20 ms·

Optimizing Things in the USSR (2016)

134 points by amai 6y ago

yters 6y ago
So if we can ever prove P=NP then communism becomes practical viable? It's interesting the political system reduces to a problem in computer science.
- thelastname 6y ago
  No, as long as humans are involved.
- jkingsbery 6y ago
  Computational complexity was one of 6 reasons the author listed at why the optimization problem was infeasible. I read the article in its entirety, and I saw a claim that the number of calculations scaled in polynomial time, but I didn't see any claims of problems that are verifiable in polynomial time with no known polynomial time solutions. Then there's the other 5 criteria, which show that this is not a computer science problem. Coming up with an objective function is entirely a subjective matter. It depends entirely on what the ruling party wants. Communist countries don't act to the benefit of all, they act to the benefit of the chosen few, just those few are chosen differently.
  - masijo 6y ago
    So, if the planification was on the hands of the people via direct democracy, like Cockshott proposes, then problem solved, kind of?
    - sudosysgen 6y ago
      As long as they could settle on a good cost function. I think my proposal for how the cost function should be found is better than Cockshott's in the short term.
  - yters 6y ago
    If you go to Shalizi's article, which the author links to, then you'll see that polynomial time is a based on very generous assumptions about the problem space of the economy to make it amenable to convex optimization. Under realistic assumptions, convexity disappears, which pushes economic planning into NP Complete and harder territory.
- myth_drannon 6y ago
  Capitalism/Communism are economic systems not political. It's all about how you distribute limited resources (Simplistically - All to a few vs a bit to everyone).
  - anoncake 6y ago
    Communism isn't about how resources are distributed, but who controls the means of production.
    - chordalkeyboard 6y ago
      Those are very similar in practice.
- sudosysgen 6y ago
  From what I understood, you wouldn't need to prove P=NP, you would just need enough computing power, as in, on the order of a few RTX 3090s.
canjobear 6y ago
See also the Slate Star Codex book review: https://slatestarcodex.com/2014/09/24/book-review-red-plenty/ https://slatestarcodex.com/2014/09/24/book-review-red-plenty...
- idoh 6y ago
  Amazing read, thanks for the link!
sudosysgen 6y ago
An interesting point here: >would correspond to an optimization problem that would take a thousand years to solve on a modern desktop computer If this really is so, then the problem is tractable nowadays - a thousand 2016 desktop computers years is something we could do multiple times a day with a modern supercomputer, so definitely feasible. Same for data, modern networked devices could provide data of sufficient quality. That being said, the big one is of course to find the function to optimize. I had an idea about this not long ago - the issue communists have with capitalism is that it has a class divide in production. So why not try this: all consumer goods must be sold on a pseudo-market. So, after production, a second algorithm sells the products at such a price that supply and demand is solved. Using the prices determined by this market, one calculates the ratio of labour (time x complexity) and resources per dollar of price found when watching supply and demand, and the optimization system could be run so as to attempt to maximize the ratio of labour+resources/price. This way, people will get what they want the most, and the system should optimize for the best way to make people work the least, which seems like the primary contradiction between an individual's work as producer and consumer. Of course, there would still be quite a few inefficiencies, but given the fact that the Soviet economy was not that far from that of the US, it could be a net positive in pure economic output? Especially since this wouldn't suffer from any economic crises at all. What would remain is a way to incentivize innovation, maybe somehow by including successful innovation into the labour price of a commodity? Of course, outside of this, there would also be serious political issues with the necessary centralization for this, and you'd need to find a way to trust the economic calculation process. All in all, this feels... much more tractable to accomplish than what I would've thought. Maybe even tractable enough that it could be, in theory, implemented today, given sufficient political will and a way to get the most competent people possible on it, which of course is far from a given.
- advisedwang 6y ago
  It is more tractable some argue [1] that companies like Walmart show that it is possible to centrally plan an economy. [1] https://vancouversun.com/entertainment/books/book-review-attention-shoppers-specials-on-socialism-on-aisle-7 https://vancouversun.com/entertainment/books/book-review-att...
advisedwang 6y ago
If you are interested in this, I recommend reading up on Chile's attempted central economic control system [1]. Rather than trying to find an optimal solution with linear algebra, they used cybernetics - apply adjustments in a feedback control system rather than attempt to pre-determine the entire economy. This system was never completed because of the (US backed) coup by Pinochet. [1] https://99percentinvisible.org/episode/project-cybersyn/ https://99percentinvisible.org/episode/project-cybersyn/
- wahern 6y ago
  Most of Project Cybersyn never materialized, especially the high-technology aspects, because the whole idea was rather abstract. They hired the guy who literally wrote the book on cybernetics, and he was mostly inventing and writing software on-the-fly. There's a reason the cybernetic revolution never materialized--it was mostly fluff. Not pseudo-science, per se, but unchastened by the real world. There's only so much mileage you can get out of, e.g., analogizing the machinations of the human economy to a PID controller. As the thread article says, > the second serious issue with a centrally planned economy was data quality: Central planners’ knowledge about the input requirements and output capabilities of individual factories was simply not as good as the people actually working in the factory. Solutions to that aspect of the problem constituted most of Cybersyn's real-world achievements. But they're sort of boring. They mostly consisted of installing voice and data lines to the management offices of factories and cajoling them to send, on a daily basis, their production numbers along with short-term expected input requirements. Yes, the Cybersyn experiment was cut short by the coup. But the mention of the U.S. is gratuitous. The coup was driven by industrialists and a fear of communism. Orders for the coup were given the imprimatur of the most powerful senators, and tacitly by a majority of the senate. (The leftists' thin margin eroded as moderates broke rank.) Allende's original vision, after nationalization of a small number of key industries, was harmonious