
Optimizing things in the USSR (2016) - yoloswagins
http://chris-said.io/2016/05/11/optimizing-things-in-the-ussr/
======
Animats
Gosplan never had anywhere near enough compute power or good data to do that
job.

The data problem could have been solved with bar-coding. That's how WalMart
got tight control over their inventory. Master Control in Bentonville,
Arkansas can see pallet 2345235 leaving warehouse 242 on truck 24343 headed
for store 2514. If store 2514 doesn't report arrival of that pallet, questions
will be asked and the pallet will be found or somebody will be in big trouble.
When the pallet is found, broken down, and product placed on shelves, the
items will eventually show up in cash register data. If shelf inventory minus
sales is not very close to incoming shipments, the "shrinkage" security people
are informed and start looking for theft.

Gosplan had an annual planning cycle and monthly reporting. WalMart has a
weekly planning cycle and daily reporting. A year was far too much lag for the
system to work well. Although it did for heavy industry, where things take
months anyway.

The huge linear programming problem isn't insoluble. It's a sparse matrix;
potato chips don't affect steel tubing much. There's probably some way to come
close to an optimal solution.[1] Sparse matrix techniques were in their
infancy when the USSR was active, though.

[1] [http://www.gurobi.com/resources/getting-started/lp-
basics](http://www.gurobi.com/resources/getting-started/lp-basics)

~~~
sdrothrock
> The data problem could have been solved with bar-coding. That's how WalMart
> got tight control over their inventory. Master Control in Bentonville,
> Arkansas can see pallet 2345235 leaving warehouse 242 on truck 24343 headed
> for store 2514. If store 2514 doesn't report arrival of that pallet,
> questions will be asked and the pallet will be found or somebody will be in
> big trouble. When the pallet is found, broken down, and product placed on
> shelves, the items will eventually show up in cash register data. If shelf
> inventory minus sales is not very close to incoming shipments, the
> "shrinkage" security people are informed and start looking for theft.

This is really interesting -- I'd never found much on pre-SAAS/internet Wal-
Mart's asset tracking system, which I assume this must be a part of. Do you
have any links to articles or books I could read to learn more about this?

~~~
Animats
There's a PBS special on this: Wal-Mart and the Bar Code".[1]

Wal-Mart has achieved a level of control over suppliers that Gosplan could
only dream about. They're going for even more control.[2]

[1]
[http://www.pbs.org/wgbh/pages/frontline/shows/walmart/secret...](http://www.pbs.org/wgbh/pages/frontline/shows/walmart/secrets/barcode.html)
[2] [http://www.supermarketnews.com/walmart/vendors-skeptical-
wal...](http://www.supermarketnews.com/walmart/vendors-skeptical-walmart-
changes-sourcing-roles)

~~~
sdrothrock
Interesting! Thank you. Surprising to me to see RFID tags mentioned in the
context of a system-wide transition -- I'll have to look into whether that was
successfully completed.

~~~
Animats
It wasn't.[1] 2003 was too early for this. Their RFID usage continues to
increase, though.

Latest WalMart edict: clear bar codes must appear on all four vertical faces
of each carton.[2] They're tired of having to rotate a box to find out what's
inside.

 _" People think we got big by putting big stores in small towns. Really, we
got big by replacing inventory with information."_ \- Sam Walton

[1] [http://www.computerworld.com/article/2551910/mobile-
wireless...](http://www.computerworld.com/article/2551910/mobile-
wireless/some-suppliers-gain-from-failed-wal-mart-rfid-edict.html)

[2]
[http://www.scdigest.com/assets/reps/walmart_carton_marking_l...](http://www.scdigest.com/assets/reps/walmart_carton_marking_letter_2016.pdf)

~~~
kevin_thibedeau
Basically copying Aldi's multiple codes and non-standard stretched UPCs.

------
merraksh
_The USSR had about 12 million types of goods. If you cross them over about
1000 possible locations, that gives you 12 billion variables, which according
to Cosma would correspond to an optimization problem that would take a
thousand years to solve on a modern desktop computer._

Modern (commercial and open-source) solvers of linear programming (LP) tackle
problems of millions of variables in minutes. Most of those 12 billion
variables would be cleared out (e.g. fixed to their lower bound, zero) in a
pre-processing step.

Problems with variables that are constrained to be integer can take much
longer, but they are orders of magnitude more efficient today than a few years
ago.

