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.
I think a major problem with communism isn't that it's so difficult to determine what needs to be produced, but that changing resource allocation becomes a political problem.
In a capitalist system, if something looks like it's going to be a big economic hit people are ready to sell off other assets and pour billions of dollars into it. Under communism, there's a guy who doesn't want to lose funding for his department who might have more power than his rivals. To make a techie metaphor, it's why a lot of people have moved to the cloud: you can choose whatever resources you want on the fly, instead of having to battle IT.
To go off on a tangent, I think there's a huge false choice between "free market economic policy" and "bureaucratic centralized economies." If we could just create a market that has an incentive structure that buoys the poor up instead of pushes them down, it would be huge. People still buy and sell based on prices, but we introduce slightly different weighting.
It's also the case that, in practice, we regulate and politicize much - maybe all - of the free market. So really, we're not having an argument about "Free market vs total centralized system", it's "how much centralization is appropriate".
So maybe we don't today need to work with the Department of Widget creation, but we need to hire lobbyists for the Senate Committee on the Widget Sector. I'm not prepared to say that informing/influencing/steak-dinnering the Senators' aides is per se better than having a nasty political fight in the Company Of The People.
The history of the US farm bill and food safety is a great example of how we don't have a genuine free market in the US. I don't argue for a free market, by the way. Regulation has done a great deal of good. It's just very important to speak with care about topics, and use words that are true to the reality.
> It's also the case that, in practice, we regulate and politicize much - maybe all - of the free market.
Do we? Perhaps you do in the US. Where I live, Australia, it's true most of the noise from the echo chamber is about what sort of regulations to impose on markets. But if you stop and look, they are invariably markets that aren't functioning well. The classic things that we appear to be always arguing about are things like power, landline internet, and water. But that isn't a surprise - they are the things that tend towards monopoly, so the market for those things is always broken or teetering on the edge of broken. We are now seeing the same effect for internet search and social media, where again network effects drive the markets towards monopoly.
At the other end of the scale, here in Australia we've toyed with creating market's to solve political problems. One perennial problem in the driest continent on the planet is water. So they created a market based on virtual water, so rather go and haggling with your local pollie for water access right you have to buy it. It's been pretty successful from what I can tell, but now there are political stouches over how much virtual water there is. I guess that the water market could be viewed as yet more rules imposed by a central authority, as indeed could rules about regulating monopolies, and rules about truth in advertising and honouring warranties and the like. But I think that's miss leading. Rules about truth in advertising are really about setting up the conditions a market needs to flourish - equal access to information from the buyer and seller.
While politicking on those rules is indeed a discussion about rules being imposed by a central authority, the purpose of those rules is to enable efficient decentralised decision making, not about "how much centralization is appropriate"
AU has slightly different framing and expectations. I've had a few conversations with people from AU, or who spent significant time there. It is different there in certain base assumptions about the role of government.
I don't want to say you're wrong, and I don't want to admit I might be wrong. ;-)
Many of us think that that freer markets do buoy up the poorer, I think Schumpeter put it well:
>"Electric lighting is no great boon to anyone who has money enough to buy a sufficient number of candles and to pay servants to attend them. It is the cheap cloth, the cheap cotton and rayon fabric, boots, motorcars and so on that are the typical achievements of capitalist production, and not as a rule improvements that would mean much to a rich man. Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort."
I think it is a moot argument if you know the history of silk and nylon.
Nylon stockings were on par and better than silk stockings until they pushed silk stockings out of market. Then they became what we know them today - wear once or twice and buy new.
You’re missing the point; Nylon stockings did not exist until capitalists invented and popularized them. Only the rich had silk stockings in 1900; now anyone can get a superior product!
It's ridicolous to suggest that nylon stockings could have been invented only under capitalism. Plenty of inventions and discovery happened also under communism.
Yeah, but only focusing on the largest of megaprojects, and even that failed horribly after some time. Products for the normal people were of horrendous quality and mostly no innovation happened.
The first one had pretty much high level language programming circa 1965 (Elbrus came later and iAXP432 much later). The second one used ternary logic which is closer to exp(0) and is more efficient.
The "products for people" innovation in USSR was to make sure that everyone has heated home - and heating was centralized in USSR (and now in Russia too), which made it much cheaper and affordable. It was in different direction and without pervasive advertising.
Inventions are one thing, but mass availability and affordability are another. I recall seeing an interview with Mikhail Gorbachev where he talked about how embarrassing it was that the Soviet Union could send men to space, but failed to produce pantyhose (of quality , in quantity).
Mikhail Gorbachev, as a person somewhat responsible for collapse of USSR, had an incentive to paint USSR in a certain light in his interview, wouldn't you agree?
I grew in USSR (I was born in 1971 in Moscow) and I do not remember any scarcity of stockings.
What about the blue collar workers that are living in RVs in the Bay Area? Are they buying silk socks?
I feel like capitalism is overly celebrated by those who benefit from it, to their detriment. The meritocracy is failing, capitalism is failing, and I’m concerned about will replace capitalism if we continue to brush off the harsh realities of its failings.
Our perspective is that others are prevented from enjoying those same benefits by the regulatory interference that is ostensibly intended to help them. We don't see it as capitalism failing, but the regulatory state failing and capitalism being distorted thus.
we are also concerned about capitalism's replacement. except we fear the continued suppression of market action to lead to authoritarian totalitarianism because the regulatory state appears to have been captured by oligarchs.
Violence as a tool exclusive to the state is a social construct much like property and so I expect the norms surrounding private property to be maintained like other constructs, through intentioned participation.
> What about the blue collar workers that are living in RVs in the Bay Area?
Not a failure of capitalism. If you make building more housing illegal the price of the existing stock will get bid up. Remember, Tokyo has grown 50% in population over the last two decades and rent and house prices have been basically flat throughout. Zoning makes housing expensive, not capitalism.
But that's not true. Building new housing, no matter how large, would be a losing proposition, as you'd have to pay for the land, which is expensive, and building lots of apartments would increase the supply, reducing the value of your land and building.
I've lived in a european city without rent control and mostly even without zoning laws (less than 20% of kiel are affected by Bebaungsplänen) and yet rent was even higher and supply even lower. Hundreds of hotels, lots of luxury apartments, but for the average citizen, nothing got built.
Capitalism doesn't optimize for producing the most supply, it optimizes for increasing the value of your assets. And if the best way to do so is by artificially limiting the supply, that's exactly what's gonna happen.
> Capitalism doesn't optimize for producing the most supply, it optimizes for increasing the value of your assets. And if the best way to do so is by artificially limiting the supply, that's exactly what's gonna happen.
There are two separate issues here, and the distinction is often missed. It is one thing when commodification brings to the masses what was once accessible only to the rich. It is an entirely separate and independent thing to make the economy more egalitarian, and some would argue just.
Capitalism seems to consistently do the former phenomenally well and make the latter catastrophically worse.
I think that's why we keep having absurd arguments about "the poor having microwaves" while we live in a grotesquely unequal society.
there will always be some resource scarcity, and there's no egalitarian economy that resulted in increased availability of luxuries across the board, on the contrary, all attempts at egalitarianism just pushed the average luxury availability to the people down.
Once upon a time, free-market capitalism did the 'make egalitarian' part just fine. In the 1960s, the USA had a 91% marginal tax rate for the highest income bracket (91% of income over 200k went to the government). In 2019 it's 37%.
Something I picked up that seems to have been dropped down the memory hole. Under Truman the US was running a hot consumer command economy from the end of WWII to the mid 50's. In some ways very much like China is doing now.
Also mid 1980's to 2000 saw the depression era limits on accumulating wealth via pure capital machinations removed one by one.
Were now in the reverse situation. from 1950. Where it was possible to make money producing consumer goods and impossible to make money via rent seeking. Now rent seeking is how you make money. And it's obvious looking at the government response to the 2008 financial crisis and the pandemic this year that's being enforced via policy.
What you are describing is often called market socialism and it is something very much worth considering, at least the libertarian socialist models of it. https://en.wikipedia.org/wiki/Market_socialism
More importantly, there is a false choice between socialism + central planning on one hand, and capitalism + free market on the other.
In fact, all mainstream socialists and Marxists today are in favor of some kind of free market. Also, none of the centrally planned, soviet style economies had any feature of socialism - they were capitalist societies, where all of the power was concentrated in the hands of those who controlled capital. Sure, workers were paid lip service, but their power and control over their work was in fact even less than in the European or American capitalist countries. They were just as much socialist countries as they were democratic - in that it was simply a title they assigned to themselves, void of any meaning whatsoever.
The main difference between an actual socialist market-based economy and the capitalist market-based economy that we have today would be that essentially all enterprises competing on the market would be co-ops, where workers democratically decide how the company is run and get to share the profits (and losses), instead of getting a pre-determined (sometimes negotiated) wage.
> all enterprises competing on the market would be co-ops, where workers democratically decide how the company is run and get to share the profits (and losses), instead of getting a pre-determined (sometimes negotiated) wage.
The problem with co-ops, partnerships and the like as a firm structure is that (1) they can't easily provide access to outside capital. Maybe they can issue debt, but that comes with a lot of drawbacks wrt. equity investment. (2) most workers have their job as their main source of income, so they don't actually want to incur the excess risk that's inherent in "sharing in the profit (and losses!) of their firm" because that literally means putting all your eggs in one basket. Outside investors can incur that risk more easily, whether by diversifying it away or by investing only part of their assets in a risky endeavor.
"All enterprises as co-ops" is a nice idea but doesn't actually work in the real world. Co-ops and partnerships are totally fine for very low capital intensity businesses like law firms, but quite unsuitable elsewhere.
Co-ops have rarely been tried out, so you really can't say that with that authority. There are also many ways for a co-op to organize, the pure profit-sharing model is probably not the most popular for the reasons you outlined.