cooperation between central planners and the rest of the free market. But there was too much resistance, as reflected in the difficulty Project Cybersyn had in simply collecting data. Part of the resistance was cultural (it's just not how people were used to working), and part of it was deliberate, politically motivated opposition. In frustration Allende increasingly turned to more forceful measures for "controlling the means of production", reneging on some of his promises regarding the extent of nationalization. Eventually he pushed the country too far and he was assassinated by, basically, the capitalist class. (Especially for a South American country, Chile historically was and remains quite conservative. Just as in the U.S., much of the lower classes are as capitalist as the elite, especially when faced with concrete socialist policies, as opposed to the promises.) The U.S. had no hand in any of it. It's only role, AFAIU, was placating the fears of the coup architects by promising asylum if the coup failed, and those promises came after planning for the coup was well underway.
pnathan 6y ago
I really like learning about Soviet perspectives. Often it provides a fascinating counterpoint and alternative ways of approaching a problem. So much work was done, but it is, of course, all in Russian originally.
- ThinkingGuy 6y ago
  The textbook in my high school economics class [1] actually devoted a whole chapter to centrally planned economies, covering the methods they used for allocating resources in a fair amount of detail. As an American kid growing up during the cold war, I remember it being one of the more interesting chapters. Looking at the publisher's website, I see that the current edition of the book no longer includes that chapter. 1. https://www.mheducation.com/highered/product/economy-today-schiller-gebhardt/M9781259852022.html https://www.mheducation.com/highered/product/economy-today-s...
  - shirakawasuna 6y ago
    We have reached the End of History (TM), you see, and no longer need to think about that.
    - dang 6y ago
      Can you please stop using HN for ideological battle? You've done it a lot and it's not what this site is for, regardless of which ideology you favor or disfavor. Especially please don't post unsubstantive comments like the above. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
      - shirakawasuna 6y ago
        This is a thread about the economy of the USSR. Most of the comments are ideological, on the side of capital, and generally incorrect and ignorant of history. It is impossible to discuss this topic without discussing and arguing ideologically-founded positions. If the guidelines are against this, the entire thread should be nuked by mods and virtually every person in the thread should be warned and/or have their comments removed. Until then, I will provide some informed, highly relevant, and historically-grounded balance to the generally libertarian/liberal techbro (ideological) narratives spread constantly on HackerNews. Edit: here's a list of what you should look at for consistency: - The top comment is an ideologically-based analysis (hey, just like mine) using non-standardized terms but presenting them as common: https://news.ycombinator.com/item?id=25088755 https://news.ycombinator.com/item?id=25088755 - The second-to-top comment is an ideological but high-level description of Chile's approach to this problem, including an ideological (but accurate) description of why it was not actually tested: https://news.ycombinator.com/item?id=25085779 https://news.ycombinator.com/item?id=25085779 - I'm replying to a comment to the third-to-the-top comment. My reply here is merely a reference to the common idea of "the end of history" for capitalist economics following the collapse of the Soviet Union, which I would guess is relevant of the removal of planned economies from their textbook. My reference to this is barely ideological at all and I'm not sure how I'd even argue that it was. - The fourth-to-the-top comment is a negative one towards the supply chains in the former Soviet bloc: https://news.ycombinator.com/item?id=25090289 https://news.ycombinator.com/item?id=25090289. Their examples of them being bad include modularity and repairability, which is of course ideological. - The fifth highest comment is a joke about the game Factorio: https://news.ycombinator.com/item?id=25089965 https://news.ycombinator.com/item?id=25089965. - The sixth highest comment is discussing a different (imo, bad) book called "Why Nations Fail": https://news.ycombinator.com/item?id=25087224 https://news.ycombinator.com/item?id=25087224. They present the authors' position, which is of course ideological and highly capitalist. - The seventh highest comment is a link to another review. - The eight highest comment is vague guessing about computing power. - The ninth highest comment is referring to another thread from three years ago on this exact same topic. It is jam-packed with ideological positions on why planned economies can't work. https://news.ycombinator.com/item?id=25088681 https://news.ycombinator.com/item?id=25088681 - The tenth highest comment repeats apocryphal comments about Lenin and Henry Ford. https://news.ycombinator.com/item?id=25090364 https://news.ycombinator.com/item?id=25090364. Soviets existed before Ford's work and evolved in various different directions due to power dynamics. - The eleventh highest comment is a political commentary on Tetris. https://news.ycombinator.com/item?id=25089021 https://news.ycombinator.com/item?id=25089021 - The twelfth highest comment is references to a relevant (ideological) debate, with Mises given the second (and last) word: https://news.ycombinator.com/item?id=25089447 https://news.ycombinator.com/item?id=25089447 - The thirteenth highest comment is about the practicality of revisiting these ideas given greater computing power (again): https://news.ycombinator.com/item?id=25085755 https://news.ycombinator.com/item?id=25085755 This is getting a bit silly, but you get the idea. Just going through the top comments in order reveals ideologically-heavy discussion because the topic itself is inherently political and regards matters where the average Western person (and tech person) has been propagandized more than informed on the history and economics. The majority of the comments boil down to, "it can't work because X" or "it can work because Y", all of which must have ideologically foundations on economics.
hpoe 6y ago
Nice way to revise history to make the Holomdor just a result of lack of computational power not a genocidal atrocity. Next up Mao's 5 year plan only killed millions of people because of an error in a spreadsheet. Other than that it was totally going to work. In all honesty to reduce this to a simple problem of calculation and balancing a sheet is incredibly simplified and narrowminded, it's like reducing all of art to a single dimension and analyzing it on that.
- sudosysgen 6y ago
  That's not the point of the article. The article talks purely about economic systems. Western, capitalist democracies too did things like the Holodomor. There isn't much of a reason why a (computed) planned economy would have to lead to the Holodomor, or the Great Chinese Famine.
