroids. If you still think central planning is a good idea, please talk to some people who lived in the USSR, they're about 50-60 years old today and can still tell you good stories. Some of them speak good English. Then think really hard how you'll make sure your proposed central planning system won't devolve to that level of corruption.
AnimalMuppet 9y ago
Say this is possible. Say this would even work (for some definition of "work"). I still have a nagging question: Is there any reason to suspect that this would work better than the current system? (Yes, I know, you can list all the problems produced by the current system. You can't list all the problems that would be produced by the proposed new system, though, because you haven't experienced them.) I see comments saying that smartphones will provide the needed data to make this idea work well, but that doesn't do anything to answer the question "Will it be better?"
- yorwba 9y ago
  If the system can be set up so that the status quo is one possible result, the risk of it getting worse is bounded by the difference between the optimization criterion and whatever you think of as better. If you are reasonably sure they are well-aligned, you can just try it out to see if things get better.
js8 9y ago
I suspect the main reason why central planning fails is not actually the planning part. The problem is human hubris - the idea that if the plan fails, then all you need is a "better" plan that accounts for more things. In the real world, things break constantly for various reasons. And there is a trade-off between efficiency and robustness. If you try to make something very very efficient (i.e. optimal), then you also make it very brittle. So for instance, in the communist economies (not that they wouldn't have other problems, they were dictatorships after all), the planners would decide that it is "optimal" to have this one factory producing something, like computer chips. But then something got delayed there, and everybody who expected the thing to be delivered had to wait. These unexpected delays accumulated through this "optimal" solution. I think main reason why capitalism works is actually because it is terribly inefficient. It duplicates a lot of work, through competition. But the robustness is much higher. And that's why it's a success and has higher overall economic throughput. You can see this paradox in large corporations, which are, as many people noted here, centrally planned economies. They suffer from the same problem - human planners are trying to be too optimal, the robustness suffers, and the result is often spectacular internal failures. It's like with spacecrafts. Of course it would be more efficient if the spacecraft had only one engine, one computer, and so on. But what if it breaks? Then the whole mission fails. That's why it needs backup engines, backup computers, and so on.
coin 9y ago
-1 for mobile hostile website that disables zoom
atemerev 9y ago
Planned economy is uncompetitive for more reasons than insufficient computing power. You can't plan innovation. It is hard to plan for knowledge economy in general (material production is increasingly a smaller part of total GDP — something that early Communist theorists failed to predict). Capitalism is automatic, self-correcting, parallel optimization process. It is asymptotically optimal.
- fetbaffe 9y ago
  Yes, real question to ask is, why is a good produced? In a central planned system that is a policy decision based on the knowledge the planners have. In a market based system that decision is decentralized to the actors in that system and therefore the rate of innovation is based on the sum of the actors distributed knowledge, that sum will always be more than that of a centralized body. Hayek described that as the Local knowledge problem. https://en.wikipedia.org/wiki/Local_knowledge_problem https://en.wikipedia.org/wiki/Local_knowledge_problem
- codedokode 9y ago
  Capitalism has own set of problems like unfair distribution of income, unequal opportunities, patent system that prevents spreading innovation. I think it is used only because we don't have a better system at the moment and because people who benefit from it want to keep the status quo. For example, in a capitalist economy two people that contribute equal amount of time to work can get different rewards for it. And those who get bigger reward would oppose to changes.
  - atemerev 9y ago
    Correct, but he will eventually be replaced by somebody who can produce the same output and ask for less. It makes all business sense. Opposing market pressure is unsustainable in the long term.
    - codedokode 9y ago
      Then why education or medical care costs do not decrease over time? How do they win against market pressure?
jondubois 9y ago
The biggest mistake of communism is that it assumes that entrepreneurship is economically worthless. It's literally the opposite extreme of capitalism which assumes that entrepreneurship is the most important profession. I think communism might have worked better if it had given more autonomy to managers to make decisions and used output data for the previous year to decide budgets for each factory/company.
- profalseidol 9y ago