For example, the largest company in the Basque region of Spain is the Mondragon corporation, a 12—billion euro yearly revenue, 60 years old federation of co-ops with about 81,000 members+employees, working in industry, finance, retail, and knowledge - hardly low-capital areas. They are currently the 10th largest company in Spain. They do have traditional employees as well as worker-owners, and there are concerns about the percentages of each, but overall they are a true co-op at a huge scale, proving that it can be done.
If there were government policies to encourage this type of business, especially by providing better credit access, and if this was closer to the beaten path, I don't see any reason that it couldn't be at least a major part of the economic landscape, even if not easily becoming dominant.
Communist systems took poor and often feudal countries or colonies and made them into regional powers or superpowers. The liberal narrative that we've reached the end of history because of their "failure" is absurd in the extreme, particularly given the outside pressures and violences they (usually) weathered.
Instead of, "what's wrong with communism!?", we should be asking, "if communism doesn't work, why was it necessary for capitalist countries to direct the entirety of their foreign policies into violence and sanctions against communists in their own communist countries and anyone who so much as requested aid from them, despite capitalist countries refusing to supply such aid?"
The reality is that communist countries actually did work and worked better than the prior state those countries were in, but were targeted for systematic erasure by the rest of the planet. When communist countries fell, life did not get better for those who lived there. It got worse. Pensions were privatized or canceled. Public programs eliminated. Promises of multi-party democracy were amended to disclude communists or anyone like them, with violence. Quality of Life indicators plunged and with no option to return to the former system (a certainly authoritarian condition imposed by the newly-in-power, Western-supported governments), these countries languished for decades and were and continue to be subjected to new depravities and exploitation even as they claw back some semblance of dignity.
Look at polling in the former Eastern Bloc. In Russia. In China. It's still very popular and it's not because of the chauvinist (and often contextually racist) idea they're all brainwashed goons. They saw the changes and often have a critically supportive view of a return. They say that most things were better, but acknowledge those that were worse, and when they say they'd support a return it's not to an identical state, just a similar one. But their political systems prevent this. One must wonder why.
I grew up in Socialist Poland. What you're saying is absurdly far away from reality.
Very few people say that things were better. It was a miserable time back then, and the life has drastically improved for the vast majority of the society.
When there was toilet paper delivered to the stores, it was a big deal. And by "toilet paper" I mean a gray, thin, one-layered, recycled one. It's weird we didn't switch to the asian water-bidet style then.
There was literally nothing available in the stores. Imagine your local supermarket, but with literal empty shelves, just vinegar on some of them.
There was even a joke about a guy who comes to a hardware store:
- I'd like some screws
- We don't have screws
- I'd like some nails then
- We don't have nails either
- Well, what do you have?
- Nothing.
- Why don't you close the store down then?
- We don't have the locks either.
This was a reality for dosens of millions of people back then. Saying that anyone misses that time, and that many people had it better is some kind of a sick fantasy.
Also, it wasn't due to US politics (although it didn't help). With the private enterprise being trashed, and people demotivated to do any sort of work (what for? "If you sit, or you stand, 100zł payment is your right" - another common joke), it was bound to collapse.
If anything, people in Poland saw West world as the one that was fighting to get us out of it all (and as a place of freedom and possibility).
And really - the crazy 90s after the communist rule fell, we saw a huge increase in the quality of life for almost everyone.
> Instead of, "what's wrong with communism!?", we should be asking, "if communism doesn't work, why was it necessary for capitalist countries to direct the entirety of their foreign policies into violence and sanctions against communists in their own communist countries and anyone who so much as requested aid from them, despite capitalist countries refusing to supply such aid?"
The Cold War would be an answer, unless you somehow deny that communists were equally dedicated to subverting and overthrowing the west.
> The reality is that communist countries actually did work and worked better than the prior state those countries were in
I disagree that this is a valid generalization. There may have been some Pareto improvements and its clear that certain people benefitted and others did not.
> When communist countries fell, life did not get better for those who lived there. It got worse.
This is because the centrally planned economy depleted vast amounts of capital in their desperate struggle to keep the economy moving and competitive with the west.
> They say that most things were better, but acknowledge those that were worse, and when they say they'd support a return it's not to an identical state, just a similar one. But their political systems prevent this. One must wonder why.
Cynically I could offer the same answer a communist would offer when asked why people weren't permitted to own factories in the Soviet Union: because that would put "the wrong people" in charge of the means of production.
Less cynically, its not clear how a centrally planned economy would know how to correctly allocate resources, so there's no reason to return to the central planning model in the absence of a solution to the problems that caused it to fail in the first place.
That's not the answer, it's the mechanism of that violence.
> unless you somehow deny that communists were equally dedicated to subverting and overthrowing the west.
I will absolutely deny that. Note the number of capitalist governments coup'd by communists. Note the number of invasions and constant wars of The West. Look at Vietnam. Western involvement was long-reaching, direct, violent, and generally within other countries fighting grassroots revolutions / civil wars or throwing off colonial it imperial influence.
When attempting to find similar situations started by communist countries, we find important differences. Dragged into conflicts on their borders. Literally fighting a genocide directed at themselves. Long-standing territorial disputes on their borders.
> I disagree that this is a valid generalization
Feudal backwaters subject to regular famines became superpowers that eliminated homelessness and hunger. And the fall of those systems corresponded to drops in QoL over and over and over again.
What other tests would you want?
> This is because the centrally planned economy depleted vast amounts of capital in their desperate struggle to keep the economy moving and competitive with the west.
Capital is just stuff or money tradeable for stuff. The stuff didn't go away after color revolutions. But public programs were absolutely privatized or abolished by liberal capitalist governments in moves aligned with their ideologies - ideologies you can find throughout this site, in fact.
> Cynically I could offer the same answer a communist would offer when asked why people weren't permitted to own factories in the Soviet Union: because that would put "the wrong people" in charge of the means of production.
Ah, but in that case there's a consistent ideological position: bourgeois democracy and ownership must be curtailed because otherwise it will grow and eat you and those you love. According to liberal democracy, you're supposed to be able to seek and form a representative government in a multi-party setting - yet they restrict those parties to force bourgeois options to be the only ones available.
The supposedly core ideals of The West clearly bow to capital when push comes to shove and one should question the propaganda that it's these ideals that won or were even the actual goal.
> Less cynically, its not clear how a centrally planned economy would know how to correctly allocate resources, so there's no reason to return to the central planning model in the absence of a solution to the problems that caused it to fail in the first place.
But the vast majority of several countries want that return, with support increasing with age - the people who actually lived under communist party rule. They are prevented from doing so by their political systems. It cannot be voted in. Democracy clearly doesn't mean that much to The West, right?
I'm not sure it will be fruitful to discuss this issue with someone who denies the international ambitions of communism :)
> Note the number of capitalist governments coup'd by communists. Note the number of invasions and constant wars of The West. Look at Vietnam. Western involvement was long-reaching, direct, violent, and generally within other countries fighting grassroots revolutions / civil wars or throwing off colonial it imperial influence.
"the state is always an instrument of class warfare" I'm justifying western imperialism by referring to the nature of the class struggle as characterized by communists. You're not going to convince anyone by denying that communists were interested in spreading their ideology to other countries tries by force and you're not going to convince capitalists by pointing out how successful we were at stopping communist aggression.
> Feudal backwaters
how patrician of you
> Feudal backwaters subject to regular famines became superpowers that eliminated homelessness and hunger. And the fall of those systems corresponded to drops in QoL over and over and over again.
quality of life was pretty bad leading up to the fall, that's why it fell. observing that you can conscript a bunch of farmers to invade outlying countries and steal their grain, then feed those of the survivors you haven't tortured to death in gulags is hardly an argument. I'd be more impressed by the superpower claim if it wasn't the case that the USSR went bankrupt trying to compete as a superpower.
> What other tests would you want?
can you sell your labor or the product thereof for a price of your choosing? Can you buy tools for work and control them as your own property, inclusive of charging rent for their usage? These are QoL issues that are relevant to workers.
> Capital is just stuff or money tradeable for stuff. The stuff didn't go away after color revolutions. But public programs were absolutely privatized or abolished by liberal capitalist governments in moves aligned with their ideologies - ideologies you can find throughout this site, in fact.
Capital is the means of production and it requires maintenance and planning, if capital is not maintained and replaced it wears out and breaks and is no longer capital. The planners in the USSR knew this well and that's why they had so much trouble keeping the system going when they wielded authoritarian powers. They couldn't keep the capital running because they lacked price signals in order to obtain information about scarcity relative to demand. Those public programs had run out of value to reallocate.
> Ah, but in that case there's a consistent ideological position: bourgeois democracy and ownership must be curtailed because otherwise it will grow and eat you and those you love.
Yes, ideology is good for justifying terrible things. Thats why we require that people are allowed to criticize ideology.
> According to liberal democracy, you're supposed to be able to seek and form a representative government in a multi-party setting - yet they restrict those parties to force bourgeois options to be the only ones available.
Yet liberal democracy still falls victim to the paradox of tolerance. Hence the desire to prohibit ideas and ideologies that would overthrow civil society.
> The supposedly core ideals of The West clearly bow to capital when push comes to shove and one should question the propaganda that it's these ideals that won or were even the actual goal.
Actually I question your grasp of the foundational ideas of "The West", whatever that is.
> But the vast majority of several countries want that return, with support increasing with age - the people who actually lived under communist party rule. They are prevented from doing so by their political systems. It cannot be voted in. Democracy clearly doesn't mean that much to The West, right?
I'm not sure your criticism of The West is apt when it is those several countries that fail to heed their respective majorities in returning to authoritarian central planning. Perhaps you are falling victim to the authoritarian's paradox here. Perhaps those democracies are simply engaged in the sort of central planning that is necessary to sustain a society, the kind of central planning that the communist republics they replaced were unable to stomach.