  - 082349872349872 6y ago
    The Irish would agree.
- yters 6y ago
  There is a certain sense where this is communism's central failing. If we remove all the moral components of mass starvation due to idealistic utopianism, the central tenet of communism is materialism and consequently that all human ingenuity reduces to computation. This means that we should in theory be able to replace human capitalists with a giant computer. But, if materialism is wrong, and humans have a trans-computational reasoning ability, then this means even at a theoretical level communism is fatally flawed, because the economy is intrinsically reliant upon human ingenuity and thus must be capitalistic, because the economy rides upon the locus of the individual human mind which can never, not even in theory, be replaced by a computer. In a certain sense, the amoral repudiation of communism is even more powerful, because even the cold blooded bureaucratic bean counters behind the revolution can no longer even appeal to clear minded rationalism to justify their political philosophy. It is not a coincidence that Marx envisioned a mechanical singularity as the apex of the inevitable communist revolution. Also may explain the strong communist and materialist leanings in the elite of the tech sector, along with the collaboration between the tech elite and the CCP.
gumby 6y ago
communism discards almost all the signalling systems (market signals) so relatively quickly comes off the rails. Raw capitalism tries to do the same of course (monopoly and control) as the signalling systems provide information to new entrants / competitors. That is one of the most important externalities governments need to address.
mlamat 6y ago
Adam Curtis made a documentary about this: https://www.youtube.com/watch?v=h3gwyHNo7MI https://www.youtube.com/watch?v=h3gwyHNo7MI
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noir_lord 6y ago
If it takes a thousand years on a modern desktop. Then amazon could theoretically do it in days (assuming it's amenable to parallelization) no?
- why_only_15 6y ago
  My understanding is that it isn't. See the article this references many times ( https://crookedtimber.org/2012/05/30/in-soviet-union-optimization-problem-solves-you https://crookedtimber.org/2012/05/30/in-soviet-union-optimiz... ), the paragraph starting with "So long as we are thinking like computer programmers".
asdfman123 6y ago
The Red Plenty was a great book and is highly recommended reading. I'm reading a book right now called "Why Nations Fail" (a little drier but definitely worth the read) and it argues that part of the reason why strongly centralized economies fail is that politics gets in the way of optimizing for growth. E.g. maybe USSR communism could have worked better if there wasn't, say, the coal minister standing in the way of moving resources away from coal to a better use of capital.
- shirakawasuna 6y ago
  An important consideration is that USSR-style communism did not fail because of a fundamentally broken economy, but due to expending vast resources and organization against outside attacks / foreign policy. Not that there weren't serious economic problems, just that they were not dramatic and certainly not so compared to those of capitalist countries. For example, the Soviet system did a poor job at incentivizing production. Factories that performed worse would often receive greater benefits, as policymakers frequently followed a "squeaky wheel gets the grease" approach. This also happened internal to factories or other productive activities, where there was no real incentive to work more efficiently and sometimes a disincentive. These are, of course, easily soluble problems with greater information and adding some incentives for workers' performance, but I don't bring them up because of that - I bring them up because it's what workers complained about.
  - chordalkeyboard 6y ago
    > Factories that performed worse would often receive greater benefits, as policymakers frequently followed a "squeaky wheel gets the grease" approach. This also happened internal to factories or other productive activities, where there was no real incentive to work more efficiently and sometimes a disincentive. Of course they did, this is Marxist doctrine. From each according to his ability, to each according to his need. Why would this be a bad thing? Who would want to change this aspect of central planning? > These are, of course, easily soluble problems with greater information and adding some incentives for workers' performance So did they fail to solve these problems because they were prevented from doing so because of dogma?
titanomachy 6y ago
So it sounds like a market economy is optimal in some senses, but the advantage of a centrally-planned economy is that it would allow administrators to directly choose the objective function that they're optimizing for. That's interesting. It seems like even if the optimization problem part were tractable, choosing an objective function to optimize social wellbeing would be very hard.
- Retric 6y ago
  I wonder if it would have been easier back in 1848 when the communist manifesto was created than today. Consistently meeting people’s basic needs for food, clean water, and shelter would have been a step up for most of the world back then where today the standard of living for most people is dramatically past that point. Both China and Russia experienced a famine shortly after becoming communist, so at least initially it seems to make things worse.
  - titanomachy 6y ago
    Those needs could be met in an agrarian model, but you'd get swept away by the industrialized nations in pretty short order. Meeting those basic needs wouldn't be enough for long in a competitive global landscape.
    - Retric 6y ago
      I am not suggesting a hypothetical economy which only did those things. Governments need to build militaries and roads etc. I am rather suggesting 170 years ago the yardstick for success may have looked very different. Something that is obviously flawed today may have seemed far more reasonable to people at the time and even somewhat worked. Hell the US still had slavery back then, it was simply a very different time period. Which kind of makes me think what biases someone in 170 years in the other direction aka 2190 would have thinking about our time period.
      - 082349872349872 6y ago
dang 6y ago
If curious see also a thread from 2017 https://news.ycombinator.com/item?id=14515225 https://news.ycombinator.com/item?id=14515225
moralsupply 6y ago
Central planning might appear as a "good idea", until your linear programming model has to deal with factors of production that are counted in small quantities (eg. highly specialized machinery), at which point the so called "tragedy of the integers" degenerates any model you throw at the problem. As it turns out, the "economy" is a distributed intelligence, in which only individual actors know what's best for themselves, who react according to all sorts of information, and the overall effect of their interactions is codified in the prices of products and services. Trying to replace that with a "central brain" inevitably leads to severe misallocation of resources.
