And that 7 people were going to be able to effectively manage the production of every sector of the economy?
That being said, the free market "regulating itself" is pretty bad at it. First of all, it only has one cost function to optimize, which is never going to be what humans want to optimize. Then, it forces production information largely through low fidelity price signals. Finally, these signals are very much delayed, and by the time you answer the price signal, it may have changed wildly, which means that in some cases straightforward organisation that anyone with the relevant information could rapidly approximate can take years to come because the signal changes more rapidly and with considerable delay leading to dysfunction as other prices signals attempt to respond to it. There are many other issues with it.
Of course, an IBM System/360 and 7 people couldn't do it. It's just an attempt to see where the system had to improve. If it did work out it would have ended up with a staff of thousands of people, direct connections to much of the machinery and to people in the production lines, specially built supercomputers with linear and non-linear optimisations accelerators, etc..., while still allowing many markets where it made sense and use them as information.
As it was, a bunch of old crusty bureaucrats in the Soviet Union managed to get within the order of magnitude of the market regulating itself via supply and demand and free competition with data manually collated and corrupted every step of the way and refresh cycles on the order of months if not years, with the computation itself being in large part done manually. So it was an interesting and worthwhile experiment.
To speak metaphorically, decentralized market regulation by supply and demand is the Bitcoin style of solving the problem. That is extremely inefficient, wasting lots of resources, being very slow but avoiding a single point of failure.
If you are surprised by the comparison, consider that you are avoiding the calculation problem with "the market regulating itself" phrase which falsely implies that this regulation would happen for free. It is equivalent to saying "Bitcoin approves transactions itself". That is true but there is still huge processing power employed to do so, as the huge mining farms show. In a free market calculations are performed by every individual actor in the market. In fact companies spent huge amounts of resources on market research to find out what and how much they should produce.
Central planning does naturally require far less processing power and can be more efficient (it has a much better best case but, to be fair, also a much worse worst case).
Even primitive, paper based, Soviet style planning has been proven to be quite adequate for early 20th century economies (don't be tempted to move the goalpost here, yes there were inefficiencies and it sometimes did perform worse that free markets, the point is it was already good enough to keep a country running for decades)
Now cybersyn was the right idea to go a step further. Make the central planning faster, more flexible and more democratic. To answer your question a little bit less simplistic, it depends. Obviously cybersyn was an early experiment and would surely not sufficed but would have Chile been better off with it than with the bloody CIA backed dictatorship that was put in power instead? Yeah, I am quite sure. We have now strong empirical evidence that neoliberalism does not work as promised.
Central planning works horribly and there's wide evidence of that.
> decentralized market regulation by supply and demand is the Bitcoin style of solving the problem.
This is word salad. The criticism of bitcoin - that I would absolutely agree with - is that it wastes resources to solve the same problem that a SQL database solves, just more inefficiently.
In order to solve the same problem a market solves you would need to take into account the preferences of millions of independent actors and mash them together into a Frankenstein solution, which is clearly beyond the capabilities of any government, with or without computers.
> Even primitive, paper based, Soviet style planning has been proven to be quite adequate for early 20th century economies
This claim is complete insanity. At no point in history the USSR has performed better than the first world in any sector, with the exception of a few propaganda stunts (like the space race) that came at costs so enormous that could only be borne by a brutal dictatorship, and that were promptly and easily matched and surpassed by the US.
Frankly, if your argument for central planning is to point at how well it worked out for the Soviets, I don't need to argue any further.
> it was already good enough to keep a country running for decades
Anything is good enough to keep a country running for decades, that's not a reasonable indicator of any kind of success whatsoever. The alternative to central planning is to stop doing it, not to go back to the 19th century.
> would have Chile been better off with it than with the bloody CIA backed dictatorship
A comment that contains a literal invitation to not move the goalposts ends with an irrelevant tangent. How ironic.
Yes, the OG 9/11 was bad, you get a gold star.
Cybersyn is interesting as an information system for the technology it employed, and is for sure a great display of ingenuity.
But come on, let's stop beating this dead horse. Central planning is a pipe dream.
Good luck with that! I am telling you, it was guaranteed to fail. We never saw it fail because it got dismantled.
People still fantasize about sitting on that control room and those unergonomic chairs, controlling the economy using 8 buttons at a time.
It's not just a greedy algorithm like a market system to get the lowest costs for the first orders only.
Directly as a result of it and the work Stafford Beer did on it, we got the whole field of system dynamics.
Also, Cybersyn was a pioneer in the idea of complex control systems with multiple humans in the loop.
https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
[1] https://cidadeinseguranca.files.wordpress.com/2012/02/deleuz...
The CIA set up a special branch to study the Soviet cybernetics menace. It issued numerous reports, pointing out, among other strategic threats, the Soviet plans to build a 'Unified Information Net.' Based on CIA reports, in October 1962 President Kennedy's top aid wrote in an internal memo that the 'all-out Soviet commitment to cybernetics' would give the Soviets 'a tremendous advantage.' He warned that 'by 1970 the USSR may have a radically new production technology, involving total enterprises or complexes of industries, managed by closed loop, feedback control employing self-teaching computers.' If the American negligence of cybernetics continues, he concluded, 'we are finished.'