~~~
Scea91
> Problems with variables that are constrained to be integer can take much
> longer, but they are orders of magnitude more efficient today than a few
> years ago.

Yet, they are still NP-complete.

~~~
lorenzhs
Doesn't mean that you can't write efficient heuristics that find close-to-
optimal or even optimal solutions for a wide variety of practical instances.

------
Pamar
This is indeed an excellent article, I just want to add that Red Plenty is an
amazing example of "Scientist Fiction"
([http://bactra.org/notebooks/scientist-
fiction.html](http://bactra.org/notebooks/scientist-fiction.html) \- see also
-
[https://www.librarything.com/tag/scientist+fiction](https://www.librarything.com/tag/scientist+fiction))
and definitely deserves to be read if you have any interest in technology,
data, economics.

Spufford also wrote The Backroom Boys ([https://www.amazon.com/Backroom-Boys-
Secret-Return-British/d...](https://www.amazon.com/Backroom-Boys-Secret-
Return-British/dp/0571214967)) about British tech after WWII, definitely worth
a read even if Red Plenty remains unsurpassed.

I'll also add the Wayback Machine for the (now defunct) website created by the
author for Red Plenty:
[https://web.archive.org/web/20160713031430/http://www.redple...](https://web.archive.org/web/20160713031430/http://www.redplenty.com:80/Red_Plenty/Front_page.html)

------
atemerev
Planned economy is uncompetitive for more reasons than insufficient computing
power.

You can't plan innovation. It is hard to plan for knowledge economy in general
(material production is increasingly a smaller part of total GDP — something
that early Communist theorists failed to predict).

Capitalism is automatic, self-correcting, parallel optimization process. It is
asymptotically optimal.

~~~
realusername
You mean free-market, not capitalism, they are not synonyms.

~~~
bcherny
Could you elaborate? What does it mean to have non free market capitalism, or
non capitalist free markets?

~~~
js8
I try to use following definitions (of course, both are fuzzy and apply only
to some extent in real world):

Free market: A system where the goods are distributed based on prices set
through the market mechanism. In particular, anybody can produce and buy
anything.

Capitalism: A system where there is a private ownership of capital and human
labor is being sold/bought for a price.

So yeah, in theory, you can have free market without capitalism (for example
everybody works for a worker cooperative), and capitalism (almost) without
free market (there are distinct capitalists and worker classes, and market is
heavily regulated or subsidized from the state).

------
flavio81
This is one of the best articles i've read!!

The article makes me think that the failure of the planned economy system
would probably not have happened if they had modern computers (and computing
tools we take for granted today). The author thinks this would only be
possible in about 100 years because he considers that _everything_ needs to be
considered in the model. However, one could make the case for doing central
planning of a limited set of goods which are interdependent, of course.

AI being all the rage in the news these days, and pretty much in fashion, who
knows, perhaps automatic optimization of a country's economy will start to be
talked about as a Good Thing To Have?

<start dancing, comrade...>

~~~
Scea91
It's much more a people problem than a technical one. Uless you eliminate
people from the equation, this utopia will never work.

------
azernik
The computational complexity seems to depend on the desire to solve all the
problems at once. But how about solving just the warped incentive structures
of capitalism?

Simulate perfectly rational economic actors that are only concerned with the
next upstream and downstream hops in the market, have them take into account
the "taxes" and "credits" of externalities without any of the pesky politics,
and distribute in-simulation "purchasing power" to end consumers in whatever
way you deem fit. You could even distribute this end-user power to _actual_
consumers, in order to allow them the freedom to input their desires into the
system.

Basically, remove the capitalists from the capitalist system; or, just use the
computational model of capitalism without actually giving _power_ to the
computational nodes.

~~~
bcoates
But you're not getting rid of the warped incentive structures, you're just
simulating them! Assuming you actually get your data and everything perfect
you just get capitalism-world, warts and all.

If you just want to be able to digitally assign more symbolic purchasing power
to the agents dispossessed by the current system, the government already has
the power and infrastructure to do that. Adding another level of computer
abstraction to the already symbolic computerized money system doesn't do
anything.