- CinchWrench 6y ago
  I've worked extensively with MIP and never heard the phrase "tragedy of the integers." Can you tell me where I can go to learn more about this outlook on issues associated with (i suppose) linear relaxations of integer problems?
- baybal2 6y ago
  > Central planning might appear as a "good idea", until your linear programming model has to deal with factors of production that are counted in small quantities (eg. highly specialized machinery), at which point the so called "tragedy of the integers" degenerates any model you throw at the problem. Central planning might appear as a "good idea", until your linear programming model runs into a typical union bureaucrat. Attributing the failure of union's system to "bad math" is like saying a man dying from old age dying from a heart disease. The biggest reason, eclipsing all others, for the economic ruin of the union was the extreme, omnipresent corruption of everything economics.
  - triangleman 6y ago
    And now we have two good arguments against central planning, just off the cuff. Academically and rhetorically, Hayek demolished the idea some 75 years ago.
- segfaultbuserr 6y ago
  > Trying to replace that with a "central brain" inevitably leads to severe misallocation of resources. Now the question is: If a conglomerate has a dominate position in a marketplace, doesn't its administration face many of the same problems and challenges just like a central planner? In this situation, from a technical perspective, which are the similarities and differences here? Of course, one can answer, "this is why we have anti-trust laws", or "the free market still largely works, nobody can fully control an economic sector, even a conglomerate is bounded by the market". But it doesn't respond to the real question. For example, if Amazon or Google is trying to use an algorithm to optimize something globally, intuitively, it seems that they are effectively solving the same type of economic calculation problem, albeit at a much smaller scale. I made this comment because I recently saw an essay that also uses the book Red Plenty as an example to argue that many attempts on "AI", "machine learning" or "big data" by large corporations can potentially fall into the old central planning pitfalls. What is your opinion?
everly 6y ago
There was a tweet posted here a couple of weeks ago [0] which highlighted the sad state of Tetris for iPhone. I couldn't help but chuckle at the thought that the beloved original version was developed in the Soviet Union and then capitalism turned it into...whatever it is now. And if your goal is to make money then I guess the capitalist version is right on schedule. But if your goal is to provide a stimulating (and mildly fulfilling imo) interactive entertainment that doesn't rot your citizens' minds and bank accounts then it's not quite as clear. [0] https://twitter.com/sandofsky/status/1321593104298725376?s=19 https://twitter.com/sandofsky/status/1321593104298725376?s=1...
awinter-py 6y ago
see also https://en.wikipedia.org/wiki/Socialist_calculation_debate https://en.wikipedia.org/wiki/Socialist_calculation_debate or van mises' 1920 paper on this topic (overview here https://en.wikipedia.org/wiki/Economic_calculation_problem https://en.wikipedia.org/wiki/Economic_calculation_problem)
- amai 6y ago
  Here a quote from your interesting links. It seems some were already very aware of the short comings of centralised economy: "If a universal mind existed, of the kind that projected itself into the scientific fancy of Laplace – a mind that could register simultaneously all the processes of nature and society, that could measure the dynamics of their motion, that could forecast the results of their inter-reactions – such a mind, of course, could a priori draw up a faultless and exhaustive economic plan, beginning with the number of acres of wheat down to the last button for a vest. The bureaucracy often imagines that just such a mind is at its disposal; that is why it so easily frees itself from the control of the market and of Soviet democracy. But, in reality, the bureaucracy errs frightfully in its estimate of its spiritual resources. [...] The innumerable living participants in the economy, state and private, collective and individual, must serve notice of their needs and of their relative strength not only through the statistical determinations of plan commissions but by the direct pressure of supply and demand. — Leon Trotsky, The Soviet Economy in Danger"
averros 6y ago
The reason why central planning (i.e. "optimization" of Soviet sort) fails has nothing to do with complexity, algorithms, data quality, etc. That central planning always fails due to economic calculation problem - the logical proof of impossibility of stable centrally planned economy was published by Ludwig von Mises in 1920, and pretty much accurately described the fate of all socialist economies. Briefly, the proof relies on the fact that human utility functions are hidden, and that the only way to extract information about them is to observe voluntary trade between humans. These trades in aggregate create prices which guide the economic planning by independent producers. The very fact of imposing central plans on people (who are no longer able to engage in voluntary trade) effectively destroys the input information about what people want or need and how much they value goods. After this information is destroyed, no matter how fancy the computers and planning algorithms are, they cannot possibly produce any meaningful plans. Garbage in - garbage out.
CGamesPlay 6y ago
Reading this, it seems to me that playing Factorio is an exercise in applied soviet-style central planning.
- danuker 6y ago
  > Factories that depended on those commodities often sat idle for months as they waited for the shortages to end. Yep, sounds like most of my gameplay.
markvdb 6y ago
Two random thoughts: - Go to any former Soviet country. Still today, one can see and feel the supply chain problems in so many remaining visible products. Street lights, staircases, trains, ... Overbuilt, modular, repairable. - Negative externalities like CO². We can probably learn a thing or two about what to do (or not!) with them from this totally crazy experiment that the USSR was.
ncmncm 6y ago
Lenin was a huge admirer of the Ford Motor Company. His "soviets" were cribbed wholesale from Ford's corporate governance handbook. So, if Soviet planning seems to resemble corporate practice, it is not an accident.
amai 6y ago
China is still using five-year plans for it's economy. It seems much more successful. How is this different from the Soviet way of planning the economy? - https://www.aljazeera.com/economy/2020/10/29/china-unveils-5-year-path-to-becoming-a-tech https://www.aljazeera.com/economy/2020/10/29/china-unveils-5... - https://en.wikipedia.org/wiki/Five-year_plans_of_China https://en.wikipedia.org/wiki/Five-year_plans_of_China