  Really sucks that the word communism is now used to describe Lenin's legacy. Even the USSR 'communists' said that what they have is not communism.. but 'socialism'. Prior to the rise of the Bolsheviks, there were a number of Marxists that were equally popular as Lenin such as Rosa Luxemburg. They were opposed to what the Bolsheviks were preaching. Nowadays, now a listener of Prof. Richard Wolff and his the Democracy at Work project he started.
Pamar 9y ago
Now that we are discussing Central Planned Economy I'd like to drop a link to a fascinating and mostly forgotten attempt to make it work in a more "democratic" way in Chile, during the short-lived Allende government: https://en.wikipedia.org/wiki/Project_Cybersyn https://en.wikipedia.org/wiki/Project_Cybersyn
vbezhenar 9y ago
I'm still thinking that USSR approach to have planned economy is much better than free market economy in the long run. They just lacked proper software (and hardware) to do the proper planning and it turned out that at that time free market was better. But with today's algorithms (or may be with tomorrow's) country-scale planning should be possible and it will be much more efficient. Other question is do we really need that efficiency? Robots are more efficient than people, so people are already losing their jobs and it'll continue. Now with planned economy there will be much more jobs to lose. May be it's better for our civilization not to be very efficient, at least at current period.
fetbaffe 9y ago
Lots of people here confuses planning done in large corporations with central planning. Even if corporations plans their entire operation it is not the same as central planning, because even if a corporation plans its production it cannot plan it sales. It can only estimate because it operates on a common market. Estimation of sales plans hiring, production etc, however the actual real sales is a feedback loop into that process, where in a central planned system that feedback loop does not exist. Central planned system will just go on whatever the "sales".
- cies 9y ago
  > it cannot plan it sales. It can only estimate because it operates on a common market. So the USSR as a whole was not selling (exporting) on a common market? > Central planned system will just go on whatever the "sales". I do not understand this. The "demand" of products within the USSR should not be compared to the sales of the corp, but to the corp's internal demand for stuff (e.g. office supplies). Anyway, I'm not a proponent of central planning an economy. I see markets as a great, organic and bottom-up way of having supply and demand meet. I'm no proponent of protection-by-law of the unlimited hoarding of private property; I'm no proponent of the centralized state. Instead I'd like to see the lower level of gov't to be the most powerful. I guess I'm a mutualist.
  - fetbaffe 9y ago
    > So the USSR as a whole was not selling (exporting) on a common market? What goods was that? Military supplies? On that it operated on a market economy with the West and therefore got competition and a feedback loop and therefore produced some useful things. https://news.ycombinator.com/item?id=14519976 https://news.ycombinator.com/item?id=14519976 Soviet exported oil & gas, but that was also part of global market, which Reagan used against the Soviet by dumping the price. Soviet was largely an oil & gas economy. Apart from that Soviet didn't produce much consumer goods and exports of that to other communist countries was part of planned system. > but to the corp's internal demand for stuff In a corporation you know that you need goods based on what you are producing. If you are white collar company, it is quite logical to have office supplies and if you are IT company, you need to have computers and so on. However in a central planned system, you have to take into account the entire population what they need. But how would a planner know what to who when it does not know what you are producing. Ask every individual? If one person wants a blue pen and another red pen, what should the central planner do with that information? Produce two black pens? That is the Local knowledge problem I wrote about in this comment https://news.ycombinator.com/item?id=14520025 https://news.ycombinator.com/item?id=14520025 So the central planners think you are a carpenter, but you are actually a plumber. https://fee.org/media/10987/20150729_roadtoserfdom14.png https://fee.org/media/10987/20150729_roadtoserfdom14.png
codedokode 9y ago
I think a computer might do better planning decisions than humans do in a capitalist society. Problems like computational complexity or inprecise data apply to human managers too, and unlike them the computer doesn't make mistakes and isn't motivated to get maximum profit fot itself.
alistoriv 9y ago
It's worth noting that Chile under Allende was working on implementing a computer-based planning system[1], but unfortunately we don't know how it might have worked out cause of the US-backed military coup shortly after :^( [1] https://en.wikipedia.org/wiki/Project_Cybersyn https://en.wikipedia.org/wiki/Project_Cybersyn
ramgorur 9y ago
What about a stochastic optimization techniques like this one described here? http://www.human-competitive.org/sites/default/files/deb-myburgh-paper.pdf http://www.human-competitive.org/sites/default/files/deb-myb... The paper describes a real parameter function optimization problem, but the Gosplan was I think more of a combinatorial one. According to the author, the method described there can also be parallelized.