> I'm not sure it will be fruitful to discuss this issue with someone who denies the international ambitions of communism :)
I'm not denying that communists have had international ambitions, only that your description was accurate. And the actual internationalists (Trotskyists) have never had power or organized around it. Extant communist countries were/are part of the idea of "socialism in one country" and tended to fight battles of national liberation or build up arms without actually invading distant countries (in contrast to Western countries).
> "the state is always an instrument of class warfare" I'm justifying western imperialism by referring to the nature of the class struggle as characterized by communists. You're not going to convince anyone by denying that communists were interested in spreading their ideology to other countries tries by force
I would challenge anyone to name a communist country that attempted to export their ideology by force subject to the following reasonable conditions:
(1) They can't be really weird dictators supported / propped up by a Western anticommunist power dead-set on killing other communists.
(2) Can't name the Eastern bloc, as it was a product of a defensive countering of a genocidal campaign by Nazis (Lebensraum).
> and you're not going to convince capitalists by pointing out how successful we were at stopping communist aggression.
What aggression?
> how patrician of you
Not really, I'm referring to a literally feudal monarchy that had very limited regional power.
> quality of life was pretty bad leading up to the fall, that's why it fell.
It very much isn't.
> observing that you can conscript a bunch of farmers to invade outlying countries and steal their grain, then feed those of the survivors you haven't tortured to death in gulags is hardly an argument.
Do you believe that's an accurate summary of the USSR becoming a superpower?
> I'd be more impressed by the superpower claim if it wasn't the case that the USSR went bankrupt trying to compete as a superpower.
It didn't. It was eaten from the inside by a political power grab. However, spending on the military vs. everything else did contribute to support for that power grab.
> can you sell your labor or the product thereof for a price of your choosing? Can you buy tools for work and control them as your own property, inclusive of charging rent for their usage? These are QoL issues that are relevant to workers.
Just to be clear, you're listing examples for why communist countries didn't work or significantly improve over their past ways of being? I don't see why this constitutes not working or improving.
> Capital is the means of production and it requires maintenance and planning, if capital is not maintained and replaced it wears out and breaks and is no longer capital. The planners in the USSR knew this well and that's why they had so much trouble keeping the system going when they wielded authoritarian powers. They couldn't keep the capital running because they lacked price signals in order to obtain information about scarcity relative to demand. Those public programs had run out of value to reallocate.
How convenient that the capital ran out at the exact moment that color revolutions occurred and liberal parties took power, years and years apart from one another!
> Yes, ideology is good for justifying terrible things. Thats why we require that people are allowed to criticize ideology.
My point is, of course, that the ideology I'm referring to is consistent, in addition to having a rationale, whereas the alternative being discussed is incoherent.
> Yet liberal democracy still falls victim to the paradox of tolerance. Hence the desire to prohibit ideas and ideologies that would overthrow civil society.
I'm referring to days, weeks, months after deposing communist party rule. Unless you grant that "civil society" existed there already, then there's nothing to overthrow. In reality, it is an illiberal power grab dictated by servicing of capital, a ridiculous farce of the multi-party democracies that protesters had demanded.
> Actually I question your grasp of the foundational ideas of "The West", whatever that is.
I think it's pretty clear what "The West" refers to relative to communist countries.
But thanks for the personal jab!
> I'm not sure your criticism of The West is apt when it is those several countries that fail to heed their respective majorities in returning to authoritarian central planning.
Seems apt to me. Good talk, good talk.
> Perhaps you are falling victim to the authoritarian's paradox here. Perhaps those democracies are simply engaged in the sort of central planning that is necessary to sustain a society, the kind of central planning that the communist republics they replaced were unable to stomach.
Those "democracies" were privatizing, not pushing a different form of central planning.
Unfortunately, there is a very selectively-enforced limit on political content that has resulted in me being rate-limited, so I'm unable to respond to you in a timely manner anymore. I'd point you at some resources but I feel like that's condescending. Hilariously, this is pretty relevant to your civil society comment - online spaces have no public commons, they are all dictated and censored by whoever owns them, with serious networking effects that place them under the control of large (and censorious) corporations that treat liberal (capitalist) views as normative and non-political.
> Those "democracies" were privatizing, not pushing a different form of central planning.
that's the central plan. The planners (in their wisdom and beneficence) have decreed that private property is "ok", subject to regulation. No authoritarian can criticize this except on the basis that the authority didn't carry out their preferred dogma.
> I would challenge anyone to name a communist country that attempted to export their ideology by force subject to the following reasonable conditions:
Unless the “Eastern bloc” includes all global allies of the USSR (and therefore almost all self-described Communist countries) instead of just those located in Eastern Europe, then Cuba is pretty much the obvious answer. (hostile-to-the-existing-government interventions aimed at spreading the revolution stretch from the 1950s into at least the 1990s and took place in at least: Panama, Dominican Republic, Venezuela, Congo, Guinea-Bisseau, Yemen, Angola, and Ethiopia, some of them multiple times, and some alongside other Communist states that would be valid, though less significant, answers to your challenge, as well.)
What do I win?
> Can't name the Eastern bloc, as it was a product of a defensive countering of a genocidal campaign by Nazis (Lebensraum).
The Eastern bloc, insofar as it was notionally a defensive response to something, was a response to the formation of NATO (and, specifically, the integration of West Germany into NATO), not to the Nazis, who had already been defeated.
even disregarding the other issues with communism, the central premise is wrong: it's quite apparent that what growth centralized economy countries enjoyed was far at a lower rate than free market counterparts, up until they opened up to private initiative.
I read a book that argued that the primary thing communism accomplished was smash horribly unjust feudal states and clear the way for liberal capitalist democracies.
I'm still under the belief that too much centralized planning can severely hurt an economy but that organization is way better for the economy than everything being locked down by a narrow class of land owning elites.
> but that changing resource allocation becomes a political problem.
Resource allocation is always a political problem. (On a large-scale, anyway.)
> In a capitalist system, if something looks like it's going to be a big economic hit people are ready to sell off other assets and pour billions of dollars into it.
1. In a Capitalist system, most people have little assets; and most assets are under the control of a minority (which becomes relatively smaller over time.
2. A "big economic hit" is not necessarily in people's interests anyway.
3. The USSR was not a Communist society (and didn't claim to be). It was ruled by "The Communist Party" but that's really not the same thing.
> there's a guy who doesn't want to lose funding for his department who might have more power than his rivals
Not entirely different from divisions within a large corporation who vie for funding and/or power over their peers. (And the managers of such divisions.)
> > there's a guy who doesn't want to lose funding for his department who might have more power than his rivals
> Not entirely different from divisions within a large corporation who vie for funding and/or power over their peers. (And the managers of such divisions.)
Sure. It's just that we can get rid of large corporations if they blunder enough (see, for example, Kodak). When it's the government, and they restrict elections to one party, you're a lot more stuck.
History has shown that even workers can become wealthy in a capitalist country while they will stay poor in socialist countries.
Just compare the history of West and East Germany. There is a reason why East Germany and all other socialist countries in history had to lock their people up in their own country.
the first point stands but the second line is not the best example, the West German economy was built on top of the Marshall Plan money, not on it's own merits.
> In a Capitalist system, most people have little assets; and most assets are under the control of a minority (which becomes relatively smaller over time.
That doesn’t appear to be the case from the article you posted. Moreover its the case that more people have access to wealth than ever before because the capitalist system has commodified the ownership of wealth through stocks. So I’m not convinced about this claim. Look at the graph from the article. The amount of wealth owned by the top 0.7% is dwarfed by the next bracket.
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.
The constitution would be preserved and the press would not be censored. Civil liberties would be protected. The government began by increasing employment and wages as well as implementing agrarian reforms.
and immediately after
Allende’s biggest challenge (and the challenge of all socialist revolutions generally) was to turn private business into public entities.
Difficult to take it seriously after such cognitive dissonance.
In any case, socialism was never a technological problem. I truly doubt the USSR didn't have the technological prowess to make it work. It's a fundamental economic one. You can't remove prices from the loop, as indicators of the human desire. It doesn't matter how many machines you throw at it. You can't replace human preferences.
Maybe not a technological problem, but they certainly had a data problem. Most of the statistics the Gosplan (USSR economic planners) were basing production quotas on were fraudulent. It made price/cost discovery even more impossible.
Socialism didn’t work in _any_ country ever tried.
Even in East Germany, the country’s economists admitted in 1989 that the free market works far better and the centralized economy results in wrong allocations of resources and money.
Funny you say that, as the east/west Germany unification has been a disaster for the east side, and it still is today the poorer part of Germany. Before the unification, the east had a working economy, perhaps with problems, but every economy has problems.
> Socialism didn’t work in _any_ country ever tried.
Leninism didn't, but there's a reason why non-Leninist Marxists have been calling Leninism state capitalism since well before it's failure was obvious.
Socialism, specifically a form of what Marx referred to as “bourgeois socialism”—though not so much by conscious design but as a compromise between Marxist and other proletarian socialists who were instrumental in labor, abolition, suffrage, and other social justice movements and more moderate forces within and outside of those movements—was completely successful in the environment (advanced democratic capitalist states) for which Marx prescribed his form of socialism, being so successful as to entirely displace the late-19th Century system for which Marx coined the term “capitalism” with a system in which the rent seeking power of capital was significantly more constrained in favor of broad (varying from country to country) guarantees for the basic necessities of the general population, which has been referred to by a variety of names (the “modern mixed economy”), though it's so completely displaced the original system called “capitalism” in the same states where that systemmwas once dominant that it is now most frequently just called “capitalism” despite being very different from it.
