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  • Book Review: Red Plenty, by Francis Spufford

    Posted by David Foster on October 27th, 2019 (All posts by )

    Red Plenty by Francis Spufford

    —-

    The idea of centralized economic planning is a very seductive one.  It just seems to make sense that such planning would lead to more efficiency…less waste…and certainly less unnecessary human suffering than an environment in which millions of decision-makers, many of them in competition with one another, are making their own separate and uncoordinated decisions, resulting in pointless product redundancy, economic cycles driving unemployment, and lots of other bad things.

    Red Plenty…part novel, part nonfiction…is about the Soviet Union’s economic planning efforts as seen from the inside.  The characters include factory managers, economic planners, mathematicians, computer scientists, and “fixers.”  Published in 2010, Red Plenty is now quite timely in view of the current vogue for socialism in American political discussion.

    Marx drew a nightmare picture of capitalism, when everything was produced only to be exchanged; when true qualities and uses dropped away, and the human power of making and doing itself became only an object to be traded.  The alternative? A dance to the music of use, where every step fulfilled some real need, did some tangible good, and no matter how fast the dancers spun, they moved easily, because they moved to a human measure, intelligible to all, chosen by all.

    How might this actually be accomplished? Stalin mocked the idea that planning an economy required much in the way of intellectual depth or effort.  Get the chain of command right, Stalin seemed to be saying, build it on the right ideological principles, and all that was left was a few technical details, a little bit of drudgery to be carried out by the comrades at Gosplan with the adding machines.  But it turned out to be a little more complicated than that.

    Maksim Maksimovich Mokhov is one of the lords of the Gosplan file room, in which there are hundreds of folders, each tracking the balances and plans for a particular commodity. A good man, who takes his job seriously, Maksim has risen as high as you could go at Gosplan before the posts become purely political appointments..his was the level at which competence was known to reach its ceiling…Not just a mechanical planner, he realizes that the file folders  cast only the loosest and most imperfect net over the prodigious output of the economy as the whole, and has worked to understand the stress points, the secret path dependencies of the plan.  His specific responsibility is the chemical and rubber sector, and he is particularly concerned, at the time when he enters the story, about problems in the viscose subsector.

    Arkhipov, Kosoy, and Mitrenko run one of the most important plants in the viscose supply chain, and they are three worried men.  The plan goals aren’t being met, and they know that the path to career death is separated by only a few percentage points of plan fulfillment from the other one, the upward path, the road to glory and local fame. (A couple of decades earlier, it wouldn’t have been just career death on the table.) This plant makes two viscose-derived products, yarn and tire cord.  The yarn line works fine, the tire cord line, not so much…but no problems with the machine can be found.  There is no prospect of getting a replacement machine in any relevant timeframe.

    Arkhipov and his associates come up with a plan to solve their problem…read the book to see what it is and how it turns out.

    Nikita Khrushchev, in September 1959, told a crowd that “the dreams cherished for ages, dreams expressed in fairytales which seemed sheer fantasy, are being translated into reality by man’s own hands.”  Modern technology, combined with the benefits of a planned economy would make it possible.

    Because the whole system of production and distribution in the USSR was owned by the state, because all Russia was (in Lenin’s words) ‘one office, one factory’, it could be directed, as capitalism could not, to the fastest, most lavish fulfillment, of human needs.  

    The American exhibition in Moscow in mid-1959 (site of the “kitchen debate” between Khrushchev and Nixon) was attended by 3 million Soviets (including some of the characters in this book), and although many of them thought that the American claims of broad-based prosperity were exaggerated or worse, the experience surely helped feed the longing for a better life for the Soviet Union’s ordinary people.

    Leonid Vitalevich Kantorovich pioneered the application of mathematics to the optimization of economic activities…these methods surfaced as a possible toolkit for the planning organizations circa 1960. Could these methods help achieve Khrushchev’s stated goal of broad-based prosperity?

    For example, consider several factories, producing a common set of products but with different efficiency characteristics.  Which products should be made by which factories in order to optimize overall efficiency? A set of equations can be constructed representing the constraints that must be observed–labor, machine utlization, etc–and the relative weighting of the variables to be optimized.  Although these techniques have been used to a considerable degree in capitalist countries, they would seem tailor-made for a starring role in a planned economy.  Selling the new methods in the Soviet Union, though, could be tricky:  the linear-programming term “shadow prices”, for example, sounded like something that might have politically-dangerous overtones of capitalism!

    One of the first applications involved potatoes, the distribution of same. The BESM (computer) is using Leonid Vitalevich’s shadow prices to do what a market in potatoes would do in a capitalist country–only better. When a market is matching supply with demand, it is the actual movement of the potatoes themselves from place to place, the actual sale of the potatoes at ever-shifting prices, which negotiates a solution, by trial and error.  In the computer, the effect of a possible solution can be assessed without the wasteful real-world to-ing and fro-ing, and because the computer works at the speed of flying electrons rather than the speed of a trundling vegetable truck, it can explore the whole of the mathematical space of possible solutions, and be sure to find the very best solution there is, instead of settling for the good-enough sollution that would be all there was time for, in a working day with potatoes to deliver.