153 points by yoloswagins 9y ago

There are a factions in the strong AI community whose members espouse the idea that a planned economy would become feasible given greater computational capacity and better software. I have to think that the major objection to this is that the complexity of a socioeconomy also scales with computational capacity. Planning an economy is quite likely always beyond the capacity of any portion of entities within that economy, for the same knowledge problem. Running up a rigorous approach to proof/disproof of that would be an interesting exercise, of course. But it is an interesting example of the point that AI has a way of being all things to all people, when rigorous testing of ideas is not applied. For the would-be communists and socialists it is a road to a perfect planned technocracy, regardless of the fact that this looks less than feasible.

dragonwriter 9y ago
> There are a factions in the strong AI community whose members espouse the idea that a planned economy would become feasible given greater computational capacity and better software. The calculation problem with central planning isn't really a calculation problem, it's a missing input problem. You can't optimize utility without a good input on utility. Capitalism has significant problems by being forced to treat money as equivalent to utility, when it manifestly suffers decreasing marginal utility like everything else. This means people with access to more of it are likely to give up more for the same utility, which means capitalism overweights the preferences of the rich, and this gets worse the more effective capitalism is at optimizing by the one utility measure it has. But centrally-planned systems have even worse utility inputs, which no measure of computational power can correct; it's a GIGO problem. The experiences derived from that basic problem are (one of several reasons) why market socialism is much more common in socialist circles than state socialism these days (market socialism has been competing with state socialism—which many market socialists have referred to as state capitalism on the view that, in it, the state becomes one big capitalist enterprise—the whole time, but the Bolsheviks managed to fix most popular attention on their particular form of state socialism, and capitalists found it convenient to ignore other socialist viewpoints in their attempts to demonize socialism.)
- utexaspunk 9y ago
  >The calculation problem with central planning isn't really a calculation problem, it's a missing input problem. You can't optimize utility without a good input on utility. Historically that has been true, but couldn't technology help? Like, issuing everyone a smartphone and having them register all demand and make all purchases through it. The rest is a problem of keeping capital from aggregating at the top.
  - dragonwriter 9y ago
    > Historically that has been true, but couldn't technology help? No, it's a fundamental structure problem, not a technology (aside from the sense in which an economic system is itself a social technology) problem. > Like, issuing everyone a smartphone and having them register all demand and make all purchases through it. From a utility signalling perspective, that's not significantly different in the information it provides than just retaining currency for consumer purchases, which state socialism generally has.
    - AstralStorm 9y ago
      Or shouldn't be impossible to devise a robust decision and optimization algorithm against missing, wrong or inaccurate input. That said, linear programming is not it and the problem is extremely slippery. The trouble with governments as it is is that they make decisions In an extremely non-robust way... The robust way is supposed to work like a many-worlds predictor- corrector pattern and that's just one way. It is an order of magnitude or two more computationally intensive. (Think robust weather predictions and modelling.)
      - utexaspunk 9y ago
        I think it would pretty much require taking humans out of the decision-making process as much as possible, and maximal transparency where they are involved. Humans provide input as far as what they want and what they are willing to pay for it, and everything else is algorithms.
  - 9y ago

pm90 9y ago

Excellent post! Very well written an detailed in its analysis. Loved every part of it, especially in the end when the author speculates whether Central Planning could possibly work with the advances in technology in the future (TLDR: maybe). This is actually pretty fascinating. If we reach a level of automation such that factories are completely automated, I wonder if the data that is gathered from all those factories, along with more powerful computers and algorithms in the future, would allow central planning to work better than no planning. Some of the problems mentioned by the author are caused simply by the data being wrong, because of lying factory managers: automated factories would eliminate that problem at least. At the very least, I hope that in the future there will be a centrally planned economy managed by the government to provide a decent living standard to most citizens, while minimizing environmental impact. More productive or talented citizens would/could choose to opt to earn more wealth and purchase from an open market.

thehardsphere 9y ago
Sorry to burst your bubble, but this idea is something that economists have already discussed to death: google "the Socialist Calculation Debate". A very brief summary of its conclusions is: central planning can only perform as well as or better than the market when the economy is completely stagnant. Also, "centrally planned economy managed by the government" by definition leaves no space for "an open market" for "more productive or talented citizens" to "choose to earn more wealth and purchase from." Unless you're talking about a black market.
- baursak 9y ago
  > google "the Socialist Calculation Debate" I can't seem to find the document you're referring to and its conclusions, Wikipedia page? Is there a balanced discussion on the subject somewhere that is not from Mises Institute or some other libertarian ideologically-driven piece?
  - mattnewport 9y ago
    https://en.m.wikipedia.org/wiki/Socialist_calculation_debate https://en.m.wikipedia.org/wiki/Socialist_calculation_debate Has references to many of the original essays by Mises and Hayek that brought the problem to broader attention in economics.