Why is human preference essential? Everyone has certain needs in common:
- food
- housing
- clothing
And all those needs can be satisfied in a cookiecutter way for everyone. It's unclear to me why such a system cannot be centrally planned without reference to subjective human preference.
IMHO, the 'human preference' counterargument to communism is a red herring to throw things into subjective, logic free land.
Yeah, sure, everyone needs food. We know that. But how many olives should they produce?
Or are you going to just feed everyone the food that you've decided that they should eat? If they want olives, they're just going to have to make do with cucumbers instead?
Do you see why actual human beings might have a problem with that?
That seems orthogonal to the primary concern of communism, which is to make sure no one goes without something they need, i.e. from everyone according to ability, to everyone according to need.
Lack of accounting for wants can make for an annoying, boring economic system, but that's a much lesser charge than the system is intrinsically genocidal. And if it's the difference between a boring system and a system where the rich oppress the poor, and many are forced to live miserable lives according to their less subjective needs like food, clothing, and shelter, then the former would be morally superior. Nor is it obvious why not accounting for wants would make an economic system less successful. I.e. if you have the best of the best bringing to bear the best technology and thought to improving the lives of everyone all at once, that seems superior to everyone trying to figure it out themselves. So, the 'subjective preference' objection does not seem very strong.
I mean historically communism is intrinsically genocidal.
This is a much more serious charge than saying communism results in a bunch of products that people don't like very much.
As to why it is genocidal, and whether this is intrinsic or just a factor of having the wrong people in charge, I think the computational complexity of the problem gets at why genocide is an intrinsic property of communism. Namely, it is just way too innefficient to supply the actual needs of a nation, and so millions starve, or must be killed to make the system work.
- You can have free press without private businesses just like we can have a Judicial branch that's paid for by the government but is independent of it. It comes with challenges, but it's not like privately run news are perfect either.
- Civil liberties can be protected in any form of government and economy, even a dictator can decide to do that
- increasing employment is a no-brainer, it's a prominent feature of socialist countries.
- agrarian reforms are similarly commonly observed, it's probably one of the defining things of the USSR (and China, where it famously didn't go as smoothly)
There's also no real reason why you can't have prices in socialism (and as far as I'm aware most socialist systems have prices). The loop looks a bit different since the supply side is typically centrally managed, but even that is technically an implementation detail and not a required feature of socialism.
> There's also no real reason why you can't have prices in socialism
There is: you can't estimate how much people will want something new.
Imagine the new macbook air with Apple Silicon.
What should the price be, in a socialist system?
Set it too low and there will be shortage because you will not be able to produce enough as you wont get profits that would allow you to build extra factories and by extra components.
Set it too high and there will be surpluses rotting in factories because nobody will want it.
You need to guess right in advance. In a capitalist system, companies hold the responsibility: if they are wrong too often, they go bankrupt.
In a socialist system, the responsibility is diluted, resulting in a cumulative overall inefficiency, with both shortage (ex: food in the USSR) and surpluses (ex: cotton in the USSR again).
I used "new things" to simplify the reasoning, but the same logic apply to existing things: do you want more or less say phones compared to last year?
You can't say "just as much", because the optimal amount will be impacted by a lot of things that change every year.
Unless they're banks, or auto manufacturers, or any other huge corporation that would get bailed out by the government. Wonder why that bailing out is a problem for socialist governments, but not capitalist ones.
> There is: you can't estimate how much people will want something new.
Socialism cannot estimate this any better or worse than capitalism. Contrasting the two is actually a bit absurd, given that socialism has a wide range of forms and does not prescribe the form in which workers own productive capital.
e.g., market socialists exist. So do central planning-pushing communists. So do communalists...
> Socialism cannot estimate this any better or worse than capitalism.
False, capitalism successfully prices products every day. The failures are eliminated in a process akin to natural selection of species.
> socialism has a wide range of forms and does not prescribe the form in which workers own productive capital.
the only form of socialism that capitalists oppose is the one where socialists restrict the form in which people own productive capital. all those alternative forms of socialism you advocate are free to exist in a free market but they are as rare as hen's teeth (not to say nonexistent). why is that?
> False, capitalism successfully prices products every day. The failures are eliminated in a process akin to natural selection of species.
Capitalism doesn't do that either. This entire comparison is a category error.
In this discussion, capitalism is being conflated with markets and socialism with planned economies. Neither of those conflations are valid.
> the only form of socialism that capitalists oppose is the one where socialists restrict the form in which people own productive capital.
That is all forms of socialism. It's the only thing socialism is consistently about.
> all those alternative forms of socialism you advocate are free to exist in a free market
No they aren't. They're fundamentally incompatible with the theory of a free market. They are all focused on the abolition of private property.
> but they are as rare as hen's teeth (not to say nonexistent). why is that?
Because when they get a footing they're actively attacked by capitalists. Economically attached with sanctions, invaded, coup'd, bombed, etc.
Rojava is doing an experiment in communalism as we speak. Turkey is bombing it once the US got what they wanted from Rojava (fighting ISIS). Chile elected Allende, who was coup'd within two years by CIA-backed Pinochet. EZLN survives through the weakness of the central Mexican government and their relative irrelevance to capitalists.
Most political systems do not actually allow for the election of such parties to power. They have powerful propaganda campaigns baked into their education and mass media systems, with bourgeois infighting characterized as the extent of acceptable debate. Many force a two-party duopoly where only bourgeois parties have any chance of winning. Many outlaw socialist/communist parties or kill and harass their leaders. Many aren't democracies at all and would require an ideological military process to establish it - and have their opposition strategically funded by Western powers.
There are many reasons that ruling powers maintain that power.
> In this discussion, capitalism is being conflated with markets and socialism with planned economies. Neither of those conflations are valid.
Perhaps but I'm not sure it makes much of a difference. Socialism (absent central planning) doesn't have a means of allocating capital, so no one has ever tried it for long. When they do, everything falls to the tragedy of the commons. Even authoritarian socialists agree to this. Socialist anarchists have various opinions but agree that socialist organization is an unsolved problem. No one is prevented from setting up a socialist organization in capitalist countries, its merely the case that when they do, they aren't able to externalize their costs and they don't achieve very much.
> That is all forms of socialism. It's the only thing socialism is consistently about.
Then all forms of what you consider to be socialism will fail because of plunder.
> No they aren't. They're fundamentally incompatible with the theory of a free market. They are all focused on the abolition of private property.
yeah, its not cool to mess with other people's stuff. that's the problem here.
> Because when they get a footing they're actively attacked by capitalists. Economically attached with sanctions, invaded, coup'd, bombed, etc.
Maybe if "getting a footing" wasn't synonymous with expropriating the capitalists this wouldn't happen.
> There are many reasons that ruling powers maintain that power.
This is true. its also the case that rulers over a mixed economy have vastly more wealth at their disposal than rulers over a command economy and a collective that has norms prohibiting the collection of rents. This is because the market generates more wealth and rulers are able to extract more wealth because there is more wealth.
> Perhaps but I'm not sure it makes much of a difference.
It does. Many socialists want to (and do) use markets as part of their desired transition. Capitalism is not actually pro-market by default, it just uses markets to accumulate capital. Left to its own devices, anticompetitive (i.e., anti-market) behaviors always arise.
Capitalism vs. socialism is not markets vs. a planned economy. It's about who owns the means of production.
> Socialism (absent central planning) doesn't have a means of allocating capital, so no one has ever tried it for long.
China's doing it right now via state capitalism, erring on a side where they allow capitalists to exist in an extremely controlled fashion and they regularly jail or put to death those who violate their rules - or they seize segments of industry. Socialists often create transitional plans where they maintain much of the same system but with significant curtailing of private property.
Other socialist countries / groups have operated largely by collectives, where initial capital is raised jointly with the government but once a venture is going it self-sustains as a collective bringing in new capital and divying it up by and to workers. Vietnam runs a mixed system where this is the dominant mode of production (the other is a China-style "controlled" capitalism).
Socialism is also a pretty wide brush. Rojava is communalist and local councils are the primary vehicle for regulating and controlling production. EZLN is anarchist-ish and nearly everything is a collective or co-op, with workers pooling capital to start a venture but also working within it and sharing alike. There are many ways to do socialism.
> When they do, everything falls to the tragedy of the commons.
I'm not sure what this is referring to.
> Even authoritarian socialists agree to this.
No such thing as "authoritarian socialists". That's not a self-identity or an ideology, but a pejorative produced by liberals and the folks that take that libertarian-made political compass too seriously.
> Socialist anarchists have various opinions but agree that socialist organization is an unsolved problem.
Anarchists tend to think that it isn't even a problem. Once they win, they depend on self-organization.
> No one is prevented from setting up a socialist organization in capitalist countries, its merely the case that when they do, they aren't able to externalize their costs and they don't achieve very much.
I mean, socialists can organize a party or something within a capitalist country, but you can't do socialism within a capitalist country. The entire system's function is dictated by capitalism - a co-op, for example, is still competing with all the other capitalist companies and has to follow the rules set up for them or perish.
Not sure what you mean by externalizing costs. If you're thinking of co-ops, they absolutely can and do externalize costs.
> Then all forms of what you consider to be socialism will fail because of plunder.
I don't see why.
> yeah, its not cool to mess with other people's stuff. that's the problem here.
Depends on what that stuff is. Private property is distinguished from personal property in a socialist view.
> Maybe if "getting a footing" wasn't synonymous with expropriating the capitalists this wouldn't happen.
If socialists weren't socialist this wouldn't happen? This doesn't make any sense and it doesn't address the point.
> This is true. its also the case that rulers over a mixed economy have vastly more wealth at their disposal than rulers over a command economy and a collective that has norms prohibiting the collection of rents. This is because the market generates more wealth and rulers are able to extract more wealth because there is more wealth.