    And even in the planned Soviet economy, there is still a market in potatoes, right here in Moscow, the leftover scrap of capitalism represented by the capital’s collective-farm bazaars, where individual kolkhozniks sell the product from their private plots…The market’s clock speed is laughable.  It computes a the rate of a babushka in a headscare, laboriously breaking a two-rouble note for change and muttering the numbers under her breath…No wonder that Oscar Lange over in Warsaw gleefully calls the marketplace “a primitive pre-electronic calculator.”

    So put the BESM to work minimizing distance that the potatoes have to travel..a proxy for efficiency and freshness:  price is not a consideration, since the state selling price of potatoes has been fixed for many years.  But BESM can only work with abstract potatoes: Not, of course, potatoes as they are in themselves, the actual tubers, so often frost-damaged or green with age or warty with sprouting tublices–but potatoes abstracted, potatoes considered as information, travelling into Moscow from 348 delivering units to 215 consuming organizations…The economists recognize the difficulty of getting a computer model to mirror the world truly.  They distinguish between working at zadachi, ‘from the problem’, and of fotografii, ‘from the photograph’…This calculation, alas, is from the photograph.  It deals with potato delivery as it has been reported to Leonid Vitalevich and his colleagues.  There has been no time to visit the cold-stores, interview the managers, ride on the delivery trucks. But the program should still work.

    The author notes that “the idea that the computer had conclusively resolved the socialist calculation debate in socialism’s favour was very much a commonplace of the early sixties.”

    But despite all the planning paperwork, despite the attempts at computerization, people like Chekuskin remain essential to keep the Soviet economy functioning at all.  He is a fixer, he works the system to ensure that his customers–factories, for the most part–can get the parts and materials they need in order to keep operating.  Before the revolution, he was a salesman: now, the economic problem is not selling, but buying.  Chekuskin explains what a real salesman was, back in the day:

    You’re thinking of some fellow who works in a sales administration, sits by his phone all day long like a little king, licks his finger when he feels like it, and says, “You can have a litttle bit”…That’s not a salesman.  You see, the world used to be the other way up, and it used to be the buyers who sat around examining their fingernails, hard enough as that is to imagine.  A salesman was a poor hungry bastard with a suitcase, trying to shift something that people probably didn’t want, ’cause back in those days, people didn’t just get out the money and buy anything they could get their hands on.  They had to be talked into it.”

    But with Communism, the things changed.  Back then, people didn’t want to buy.  Now, they don’t want to sell.  There’s always that resistance to get past.  But the trick of it stays the same:  make a connection, build a relationship.

    Volodya, is a young propagandist recently assigned to the huge locomotive plant in Novocherkassk, a dismal town that also features a university.  Unfortunately, it was classified by the planners as a “college town”, in need of the calorific intake required to lift pencils and wipe blackboards, but there were forty thousand people living and working in the industrial zone out by the tracks now, and between the students and the loco workers, a locust would have been hard put to it to find a spare crumb. White bread was a distant memory, milk was dispensed only at the head of enormous queues.  Sausages were as rare a comets.  Pea soup and porridge powered the place, usually served on half-washed plates.

    Eventually, people can’t stand it anymore–and decisions by two separate planning organizations have the result that on the very same day, food prices are increased and so are the production quotas at the locomotive factory.   There is a raucous mass protest, featuring signs like MEAT, BUTTER, AND PAY and CUT UP KHRUSHCHEV FOR SAUSAGES.  The loco plant manager, Korochkin, does not handle the situation well, and the rage grows.

    The ensuing catastrophe is vividly described as it is observed by the horrified Volodya.  Troops open fire on the protestors:  26 people are killed an 87 wounded.  Death sentences and long prison terms are handed down.

    This was a real event:  it happened in 1962.  News about the events did not appear in the state-controlled press for thirty years.

     

    The author offers some interesting thoughts on the role of intellectuals in Czarist Russia and in the Soviet Union.  In the Czarist era, to be an intellectual was to feel that you were, at least potentially, one of those who spoke truth to power. ..These attitudes meant that while intellectuals largely welcomed the Revolution as the end of tsarism, very few of them signed up for Lenin’s brand of Marxism, even when–or especially when–it had state power behind it.  Indeed, a number of scholars who had been happy to teach Marxism before the Revolution, as a way of sticking a finger in the eye of power, promptly started offering courses in religious philosophy after it, to achieve the same effect…By the end of the 1920s, however, the Party was in a position to enforce ideological conformity…the new technological intellectuals were willing to be told, were willing to believe, that the task of speaking truth to power was now redundant, because truth was in power.  (emphasis added)

    On the kinds of people who achieved positions of power in the Soviet Union:  At the turbulent beginning of Lenin’s state, the Party’s operatives had signified their power by using the direct iconography of force.  They wore leather jackets and cavalry coats, they carried visible revolvers.  Stalin’s party, later, dressed with a vaguely military austerity…Now, by contrast, the symbolism was emphatically civil, managerial.  The Party suit of the 1960s declared that the wearer was not a soldier, not a policeman.  He was the person who could give the soldier and the policeman orders.  The philosopher kings were back on top.