flavio81 9y ago

This is one of the best articles i've read!! The article makes me think that the failure of the planned economy system would probably not have happened if they had modern computers (and computing tools we take for granted today). The author thinks this would only be possible in about 100 years because he considers that everything needs to be considered in the model. However, one could make the case for doing central planning of a limited set of goods which are interdependent, of course. AI being all the rage in the news these days, and pretty much in fashion, who knows, perhaps automatic optimization of a country's economy will start to be talked about as a Good Thing To Have? <start dancing, comrade...>

tomcam 9y ago
Your optimized is my nightmare.
Scea91 9y ago
It's much more a people problem than a technical one. Uless you eliminate people from the equation, this utopia will never work.

philipkglass 9y ago

As described above and in Cosma Shalizi’s post, the number of steps required to solve a linear programming problem with nn products and mm constraints is proportional to (m+n)3/2n2(m+n)3/2n2. The USSR had about 12 million types of goods. If you cross them over about 1000 possible locations, that gives you 12 billion variables, which according to Cosma would correspond to an optimization problem that would take a thousand years to solve on a modern desktop computer. However, if Moore’s Law holds up, it would be possible in 100 years to solve this problem reasonably quickly. I found Red Plenty fascinating and I enjoyed the Crooked Timber seminar that Chris Said links to, particularly Shalizi’s post. I'm still wondering: why is the compute-unit "a modern desktop computer?" Is parallel scaling poor for this kind of problem? If parallel scaling is poor, might better speedups be available with ASICs? Or are there heuristics that run faster and produce usually-close-to-optimal solutions on this type of problem? I'm just running through some common ways to accelerate solutions for compute-intensive tasks that run slowly on a single-socket of general purpose CPUs. For all I know, none of these avenues are promising.

Pamar 9y ago

This is indeed an excellent article, I just want to add that Red Plenty is an amazing example of "Scientist Fiction" (http://bactra.org/notebooks/scientist-fiction.html http://bactra.org/notebooks/scientist-fiction.html - see also - https://www.librarything.com/tag/scientist+fiction https://www.librarything.com/tag/scientist+fiction) and definitely deserves to be read if you have any interest in technology, data, economics. Spufford also wrote The Backroom Boys (https://www.amazon.com/Backroom-Boys-Secret-Return-British/dp/0571214967 https://www.amazon.com/Backroom-Boys-Secret-Return-British/d...) about British tech after WWII, definitely worth a read even if Red Plenty remains unsurpassed. I'll also add the Wayback Machine for the (now defunct) website created by the author for Red Plenty: https://web.archive.org/web/20160713031430/http://www.redplenty.com:80/Red_Plenty/Front_page.html https://web.archive.org/web/20160713031430/http://www.redple...

ryandrake 9y ago

It's funny how the vast majority of capitalist corporations consider capitalism as a sacrosanct principle, yet when you look at how they operate it's basically Soviet-style central planning. The senior executive [nomenklatura] who, often, are treated More Equal Than Others, centrally plan who works on what and what resources they are allocated: a bureaucratic elite picking and choosing how the wealth of the company is redistributed and used among teams, as opposed to letting a market decide which projects live and die. As Ronald Coase pointed out, companies tend to be "islands of central planning in a sea of market relationships." Another parallel to the Soviets: Things like good-ol-boy networks and elite school alumni [membership in The Party] are largely what drives promotion within the higher ranks.

aqsalose 9y ago
Some leftists critical of the USSR described the Soviet system as "state capitalism": the state is the only capitalist in the system.
adekok 9y ago
Which largely parallels one of my recent comments: https://news.ycombinator.com/item?id=14513718 https://news.ycombinator.com/item?id=14513718 Downvoted for no apparent reason... In short, managers often don't pay attention to how the products are created. They instead rely on checklists to "prove" that processes were followed. Nothing beats "feet on the ground". If you know what's going on, you know how to manage it. If you're managing based on summaries of summaries of summaries... it will go badly. See Jim Sinegal for a real-world example of this success story: https://www.usnews.com/news/best-leaders/articles/2009/10/22/jim-sinegal-costco-ceo-focuses-on-employees https://www.usnews.com/news/best-leaders/articles/2009/10/22...
- macspoofing 9y ago
  You don't know what you're talking about. >Nothing beats "feet on the ground". Except if you're managing a huge global supply chain.
  - 9y ago

CharlesDodgson 9y ago

I too highly recommend Red Plenty, it's one of my favourite books, I'd also recommend Cultural Babbage by the same author, it's a compilation of essays on the topics of culture and technology, It's wrote in the 90s and very interesting to read, to understand the relevance and the thinking of the day.

merraksh 9y ago

The USSR had about 12 million types of goods. If you cross them over about 1000 possible locations, that gives you 12 billion variables, which according to Cosma would correspond to an optimization problem that would take a thousand years to solve on a modern desktop computer. Modern (commercial and open-source) solvers of linear programming (LP) tackle problems of millions of variables in minutes. Most of those 12 billion variables would be cleared out (e.g. fixed to their lower bound, zero) in a pre-processing step. Problems with variables that are constrained to be integer can take much longer, but they are orders of magnitude more efficient today than a few years ago.