------
exratione
There are a factions in the strong AI community whose members espouse the idea
that a planned economy would become feasible given greater computational
capacity and better software.

I have to think that the major objection to this is that the complexity of a
socioeconomy also scales with computational capacity. Planning an economy is
quite likely always beyond the capacity of any portion of entities within that
economy, for the same knowledge problem.

Running up a rigorous approach to proof/disproof of that would be an
interesting exercise, of course.

But it is an interesting example of the point that AI has a way of being all
things to all people, when rigorous testing of ideas is not applied. For the
would-be communists and socialists it is a road to a perfect planned
technocracy, regardless of the fact that this looks less than feasible.

~~~
dragonwriter
> There are a factions in the strong AI community whose members espouse the
> idea that a planned economy would become feasible given greater
> computational capacity and better software.

The calculation problem with central planning isn't​ _really_ a calculation
problem, it's a missing input problem. You can't optimize utility without a
good input on utility.

Capitalism has significant problems by being forced to treat money as
equivalent to utility, when it manifestly suffers decreasing marginal utility
like everything else. This means people with access to more of it are likely
to give up more for the same utility, which means capitalism overweights the
preferences of the rich, and this gets worse the more effective capitalism is
at optimizing by the one utility measure it has. But centrally-planned systems
have even _worse_ utility inputs, which no measure of computational power can
correct; it's a GIGO problem.

The experiences derived from that basic problem are (one of several reasons)
why market socialism is much more common in socialist circles than state
socialism these days (market socialism has been competing with state
socialism—which many market socialists have referred to as state _capitalism_
on the view that, in it, the state becomes one big capitalist enterprise—the
whole time, but the Bolsheviks managed to fix most popular attention on their
particular form of state socialism, and capitalists found it convenient to
ignore other socialist viewpoints in their attempts to demonize socialism.)

~~~
utexaspunk
>The calculation problem with central planning isn't​ really a calculation
problem, it's a missing input problem. You can't optimize utility without a
good input on utility.

Historically that has been true, but couldn't technology help? Like, issuing
everyone a smartphone and having them register all demand and make all
purchases through it. The rest is a problem of keeping capital from
aggregating at the top.

~~~
AnimalMuppet
Apart from dragonwriter's point, that you're just duplicating the signaling
that money currently does: You want to let some central authority watch every
purchase I ever make, just so that they can try to plan the economy better?
Um, hello? Privacy concerns, anyone?

~~~
yorwba
If you don't need your ${purchase you'd like to keep private} to be optimally
produced, you could register demand for a facility that allows you to select
from an assortment of goods effectively anonymously, i.e. a shop. The demand
would then be tracked on the aggregate level. Of course this is assuming that
the selection includes what you want, otherwise you will have to be more open
about your desires to have them satisfied.

------
flavio81
"In soviet union, optimization problem solves YOU!"

(The article includes a link to an article with such name, a good read for an
in-depth discussion / comment trail regarding optimization in the USSR /
CCCP:)

[http://crookedtimber.org/2012/05/30/in-soviet-union-
optimiza...](http://crookedtimber.org/2012/05/30/in-soviet-union-optimization-
problem-solves-you)

------
pm90
Excellent post! Very well written an detailed in its analysis. Loved every
part of it, especially in the end when the author speculates whether Central
Planning could possibly work with the advances in technology in the future
(TLDR: maybe).

This is actually pretty fascinating. If we reach a level of automation such
that factories are completely automated, I wonder if the data that is gathered
from all those factories, along with more powerful computers and algorithms in
the future, would allow central planning to work better than no planning. Some
of the problems mentioned by the author are caused simply by the data being
wrong, because of lying factory managers: automated factories would eliminate
that problem at least.

At the very least, I hope that in the future there will be a centrally planned
economy managed by the government to provide a decent living standard to most
citizens, while minimizing environmental impact. More productive or talented
citizens would/could choose to opt to earn more wealth and purchase from an
open market.

~~~
thehardsphere
Sorry to burst your bubble, but this idea is something that economists have
already discussed to death: google "the Socialist Calculation Debate". A very
brief summary of its conclusions is: central planning can only perform as well
as or better than the market when the economy is completely stagnant.

Also, "centrally planned economy managed by the government" by definition
leaves no space for "an open market" for "more productive or talented
citizens" to "choose to earn more wealth and purchase from." Unless you're
talking about a black market.