[1] https://balticworlds.com/the-cybernetics-scare-and-the-origi...
But this plan was not implemented, because the stalinist bureaucracy was afraid they can lose his privileges:
Glushkov's proposal faced opposition on two sides. Industrial managers and government bureaucrats opposed the computerization of economic planning and management because it exposed their inefficiency, reduced their power and control of information, and ultimately threatened to make them redundant. On the other hand, liberal economic reformers viewed Glushkov's proposal as a conservative attempt to further centralize the control of the economy and to suppress the autonomy of small economic units. A controversy erupted.
[2] https://web.mit.edu/slava/homepage/articles/Gerovitch-InterN...
There are modern thinkers working on this same line:
[3] https://en.wikipedia.org/wiki/Towards_a_New_Socialism
[4] https://www.amazon.com/Peoples-Republic-Walmart-Corporations...
As soon as a measure becomes a metric is ceases to become a good measurement of success.
The Soviet system failed both because the planners couldn't deal with modeling a complex economy, but also because they had no idea how much a given good cost to make, produce, or deliver to its point of sale.
It failed because all decision making was centralized, but no services were, so every enterprise had its own mix kindergartens, schools, recreation facilities, clinics, commissaries and dining facilities.
Any system that measured productivity of railways for example simply in ton-miles, with a quota of ton-miles to be met, I'd say is basically doomed to failure, particularly one with an inflexible plan governing it.
When the system worked, it was from local managers calling in favors and doing trades to keep production rolling.
A neat statistic, the planned economy of the SU, used as much or more oil per capita (I think twice as much) than as west, and produced 30% or more less in GDP, per capita. This is true of other consumable raw materials, all while spewing comparatively massive amounts of pollution out.
The so called 'cybernetic factory' at the heart of the project was about making real time information exchange between several levels of hierarchy possible, with much delegated to the factories themselves. Centralized decision-making was reserved for high-level planning akin to Auftragstaktik in the German army (I believe it's called mission command in the UK and US).
Friedrich Hayek of all people, who met Beer at a conference in 1960 in Illinois was actually very sympathetic to Cybersyn. The frequent comparisons between Cybersyn and Soviet Planning are pretty much the result of a political campaign against Allende, it doesn't have much to do with the scientific ideas behind the project.
If you have heard people talk about 'smart factories', 'industry 4.0', IoT devices gathering data in real time and relaying them to big computers where they can be analysed and quickly sent back to the workers you have in reality stumbled upon people who are trying to build CyberSyn 2.0, probably without knowing it and less socialist branding.
Cybernetic Revolutionaries: Technology and Politics in Allende's Chile by Eden Medina is a good, in depth book on the topic.
Ironically, it's the tankies (neostalinists) who seem to be the loudest defenders of it. If it's propaganda it seemingly worked on the wrong audience.
Cybernetics can improve on that somewhat by changing static plans into dynamic sets of rules for how to react, but the need to respond dynamically is pretty much inescapable and then it would seem better to lean into that.
I don't quite understand your point. Could you elaborate further? What do you mean by leaning into the dynamism?
So instead of having a quota of ton-miles, you will simply have a bunch of goods on sale. If a lot of people are buying them, you can increase their prices and at the same time increase production.
Once you compute how best to minimize the difference between demand and supply, you compute what goods have to be produced, and work backwards from there until you can calculate what inputs they need.
There are a few proposed metric. Essentially the idea is to completely do away with any quotas outside of exceptional circumstances, and respond to demand dynamically in a way to reduce the amounts of hours worked and increase the consumer satisfaction, as measured by their comparative subjective value for various goods.
We both agree that the quota system and the inefficiency of the Soviet system was considerable. However, another interesting statistic you may not be aware of is that, outside of times of war and for the last few months, Soviet GDP per capita never decreased, while still providing fairly acceptable living standards, and good ones by global standards.
The fact that it was actually not really doomed to failure at all and it's comparative performance compared to the rest of the world, as well as that it lasted quite a while shows that there is enough value in the good sides of the historical centrally planned economies to partly make up for the atrocious and seemingly obviously debilitating issues.
The idea of cybernetic central planning is to reduce stress, offer more social safety, reduce economic inequalities, all while doing away with quotas, inflexible plans, precomputed prices, inflexibility to demand, and sensitivity to fraudulent information.
Basically, give up on trying to guess what to make and in what quantities, and let the consumer decide what they prefer, but then intelligently use that information to determine how to organize production as well as possible, and then measure the results of these organizations in real-time to provide feedback and adjust various processes.
An interesting way to look at it is that, in capitalism, Capital has a mind of it's own and basically acts as a control system. In essence, in capitalism, capital wants to grow, and it does so by estimating all of the returns it could be generating, and if it is credible to increase returns, re-allocate itself to the most profitable return. So, through a few dozens of layers of price signals, it can control the economy to increase it's own profit, and in doing itself it also increases productions and allows capital pledged to consumption to have goods and service. Cybernetic planning intends to directly measure the price signals as close to the source as possible, and when possible even underlying signals before that, and use those to optimize some function that will allow people to work as little as possible but have as many goods and services as possible. The idea is that, as with the control systems humans program, we deal with the lower complexity of the model (at least for the foreseeable future) with more direct access and dynamic access to the data and to the levers of action.