So the story goes. The expropriation of value from the Global South has something to say about that, though.
Unfortunately, there is a very selectively-enforced limit on political content that has resulted in me being rate-limited, so I'm unable to respond to you in a timely manner anymore. I'd point you at some resources but I feel like that's condescending. Best of luck to you, friend.
> Capitalism vs. socialism is not markets vs. a planned economy. It's about who owns the means of production.
Yes, and dictating the rules of ownership that others must follow is a feature of central planning.
> but you can't do socialism within a capitalist country. The entire system's function is dictated by capitalism - a co-op, for example, is still competing with all the other capitalist companies and has to follow the rules set up for them or perish.
Yes, they can't compete on a purely material basis. Thats why you don't see them.
> Depends on what that stuff is. Private property is distinguished from personal property in a socialist view.
yes that's it. Your willingness to disregard my opinions about what constitutes my property on a dogmatic basis is the source of conflict here.
> If socialists weren't socialist this wouldn't happen? This doesn't make any sense and it doesn't address the point.
The point being that insofar as expropriation is synonymous with socialism, socialism is a crime.
> So the story goes. The expropriation of value from the Global South has something to say about that, though.
colonialism and neocolonialism are special cases of a command economy.
The government is paying the people for labor, the people pay the government for the goods they buy. That can totally include the feedback loop that well-selling goods get allocated more resources because they made a bigger "profit". Of course often it wasn't implemented that way, but it sounds like the Chilean system would have done that.
Thats what a company does in a market. The problem with asking the government to do the same thing is that they need to stop coercing people to comply with threats of violence. If they don't do that, then they are merely another corporation. We don't see this as a problem but getting the people with guns to stop using them to extort behavior they want is a devilishly hard problem.
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.
Well? So does a "distributed" economy. Goods are manufactured, shipped across the planet, to be dumped in a landfill. A significant portion of food goes to waste, all the while some other people starve (incidentally, being forced to plant cash crops e.g. cocoa rather than grow food for themselves). We have given trillions to help pay for the losses of the bankers, who are the people who truly rule us. We are currently in the process of giving trillions in subsidies to industries which have either already doomed us to extinction or soon will. The list goes on.
The trillion dollar bailouts are central planning. The fact that consumer goods are manufactured in countries by people who can't afford to buy them and sold to people in other countries who throw them away is a symptom of the vast disparity in cost of doing business in the respective countries. Subsidies are always and everywhere the product of a central planner.
In order to criticize a distributed system properly it is necessary to identify those things that are the product of the distributed system, rather than those things that are the product of centralized planning.
The trillion dollar bailouts are indeed central planning, but they are a reaction to a failure in distributed planners as recognised by the most firm believers in distributed planning. As in, "Oh crap, this free market is in the process of unravelling, the only way to stop it is to throw a bailout at it." So it's still a product of decentralised planning (to use your term).
The reaction following a bailout is usually, "whoops, we didn't do enough central planning beforehand" i.e. the new banking regulations such as tighter loan-to-deposit ratios. So, overall, this supports the parent comment's point of the inefficiencies of decentralised planning.
> they are a reaction to a failure in distributed planners as recognised by the most firm believers in distributed planning.
No, they are a reaction to the perceived failures of “distributed planning” as perceived by advocates of central planning. Free marketers have always said that those banks need to be allowed to fail because they made bad decisions and bankruptcy sells their assets so the creditors can get paid and new management can operate them.
With bailout you have this bizarre system where profits are privatized and losses are socialized, which is not a distributed system or a free market.
USSR, as the country, failed because of central planning. Bailout is not a good solution too, because capital flow from competitive players to incompetent, which is bad for evolution. US banking system is far behind other banking systems because of that.
I absolutely was not expressing an opinion either way. All I was saying is that the parent comment was raising a point that supported the opposite argument than they thought, not that I agreed or disagreed with it.
> The trillion dollar bailouts are central planning.
There's a difference between an measurement that's imposed by a dominant economic actor and having a centrally planned economy.
Bailouts were arguably applied centrally by a central bank, but they are distributed throughout all economic actors that apply for bailouts and meet requirements.
I agree there is a difference. Also “meet requirements” is intended to portray the process as somewhat objective but its not. They write those requirements with an eye towards who they want to get the bailout.
> The trillion dollar bailouts are central planning.
> In order to criticize a distributed system properly it is necessary to identify those things that are the product of the distributed system, rather than those things that are the product of centralized planning.
What you call "central planning" is merely the emergent behaviour of the "distributed" capitalist system. A certain bearded German economist warned that in such an economy, the state is just another apparatus of the bourgeoisie.
Turning the old cliché on its head, pure capitalism only works in theory, never in practice. In the real world, disparities in money are disparities in power, which ensure things such as bailouts and more fundamentally, banking laws that are effectively a license (for some) to print free money for themselves.
> A certain bearded German economist warned that in such an economy, the state is just another apparatus of the bourgeoisie.
That bearded economist was on to something. Alas nowadays policy advocates in his tradition seem to want the bourgeoisie state to write and enforce more rules, forgetting that those rules are unlikely to benefit anyone other than an oligarch.
> pure capitalism only works in theory, never in practice.
Thats dogma and unlikely to be true.
> In the real world, disparities in money are disparities in power, which ensure things such as bailouts and more fundamentally, banking laws that are effectively a license (for some) to print free money for themselves.
Its more accurate to say that "disparities in power lead to disparities in money." Certainly there are other forms of power, like the ones people use to expropriate money and assets from those who have money and assets but less power.
Bailouts are a necessary resort when the market fails to self regulate. Which spoiler alert, it has always done cyclically since capitalism is a thing.
The question is not if there will be another crisis, is when it will be. Under a free market, economical crisis are a certainty.
Nothing makes them necessary, and the free market regulates by allowing those businesses to fail. Since we don’t have a free market, but a regulated one, those crises you refer to are symptoms of a regulated market.
Cyclic failures are also a result of the banking system and their use of scrip as opposed to specie.
> Goods are manufactured, shipped across the planet, to be dumped in a landfill.
Goods are shipped because someone bought them with their hard-earned money to fulfill a need they personally have. Whatever they do with it afterwards is up to them.
I fail to see how central planning comes into play in this scenario, unless you're trying to claim that you personally know best than anyone else what to do with other people's money or needs.
> A significant portion of food goes to waste
I fail to see the relevance of your comment. Demand is not predicted or specified by a crisp value, and even supply is subjected to stochastic variations. Thus you either underprovision, which causes scarsity, or you over provision, which increases the odds all needs are fulfilled at the risk of increasing losses.
So the problem boils down to either food shortages or "waste".
So, with this in mind, again what's the problem with "waste"?
> all the while some other people starve
I fail to see the rational basis and relevance of your argument. It reads like apuerile appeal to emotion, in fact. I mean, if I forget some leftovers in the back of the fridge and later I decide to just throw it out to avoid any risk of suffering through a bout of food poisoning, am I contributing to a famine somewhere in the world? Would those fictional and hypothetical starved people benefit in any way if I didn't threw out my leftovers? Or would I be contributing to end world hunger if I ate all my food and left no leftovers at the end of a meal? And does the driver of a truck transporting food supplies be found guilty of causing famines if he has an accident which ends up destroying his cargo?
> We have given trillions to help pay for the losses of the bankers (...)
And here comes the rest of the anticapitalist bingo. It's as if centrally planned economies weren't forced to shift resources around during economic crises to avoid collapsing. I mean, al those shipments from the URSS to Cuba were never bailouts, right?
> Goods are shipped because someone bought them with their hard-earned money to fulfill a need they personally have. Whatever they do with it afterwards is up to them.
This sets the tone for any further conversation we might have. You are simply a fundamentalist, a dogmatist. People earn money because they work hard, then they buy stuff with that money, then they do things with that stuff. And that's how our economy works! I don't even know how to reply to such an absurd statement. It's like someone saying the sky is pink. What are you even supposed to argue other than... just look out your window?
> points two and three
Glad you decided to split my sentence in two in order to argue against something that I didn't say. A significant portion of food goes to waste while there are shortages in other places, this is what I said. You can argue all you wan't but you cannot change the basic reality that your system for allocating resources isn't doing a good job at allocating resources.
> We have given trillions to help pay for the losses of the bankers
Bankers (class I people) are given free money that they then lend out, with interest, to the rest of us (class II people) who pay tithe to them for the economy to work at all. Not content with this, if they ever make a serious fuck-up and tank the whole economy, we will be there to compensate them for their losses and make sure that they still get their due profit. This is not right, full stop.
> 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.
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.
> 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.
Big companies are little command economies with many of the problems at a smaller scale.
Having run a $100M vertical in a very large organization, it’s pretty easy to see how problems develop. There’s always a trade off between “efficiency”, standards and local/global control.
With central control, a guy in California buys the vehicle fleet, and doesn’t understand why people in Boston need a car that doesn’t get stuck in snow, etc. Another model might be a scenario where semi-autonomous divisions consume shared services as captive market participants.
AI, etc will probably exacerbate these things, as they’ll allow more growth with less people managing things.
> 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?
Yes they do. the differences are that they are still dependent on goods that their own firm doesn't produce, so the prices of those goods discipline their budget/plans to some degree, the firm is unable to use violence to compel the behavior they need to survive, and that as they call victim to the same central planning problems as governments, their marginal profit decreases so that the owner sees less profit and the price of a share of ownership decreases because of that.
But they can use violence. By capturing control of the state and shifting state policy to coerce in its favour. Or failing that, employing violence directly themselves as many large monopolies did in the 20s and 30s.