~~~
petra
With regards to the innovation question: considering that the soviets we're
quite good at military and space innovations, and that defense organizations
in general produce a lot of innovation(think DARPA), maybe central planning
could work ?

Though of course the required central planning here is quite different, more
about smart bets than optimizations, and focusing engineering resources at
important problems, which doesn't seem that great at capitalistic economies
either(think planned obsolesce, "my generation is optimizing ads", browser in-
incompatibilities, etc) .

~~~
thehardsphere
The Soviets were really good at military and space innovations but:

1\. They weren't much better than the West. Consider that the capitalist world
surpassed them at pretty much anything they started with an advantage in.

2\. They were also really bad at managing the scarcity of very basic things
their people needed. Like, food and medicine. The joke was that Russia had
"bad weather" for 70 years under communism.

~~~
fetbaffe
Soviets where good at military and space innovation because there was
competition with the West.

There was no competition on their domestic market, hence it sucked.

------
fetbaffe
Lots of people here confuses planning done in large corporations with central
planning.

Even if corporations plans their entire operation it is not the same as
central planning, because even if a corporation plans its production it cannot
plan it sales. It can only estimate because it operates on a common market.

Estimation of sales plans hiring, production etc, however the actual real
sales is a feedback loop into that process, where in a central planned system
that feedback loop does not exist. Central planned system will just go on
whatever the "sales".

~~~
cies
> it cannot plan it sales. It can only estimate because it operates on a
> common market.

So the USSR as a whole was not selling (exporting) on a common market?

> Central planned system will just go on whatever the "sales".

I do not understand this. The "demand" of products within the USSR should not
be compared to the sales of the corp, but to the corp's internal demand for
stuff (e.g. office supplies).

Anyway, I'm not a proponent of central planning an economy. I see markets as a
great, organic and bottom-up way of having supply and demand meet. I'm no
proponent of protection-by-law of the unlimited hoarding of private property;
I'm no proponent of the centralized state. Instead I'd like to see the lower
level of gov't to be the most powerful. I guess I'm a mutualist.

~~~
fetbaffe
> So the USSR as a whole was not selling (exporting) on a common market?

What goods was that? Military supplies? On that it operated on a market
economy with the West and therefore got competition and a feedback loop and
therefore produced some useful things.

[https://news.ycombinator.com/item?id=14519976](https://news.ycombinator.com/item?id=14519976)

Soviet exported oil & gas, but that was also part of global market, which
Reagan used against the Soviet by dumping the price. Soviet was largely an oil
& gas economy.

Apart from that Soviet didn't produce much consumer goods and exports of that
to other communist countries was part of planned system.

> but to the corp's internal demand for stuff

In a corporation you know that you need goods based on what you are producing.
If you are white collar company, it is quite logical to have office supplies
and if you are IT company, you need to have computers and so on.

However in a central planned system, you have to take into account the entire
population what they need. But how would a planner know what to who when it
does not know what you are producing. Ask every individual?

If one person wants a blue pen and another red pen, what should the central
planner do with that information? Produce two black pens?

That is the Local knowledge problem I wrote about in this comment

[https://news.ycombinator.com/item?id=14520025](https://news.ycombinator.com/item?id=14520025)

So the central planners think you are a carpenter, but you are actually a
plumber.

[https://fee.org/media/10987/20150729_roadtoserfdom14.png](https://fee.org/media/10987/20150729_roadtoserfdom14.png)

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

Another parallel to the Soviets: Things like good-ol-boy networks and elite
school alumni [membership in The Party] are largely what drives promotion
within the higher ranks.

~~~
TomMarius
The difference is that the corporations are still participating in a free
market trade, no one is forced to be a customer while communist governments
don't have to worry about losing a customer.