    But there is a problem with the kingship of philsophers.  Wisdom was to be set where it could be ruthless.  Once such a system existed, though, the qualities required to rise in it had much more to do with ruthlessness than with wisdom…(Lenin’s original Bolsheviks) were many of them highly educated people, literate in multiple European languages, learned in the scholastic traditions of Marxism; and they preserved these attributes even as they murdered and lied and tortured and terrorized.  They were social scientists who thought principle required them to behave like gangsters. But their successors…were not the most selfless people in Soviet society, or the most principled, or the most scrupulous.  They were the most ambitious, the most domineering, the most manipulative…Gradually their loyalty to the ideas became more and more instrumental, more and more a matter of what the ideas would let them grip in their two hands.  In summary:  Stalin had been a gangster who really believed he was a social scientist.  Khrushchev was a gangster who hoped he was a social scientist. But the moment was drawing irresistibly closer when the idealism would rot away by one more degree, and the Soviet Union would be government by gangsters who were only pretending to be social scientists.

    Francis Spufford is a fine writer who demonstrates considerable creativity in his work.  He explains the functioning of the BESM computer from the viewpoint of an electron.  His description of a character’s labor and childbirth in a Soviet hospital setting is so vivid and harrowing that I can imagine it having a measurable negative fertility effect among women reading it.

    One reviewer at Amazon said:  I happened to grew up in Soviet Union and actually met some of the people mentioned in this book .. It’s unbelievable how a foreigner who doesn’t even speak Russian could capture the spirit of that time with the littlest details and at the same time summarize the grandest historic forces shaping up the superpowers of the XX century.

    The book includes an extensive set of notes clearly explaining which stories and characters are historical and which are literary inventions or modifications.  (For example, the true story of the BESM computer and the Moscow potato market was moved from th 1966 back to 1961, for narrative reasons)

    An outstanding book, not to be missed.

     

    37 Responses to “Book Review: Red Plenty, by Francis Spufford”

    1. Jay Guevara Says:

      The idea of centralized economic planning is a very seductive one. It just seems to make sense that such planning would lead to more efficiency…less waste…and certainly less unnecessary human suffering than an environment in which millions of decision-makers, many of them in competition with one another, are making their own separate and uncoordinated decisions, resulting in pointless product redundancy, economic cycles driving unemployment, and lots of other bad things.

      To see the historical background to such thinking, read Edward Bellamy’s influential (at the time) book “Looking Backward,” published in 1888, and summarized here:

      https://en.wikipedia.org/wiki/Edward_Bellamy

      It’s available free on Project Gutenberg.

      From Wiki:

      In Looking Backward, a non-violent revolution had transformed the American economy and thereby society; private property had been abolished in favor of state ownership of capital and the elimination of social classes and the ills of society that he thought inevitably followed from them.[7] In the new world of the year 2000, there was no longer war, poverty, crime, prostitution, corruption, money, or taxes.[7] Neither did there exist such occupations seen by Bellamy as of dubious worth to society, such as politicians, lawyers, merchants, or soldiers.[7] Instead, Bellamy’s utopian society of the future was based upon the voluntary employment of all citizens between the ages of 21 and 45, after which time all would retire.[7] Work was simple, aided by machine production, working hours short and vacation time long.

      Sound familiar?

    2. Gringo Says:

      The lefty site Crooked Timber had a discussion of Red Plenty.Red Plenty Seminar. The seminar- not the book- is also downloadable in MOBI, PDF, or EPUB format. The warning is made that the EPUB version crashes a Nook. That may have once been the case, but it didn’t crash my Nook today.

      The only other exposure I had to Crooked Timber was a CT posting on Fidel’s stepping down from power. Some poster wrote something like, “Well, Cuba is better than Haiti.” When I responded by pointing out that was also the case before 1959, the response came, “I wasn’t talking to YOU, I was talking to someone else.” Oh well.

    3. David Foster Says:

      Another story about Kantorovich’s attempts to apply linear programming…found here….he was trying to improve a process for cutting sheet steel for railroad cars. There was a lot of scrap, as there often is when a variety of shapes must be cut from a larger piece. He formulated the problem as a linear programming problem, and reduced the scrap significantly…by 50%.

      Big problem: the scrap was being counted on as an input for steel mills in the area, and the railcar company now could not meet its scrap quota. Kantorovich was now in trouble for economic sabotage. (He was rescued by the military, and his methods were applied to metal-cutting for tanks and the layout of minefields)

    4. Whitehall Says:

      I read “Looking Backward” as a teenager surveying utopias on my own.

      Even as a poor kid looking for some salvation in socialism, I saw it as bunk and worthless fantasy.

      Sorry, but I won’t be reading “Red Plenty.” It sounds all too depressing!

    5. David Foster Says:

      Looking at some of the other reviews that have been posted….here’s on Slate Star Codex, suggesting that with more & faster computers, maybe it all could have worked.

      And that the main problem with the Soviet Union was killing a lot of competent people and keeping a lot of the other competent people from positions of power…”Soviet Communism isn’t what happens when you let nerds run a country, it’s what happens when you kill all the nerds who are experts in country-running, bring in nerds from unrelated fields to replace them, then make nice noises at those nerds in principle while completely ignoring them in practice.”

      Were the American founding fathers ‘nerds’ in the sense this reviewer means?

    6. David Foster Says:

      Sorry, left out the link to the Slate Star Codex review:

      https://slatestarcodex.com/2014/09/24/book-review-red-plenty/

    7. Anonymous Says:

      It can never be solved by better machines, information and nerds running the production system. It is about individual choices in consumption and production which creates the incentives to respond efficiently to what others want and offer.