Scea91 9y ago
> Problems with variables that are constrained to be integer can take much longer, but they are orders of magnitude more efficient today than a few years ago. Yet, they are still NP-complete.
- lorenzhs 9y ago
  Doesn't mean that you can't write efficient heuristics that find close-to-optimal or even optimal solutions for a wide variety of practical instances.
- merraksh 9y ago
  Indeed. Unless we prove P=NP, technology will only help re-define what "practically solvable" problems are.

arcbyte 9y ago

Very interesting article. > It is likely that many recommendations for the broader economy would have been ignored as well. For example, if a computer recommended that the price of heating oil should be doubled in the winter, how many politicians would let that happen? The heating oil required to maintain temperatures in so many cubic feet of air space in the country, given some quantity of heaters at various levels of efficiency, themselves producable by the same giant calculation. The problem is the dimensions/variables are endless and subject to change based on the uncalculable whims of people. Stopping at any one point is arbitrary

flavio81 9y ago

"In soviet union, optimization problem solves YOU!" (The article includes a link to an article with such name, a good read for an in-depth discussion / comment trail regarding optimization in the USSR / CCCP:) http://crookedtimber.org/2012/05/30/in-soviet-union-optimization-problem-solves-you http://crookedtimber.org/2012/05/30/in-soviet-union-optimiza...

Houshalter 9y ago

Another review on this book I liked http://slatestarcodex.com/2014/09/24/book-review-red-plenty/ http://slatestarcodex.com/2014/09/24/book-review-red-plenty/

adekok 9y ago

Even local optimizations are useful: https://books.google.ca/books?id=NLRVWaNw76MC&pg=PT28&lpg=PT28&dq=GM+paint+robot+bidding&source=bl&ots=AANDJ_pZ8D&sig=eKJC_1NCjo27fPKexVc1y3aTIkw&hl=en&sa=X&ved=0ahUKEwih-KvA6a7UAhXG64MKHRlwBuIQ6AEILjAB#v=onepage&q=GM%20paint%20robot%20bidding&f=false https://books.google.ca/books?id=NLRVWaNw76MC&pg=PT28&lpg=PT... GM updated their paint robots to "bid" on new jobs (i.e. cars). They ended up saving 1.5M a year. Not much, but multiple similar things add up. i.e. when the price of the product accurately reflects the costs, the markets can be more efficient.

cmrdporcupine 9y ago

A good book on this topic (from a sympathetic, Marxian-economics POV) is http://www.palgrave.com/us/book/9780333495490 http://www.palgrave.com/us/book/9780333495490 "Problems of the Planned Economy"

deleted 9y ago
[deleted]

Houshalter 9y ago

The computational complexity thing seems solvable. For one, it mentions today it would require 1,000 desktop computers to find the optimal solution. 1,000 computers is a pretty affordable thing for the benefit of managing an entire economy. But most importantly you don't need to find an optimal solution. Things like gradient descent and hillclimbing will very quickly find locally optimal solutions. That's basically what capitalism is, prices and business demands propagate and sort of do gradient descent (but often very slowly and inefficiently.) Algorithms like scatter search and novelty search can be used to explore the wider search space and find the global optimum. E.g. "what would the locally optimal solution be if we shut down this factory and built a new factory here, and would it be better?"

azernik 9y ago

I also highly recommend this blog post, which this article references and links to frequently: http://crookedtimber.org/2012/05/30/in-soviet-union-optimization-problem-solves-you/ http://crookedtimber.org/2012/05/30/in-soviet-union-optimiza...

Animats 9y ago

Gosplan never had anywhere near enough compute power or good data to do that job. The data problem could have been solved with bar-coding. That's how WalMart got tight control over their inventory. Master Control in Bentonville, Arkansas can see pallet 2345235 leaving warehouse 242 on truck 24343 headed for store 2514. If store 2514 doesn't report arrival of that pallet, questions will be asked and the pallet will be found or somebody will be in big trouble. When the pallet is found, broken down, and product placed on shelves, the items will eventually show up in cash register data. If shelf inventory minus sales is not very close to incoming shipments, the "shrinkage" security people are informed and start looking for theft. Gosplan had an annual planning cycle and monthly reporting. WalMart has a weekly planning cycle and daily reporting. A year was far too much lag for the system to work well. Although it did for heavy industry, where things take months anyway. The huge linear programming problem isn't insoluble. It's a sparse matrix; potato chips don't affect steel tubing much. There's probably some way to come close to an optimal solution.[1] Sparse matrix techniques were in their infancy when the USSR was active, though. [1] http://www.gurobi.com/resources/getting-started/lp-basics http://www.gurobi.com/resources/getting-started/lp-basics