~~~
maxxxxx
It seems with the bailouts of 2008 and other subsidies we are forced to
support companies if we like it or not.

~~~
TomMarius
That's true and a sad consequence of increasingly socialist governments.

------
Houshalter
The computational complexity thing seems solvable. For one, it mentions today
it would require 1,000 desktop computers to find the optimal solution. 1,000
computers is a pretty affordable thing for the benefit of managing an entire
economy.

But most importantly you don't need to find an optimal solution. Things like
gradient descent and hillclimbing will very quickly find locally optimal
solutions. That's basically what capitalism is, prices and business demands
propagate and sort of do gradient descent (but often very slowly and
inefficiently.) Algorithms like scatter search and novelty search can be used
to explore the wider search space and find the global optimum. E.g. "what
would the locally optimal solution be if we shut down this factory and built a
new factory here, and would it be better?"

------
adekok
Even local optimizations are useful:

[https://books.google.ca/books?id=NLRVWaNw76MC&pg=PT28&lpg=PT...](https://books.google.ca/books?id=NLRVWaNw76MC&pg=PT28&lpg=PT28&dq=GM+paint+robot+bidding&source=bl&ots=AANDJ_pZ8D&sig=eKJC_1NCjo27fPKexVc1y3aTIkw&hl=en&sa=X&ved=0ahUKEwih-
KvA6a7UAhXG64MKHRlwBuIQ6AEILjAB#v=onepage&q=GM%20paint%20robot%20bidding&f=false)

GM updated their paint robots to "bid" on new jobs (i.e. cars). They ended up
saving 1.5M a year. Not much, but multiple similar things add up.

i.e. when the price of the product accurately reflects the costs, the markets
can be more efficient.

------
philipkglass
_As described above and in Cosma Shalizi’s post, the number of steps required
to solve a linear programming problem with nn products and mm constraints is
proportional to (m+n)3 /2n2(m+n)3/2n2. The USSR had about 12 million types of
goods. If you cross them over about 1000 possible locations, that gives you 12
billion variables, which according to Cosma would correspond to an
optimization problem that would take a thousand years to solve on a modern
desktop computer. However, if Moore’s Law holds up, it would be possible in
100 years to solve this problem reasonably quickly._

I found Red Plenty fascinating and I enjoyed the Crooked Timber seminar that
Chris Said links to, particularly Shalizi’s post. I'm still wondering: why is
the compute-unit "a modern desktop computer?" Is parallel scaling poor for
this kind of problem?

If parallel scaling is poor, might better speedups be available with ASICs? Or
are there heuristics that run faster and produce usually-close-to-optimal
solutions on this type of problem? I'm just running through some common ways
to accelerate solutions for compute-intensive tasks that run slowly on a
single-socket of general purpose CPUs. For all I know, none of these avenues
are promising.

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

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

------
js8
I suspect the main reason why central planning fails is not actually the
planning part. The problem is human hubris - the idea that if the plan fails,
then all you need is a "better" plan that accounts for more things.

In the real world, things break constantly for various reasons. And there is a
trade-off between efficiency and robustness. If you try to make something very
very efficient (i.e. optimal), then you also make it very brittle. So for
instance, in the communist economies (not that they wouldn't have other
problems, they were dictatorships after all), the planners would decide that
it is "optimal" to have this one factory producing something, like computer
chips. But then something got delayed there, and everybody who expected the
thing to be delivered had to wait. These unexpected delays accumulated through
this "optimal" solution.

I think main reason why capitalism works is actually because it is terribly
inefficient. It duplicates a lot of work, through competition. But the
robustness is much higher. And that's why it's a success and has higher
overall economic throughput.

You can see this paradox in large corporations, which are, as many people
noted here, centrally planned economies. They suffer from the same problem -
human planners are trying to be too optimal, the robustness suffers, and the
result is often spectacular internal failures.

It's like with spacecrafts. Of course it would be more efficient if the
spacecraft had only one engine, one computer, and so on. But what if it
breaks? Then the whole mission fails. That's why it needs backup engines,
backup computers, and so on.

------
jondubois
The biggest mistake of communism is that it assumes that entrepreneurship is
economically worthless. It's literally the opposite extreme of capitalism
which assumes that entrepreneurship is the most important profession.

I think communism might have worked better if it had given more autonomy to
managers to make decisions and used output data for the previous year to
decide budgets for each factory/company.