As an aside, I see this as the fundamental point of departure in language between a Marxian socialist and a libertarian-capitalist, they mean two different things by the "state": libertarians believe the state is a parasite on the market and a corrupter and destroyer of the free market. Marxists believe that the state is created _by_ the market for itself ("The executive of the modern state is nothing but a committee for managing the common affairs of the whole bourgeoisie.") Both see the other as hopelessly naive.
> Marxists believe that the state is created _by_ the market for itself
I don't think that is accurate.
Marxists believe that in practice bourgeois control of the State (in the developmental phase of capitalism, bourgeois influence on the aristocracy which controls the State) is the vehicle by which the bourgeois create and maintain the system of private property of which the market is an epiphenomenon. (And, therefore, that control of the State is necessary to abolish that system of property rights and the capitalist system that depends on it.)
On the descriptive points of this libertarian capitalists generally agree (disagreeing on the normative assessment); seeing that the purpose of the state is to enforce the system of property rights that the market relies on, and that the State is defective to the extent that it extends beyond or departs from that function.
> On the descriptive points of this libertarian capitalists generally agree (disagreeing on the normative assessment); seeing that the purpose of the state is to enforce the system of property rights that the market relies on, and that the State is defective to the extent that it extends beyond or departs from that function.
Some see the state as a capture of the dispute resolution process and feel that the market emerges as a consequence of certain norms.
> But they can use violence. By capturing control of the state and shifting state policy to coerce in its favour. Or failing that, employing violence directly themselves as many large monopolies did in the 20s and 30s.
This is true but in functional terms the corporation is then acting with the powers of a government or organized crime, and then is subject to the same arguments that are used to explain the failures/successes of those systems.
> Marxists believe that the state is created _by_ the market for itself
This is somewhat true. Its important to note that it is created or captured by certain market participants, not the market as a whole.
There are hierarchical levels to the "economy" and central planning may work well at some levels. Companies at the lower levels of the hiearchy are centrally planned entities with managers assigning tasks to employees instead of using a free market to distribute them within the organization. At the middle layer, the free market links these centrally planned companies and force them to compete. It's an open question whether having a centrally planned top layer to handle national economic strategy and steer market forces is better than letting the free market handle that as well.
> Companies at the lower levels of the hiearchy are centrally planned entities with managers assigning tasks to employees instead of using a free market to distribute them within the organization.
Not really. I mean, there's a FAANG which is notorious for fostering a competitive environment between development teams even down to it's lower level employees, which includes flexible team configurations where individuals cooperate on separate projects.
As it turns out, means it's your opinion or are you stating it as a fact?
By the way, if you insist that capitalist economies are distributed, how would you explain the extreme concentration of capital in a few hands? The global markets are ultimately controlled by a handful of people.
> By the way, if you insist that capitalist economies are distributed, how would you explain the extreme concentration of capital in a few hands? The global markets are ultimately controlled by a handful of people.
You can't equate current-day "capitalism" with "free market capitalism". We live under state-regulated, corporatist economy, which is designed to concentrate power in the hands of big corporations that are associated with the state.
That said, even in a "free market capitalist" system you'd expect concentration of wealth, for the reason that any competitive system presents an exponential distribution of performance in the outcomes. What you wouldn't expect, however, is that the concentration of wealth would be so skewed as we have in a corporatist economy.
On the top of that, inequality on itself is not a problem. I'd argue it's a necessity if you want to be able to create wealth, as it's a side-effect of the incentives associated with competition (as stated above). In other words, inequality is not so much of an issue if the whole of the economy is producing more wealth, which in one way or another becomes distributed as it increases productivity. In the end, the real matter is poverty -- but from all solutions we can think on how to solve that problem, centralization and bureaucracy (here meaning: a state) seem to be the worst of all. In my personal opinion, localism (meaning: acting in the smaller community scale, as opposed to central control) and voluntaryism (meaning: the ethics of voluntary associations, as opposed to coercion) are the keys to set us up to help each other and eradicate poverty.
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.
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.
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.
> 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.
As someone who actually grew up in a real communist country (East Germany), I can tell you you’re on the wrong here.
I know the feeling first hand when you went into a store and wanted to buy something as ubiquitous as an electric drill and they had none, no matter which store you tried.
And that was the result of a centralized economy because in West Germany, they never had that problem. The free market always balanced out supply and demand through the pricing mechanism.
Leading economists in East Germany 1989 admitted in the so-called Schürer-Papier that it was the centralized socialist market that was driving factor of running the country and its economy to the ground.
The USSR despite being so huge copycat a lot of designs from the West simply because the centralized market hardly allowed for any innovation on their own.
Computers, cars, planes and much more were imported from the West or stolen and then copied.
Essentially none of what you said contradicts any point I've made. I am not a USSR utopian. Very much the opposite: it had very serious problems. The issue is the comparative nature, where capitalists pick and choose what counts as explanatory failure, typically ignoring things like constant aggressive wars and funding, e.g., the Stasi. There is also the matter of the means by which capitalist countries maintain themselves, as it is very, very far from a circular or sustainable system, but one that has depended very heavily on expropriation and military dominance. The position I'm presenting is not, "communism was fantastic, ideal, perfect, without core problems". It is, "communism well for a very long time despite incredible external aggression and vastly improved the lot of people who would otherwise have been put through an economic meat grinder". It is an indictment of the primary alternative economic system that bureaucratic central planning could work so decently in comparison.
When looking at explanations for failure, only the most proximal analyses are given credence in pop culture (The Schuerer report was days before the fall of the DDR) and no holistic analysis is considered. To be scientific and historical about this, one must consider the alternative hypotheses, the greater picture and burdens. Let's consider one simple one: the extractive nature of western imperial economics - transferring wealth from the global south to itself. To what extent can you reject the hypothesis that a significant explanatory factor in the economic success of West Germany is the disproportionate value received from these exploitative relationships? Is it considered in the analyses and conclusions drawn? If not, why not? It seems like a very relevant question to me - there are countless examples of capitalist countries with far, far, far worse outcomes than communist ones, and they tend to be in the Global South.
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?
- 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.
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.
> 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
That sounds like it could be applied to any Western society today as well. Throughout history, have there been any alternative democratic systems where politicians are less 'powerful'?
The power is more decentralized, though. Certain elites in say US democracy do want to slow down change for their own benefit, and sometimes they are moderately successful, but they don't have as much power. They certainly don't have the whole power of the state behind them.
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.
> 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?
> Of course they did, this is Marxist doctrine. From each according to his ability, to each according to his need.
It doesn't make any sense to jump straight to "from each according to his ability, to each according to his need" in a Marxist tradition. That's a state reached with communism, a proposed end state to a socialist transition of undetermined length - and no actual prescription for how, exactly, any of that would happen.
That would more aptly describe some (non-Marxist) anarcho-communist movements, who believe you can jump straight to a communist way of being without a transition.
> Why would this be a bad thing? Who would want to change this aspect of central planning?
If you are actually punished for making production work better you will become alienated from your job and actually want to do a worse job in order to improve your own personal conditions. People care more about their families, their friends, their local well-being than a far-off bureaucrat's.
> So did they fail to solve these problems because they were prevented from doing so because of dogma?
Not really, they were heavily focused on foreign policy and a growing domestic intelligentsia that was increasingly bourgeois, believing Western propaganda about how much better life was elsewhere and lacking real experience with rampant homelessness, hunger, and the state of poorer countries. That group was actively vying for power and eventually won as the public grew weary of defensive wars and focusing industry on defense and also began to buy that propaganda. That led to serious internal struggles and, eventually, what amounted to a bourgeois coup that dissolved the USSR at the barrel of a tank.
All in all, the problems I described were not dealbreakers. Western bourgeois democracies have plenty of "bullshit jobs", yet we don't refer to that as a problem that's failing to be solved due to dogma - it's failing to get solved because there are dominant systemic forces responsible for it being that way in the first place and they are so fundamental to our typical understanding of how the economy should work that we don't even talk about them, instead distracted by fights between center-right bourgeois politics and far-right bourgeois politics.
> That's a state reached with communism, a proposed end state to a socialist transition of undetermined length - and no actual prescription for how, exactly, any of that would happen.
It is indeed true that socialists and communists reject the construct of private property and jump to expropriation and violence with no idea how to progress from this state to their desired end state.
> If you are actually punished for making production work better you will become alienated from your job and actually want to do a worse job in order to improve your own personal conditions.
This is why "from each according to his ability, to each according to his need" is a terrible idea and likely to fail in any scenario involving human beings.
> Not really, they were heavily focused on foreign policy and a growing domestic intelligentsia that was increasingly bourgeois
Yes, they were more interested in exporting their ideology to the rest of the world than making it work where they were already in charge, and frustrating people's natural inclinations was so difficult as to require a massive domestic espionage apparatus. But what is even more interesting is that all those loyal soviet apparatchiks became more bourgeoise as they became responsible for allocating more resources. Perhaps the communists could learn something here too.
> believing Western propaganda about how much better life was elsewhere and lacking real experience with rampant homelessness, hunger, and the state of poorer countries.
The propaganda was not too far from reality as many defectors learned.
> Western bourgeois democracies have plenty of "bullshit jobs", yet we don't refer to that as a problem that's failing to be solved due to dogma
I think some people do.
> so fundamental to our typical understanding of how the economy should work that we don't even talk about them
i.e. dogma
> instead distracted by fights between center-right bourgeois politics and far-right bourgeois politics.
Funny, the people on the right say its between center-left and far-left. I think you both need to read more, tbqh.
> It is indeed true that socialists and communists reject the construct of private property
yes
> and jump to expropriation
yes
> and violence
No. Most individual socialists are reluctant to be involved in any form of violence and anticipate it to be defensive in form. You can kind of get a sense for this when diving into who the foreign aggressors/invaders are in most conflicts and who are fighting anti-colonial revolutions following a general breakdown of society + state violence cracking down on political movements. Not a lot of people eager for violence among socialists. Pretty much the opposite - tons of people who are debilitated by their empathy.