sdrothrock 9y ago
> The data problem could have been solved with bar-coding. That's how WalMart got tight control over their inventory. Master Control in Bentonville, Arkansas can see pallet 2345235 leaving warehouse 242 on truck 24343 headed for store 2514. If store 2514 doesn't report arrival of that pallet, questions will be asked and the pallet will be found or somebody will be in big trouble. When the pallet is found, broken down, and product placed on shelves, the items will eventually show up in cash register data. If shelf inventory minus sales is not very close to incoming shipments, the "shrinkage" security people are informed and start looking for theft. This is really interesting -- I'd never found much on pre-SAAS/internet Wal-Mart's asset tracking system, which I assume this must be a part of. Do you have any links to articles or books I could read to learn more about this?
- Animats 9y ago
  There's a PBS special on this: Wal-Mart and the Bar Code".[1] Wal-Mart has achieved a level of control over suppliers that Gosplan could only dream about. They're going for even more control.[2] [1] http://www.pbs.org/wgbh/pages/frontline/shows/walmart/secrets/barcode.html http://www.pbs.org/wgbh/pages/frontline/shows/walmart/secret... [2] http://www.supermarketnews.com/walmart/vendors-skeptical-walmart-changes-sourcing-roles http://www.supermarketnews.com/walmart/vendors-skeptical-wal...

azernik 9y ago

The computational complexity seems to depend on the desire to solve all the problems at once. But how about solving just the warped incentive structures of capitalism? Simulate perfectly rational economic actors that are only concerned with the next upstream and downstream hops in the market, have them take into account the "taxes" and "credits" of externalities without any of the pesky politics, and distribute in-simulation "purchasing power" to end consumers in whatever way you deem fit. You could even distribute this end-user power to actual consumers, in order to allow them the freedom to input their desires into the system. Basically, remove the capitalists from the capitalist system; or, just use the computational model of capitalism without actually giving power to the computational nodes.

bcoates 9y ago
But you're not getting rid of the warped incentive structures, you're just simulating them! Assuming you actually get your data and everything perfect you just get capitalism-world, warts and all. If you just want to be able to digitally assign more symbolic purchasing power to the agents dispossessed by the current system, the government already has the power and infrastructure to do that. Adding another level of computer abstraction to the already symbolic computerized money system doesn't do anything.
tomcam 9y ago
Brilliant. Now who decides what perfectly rational is?

Asooka 9y ago

One thing I don't see mentioned here is how miserable a centrally-planned economy is for the people living in it. My parents lived during the heyday of the Soviet Union and it was pretty awful. As an example, let's say you want to go and buy shoes. You go to the shoe store and you buy a pair in your number. You don't actually get to choose, the shoes you can buy have already been made for you, you just have to pay for them the planned price you're expected to pay for the pair of shoes. It's also planned when these will wear out and you'll need to go buy a new pair. In fact, all the pairs of shoes you'll need to buy for the next five years have been planned. You want something else than brown shoes? Fuck you (except if you're high enough the totem pole that you get a choice between brown and black). You want high-quality leather shoes? Fuck you. You want to start your own shoe factory? Fuck you, the state owns all the factories. You want to make your own shoes with leather? Fuck you, all the leather usage is planned centrally by the state using statistics. You want to raise your own cow on your own land to have your own leather? Fuck you, fuck you and fuck you - you don't get to own land, or have cows. The state owns all the land and all the cows. In fact, the state has already planned all the usage of the leather it will get from killing cows that are yet to even be born. And shoes are just one good among many. If the state determines only 10% of the population gets to ride a bicycle, it will produce exactly that amount of bicycles. Central planning never speculatively overproduces, or even innovates, because that hinges on thinking you can sway the market this way or that. You think "hey, I bet people will really want to buy wine-red shirts, instead of white striped shirts", so you try it out and you capture part of the market. Central planning can't account for people coming up with ideas in the middle of a 5-year planning cycle. Central planning is also a form of totalitarianism. Every single totalitarian system in history has always pivoted (if it didn't start as) to a form of serfdom, with all benefits going to the people on top. It doesn't matter if it's a king, or "The Party", C-level management always looks out for themselves first. A state with total power is a really shitty place to live in for most subjects. That said, you could probably have some sort of rationally chosen economy just for the state's own needs, i.e. the state takes care of the roads, so it needs this much asphalt, so taking a survey of the available factories, it should order from this and that factory for maximum quality at minimum price. Something like an alternative to public bids. But a fully centrally planned economy only works with robotic workers that never ever consume or buy anything unplanned. You want to know why corruption was so pervasive? Because people want something more than only being allowed to buy thin brown leather shoes, blue jeans and white striped shirts. Centrally planned economy is something like India's caste system on steroids. If you still think central planning is a good idea, please talk to some people who lived in the USSR, they're about 50-60 years old today and can still tell you good stories. Some of them speak good English. Then think really hard how you'll make sure your proposed central planning system won't devolve to that level of corruption.