~~~
profalseidol
Really sucks that the word communism is now used to describe Lenin's legacy.
Even the USSR 'communists' said that what they have is not communism.. but
'socialism'.

Prior to the rise of the Bolsheviks, there were a number of Marxists that were
equally popular as Lenin such as Rosa Luxemburg. They were opposed to what the
Bolsheviks were preaching.

Nowadays, now a listener of Prof. Richard Wolff and his the Democracy at Work
project he started.

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

[1]
[https://en.wikipedia.org/wiki/Project_Cybersyn](https://en.wikipedia.org/wiki/Project_Cybersyn)

------
vbezhenar
I'm still thinking that USSR approach to have planned economy is much better
than free market economy in the long run. They just lacked proper software
(and hardware) to do the proper planning and it turned out that at that time
free market was better. But with today's algorithms (or may be with
tomorrow's) country-scale planning should be possible and it will be much more
efficient.

Other question is do we really need that efficiency? Robots are more efficient
than people, so people are already losing their jobs and it'll continue. Now
with planned economy there will be much more jobs to lose. May be it's better
for our civilization not to be very efficient, at least at current period.

------
AnimalMuppet
Say this is possible. Say this would even work (for some definition of
"work"). I still have a nagging question: Is there any reason to suspect that
this would work _better_ than the current system? (Yes, I know, you can list
all the problems produced by the current system. You can't list all the
problems that would be produced by the proposed new system, though, because
you haven't experienced them.)

I see comments saying that smartphones will provide the needed data to make
this idea work well, but that doesn't do anything to answer the question "Will
it be _better_?"

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

------
arcbyte
Very interesting article.

> It is likely that many recommendations for the broader economy would have
> been ignored as well. For example, if a computer recommended that the price
> of heating oil should be doubled in the winter, how many politicians would
> let that happen?

The heating oil required to maintain temperatures in so many cubic feet of air
space in the country, given some quantity of heaters at various levels of
efficiency, themselves producable by the same giant calculation. The problem
is the dimensions/variables are endless and subject to change based on the
uncalculable whims of people. Stopping at any one point is arbitrary

------
ramgorur
What about a stochastic optimization techniques like this one described here?

[http://www.human-competitive.org/sites/default/files/deb-
myb...](http://www.human-competitive.org/sites/default/files/deb-myburgh-
paper.pdf)

The paper describes a real parameter function optimization problem, but the
Gosplan was I think more of a combinatorial one. According to the author, the
method described there can also be parallelized.

------
Asooka
One thing I don't see mentioned here is how miserable a centrally-planned
economy is for the people living in it. My parents lived during the heyday of
the Soviet Union and it was pretty awful.

As an example, let's say you want to go and buy shoes. You go to the shoe
store and you buy a pair in your number. You don't actually get to choose, the
shoes you can buy have already been made for you, you just have to pay for
them the planned price you're expected to pay for the pair of shoes. It's also
planned when these will wear out and you'll need to go buy a new pair. In
fact, all the pairs of shoes you'll need to buy for the next five years have
been planned.

You want something else than brown shoes? Fuck you (except if you're high
enough the totem pole that you get a choice between brown and black).

You want high-quality leather shoes? Fuck you.

You want to start your own shoe factory? Fuck you, the state owns all the
factories.

You want to make your own shoes with leather? Fuck you, all the leather usage
is planned centrally by the state using statistics.

You want to raise your own cow on your own land to have your own leather? Fuck
you, fuck you and fuck you - you don't get to own land, or have cows. The
state owns all the land and all the cows. In fact, the state has already
planned all the usage of the leather it will get from killing cows that are
yet to even be born.

And shoes are just one good among many. If the state determines only 10% of
the population gets to ride a bicycle, it will produce exactly that amount of
bicycles. Central planning never speculatively overproduces, or even
innovates, because that hinges on thinking you can sway the market this way or
that. You think "hey, I bet people will really want to buy wine-red shirts,
instead of white striped shirts", so you try it out and you capture part of
the market. Central planning can't account for people coming up with ideas in
the middle of a 5-year planning cycle.