      Many times we don’t even know what we will choose until we actually have to make the individual choice with the real opportunity costs facing us in real time. We make good and bad choices and we incorporate that information for our following decisions. Any planned system substitutes some central authority’s values for our own and kills the positive incentives to produce and consume efficiently and IAW our own preferences.

      The last thing that would motivate me would be nerds telling me what I want and compelling me to act that out. No system of human interaction works instantly or flawlessly, but free markets have shown the best results and I believe they are most attuned to human nature.

      Death6

    8. Brian Says:

      Of course the “nerds” immediately get shot by thugs who want to sit in the chair where all the decisions get made. What possible theory of human motivation would suggest any other outcome?

      From SSC:
      “This book was the first time that I, as a person who considers himself rationally/technically minded, realized that I was super attracted to Communism.”
      Duh, Mr. “rationally/technically minded” Guy, you were “super attracted” to being the guy who makes all the decisions for everybody else. But hopefully the thought of having all the decisions made by someone you don’t actually like would dissuade you from this juvenile attraction.

    9. Gringo Says:

      ”Soviet Communism isn’t what happens when you let nerds run a country, it’s what happens when you kill all the nerds who are experts in country-running, bring in nerds from unrelated fields to replace them, then make nice noises at those nerds in principle while completely ignoring them in practice.”

      Given that Lenin and Trotsky wrote volumes up on volumes, it is safe to call them nerds.But it was the nerds who decided they needed thug policies to bring about their Utopia. While Stalin was a thug- he robbed banks before the Revolution to fill the Bolshevik coffers- he was not the dummkopf that Trotsky said he was. He was a poet,well-read, a former seminary student and editor of Pravda. It is a fair bet that he wrote at least some of those volumes attributed to him. Once more,nerds endorsing thug methods was the problem.

    10. Gringo Says:

      Regarding commies and cybernetics- the Allende years in Chile included some cybernetics.However, the armed takeovers of agricultural lands, resulting in a per capita decline of 20% in agricultural production in 3 years, presented a production problem that computers couldn’t solve. Owners not investing in increased production in fear that their properties would be nationalized (confiscated) also presented a problem that computers couldn’t solve. As Allende used a decree law (520) left over from a military socialist coup in the 1930s to nationalize hundreds of businesses, the owners were not being paranoid, but prudent.

      https://en.wikipedia.org/wiki/Project_Cybersyn

    11. Kirk Says:

      A planned economy is one where the idiots in charge think that they can do better at running the economy than the economy can do at running itself.

      And, being as nobody really understands what the hell the economy is doing, or, really, the exact details of how it all works in the first damn place, well… Yeah.

      Marx was a moron, and everyone who’s followed after him are equally arrogant and dull. The root of the problem is that there are way too many factors going into things than anyone can appreciate or foresee. It’s like the whole question of Bernie’s deodorant–For his mindset, there should only be the one variety for sale in some generic bland format, a single formula. The trouble is, everyone’s body chemistry is different, and there’s no way to make a deodorant fragrance that will satisfy everyone, or, for that matter, even work for everyone. What’s an alluring smell on one woman will, in interaction with her biochemistry, be an abomination on someone else. The variables are incalculable, and you either tell a bunch of people that they’re going to have to deal with smelling like crap, or you have the variety of scents and strengths you find down at the local Walmart. It’s actually more efficient to do it that way, and it gives a lot of people something to do. If we were all robotic ants, well… Yeah. You wouldn’t need the scent-masking. But, we’re not, so we do, and there ya go.

      The whole range of economic activity goes like this. There’s actually damned little that is calculable or even knowable, when you get down to it. The sort of Communism laid out in Red Plenty reminds me of many of the MBA types I’ve run into here in the US, who think that widget “A” is widget “B”, and that what they know from “A” is transferable to “B”, when the reality is that there are some similarities, indeed, but that the differences are what’s important. And, the only way to know those things are to have grown up in widget industry “A” and “B” respectively. You can’t apply universal truths past a certain point, because while there are, indeed, universal truths, one of them is that everything is different in the details. Another is that the details matter more than the tyro observer might think.

    12. Mike K Says:

      Planned economies have the same problem that global warming alarmists have. Economics and weather are both chaotic systems, if “system” can be applied to chaos. Too many variables. In science you often work on problems by reducing variables until you can understand the process. In chaotic systems, that doesn’t work.

    13. David Foster Says:

      Kirk…”The sort of Communism laid out in Red Plenty reminds me of many of the MBA types I’ve run into here in the US, who think that widget “A” is widget “B”, and that what they know from “A” is transferable to “B”, when the reality is that there are some similarities, indeed, but that the differences are what’s important. And, the only way to know those things are to have grown up in widget industry “A” and “B” respectively.”

      It’s not just MBAs: also, data scientists with PhDs. The current vogue for ‘big data’ means that there is likely to be a lot more of that sort of thing.

    14. Jay Guevara Says:

      Planned economies have the same problem that global warming alarmists have. Economics and weather are both chaotic systems, if “system” can be applied to chaos.

      I’ve used that parallel to question the validity of climate models, which I strongly suspect are laughably flawed.*

      If you could accurately model a chaotic system, which such system would you model? The financial markets, of course. The rewards are far greater, and the problem more tractable, than modeling the climate. Financial institutions have vast resources, both financial and intellectual, that they can devote to such modeling, and a massive incentive to do so.