AnimalMuppet 9y ago

Say this is possible. Say this would even work (for some definition of "work"). I still have a nagging question: Is there any reason to suspect that this would work better than the current system? (Yes, I know, you can list all the problems produced by the current system. You can't list all the problems that would be produced by the proposed new system, though, because you haven't experienced them.) I see comments saying that smartphones will provide the needed data to make this idea work well, but that doesn't do anything to answer the question "Will it be better?"

yorwba 9y ago
If the system can be set up so that the status quo is one possible result, the risk of it getting worse is bounded by the difference between the optimization criterion and whatever you think of as better. If you are reasonably sure they are well-aligned, you can just try it out to see if things get better.

js8 9y ago

I suspect the main reason why central planning fails is not actually the planning part. The problem is human hubris - the idea that if the plan fails, then all you need is a "better" plan that accounts for more things. In the real world, things break constantly for various reasons. And there is a trade-off between efficiency and robustness. If you try to make something very very efficient (i.e. optimal), then you also make it very brittle. So for instance, in the communist economies (not that they wouldn't have other problems, they were dictatorships after all), the planners would decide that it is "optimal" to have this one factory producing something, like computer chips. But then something got delayed there, and everybody who expected the thing to be delivered had to wait. These unexpected delays accumulated through this "optimal" solution. I think main reason why capitalism works is actually because it is terribly inefficient. It duplicates a lot of work, through competition. But the robustness is much higher. And that's why it's a success and has higher overall economic throughput. You can see this paradox in large corporations, which are, as many people noted here, centrally planned economies. They suffer from the same problem - human planners are trying to be too optimal, the robustness suffers, and the result is often spectacular internal failures. It's like with spacecrafts. Of course it would be more efficient if the spacecraft had only one engine, one computer, and so on. But what if it breaks? Then the whole mission fails. That's why it needs backup engines, backup computers, and so on.

coin 9y ago

-1 for mobile hostile website that disables zoom

atemerev 9y ago

Planned economy is uncompetitive for more reasons than insufficient computing power. You can't plan innovation. It is hard to plan for knowledge economy in general (material production is increasingly a smaller part of total GDP — something that early Communist theorists failed to predict). Capitalism is automatic, self-correcting, parallel optimization process. It is asymptotically optimal.

fetbaffe 9y ago
Yes, real question to ask is, why is a good produced? In a central planned system that is a policy decision based on the knowledge the planners have. In a market based system that decision is decentralized to the actors in that system and therefore the rate of innovation is based on the sum of the actors distributed knowledge, that sum will always be more than that of a centralized body. Hayek described that as the Local knowledge problem. https://en.wikipedia.org/wiki/Local_knowledge_problem https://en.wikipedia.org/wiki/Local_knowledge_problem
codedokode 9y ago
Capitalism has own set of problems like unfair distribution of income, unequal opportunities, patent system that prevents spreading innovation. I think it is used only because we don't have a better system at the moment and because people who benefit from it want to keep the status quo. For example, in a capitalist economy two people that contribute equal amount of time to work can get different rewards for it. And those who get bigger reward would oppose to changes.
- atemerev 9y ago
  Correct, but he will eventually be replaced by somebody who can produce the same output and ask for less. It makes all business sense. Opposing market pressure is unsustainable in the long term.
  - codedokode 9y ago
    Then why education or medical care costs do not decrease over time? How do they win against market pressure?

jondubois 9y ago

The biggest mistake of communism is that it assumes that entrepreneurship is economically worthless. It's literally the opposite extreme of capitalism which assumes that entrepreneurship is the most important profession. I think communism might have worked better if it had given more autonomy to managers to make decisions and used output data for the previous year to decide budgets for each factory/company.

profalseidol 9y ago
Really sucks that the word communism is now used to describe Lenin's legacy. Even the USSR 'communists' said that what they have is not communism.. but 'socialism'. Prior to the rise of the Bolsheviks, there were a number of Marxists that were equally popular as Lenin such as Rosa Luxemburg. They were opposed to what the Bolsheviks were preaching. Nowadays, now a listener of Prof. Richard Wolff and his the Democracy at Work project he started.