> with no idea how to progress from this state to their desired end state.
I would say it's more that there are many competing ideas on how to do so and there's constant infighting.
> This is why "from each according to his ability, to each according to his need" is a terrible idea and likely to fail in any scenario involving human beings.
But it's not relevant to this situation...
> Yes, they were more interested in exporting their ideology to the rest of the world than making it work where they were already in charge
I'm referring to actually defensive capabilities. Not the "defense" euphemism that Westerners use to describe very military investments used in very aggressive ways.
> and frustrating people's natural inclinations was so difficult as to require a massive domestic espionage apparatus.
Those were and are very direct responses to spying and disruption. Western approaches to socialist-run countries create the same conditions every time, creating a form of selection (like natural selection) for organizing around fighting foreign influence. You'll note that those who didn't (like Allende) were and even those who tried to but weren't strong enough (like Sankara) were murdered and had their governments replaced by imperial powers.
This doesn't mean their domestic spying was or is good, just that it was, in fact, a reaction to real and active outside threats. Notice that Western powers are currently engaged in widespread domestic spying over much smaller threats.
> But what is even more interesting is that all those loyal soviet apparatchiks became more bourgeoise as they became responsible for allocating more resources. Perhaps the communists could learn something here too.
The people I'm describing didn't have any responsibility for allocating resources, they were nerds in universities.
> The propaganda was not too far from reality as many defectors learned.
Defectors that weren't already straight-up spies were frequently disappointed. They found the main thing that they sought: popular consumer goods that they envied. But they also discovered higher rates of homelessness, hunger, a lack of safety at night, and more reactionary views towards homosexuality and women.
Defectors in the opposite direction had similar experiences. When they weren't spies (they often were), they were disappointed in their experience, as they tended to get spied on a lot themselves. Both sides tried to poison or otherwise murder the others' defectors as well.
> I think some people do.
I haven't met many people that acknowledge the existence of "bullshit jobs" and definitely not any who thought they existed for dogmatic reasons. But we all have our bubbles. Do you have any examples that you're thinking of?
> > so fundamental to our typical understanding of how the economy should work that we don't even talk about them
> i.e. dogma
Ha, I thought the same thing as I wrote it and then got distracted. I'm thinking of implicit ideas of how the world works, where we don't even think about alternatives. I'm not sure whether I'd call that dogma or not. I'm not finding the right words to describe it, unfortunately.
> Funny, the people on the right say its between center-left and far-left. I think you both need to read more, tbqh.
If we try to place these ideas on a one-dimensional axes for convenience, the far left is clearly taken up by socialists and communists. Socialists reject all capitalists as allies and drive a hard line between them and everyone else. The nearest to them are social democrats, who attempt to create a controlled form of capitalism through democratic means, where strong social programs and safety nets prevent (theoretically) the public from suffering the worst tendencies of capitalism. Then there are liberals who might believe in some social programs that already exist, but shy away from creating new ones and tend to prefer market-based solutions. Then there are liberals who tend more and more towards uncontrolled capitalism. Finally, there are factions within capitalists themselves that create ideologies like fascism who attempt to resolve crises in profit due to labor fights by adopting a highly nationalist and xenophobic position that blames "bad" capitalists for everyones' problems and tries to organize around "good" capitalists that do things right.
Social Democrats and liberals in favor of social programs tend to populate the center-left and center. Other liberals are right wing and it just keeps going farther right.
Folks on the right who call liberals in favor of social programs "far left" do so because they've not actually been exposed to actual socialists or as a bad-faith pejorative.
> Finally, there are factions within capitalists themselves that create ideologies like fascism who attempt to resolve crises in profit due to labor fights by adopting a highly nationalist and xenophobic position that blames "bad" capitalists for everyones' problems and tries to organize around "good" capitalists that do things right.
Our perspective is that fascists are not capitalists because they seek to manage the economy through central planning.
The rest of this argument is not likely to be fruitful unless you can critically examine your notions surrounding property and violence. Theres also a healthy amount of revisionist historical thinking that seeks to whitewash the terrible conditions created by communist countries. I'm not interested in debating matters of fact here so thank you for your replies and your perspective.
> Our perspective is that fascists are not capitalists because they seek to manage the economy through central planning.
An incorrect perspective. Fascism is sacrificing one set of the ownership class for another, diverting populism directed against a hostile liberal economic system to only part of that class while giving more power to the rest of it. Fascism is characterized by privatization, not central planning, with a subset of the bourgeoisie gaining vast new powers in comparison. You could even ask Mussolini himself about this in his comments about how fascism should more correctly be called corporatism - and see his transition from opportunistic socialist to opportunistic fascist serving key bourgeois individuals and their interests.
> The rest of this argument is not likely to be fruitful unless you can critically examine your notions surrounding property and violence.
I can critically examine them and always have been able to. Should I interpret this to actually mean, "until you change your opinions on them"? I figured there would be an accompanying pushback about them, but I don't see one.
> Theres also a healthy amount of revisionist historical thinking that seeks to whitewash the terrible conditions created by communist countries.
Again, this seems to just be, "I disagree". A fruitful conversation would be one where we can have a discussion and real exchange, not vague dismissiveness.
> I'm not interested in debating matters of fact here so thank you for your replies and your perspective.
Historical and economic analyses are rarely simple matters of fact and this is a subject where dealing with other perspectives is a necessity. None of what we're discussing is at the level of simple facts, they are interpretations depending on a large set of suppositions and historical knowledge.
No, it merely emphasizes things that you do not consider and ignores things that you consider relevant.
> Fascism is sacrificing one set of the ownership class for another, diverting populism directed against a hostile liberal economic system to only part of that class while giving more power to the rest of it. Fascism is characterized by privatization, not central planning
Fascism is characterized by an alliance between state and corporate leaders. Its not truly private if the state still controls your production.
> I can critically examine them and always have been able to.
Good, then you should be able to respond to arguments that question your preferred perspective on property rights by defending it rather than assuming it to be the case.
> Should I interpret this to actually mean, "until you change your opinions on them"? I figured there would be an accompanying pushback about them, but I don't see one.
You should interpret it as a gentle nudge towards considering the pushback you have already received in a new light.
> Again, this seems to just be, "I disagree". A fruitful conversation would be one where we can have a discussion and real exchange, not vague dismissiveness.
I'm not interested in debating over the factual accuracy of the deplorable conditions in the soviet republics and satellite communist nations. I consider that (alleged) fact to be settled, you do not, there's nothing to be gained here.
> Historical and economic analyses are rarely simple matters of fact and this is a subject where dealing with other perspectives is a necessity.
This is true.
> None of what we're discussing is at the level of simple facts, they are interpretations depending on a large set of suppositions and historical knowledge.
The factual dispute I referred to is our disagreement on the quality of life of the soviet and communist citizens under state controlled economies. I'm uninterested in your revisionist account alleging that it "wasn't that bad."
> But I welcome a discussion.
Lets return to the issue of property rights. How do you justify imposing your opinion on property rights on other people who don't share that opinion?
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.
>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.
The main problem I can think of is the politicking involved. eg. special interests leaning on politicians to get their industry prioritized some way in the system. Even without lobbying it's possible for this to go sideways, if well intentioned policy makers decide to use the system to promote certain agendas. For instance, the central government might place a huge bonus on steel production to promote industrialization[1]
Well, I think a big reason why this happened is that there really was no objective way of deciding which industries should be prioritized. It just so happened that steel production seemed to be the industry that prioritizing would allow for the most future growth.
In a way, this was true for the USSR - the Red Army in WW2 was incredibly well equipped in numbers, which would have been impossible if they had not focused on so hard in steel production.
But in theory, if one could get such a system going, and if it could be implemented in a verifiable way, then there would be no way for the government to justify prioritizing one industry over the other. Indeed, how could you argue that you make a better job than the algorithm? If the government decided to incentivize further productive growth, that should be done via a hyperparameter.
I think the major politicking issue would be getting the politicians to willingly give up their power to this system, which indeed would be a huge problem.
Correct, the politics and power dynamics are the primary barrier, not because the theories fail (they tend to go untested).
Look at Venezuela. A country that has been dependent on an oil-based extraction economy for decades and subject to brutal imperialism elects a socialist government that nationalizes... just that one industry, and the entirety of Western powers turn against them along with local national business owners, sabotaging their own points of sale as a form of economic warfare, instead selling across the border to support a black market.
As a reminder, despite the socialist label of the party in power, Venezuela has a significantly lower level of nationalization than France. But because France is not a target of both imperial and capital interests, but is instead firmly established as an imperial country itself, we don't see sanctions or (inaccurate) dithering over election integrity.
Venezuela is what you get when you propose to move some of the power and profits away from capital and don't have the footing to withstand their counterattack.
A small country is already smaller than a gigantic corporation. Of course the larger corporation try to have an internal economogy (with department charging each other), but they're still mostly centrally planned.
So you could say the modern capitalism with gigantic corporation is already an exercise in central planning.
"""To the biologist the problem of socialism appears largely as a problem of
size. The extreme socialists desire to run every nation as a single business
5
concern. I do not suppose that Henry Ford would find much difficulty in
running Andorra or Luxembourg on a socialistic basis. He has already more
men on his pay-roll than their population. It is conceivable that a syndicate
of Fords, if we could find them, would make Belgium Ltd or Denmark Inc.
pay their way. But while nationalization of certain industries is an obvious
possibility in the largest of states, I find it no easier to picture a completely
socialized British Empire or United States than an elephant turning somersaults or a hippopotamus jumping a hedge."""