      But no one has successfully modeled the financial markets. Yet we’re asked to believe that some graduate students at several third-rate universities have solved a much more involved problem that spans fields ranging from physics to chemistry to biology to geology?

      No sale.

      * I note in this connection that for at least one climate model the modelers admitted to neglecting to include the effect of the 35 active volcanoes on earth belching out all manner of gases and particulates. Oops.

    15. David Foster Says:

      “The financial markets, of course. The rewards are far greater, and the problem more tractable, than modeling the climate.”

      Not sure about the tractability part…financial markets are made up of people, many of whom are doing their *own* financial modeling. At least the climate isn’t consciously trying to outsmart you…

    16. veryretired Says:

      I haven’t commented here or anywhere on the web for quite some time, for various reasons not important here, but routinely check this site, and enjoy the articles and commentary.

      This article piqued my interest because of its tangential relationship to an idea I’ve been playing with recently.

      My standard measure in so many areas of life has long been whether or not any proposal recognizes and supports the rights of independent individuals to live their lives as they see fit in a non-violent, non-fraudulent manner.

      Those who value the collective above all else, and consign the individual to a footnote in the grand social movements they envision, can never achieve their alleged goals because the pursuit of the power to make the big decisions that their system demands replaces and subverts all other purposes and principals, with force becoming the only arbiter which can secure their position .

      Thus, the emergence of the likes of Stalin, Mao, Pol Pot,et al are not the result of the failure of collectivism’s vision, but the only true fulfillment of that vision’s very nature.

      What collectivism loses in its endless officials, computer programs, production plans, and relentless coercion of everyone to do what they’re told, say what they’re told to say, and think what they’re told to think, is what only can be described as “magic”.

      By this I mean all those elements in our development that have occurred, mysteriously, in the last few hundred years since the concept of the rights of individuals has advanced through our culture and society, that would be pronounced “magic” by any of our ancestors from thousands to only a few hundred years ago, if they could be transported here and exposed to the life we take for granted.

      That magic is the result of millions of independent minds making an advance here, or implementing a new idea there, or devising some new method of achieving the goal which has driven human effort forever—providing for oneself and one’s family as best as possible.

      We live in a world of magic because we have allowed the true generator of reality’s only magic to finally perform with minimal hindrance—the individual human mind, ever searching, ever reimagining, ever attempting to answer that age-old question—how can I make this work better to provide the kind of life I seek for myself and my family.

      What you end up with when you discard the magic in life are those gruesome, hulking gray towers that marked so much of the cities, and the lives they contained, in the marxist monstrosities.

      When you don’t feel the magic, and revel in it, or, indeed, fear and try to destroy it, you end up in the kind of nightmare that Soltzenitzen (sp) and so many others have described.

      For millenia, humans have dreamed of magic, tried uncounted spells and enchantments, longed for some way to overcome the endless dangers of life, when all the time the creator of magic was right there in their own heads.

      The collectivists could never feel, or appreciate, this magic in themselves or others. The drab grayness of the world they created was the physical image of their lack of magic in their minds, hearts, and souls.

      It is the mind of the individual in which the magic lives, and changes the world, in ways our ancestors for millennia could only dream about as a heaven attainable when they died, but never to be found here on Earth.

    17. David Foster Says:

      Veryretired…good to see you here again. Thanks for a thoughtful comment.

      Socialists, and other centralizers, believe that the magic originates with a small minority of thinkers and is propagated efficiently through the society via the top-down planning. They fail to understand the degree to which innovation, and even ongoing operation, depends on millions of creative acts, large and small, by people throughout the society. These become difficult to impossible as the central-planning net is drawn tighter and tighter.

      There is no place for the clockmaker among the gears of the clock.

    18. Mike K Says:

      They fail to understand the degree to which innovation, and even ongoing operation, depends on millions of creative acts,

      Always good to recall that all scientific discoveries in ancient times were achieved by alchemists.

    19. Stephen Karlson Says:

      You’d think, to extend a David Foster observation, that the epigones of Big Data and Informed Management would see in the failings of Gosplan, or for that matter, of more than a few late 1960s conglomerates, that there are limits to what Expertise can do.

    20. David Foster Says:

      Even rats seem happier and are less-stressed when they get treats as a reward for driving around in their little cars, rather than being passively driven around by humans:

      https://phys.org/news/2019-10-rats-tiny-cars-scientists.html

    21. Gringo Says:

      David Foster
      Socialists, and other centralizers, believe that the magic originates with a small minority of thinkers and is propagated efficiently through the society via the top-down planning. They fail to understand the degree to which innovation, and even ongoing operation, depends on millions of creative acts, large and small, by people throughout the society. These become difficult to impossible as the central-planning net is drawn tighter and tighter.

      I have gotten through about a third of Red Plenty. Spofford has written an interesting book. He calls the book a “fairy tale” of the Soviet hope that the Soviet economy would overtake the US economy. It combines a “fictional” account which is based in large part on real people and actual events. At the end of each chapter/episode, Spofford then explains what is “fiction” and what is not.This post-episode (post-chapter) recap includes an exhaustive number of suggested sources- but he doesn’t here overwhelm with complete footnotes. He will point to a source, but not the precise page in his factual explanation at the end of each chapter.