134 points by amai 6y ago

So if we can ever prove P=NP then communism becomes practical viable? It's interesting the political system reduces to a problem in computer science.

thelastname 6y ago
No, as long as humans are involved.
jkingsbery 6y ago
Computational complexity was one of 6 reasons the author listed at why the optimization problem was infeasible. I read the article in its entirety, and I saw a claim that the number of calculations scaled in polynomial time, but I didn't see any claims of problems that are verifiable in polynomial time with no known polynomial time solutions. Then there's the other 5 criteria, which show that this is not a computer science problem. Coming up with an objective function is entirely a subjective matter. It depends entirely on what the ruling party wants. Communist countries don't act to the benefit of all, they act to the benefit of the chosen few, just those few are chosen differently.
- masijo 6y ago
  So, if the planification was on the hands of the people via direct democracy, like Cockshott proposes, then problem solved, kind of?
  - sudosysgen 6y ago
    As long as they could settle on a good cost function. I think my proposal for how the cost function should be found is better than Cockshott's in the short term.
- yters 6y ago
  If you go to Shalizi's article, which the author links to, then you'll see that polynomial time is a based on very generous assumptions about the problem space of the economy to make it amenable to convex optimization. Under realistic assumptions, convexity disappears, which pushes economic planning into NP Complete and harder territory.
myth_drannon 6y ago
Capitalism/Communism are economic systems not political. It's all about how you distribute limited resources (Simplistically - All to a few vs a bit to everyone).
- anoncake 6y ago
  Communism isn't about how resources are distributed, but who controls the means of production.
  - chordalkeyboard 6y ago
    Those are very similar in practice.
sudosysgen 6y ago
From what I understood, you wouldn't need to prove P=NP, you would just need enough computing power, as in, on the order of a few RTX 3090s.

canjobear 6y ago

See also the Slate Star Codex book review: https://slatestarcodex.com/2014/09/24/book-review-red-plenty/ https://slatestarcodex.com/2014/09/24/book-review-red-plenty...

idoh 6y ago
Amazing read, thanks for the link!

sudosysgen 6y ago

An interesting point here: >would correspond to an optimization problem that would take a thousand years to solve on a modern desktop computer If this really is so, then the problem is tractable nowadays - a thousand 2016 desktop computers years is something we could do multiple times a day with a modern supercomputer, so definitely feasible. Same for data, modern networked devices could provide data of sufficient quality. That being said, the big one is of course to find the function to optimize. I had an idea about this not long ago - the issue communists have with capitalism is that it has a class divide in production. So why not try this: all consumer goods must be sold on a pseudo-market. So, after production, a second algorithm sells the products at such a price that supply and demand is solved. Using the prices determined by this market, one calculates the ratio of labour (time x complexity) and resources per dollar of price found when watching supply and demand, and the optimization system could be run so as to attempt to maximize the ratio of labour+resources/price. This way, people will get what they want the most, and the system should optimize for the best way to make people work the least, which seems like the primary contradiction between an individual's work as producer and consumer. Of course, there would still be quite a few inefficiencies, but given the fact that the Soviet economy was not that far from that of the US, it could be a net positive in pure economic output? Especially since this wouldn't suffer from any economic crises at all. What would remain is a way to incentivize innovation, maybe somehow by including successful innovation into the labour price of a commodity? Of course, outside of this, there would also be serious political issues with the necessary centralization for this, and you'd need to find a way to trust the economic calculation process. All in all, this feels... much more tractable to accomplish than what I would've thought. Maybe even tractable enough that it could be, in theory, implemented today, given sufficient political will and a way to get the most competent people possible on it, which of course is far from a given.

advisedwang 6y ago
It is more tractable some argue [1] that companies like Walmart show that it is possible to centrally plan an economy. [1] https://vancouversun.com/entertainment/books/book-review-attention-shoppers-specials-on-socialism-on-aisle-7 https://vancouversun.com/entertainment/books/book-review-att...

advisedwang 6y ago

If you are interested in this, I recommend reading up on Chile's attempted central economic control system [1]. Rather than trying to find an optimal solution with linear algebra, they used cybernetics - apply adjustments in a feedback control system rather than attempt to pre-determine the entire economy. This system was never completed because of the (US backed) coup by Pinochet. [1] https://99percentinvisible.org/episode/project-cybersyn/ https://99percentinvisible.org/episode/project-cybersyn/

wahern 6y ago
Most of Project Cybersyn never materialized, especially the high-technology aspects, because the whole idea was rather abstract. They hired the guy who literally wrote the book on cybernetics, and he was mostly inventing and writing software on-the-fly. There's a reason the cybernetic revolution never materialized--it was mostly fluff. Not pseudo-science, per se, but unchastened by the real world. There's only so much mileage you can get out of, e.g., analogizing the machinations of the human economy to a PID controller. As the thread article says, > the second serious issue with a centrally planned economy was data quality: Central planners’ knowledge about the input requirements and output capabilities of individual factories was simply not as good as the people actually working in the factory. Solutions to that aspect of the problem constituted most of Cybersyn's real-world achievements. But they're sort of boring. They mostly consisted of installing voice and data lines to the management offices of factories and cajoling them to send, on a daily basis, their production numbers along with short-term expected input requirements. Yes, the Cybersyn experiment was cut short by the coup. But the mention of the U.S. is gratuitous. The coup was driven by industrialists and a fear of communism. Orders for the coup were given the imprimatur of the most powerful senators, and tacitly by a majority of the senate. (The leftists' thin margin eroded as moderates broke rank.) Allende's original vision, after nationalization of a small number of key industries, was harmonious cooperation between central planners and the rest of the free market. But there was too much resistance, as reflected in the difficulty Project Cybersyn had in simply collecting data. Part of the resistance was cultural (it's just not how people were used to working), and part of it was deliberate, politically motivated opposition. In frustration Allende increasingly turned to more forceful measures for "controlling the means of production", reneging on some of his promises regarding the extent of nationalization. Eventually he pushed the country too far and he was assassinated by, basically, the capitalist class. (Especially for a South American country, Chile historically was and remains quite conservative. Just as in the U.S., much of the lower classes are as capitalist as the elite, especially when faced with concrete socialist policies, as opposed to the promises.) The U.S. had no hand in any of it. It's only role, AFAIU, was placating the fears of the coup architects by promising asylum if the coup failed, and those promises came after planning for the coup was well underway.