Pamar 9y ago

Now that we are discussing Central Planned Economy I'd like to drop a link to a fascinating and mostly forgotten attempt to make it work in a more "democratic" way in Chile, during the short-lived Allende government: https://en.wikipedia.org/wiki/Project_Cybersyn https://en.wikipedia.org/wiki/Project_Cybersyn

vbezhenar 9y ago

I'm still thinking that USSR approach to have planned economy is much better than free market economy in the long run. They just lacked proper software (and hardware) to do the proper planning and it turned out that at that time free market was better. But with today's algorithms (or may be with tomorrow's) country-scale planning should be possible and it will be much more efficient. Other question is do we really need that efficiency? Robots are more efficient than people, so people are already losing their jobs and it'll continue. Now with planned economy there will be much more jobs to lose. May be it's better for our civilization not to be very efficient, at least at current period.

fetbaffe 9y ago

Lots of people here confuses planning done in large corporations with central planning. Even if corporations plans their entire operation it is not the same as central planning, because even if a corporation plans its production it cannot plan it sales. It can only estimate because it operates on a common market. Estimation of sales plans hiring, production etc, however the actual real sales is a feedback loop into that process, where in a central planned system that feedback loop does not exist. Central planned system will just go on whatever the "sales".

cies 9y ago
> it cannot plan it sales. It can only estimate because it operates on a common market. So the USSR as a whole was not selling (exporting) on a common market? > Central planned system will just go on whatever the "sales". I do not understand this. The "demand" of products within the USSR should not be compared to the sales of the corp, but to the corp's internal demand for stuff (e.g. office supplies). Anyway, I'm not a proponent of central planning an economy. I see markets as a great, organic and bottom-up way of having supply and demand meet. I'm no proponent of protection-by-law of the unlimited hoarding of private property; I'm no proponent of the centralized state. Instead I'd like to see the lower level of gov't to be the most powerful. I guess I'm a mutualist.
- fetbaffe 9y ago
  > So the USSR as a whole was not selling (exporting) on a common market? What goods was that? Military supplies? On that it operated on a market economy with the West and therefore got competition and a feedback loop and therefore produced some useful things. https://news.ycombinator.com/item?id=14519976 https://news.ycombinator.com/item?id=14519976 Soviet exported oil & gas, but that was also part of global market, which Reagan used against the Soviet by dumping the price. Soviet was largely an oil & gas economy. Apart from that Soviet didn't produce much consumer goods and exports of that to other communist countries was part of planned system. > but to the corp's internal demand for stuff In a corporation you know that you need goods based on what you are producing. If you are white collar company, it is quite logical to have office supplies and if you are IT company, you need to have computers and so on. However in a central planned system, you have to take into account the entire population what they need. But how would a planner know what to who when it does not know what you are producing. Ask every individual? If one person wants a blue pen and another red pen, what should the central planner do with that information? Produce two black pens? That is the Local knowledge problem I wrote about in this comment https://news.ycombinator.com/item?id=14520025 https://news.ycombinator.com/item?id=14520025 So the central planners think you are a carpenter, but you are actually a plumber. https://fee.org/media/10987/20150729_roadtoserfdom14.png https://fee.org/media/10987/20150729_roadtoserfdom14.png

codedokode 9y ago

I think a computer might do better planning decisions than humans do in a capitalist society. Problems like computational complexity or inprecise data apply to human managers too, and unlike them the computer doesn't make mistakes and isn't motivated to get maximum profit fot itself.

alistoriv 9y ago

It's worth noting that Chile under Allende was working on implementing a computer-based planning system[1], but unfortunately we don't know how it might have worked out cause of the US-backed military coup shortly after :^( [1] https://en.wikipedia.org/wiki/Project_Cybersyn https://en.wikipedia.org/wiki/Project_Cybersyn

ramgorur 9y ago

What about a stochastic optimization techniques like this one described here? http://www.human-competitive.org/sites/default/files/deb-myburgh-paper.pdf http://www.human-competitive.org/sites/default/files/deb-myb... The paper describes a real parameter function optimization problem, but the Gosplan was I think more of a combinatorial one. According to the author, the method described there can also be parallelized.