      In the 19502, the Soviet economy was growing quickly. At the time, the Soviets “calculated” the growth rate to be 8%, the CIA 7 %, and post Soviet analyses saw 5% growth. By comparison, West Germany was growing at 5% and the US at 3.3%. With investment prioritized over consumption in the Soviet Union, growth was prioritized. But the growth rate kept diminishing.

      For a start, at a point when the plans called for growth to rise faster still, it was in fact slowing from one plan period to the next, not much, but unmistakeably. And then there was a devil in the detail of the amazing growth, if you looked closely. For each extra unit of output it gained, the Soviet Union was far more dependent than other countries on throwing in extra inputs: extra labour, extra raw materials, extra investment. The USSR got 65% of its output growth from extra inputs, compared to the USA’s 33% and the frugal 8% achieved by France. This kind of ‘extensive’ growth (as opposed to the ‘intensive’ growth of rising productivity) came with built-in limits, and the Soviet economy was already nearing them. There weren’t that many more extra Soviet citizens to employ; timber and minerals couldn’t be slung into the maw of industry very much faster than they already were; and investment was a problem in itself, even for a government that could choose what money meant. Whisper it quietly, but the capital productivity of the USSR was a disgrace. The Soviet Union already got less return for its investments, in terms of extra output, than any of its capitalist rivals. Between 1950 and 1960, for instance, it had sunk 9.4% of extra capital a year into the economy, to earn only 5.8% a year more actual production. In effect, they were spraying Soviet industry with the money they had so painfully extracted from the populace, and wasting more than a third of it in the process.

      The difference between western economies and the Soviet economy was that there was higher productivity in the west. Communism’s approach was top-down. You do what the bosses say, or you will suffer. There are consequences for this approach. One consequence is that personal initiative is discouraged. Suggestions from the factory floor do not come from those who are commanded from birth to follow and obey.

      A lot of the growth in the 1930s came from importing Western factories wholesale,such as the Ford auto factories built in the USSR.IIRC,these were not up-to-date, state-of-the-art factories, but based on obsolete models.

    22. Gringo Says:

      The difference between western economies and the Soviet economy was that there was higher improvement in productivity in the west. The Soviets didn’t innovate as much. IIRC, some of the steel plants that were scrapped post 1990 had been built in the 1930s,and had not been improved since then.

    23. Julie near Chicago Says:

      To Veryretired:

      Very, it’s absolutely terrific to hear from you again. I’ve been missing you at Samizdata for a long while now.

      You wrote,

      “My standard measure in so many areas of life has long been whether or not any proposal recognizes and supports the rights of independent individuals to live their lives as they see fit in a non-violent, non-fraudulent manner.

      We have recently been exercised at Samiz. over the pronouncement by the “bioethicist” Zeke Emanuel that we oldsters really play all the time, “hiking, riding motorcycles,” doing no “meaningful work” and therefore living “meaningless lives.” You could have come over and enjoyed the snarlfest. For some reason we all felt a bit nauseous at this attempt to make us into little useless Units.

      :>)))

      *

      David, thank you very much for the detailed book review. It sounds like a book well worth reading … and, as someone said above, depressing as the dickens.

      *

      And an Anonymous person above wrote this, which is the clearest (and most concise) explanation I’ve ever seen of “the Knowledge Problem,” and includes the pre-empting of us individuals to decide on our own values, and act upon them in the marketplace:

      “Many times we don’t even know what we will choose until we actually have to make the individual choice with the real opportunity costs facing us in real time. We make good and bad choices and we incorporate that information for our following decisions. Any planned system substitutes some central authority’s values for our own ….”

    24. CapitalistRoader Says:

      In the early aughts I had a German immigrant (East or West, IDK) philosophy professor posit in class the the Soviet Union and Warsaw Pact countries would still be around and thriving if they’d had access to contemporary MRP programs.

      If a smoker didn’t quit smoking after reading Red Plenty s/he would never quit.

    25. David Foster Says:

      CR..”In the early aughts I had a German immigrant (East or West, IDK) philosophy professor posit in class the the Soviet Union and Warsaw Pact countries would still be around and thriving if they’d had access to contemporary MRP programs.”

      Did you introduce him to some *users* of contemporary MRP programs?

    26. CapitalistRoader Says:

      DF: Yes. Me. MRP programs operate like any other: Garbage In, Garbage Out.

      I used to get into it with a buyer/production planner when one of her vendor’s parts ran out. She’d point at her monitor exclaim that we couldn’t be out because “there’s 750 on-hand on the line.”

      One day her car wouldn’t start after work in the company parking lot. I looked it over and determined that it was out of gas despite the fuel gauge showing 1/8th tank left. She yelled at me.

    27. David Foster Says:

      (Actually, I’m impressed that a *philosophy professor* would have known was an MRP program *was*…)

    28. pst314 Says:

      In the early aughts I had a German immigrant (East or West, IDK) philosophy professor posit in class the the Soviet Union and Warsaw Pact countries would still be around and thriving if they’d had access to contemporary MRP programs.

      In the 80’s a Marxist science fiction writer wrote a novel in which massive computer tech allowed a socialist society to function well. I sometimes wonder if he ever changed his mind.