The other thing to consider is failure modes. If a corporation misallocates resources, it's the shareholders that are footing the bill. Corporations make mistakes and go out of business all the time. If you apply this to the entire country, you end up with the the whole country footing the bill for policy mistakes. It already happens to an extent in capitalist systems (eg. lobbying by special interests), but centrally planned economy on a national scale will only exacerbate it.
Corporations incorrectly allocating resources leads to exactly the same issues as a centrally planned economy doing so.
The issue is, corporations invariably do so.
EDIT: Downstream comments are disputing the assertion that corporations misallocating resources causes issues for everyone. Here is why :
Not really. I'm going to use some vaguely marxian terms here because it's the only framework that applies both to centrally planned economies and market economies, but I won't be using any explicitly marxian theories, correct or not.
So, let's say that a member of the capitalist class (shareholder) sees their profit drop or even go negative as a consequence of the misallocation of the resources.
This reduction in profit without any benefit anywhere else means that the capitalist cannot increase their amount of capital. Assuming a more or less fixed rate of profit otherwise, this decrease in the amount of constant capital means that the amount of variable capital (labour) necessary to produce the same commodity is going to be higher, which means that it will cost more labour to buy and produce.
It will also mean that it is less likely that the capitalist class will increase variable capital, which would increase the monetary price of labour as demand increases, which means that wages are depressed for non-producible items such as land even at the same profit rate.
Finally, it might push the capitalist to reduce their profit rate in order to catch up to the competition, which might in turn push them to reduce their profit rate as they have more of a margin, which can lead to various crises down the line.
In the end, in capitalism, everyone pays for the errors of the shareholders, perhaps even more than the shareholder class themselves.
however corporations are limited by the damage they can do to the extent that they are limited to voluntary interactions because they run out of money/resources to waste. If you allowed a corporation to commandeer more resources at gun point it would continue to waste them.
I'm that case, I always want the latest PC build every year that ends up costing at least $10k, regardless of the fact that I have literally no use for 1TB of RAM.
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.
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.
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.
Yeah. The problem is, the administrators don't know me. I've got lots of preferences; they don't know any of them. They don't know what kind of chocolate truffles I like, or what kind of pizza, or what kind of shoes. They may get me food, and shoes, but my preferences are much more detailed than that.
The economy is something like a fractal. We have food, clothes, shelter, and medical. We all need that. But in food, we have fruit, vegetables, meat, grains, and candy. Even if they get all of that right... how are the planners supposed to know how many people want Life Savers instead of M&Ms?
So they're likely to choose an objective function that is not what individuals would choose for themselves. How are they supposed to gather the data that tells them that they made too many M&Ms and not enough Life Savers? How do they collect data at that level of detail and put it into their objective function?
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.
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.
... and back then one of the arguments for keeping slavery was "if you (bostonians) start attacking the right of property (in people), you're going to wind up with communism!"
It's funny how little the slippery slopes differ from the pre-internet (pre-telephone!) era to our own.
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.
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.
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.
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.
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).
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.
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.
>Nice way to revise history to make the Holomdor just a result of lack of computational power not a genocidal atrocity.
The hunger at the time hit hard not only Ukraine, but also inner Russia (Volga region) and Belarus. It has even affected Poland. The "genocidal atrocity" is so blatantly mythologized and lies upon lies are layered down in an attempt to form a nation-forming myth together glorification of Nazi collaborationist, which have killed a lot of Jews, Poles and even Ukranians.
There was no evil order to eliminate Ukrainians issued by the Soviet government, it was a tragic chain of events. It started from purely natural reasons and got multiplied by deficiencies of the system. People on the ground played a crucial role here as well, by passing wrong information about situation on the ground.
If it was, then how was this because of Central planning? Man-made, engineered famines have happened under capitalism too, it's not hard to twist and jerk the market into a famine given material circumstances like those that made it possible for the Holodomor.
I believe the (Chicago?) commodities markets explicitly do not deal in onion futures, because perishability meant that market was far too easy to manipulate.
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.
A cold blooded amoral répudiation of materialism is almost certainly impossible. There is literally no reason to think that the human mind is anything more than the human body, a material construct.
There are plenty of reasons to think the mind is much more. Namely, consciousness, the portal for everything else we know about the material world, is itself completely impervious to a materialistic account.
Absolutely not. There is no reason at all that consciousness is impervious to a materialistic account. Consciousness can be framed as an emergent property of systems that can process the concept of self and actualize upon it and their environment.
You might say that qualia is impervious to materialistic account, however, arguments based on qualia that attempt to be a refutation of materialism are circular - for example, the p-zombie argument, that says that there could conceivably be a "zombie", that acts exactly the same as a human but lacks consciousness, which is only possible if you accept that one could act perfectly human but lack consciousness, which is itself only possible if you accept that something may be different but indistinguishable from something else, which is itself only possible if consciousness is special in some way - which there is no reason to believe.
And so, I disagree that the existence of consciousness is inconsistent with materialism.
Sure, people can make up explanations for consciousness all day, but saying it is 'emergent' is not a meaningful materialistic description. If you tell me the Linux source code 'emerges' that gives me no understanding of how it works or how to write the thing myself. It is no different an explanation than to say 'god did it'. Materialism is the promise that we can break a thing down into components that when reassembled give us the same thing back. 'Emergence' is completely antithetical to this idea.
As of right now, there are zero materialistic accounts for consciousnes, and no reason to think one is forthcoming. The only people holding out are those who presume materialism a priori, which is just circular.
That is not what is meant by emergent property. An emergent property is a property of a system that is not a property of its constitutive parts. For example, none of the lines of code of the Linux kernel alone have the property of being an operating system, but as a whole it does have such an attribute.
So, a materialist would say that consciousness is an emergent attribute of matter, in that in a certain configuration matter obtains the property of being conscious whereas it didn't before.
This account is faillible, because it makes the following prediction : changing the material configuration changes consciousness, and that one can create consciousness via material means. The first one is indeed a correct prediction, the second one cannot be proven yet.
As for a mechanism for how exactly this happens, you are right that there are no satisfactory propositions yet, but non-materialists cannot generate one ether. There are ideas of how this could happen, for example I would suggest reading "I am a strange loop", by Hofstadter. There is no reason to believe that a materialist theory is impossible, though.
In the end, I fail to see why one should abandon such a useful framework as materialism because of consciousness.
It's preferable to drop a incorrect explanation in favor of acknowledging we don't have an explanation. Like AA, the first step is to acknowledge the problem.
> This means that we should in theory be able to replace human capitalists with a giant computer.
The unknowns that humans would be calculating are the cost and utility of all these goods. All the computation power in the world applied to this problem would get you a simulation of what each consumer does already when they bid on products.
Sure, but that would take the messy, volatile human element out of the equation, and also throw the much faster computational horsepower at the problem. If it could be done, a centralized computational system would seem to be superior to the free market.
The messy, volatile human element is the product of the calculation process. Lets say you want to know whether consumers should spend $20 at Chuck-e-Cheese or $200 at Walt Disney World. You can let them spend their money and see, and some will be happy about their choices and make the same choice next time, some will be regretful and make different choices, and some will be on the margin and either conclude that they are regretful or satisfied because of psychological and social factors.
Now imagine that you simulated all these people and determined that 70% of them would prefer Chuck-E-Cheese and 30% would prefer Disney. What do you do with this information?
Use our super computers to allocate resources appropriately? I'm not sure what you are getting at.
Marx's critique of capitalism is since a few rich people owned all the means of production, they can oppress the poor, and neglect to give them what is needed for normal life. The promise of communism is that by taking the means of production out of the hands of a few greedy individuals and somehow running the mechanisms with an objective metric to ensure all people's needs are met we will end up with a society where the poor are not oppressed by the rich, and all can live lives free from things like starvation and lack of shelter or medical care.
Of course, when the communist revolutions took the means of production out of the hands of capitalists, the new hands were no more noble, and continued to oppress with even greater brutality.
One might hope then for a communism run by objective, malice free computers by encoding human needs as a goal function for algorithmic optimizers. Within a materialist paradigm this is at least theoretically possible.
> Use our super computers to allocate resources appropriately? I'm not sure what you are getting at.
How do you translate the results of the model into a plan for allocating resources appropriately? You're either going to neglect consumer preference because you "know better" in which case its not clear what you're optimizing in your model; or you're going to have a high-fidelity simulation of what the consumers do when they bid on products in the market anyway.
> One might hope then for a communism run by objective, malice free computers by encoding human needs as a goal function for algorithmic optimizers. Within a materialist paradigm this is at least theoretically possible.
My perspective is that, to the extent that you are attempting to encode human needs without inserting your own biases and values, you would be simulating what humans would do in a free market. We can establish the existence of edge cases like humans falling victim to cognitive biases and alter our model so that we only simulate "very rational, well informed" humans; but as soon as we do that we open the door to give our own biases and values higher precedence than the desires and values of the humans we are simulating.
Also its not clear how the output of a machine would be used to allocate resources in an economy. Whether someone prefers one option to another depends on the relative cost to themselves, whether someone wants to sell one option or another depends on the relative profit. The market essentially consists of a vast system of PDE's with hidden parameters that are solved by humans iteratively in distributed fashion. You can tell Joe Sixpack that after the 7th meal, he exclusively prefers hot dogs to hamburgers unless the price of beef drops below 1.05x the price of hot dogs, but not before, and when the price of beef reaches 2x the price of hot dogs he prefers beef again but for conspicuous consumption and not for the taste. But its not clear how you would discover that before he discovered it himself, and even if true its not clear that he would prefer hot dogs to hamburgers before he went through the 7 meal process of discovering that himself.
stated preference is frequently different from demonstrated preference. if you fail to simulate people then you will fail to produce an accurate representation of their desired outcome.
This system was never completed because of the (US backed) coup by Pinochet.
[1] https://99percentinvisible.org/episode/project-cybersyn/