pnathan 6y ago

I really like learning about Soviet perspectives. Often it provides a fascinating counterpoint and alternative ways of approaching a problem. So much work was done, but it is, of course, all in Russian originally.

ThinkingGuy 6y ago
The textbook in my high school economics class [1] actually devoted a whole chapter to centrally planned economies, covering the methods they used for allocating resources in a fair amount of detail. As an American kid growing up during the cold war, I remember it being one of the more interesting chapters. Looking at the publisher's website, I see that the current edition of the book no longer includes that chapter. 1. https://www.mheducation.com/highered/product/economy-today-schiller-gebhardt/M9781259852022.html https://www.mheducation.com/highered/product/economy-today-s...
- shirakawasuna 6y ago
  We have reached the End of History (TM), you see, and no longer need to think about that.
  - dang 6y ago
    Can you please stop using HN for ideological battle? You've done it a lot and it's not what this site is for, regardless of which ideology you favor or disfavor. Especially please don't post unsubstantive comments like the above. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
    - shirakawasuna 6y ago
      This is a thread about the economy of the USSR. Most of the comments are ideological, on the side of capital, and generally incorrect and ignorant of history. It is impossible to discuss this topic without discussing and arguing ideologically-founded positions. If the guidelines are against this, the entire thread should be nuked by mods and virtually every person in the thread should be warned and/or have their comments removed. Until then, I will provide some informed, highly relevant, and historically-grounded balance to the generally libertarian/liberal techbro (ideological) narratives spread constantly on HackerNews. Edit: here's a list of what you should look at for consistency: - The top comment is an ideologically-based analysis (hey, just like mine) using non-standardized terms but presenting them as common: https://news.ycombinator.com/item?id=25088755 https://news.ycombinator.com/item?id=25088755 - The second-to-top comment is an ideological but high-level description of Chile's approach to this problem, including an ideological (but accurate) description of why it was not actually tested: https://news.ycombinator.com/item?id=25085779 https://news.ycombinator.com/item?id=25085779 - I'm replying to a comment to the third-to-the-top comment. My reply here is merely a reference to the common idea of "the end of history" for capitalist economics following the collapse of the Soviet Union, which I would guess is relevant of the removal of planned economies from their textbook. My reference to this is barely ideological at all and I'm not sure how I'd even argue that it was. - The fourth-to-the-top comment is a negative one towards the supply chains in the former Soviet bloc: https://news.ycombinator.com/item?id=25090289 https://news.ycombinator.com/item?id=25090289. Their examples of them being bad include modularity and repairability, which is of course ideological. - The fifth highest comment is a joke about the game Factorio: https://news.ycombinator.com/item?id=25089965 https://news.ycombinator.com/item?id=25089965. - The sixth highest comment is discussing a different (imo, bad) book called "Why Nations Fail": https://news.ycombinator.com/item?id=25087224 https://news.ycombinator.com/item?id=25087224. They present the authors' position, which is of course ideological and highly capitalist. - The seventh highest comment is a link to another review. - The eight highest comment is vague guessing about computing power. - The ninth highest comment is referring to another thread from three years ago on this exact same topic. It is jam-packed with ideological positions on why planned economies can't work. https://news.ycombinator.com/item?id=25088681 https://news.ycombinator.com/item?id=25088681 - The tenth highest comment repeats apocryphal comments about Lenin and Henry Ford. https://news.ycombinator.com/item?id=25090364 https://news.ycombinator.com/item?id=25090364. Soviets existed before Ford's work and evolved in various different directions due to power dynamics. - The eleventh highest comment is a political commentary on Tetris. https://news.ycombinator.com/item?id=25089021 https://news.ycombinator.com/item?id=25089021 - The twelfth highest comment is references to a relevant (ideological) debate, with Mises given the second (and last) word: https://news.ycombinator.com/item?id=25089447 https://news.ycombinator.com/item?id=25089447 - The thirteenth highest comment is about the practicality of revisiting these ideas given greater computing power (again): https://news.ycombinator.com/item?id=25085755 https://news.ycombinator.com/item?id=25085755 This is getting a bit silly, but you get the idea. Just going through the top comments in order reveals ideologically-heavy discussion because the topic itself is inherently political and regards matters where the average Western person (and tech person) has been propagandized more than informed on the history and economics. The majority of the comments boil down to, "it can't work because X" or "it can work because Y", all of which must have ideologically foundations on economics.

hpoe 6y ago

Nice way to revise history to make the Holomdor just a result of lack of computational power not a genocidal atrocity. Next up Mao's 5 year plan only killed millions of people because of an error in a spreadsheet. Other than that it was totally going to work. In all honesty to reduce this to a simple problem of calculation and balancing a sheet is incredibly simplified and narrowminded, it's like reducing all of art to a single dimension and analyzing it on that.