    29. David Foster Says:

      Chekuskin, the Fixer, drew a good contrast between systems dominated by SELLING and those dominated by BUYING. The phenomenon can be observed in any company which has a central service organization of some kind. If there is an IT organization that all business units and functions must use to get their work done, the behavior of the people in it will usually be like the “little king” phenomenon that Chekuskin described. On the other hand, if the business units & functions are allowed to contract outside to get their work done, it will be the people selling the services & products that are the supplicants.

      This isn’t just an IT thing. I met a woman who was taking an evening class in machining. She was a PhD researcher with some government agency, and often needed specialized experimental equipment made. There was a central service organization that was supposed to make lab equipment, but the schedules she was getting were of the 12th of Never variety…and evidently, she either wasn’t allowed to contract out, or didn’t have the budget for it. BUT, she would be allowed to use the machine tools in the service shop if she could demonstrate skill in machining. So, that was why she was trying to develop the skill.

    30. OBloodyHell Says:

      }}} It can never be solved by better machines, information and nerds running the production system. It is about individual choices in consumption and production which creates the incentives to respond efficiently to what others want and offer.

      Actually, it nominally can.

      That’s where the Star Trek replicator and Matter-Antimatter conversion technologies come in.

      Because then you actually have individual choice AND efficient use of materials.

      The monkey wrench comes in once you add exceptions to those techs — “Latinum” and “DiLithium Crystals”, which “cannot be replicated”.

      NOW you’ve added a scarcity element back into the mix — and economics rears its head: How do you allocate the scarce resources?

      It’s an interesting conundrum.

      In Star Trek, your socialism works on some levels because the scarcity becomes human ingenuity, human capabilities. That all the ST stories are mostly about the Best And Brightest — the ones who have the most ingenuity and capability does not change human nature. There will always be those who resent being told THEY are not the “Best And Brightest” — who think THEY should be the ones In Charge. And who will act as sand in the gears, to interfere with the proper operation of an otherwise completely optimized (by a human-chosen criteria, anyway) functional society.

    31. Joe Wooten Says:

      In the 80’s a Marxist science fiction writer wrote a novel in which massive computer tech allowed a socialist society to function well. I sometimes wonder if he ever changed his mind

      No, he went to his grave still a true believer assuming you were talking about Mack Reynolds…

    32. Anonymous Says:

      No, he went to his grave still a true believer assuming you were talking about Mack Reynolds…

      I think I heard something once about Mack Reynolds being a leftist, but have read very little of his stories. As I recall he was very popular as a good story teller. Is that correct?

      The writer I was thinking of was Samuel R. Delany, who is still alive. The novel was Stars in my Pockets Like Grains of Sand, in which pervasive data collection about every individual’s habits made possible a non-dysfunctional central planning.

    33. Veryretired Says:

      I appreciate the welcome expressed in a few of the comments above. I have stopped commenting at the few sites I used to for a variety of reasons, not the least of which was my general sense that I was spending too much time posting viewpoints that never seemed to register with the others at the site, even when they seemed to agree.

      This post is a good example.

      Economic activity is not merely finding the most efficient or productive way to produce this thing or that service.

      The economic activity that many people engage in is, in fact, a major element in their personal development, and their investment in that work involves far more than some money or some time out of their day.

      A significant part of our every day life involves using mass produced goods, or partaking of services whose delivery has been standardized over decades of common usage.

      In fact, in many areas, these standard economic elements have already been optimized in the current web of goods and services the economy offers. Why then, the collectivist asks, can’t these parts of the economy be run by a benevolent state, disinterested in profits or the personal conceit of ownership?

      At the most basic level, it is because a great many people, regardless of their educational level or the sophistication of their work, have a major mental and emotional investment is how they make a living, and that investment does not produce the same return for them if everything they do is dictated from on high.

      This happens, of course, in both public and private endeavors, but the difference between a collectivist system, and one that recognizes private property and privately owned concerns is that the employee who feels ignored by the powers that be can pursue his or her ideas as far as possible in the private system, but is pretty much stymied by the collectivist system.

      As a current example, consider Uber or Lyft, which challenged the decades old taxi systems so common in most ares, and are now under attack by various legal measures to make their activities more difficult, or impossible.

      Centuries ago, the king or lord would have tried to stop anyone whose new ways of doing something might have threatened the established ways that payed the lord to protect them, or were owned by the lord to begin with. These current attempts to curtail new methods or ideas are not much different.

      My background is farmers and small business/property owners. My mother worked as a payroll manager and control desk manager at various places, public and private, even though she had no accounting degree. My wife works in a variant of Human Resources, and is constantly frustrated because so few of her co-workers operate at her level of effort and efficiency.

      I’ve tried to explain to her that, from my former experience as a middle level manager, there just aren’t very many people who are as intelligent or dedicated to their work as she is. She is always surprised when her managers, and theirs, like her and compliment her on her work, ask for her ideas, and generally treat her with respect, even when the manager is several steps above her.

      All of this rambling is to explain why the collectivist system, regardless of the good intentions, or sophisticated computer systems they have, always end up inefficient and struggling to produce the goods or services they are assigned to provide.

      For all the endless claims that private economic systems are so cruel and hard-hearted, while collectivist systems are so caring and fulfilling, we have had an entire century in which the earth and its populations around the world have been used as a massive laboratory to test the claims of the collective.

      By any objective standard, the collective has repeatedly failed, not just to efficiently produce the goods and services their populations required, not to mention desired, but also, more importantly, to respect and protect the lives and rights of it members.