Central planning is also a form of totalitarianism. Every single totalitarian
system in history has always pivoted (if it didn't start as) to a form of
serfdom, with all benefits going to the people on top. It doesn't matter if
it's a king, or "The Party", C-level management always looks out for
themselves first. A state with total power is a really shitty place to live in
for most subjects.

That said, you could probably have some sort of rationally chosen economy just
for the state's own needs, i.e. the state takes care of the roads, so it needs
this much asphalt, so taking a survey of the available factories, it should
order from this and that factory for maximum quality at minimum price.
Something like an alternative to public bids.

But a fully centrally planned economy only works with robotic workers that
never ever consume or buy anything unplanned. You want to know why corruption
was so pervasive? Because people want something more than only being allowed
to buy thin brown leather shoes, blue jeans and white striped shirts.
Centrally planned economy is something like India's caste system on steroids.

If you still think central planning is a good idea, please talk to some people
who lived in the USSR, they're about 50-60 years old today and can still tell
you good stories. Some of them speak good English. Then think really hard how
you'll make sure your proposed central planning system won't devolve to that
level of corruption.

~~~
thehardsphere
I don't understand why this comment is downvoted. These are features of
central planning of the entire economy that are not going to go away just
because the planners have better computers that can do fancier math with
strong artificial intelligence. The article even explicitly discusses some of
these problems, which is why it's TL;DR is merely "maybe" and not "LET'S DO
IT!"

Those of you who are enamored with the idea that it's all going to play out
differently just because you can give everybody smartphones should at least
acknowledge that you're advocating for a system that has devolved to
unpleasant tyranny every time that it has been tried, and at least attempt to
explain how the technology you're love is going to make those problems go
away.

~~~
Asooka
I think my coarser language might have prompted the downvotes, but I didn't
see another way to get the point across. It's really hard to explain how it
works to people who haven't lived it themselves. A lot of people are also
entirely too optimistic about politicians doing what's good for the people
without any checks and balances in place, and I don't mean just people here or
there, this seems universal.

Also, in fact, lots of people liked central planning. Yes, you didn't have a
choice, but you had a completely guaranteed life. As long as you remained
loyal to The Party and as long as enough raw resources were being mined,
theoretically the entire supply chain was planned and guaranteed. You just had
to do your part. UBI is talked a lot about these days and central planning is
UBI on steroids. Sort of a Uniform Total Income scheme. Some people really
like that idea - they just want a stable secure life. I'm sure you can think
up of many more examples where people want their life to be guaranteed and are
willing to give up choice for security, and they really are happy in that
environment.

It almost kind of worked out in practice, if you didn't mind queuing up at 5am
at the general store to be one of the first in, so you could grab one bag of
milk (one allowed per family per day, bring your daily coupon if you want it),
because we didn't actually manage to produce enough milk for everyone to have
a bag of milk. Even though we actually have enough land and cows to do so.
Because some higher ups are skimming part of the milk, because they want more
than one bag per day. Sorry, I'm starting to go bitter again.

Even though I've seen the tail end of what central planning causes, I'm still
up for UBI, actually. Social programs are needed for a healthy society, it's
just that anything taken to extremes usually ends up badly. Mostly because you
can't take it to the extreme without the use of total power. This can be the
central argument against many such extremes: " _If your idea requires or
results in a person or group of people wielding total power over the rest of
the population, then it will inevitably end up in a form of serfdom
/slavery_".

Years after communism ended a colleague of my mother's travelled to Spain
(IIRC) wanting to see how oppressed the people in a capitalist country are.
Before he left, he still believed in the central ideas of communism and
central planning. After he came back he pretty much said "Fuck central
planning, we didn't lose because the dirty capitalists fought us, we lost
because our shit doesn't fucking work".

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

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

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cmrdporcupine
A good book on this topic (from a sympathetic, Marxian-economics POV) is
[http://www.palgrave.com/us/book/9780333495490](http://www.palgrave.com/us/book/9780333495490)

"Problems of the Planned Economy"

------
Houshalter
Another review on this book I liked
[http://slatestarcodex.com/2014/09/24/book-review-red-
plenty/](http://slatestarcodex.com/2014/09/24/book-review-red-plenty/)

------
coin
-1 for mobile hostile website that disables zoom