sudosysgen 6y ago
That's not the point of the article. The article talks purely about economic systems. Western, capitalist democracies too did things like the Holodomor. There isn't much of a reason why a (computed) planned economy would have to lead to the Holodomor, or the Great Chinese Famine.
- 082349872349872 6y ago
  The Irish would agree.
yters 6y ago
There is a certain sense where this is communism's central failing. If we remove all the moral components of mass starvation due to idealistic utopianism, the central tenet of communism is materialism and consequently that all human ingenuity reduces to computation. This means that we should in theory be able to replace human capitalists with a giant computer. But, if materialism is wrong, and humans have a trans-computational reasoning ability, then this means even at a theoretical level communism is fatally flawed, because the economy is intrinsically reliant upon human ingenuity and thus must be capitalistic, because the economy rides upon the locus of the individual human mind which can never, not even in theory, be replaced by a computer. In a certain sense, the amoral repudiation of communism is even more powerful, because even the cold blooded bureaucratic bean counters behind the revolution can no longer even appeal to clear minded rationalism to justify their political philosophy. It is not a coincidence that Marx envisioned a mechanical singularity as the apex of the inevitable communist revolution. Also may explain the strong communist and materialist leanings in the elite of the tech sector, along with the collaboration between the tech elite and the CCP.

gumby 6y ago

communism discards almost all the signalling systems (market signals) so relatively quickly comes off the rails. Raw capitalism tries to do the same of course (monopoly and control) as the signalling systems provide information to new entrants / competitors. That is one of the most important externalities governments need to address.

mlamat 6y ago

Adam Curtis made a documentary about this: https://www.youtube.com/watch?v=h3gwyHNo7MI https://www.youtube.com/watch?v=h3gwyHNo7MI

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noir_lord 6y ago

If it takes a thousand years on a modern desktop. Then amazon could theoretically do it in days (assuming it's amenable to parallelization) no?

why_only_15 6y ago
My understanding is that it isn't. See the article this references many times ( https://crookedtimber.org/2012/05/30/in-soviet-union-optimization-problem-solves-you https://crookedtimber.org/2012/05/30/in-soviet-union-optimiz... ), the paragraph starting with "So long as we are thinking like computer programmers".

asdfman123 6y ago

The Red Plenty was a great book and is highly recommended reading. I'm reading a book right now called "Why Nations Fail" (a little drier but definitely worth the read) and it argues that part of the reason why strongly centralized economies fail is that politics gets in the way of optimizing for growth. E.g. maybe USSR communism could have worked better if there wasn't, say, the coal minister standing in the way of moving resources away from coal to a better use of capital.

shirakawasuna 6y ago
An important consideration is that USSR-style communism did not fail because of a fundamentally broken economy, but due to expending vast resources and organization against outside attacks / foreign policy. Not that there weren't serious economic problems, just that they were not dramatic and certainly not so compared to those of capitalist countries. For example, the Soviet system did a poor job at incentivizing production. Factories that performed worse would often receive greater benefits, as policymakers frequently followed a "squeaky wheel gets the grease" approach. This also happened internal to factories or other productive activities, where there was no real incentive to work more efficiently and sometimes a disincentive. These are, of course, easily soluble problems with greater information and adding some incentives for workers' performance, but I don't bring them up because of that - I bring them up because it's what workers complained about.
- chordalkeyboard 6y ago
  > Factories that performed worse would often receive greater benefits, as policymakers frequently followed a "squeaky wheel gets the grease" approach. This also happened internal to factories or other productive activities, where there was no real incentive to work more efficiently and sometimes a disincentive. Of course they did, this is Marxist doctrine. From each according to his ability, to each according to his need. Why would this be a bad thing? Who would want to change this aspect of central planning? > These are, of course, easily soluble problems with greater information and adding some incentives for workers' performance So did they fail to solve these problems because they were prevented from doing so because of dogma?

titanomachy 6y ago

So it sounds like a market economy is optimal in some senses, but the advantage of a centrally-planned economy is that it would allow administrators to directly choose the objective function that they're optimizing for. That's interesting. It seems like even if the optimization problem part were tractable, choosing an objective function to optimize social wellbeing would be very hard.

Retric 6y ago
I wonder if it would have been easier back in 1848 when the communist manifesto was created than today. Consistently meeting people’s basic needs for food, clean water, and shelter would have been a step up for most of the world back then where today the standard of living for most people is dramatically past that point. Both China and Russia experienced a famine shortly after becoming communist, so at least initially it seems to make things worse.
- titanomachy 6y ago
  Those needs could be met in an agrarian model, but you'd get swept away by the industrialized nations in pretty short order. Meeting those basic needs wouldn't be enough for long in a competitive global landscape.
  - Retric 6y ago
    I am not suggesting a hypothetical economy which only did those things. Governments need to build militaries and roads etc. I am rather suggesting 170 years ago the yardstick for success may have looked very different. Something that is obviously flawed today may have seemed far more reasonable to people at the time and even somewhat worked. Hell the US still had slavery back then, it was simply a very different time period. Which kind of makes me think what biases someone in 170 years in the other direction aka 2190 would have thinking about our time period.
    - 082349872349872 6y ago

dang 6y ago

If curious see also a thread from 2017 https://news.ycombinator.com/item?id=14515225 https://news.ycombinator.com/item?id=14515225

moralsupply 6y ago

Central planning might appear as a "good idea", until your linear programming model has to deal with factors of production that are counted in small quantities (eg. highly specialized machinery), at which point the so called "tragedy of the integers" degenerates any model you throw at the problem. As it turns out, the "economy" is a distributed intelligence, in which only individual actors know what's best for themselves, who react according to all sorts of information, and the overall effect of their interactions is codified in the prices of products and services. Trying to replace that with a "central brain" inevitably leads to severe misallocation of resources.