      All around the world, even in the Scandinavian countries so beloved by western collectivists, marxist-collectivist systems have collapsed, or been drastically modified, or maintained to support the continuing power of the small group of political aristocrats who loot the countries’ wealth while imposing poverty and endless difficulties on the majority of the population they have enslaved.

      Over the next few decades, doom-sayers not withstanding, several of the current group of socialist states, however it finally develops, will walk back, strongly modify, or abandon, either violently or by exhaustion, their collectivist systems. If we can pay attention, we might be able to significantly assist these people in their journey to a more free society.

      As for the United States, various elements in our society advocating increased collectivist experimentation will be rejected, mainly because it will become increasingly apparent that all of these state programs involve less choice, and more restrictions on the rights of the individual to speak or act as each feels appropriate for their lives’ fulfillment.

      The reason for the failure of the collective, anywhere and everywhere it has, and is, been tried is its basic antipathy for the magic of the individual. Collectivism must curtail, and finally deny, the individual rights of its members.

      But we have felt the magic, we have breathed free, from the moment of our birth. And we will never surrender the magic to the cold, dead hand of some anonymous commissar who presumes the right to dictate what may be done, or said, or thought.

    34. Gavin Longmuir Says:

      Veryretired: “… various elements in our society advocating increased collectivist experimentation will be rejected, mainly because it will become increasingly apparent that all of these state programs involve less choice, and more restrictions on the rights of the individual to speak or act as each feels appropriate for their lives’ fulfillment.”

      That is a rather optimistic view of the future, Veryretired. I hope you are right about that rejection, but I fear your vision will not be fulfilled.

      Simple things — decades ago, stand-up comics could make a reasonable living by insulting everyone in their audience, and their audience would laugh. Can’t do that nowadays. The ability of individuals to speak freely has been significantly curtailed within our lifetimes — and the trend is still towards ever more Political Correctness.

      Personal view: we in the West have been very fortunate to live through the crest of Prof. Charles Handy’s “Sigmoid Curve”; now we are on the final downward part of that cycle. Things will get worse, until we have a major painful collapse. But after an unhappy period, the world will move forward again. Short-term pessimist, long-term optimist.

      Think about China as an example. China led the world until the 1400s, when the Emperor made some bad decisions. That resulted in stagnation while the rest of the world surpassed China, which in turn led to the horrors of China’s “Century of Humiliation” starting in the 1840s when the English waged war to force China to purchase opium and later the Japanese invaded. The further horrors of Mao’s Communist rule need no elaboration. And yet today, over 5 centuries after the Emperor’s bad decisions, China is once more one of the largest economies around — the Workshop of the World, with hundreds of millions lifted out of poverty within the last few decades, and ultra-modern infrastructure that most Western countries can only dream about.

      We in the West are making our own bad mistakes now, from Political Correctness to renewable energy to climate change to government deficits and so many more. We will inevitably suffer, and (just like China) it make take our descendants half a millennium to recover. But recover they will! Ultimately, the human spirit will prevail over human stupidity.

    35. Joe Wooten Says:

      I think I heard something once about Mack Reynolds being a leftist, but have read very little of his stories. As I recall he was very popular as a good story teller. Is that correct?

      The writer I was thinking of was Samuel R. Delany, who is still alive. The novel was Stars in my Pockets Like Grains of Sand, in which pervasive data collection about every individual’s habits made possible a non-dysfunctional central planning.

      Yeah, Reynolds was a decent storyteller, but later on his politics intruded more and more into the plots and got boring. Delany is not only a commie, but is also a pedophile homosexual. I read Triton in the late 70’s and was so disgusted I never read his crap again.

    36. pst314 Says:

      Yeah, Reynolds was a decent storyteller, but later on his politics intruded more and more into the plots and got boring.

      That seems to be a recurring problem: A skilled writer starts out with good habits of self-restraint, not allowing his political views or other obsessions to intrude so much as to be annoying or detrimental to storytelling. Then, with success or with cranky old age, the restraint is lost.

      I read Triton in the late 70’s and was so disgusted I never read his crap again.

      Ah, but Delany is lit’rary, and therefore Must Be Read. (sarcasm) Thus I read several more of his novels before deciding that those intellectual authorities who promoted him were not all they cracked up to be. As best I recall (after 40 years) Triton had only one such element, a passing reference to a nightclub for adolescents who wanted to hook up with middle aged men. I took it, at the time, as a purely intellectual exercise in portraying an extreme libertarian society by the scattering of many small details. (Heinlein was a master of the casually dropped phrase which makes a world convincingly different.) But the later novels I read were far creepier, directly depicting very nasty stuff, which convinced me that there was something seriously wrong with him (and this was before I heard about his advocacy of pedophilia.)

      Somebody once said, pointing to Picasso and Wagner, that one must forgive/allow artists to be monsters as society must give Great Creators license to be/do vile things which would not be tolerated in ordinary people. One might wonder if that speaker was himself a secret monster or if he “merely” valued human beings less than art, but then to so devalue human beings is itself monstrous.

    37. pst314 Says:

      We in the West are making our own bad mistakes now, from Political Correctness to renewable energy to climate change to government deficits and so many more.

      Indeed. I have been shocked recently to realize just how many people I know personally are in favor of the punitive suppression of facts and opinions of which they disapprove.

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