CinchWrench 6y ago
I've worked extensively with MIP and never heard the phrase "tragedy of the integers." Can you tell me where I can go to learn more about this outlook on issues associated with (i suppose) linear relaxations of integer problems?
baybal2 6y ago
> Central planning might appear as a "good idea", until your linear programming model has to deal with factors of production that are counted in small quantities (eg. highly specialized machinery), at which point the so called "tragedy of the integers" degenerates any model you throw at the problem. Central planning might appear as a "good idea", until your linear programming model runs into a typical union bureaucrat. Attributing the failure of union's system to "bad math" is like saying a man dying from old age dying from a heart disease. The biggest reason, eclipsing all others, for the economic ruin of the union was the extreme, omnipresent corruption of everything economics.
- triangleman 6y ago
  And now we have two good arguments against central planning, just off the cuff. Academically and rhetorically, Hayek demolished the idea some 75 years ago.
segfaultbuserr 6y ago
> Trying to replace that with a "central brain" inevitably leads to severe misallocation of resources. Now the question is: If a conglomerate has a dominate position in a marketplace, doesn't its administration face many of the same problems and challenges just like a central planner? In this situation, from a technical perspective, which are the similarities and differences here? Of course, one can answer, "this is why we have anti-trust laws", or "the free market still largely works, nobody can fully control an economic sector, even a conglomerate is bounded by the market". But it doesn't respond to the real question. For example, if Amazon or Google is trying to use an algorithm to optimize something globally, intuitively, it seems that they are effectively solving the same type of economic calculation problem, albeit at a much smaller scale. I made this comment because I recently saw an essay that also uses the book Red Plenty as an example to argue that many attempts on "AI", "machine learning" or "big data" by large corporations can potentially fall into the old central planning pitfalls. What is your opinion?

everly 6y ago

There was a tweet posted here a couple of weeks ago [0] which highlighted the sad state of Tetris for iPhone. I couldn't help but chuckle at the thought that the beloved original version was developed in the Soviet Union and then capitalism turned it into...whatever it is now. And if your goal is to make money then I guess the capitalist version is right on schedule. But if your goal is to provide a stimulating (and mildly fulfilling imo) interactive entertainment that doesn't rot your citizens' minds and bank accounts then it's not quite as clear. [0] https://twitter.com/sandofsky/status/1321593104298725376?s=19 https://twitter.com/sandofsky/status/1321593104298725376?s=1...

awinter-py 6y ago

see also https://en.wikipedia.org/wiki/Socialist_calculation_debate https://en.wikipedia.org/wiki/Socialist_calculation_debate or van mises' 1920 paper on this topic (overview here https://en.wikipedia.org/wiki/Economic_calculation_problem https://en.wikipedia.org/wiki/Economic_calculation_problem)

amai 6y ago
Here a quote from your interesting links. It seems some were already very aware of the short comings of centralised economy: "If a universal mind existed, of the kind that projected itself into the scientific fancy of Laplace – a mind that could register simultaneously all the processes of nature and society, that could measure the dynamics of their motion, that could forecast the results of their inter-reactions – such a mind, of course, could a priori draw up a faultless and exhaustive economic plan, beginning with the number of acres of wheat down to the last button for a vest. The bureaucracy often imagines that just such a mind is at its disposal; that is why it so easily frees itself from the control of the market and of Soviet democracy. But, in reality, the bureaucracy errs frightfully in its estimate of its spiritual resources. [...] The innumerable living participants in the economy, state and private, collective and individual, must serve notice of their needs and of their relative strength not only through the statistical determinations of plan commissions but by the direct pressure of supply and demand. — Leon Trotsky, The Soviet Economy in Danger"

averros 6y ago

The reason why central planning (i.e. "optimization" of Soviet sort) fails has nothing to do with complexity, algorithms, data quality, etc. That central planning always fails due to economic calculation problem - the logical proof of impossibility of stable centrally planned economy was published by Ludwig von Mises in 1920, and pretty much accurately described the fate of all socialist economies. Briefly, the proof relies on the fact that human utility functions are hidden, and that the only way to extract information about them is to observe voluntary trade between humans. These trades in aggregate create prices which guide the economic planning by independent producers. The very fact of imposing central plans on people (who are no longer able to engage in voluntary trade) effectively destroys the input information about what people want or need and how much they value goods. After this information is destroyed, no matter how fancy the computers and planning algorithms are, they cannot possibly produce any meaningful plans. Garbage in - garbage out.

CGamesPlay 6y ago

Reading this, it seems to me that playing Factorio is an exercise in applied soviet-style central planning.

danuker 6y ago
> Factories that depended on those commodities often sat idle for months as they waited for the shortages to end. Yep, sounds like most of my gameplay.

markvdb 6y ago

Two random thoughts: - Go to any former Soviet country. Still today, one can see and feel the supply chain problems in so many remaining visible products. Street lights, staircases, trains, ... Overbuilt, modular, repairable. - Negative externalities like CO². We can probably learn a thing or two about what to do (or not!) with them from this totally crazy experiment that the USSR was.

ncmncm 6y ago

Lenin was a huge admirer of the Ford Motor Company. His "soviets" were cribbed wholesale from Ford's corporate governance handbook. So, if Soviet planning seems to resemble corporate practice, it is not an accident.

amai 6y ago

China is still using five-year plans for it's economy. It seems much more successful. How is this different from the Soviet way of planning the economy? - https://www.aljazeera.com/economy/2020/10/29/china-unveils-5-year-path-to-becoming-a-tech https://www.aljazeera.com/economy/2020/10/29/china-unveils-5... - https://en.wikipedia.org/wiki/Five-year_plans_of_China https://en.wikipedia.org/wiki/Five-year_plans_of_China