Its year-on-year gdp growth (as estimated by impartial outside observers) was somewhere between 7. Starvation was going down. Luxuries were going. Kantorovich was fixing entire industries with his linear programming methods. Then Khruschev made a serious of crazy loose cannon decisions, he was ousted by Brezhnev, kantorovich was pushed aside and ignored, the Khruschev thaw was reversed and tightened up again, and everything stagnated for the next twenty years. If Khruschev had stuck around, if Kantorovich had succeeded, might the common knowledge that Communism is terrible at producing material prosperity look a little different?
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First, amazement that the soviet economy got as far as it did, given how incredibly screwed up it was. You hear about how many stupid things were going on at every level, and you think: This was the country that built Sputnik and Mir? This was the country that almost buried us beneath the tide of history? It is a credit to the russian people that they were able to build so much as a screwdriver in such conditions, let lives alone a space station. But second, a sense of what could have been. What if Stalin hadnt murdered most of the competent people? What if entire fields of science hadnt been banned write for silly reasons? What if Kantorovich had been able to make the soviet leadership base its economic planning around linear programming? How might history have turned out differently? One of the books most frequently-hammered-in points was that there was was a brief moment, back during the 1950s, when everything seemed to be going right for Russia.
During the Khruschev parts thaw, kantorovich started getting some more politically adept followers, the higher-ups started taking note, and there was a real movement to get his ideas implemented. A few industries were run on Kantorovichian principles as a test case and seemed to do pretty well. There was an inevitable backlash. Opponents accused the linear programmers of being capitalists-in-disguise, which wasnt helped by their use of something called shadow prices. But the combination of their own political adeptness and some high-level support from Khruschev who alone of all the soviet leaders seemed to really believe in his own cause and be a pretty okay guy put them within arms reach of getting their plans implemented. But when elements of linear programming were adopted, they were adopted piecemeal and toothless. The book places the blame on Alexei kosygen, who implemented a bunch of economic reforms that failed, in a chapter that makes it clear exactly how constrained the soviet leadership really was. You hear about Stalin, you imagine these guys having total power, but in reality they walked a narrow line, and all these shadow prices required more political capital than they were willing to mobilize, even when they thought Kantorovich might have a point. In the end, i was left with two contradictory impressions from the book.
So it was easier for them to just continue making the old less powerful machine. The tire factory was allocated another machine that could only make 100,000 tires a year and was back in the same quandary theyd started with. Its easy to see how all of literature these problems could have been solved (or would never have come up) in a capitalist economy, with its use of prices set by supply and demand as an allocation mechanism. And its easy to see how thoroughly the soviet economy was sabotaging itself by avoiding such prices. The hero of Red Plenty although most of the vignettes didnt involve him directly was leonid Kantorovich, a soviet mathematician who thought he could solve the problem. He invented the technique of linear programming, a method of solving optimization problems perfectly suited to allocating resources throughout an economy. He immediately realized its potential and wrote a nice letter to Stalin politely suggesting his current method of doing economics was wrong and he could do better this during a time when everyone else in Russia was desperately trying to avoid database having Stalin notice them. Luckily the letter was intercepted by a kindly mid-level official, who kept it away from Stalin and warehoused Kantorovich in a university somewhere.
The factory leaders were stuck, because if they tried to correct the government they would look like they were challenging their superiors and get in trouble, but if they failed to meet the impossible", they would all get demoted and their careers would come. They learned that the tire-making-machine-making company had recently invented a new model that really could make 150,000 tires a year. In the spirit. Chen Sheng, they decided that since the penalty for missing their" was something terrible and the penalty for sabotage was also something terrible, they might as well take their chances and destroy their own machinery in the hopes the government sent them the new. To their delight, the government believed their story about an accident and allotted them a new tire-making machine. However, the tire-making-machine-making company had decided to cancel production of their new model. You see, the new model, although more powerful, weighed less than the old machine, and the government was measuring their production by kilogram of machine.
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There were even monetary bonuses, although money bought a lot less than it did in capitalist countries and plans was universally considered inferior to health status in terms of purchasing power. Goodharts Law type issues going on if youre being judged per product, better produce ten million defective products than 9,999,999 excellent products but that wasnt the crux of the problem. Red Plenty presented the problem with the soviet economy primarily as one of allocation. You could have a perfectly good factory that could be producing lots of useful things if only you had one extra eensy-weensy part, but unless the higher-ups had allocated you that part, you were out of luck. If that part happened to break, getting a new one would depend on how much clout you (and your superiors) pulled versus how much clout other people who wanted parts (and their superiors) held. The book illustrated this reality with a series of stories (Im not sure how many of these were true, versus useful dramatizations). In one, a pig farmer in Siberia needed wood in order to build sties for his pigs so they wouldnt freeze if they froze, he would fail to meet his production target and his career would be ruined.
The government, which mostly dealt with pig farming in more temperate areas, hadnt accounted for this and so hadnt allocated him any wood, and he didnt have enough clout with officials to request some. A factory nearby had extra wood they werent using and were going to burn because it was too much trouble to figure out how to get it back to the government for re-allocation. The farmer bought the wood from the factory in an under-the-table deal. He was caught, which usually wouldnt have been a problem because everybody did this sort of thing and it was kind of the smoking marijuana while white of soviet offenses. But at that particular moment the party higher-ups in the area wanted to make an example of someone in order to look like they were on top of their game to their higher-ups. The pig farmer was sentenced to years of hard labor. A tire factory had been assigned a tire-making machine that could make 100,000 tires a year, but the government had gotten confused and assigned them a production" of 150,000 tires a year.
They realized that theyd started with a handicap czarist Russia had been dirt poor and almost without an industrial base and that theyd faced a further handicap in having the nazis burn half their country during World War ii but they figured as soon. The great Russian advances of the 50s Sputnik, gagarin, etc were seen as evidence that this was already starting to come true in certain fields. And then it all went wrong. Grant that communism really does have the above advantages over capitalism. What advantage does capitalism have? The classic answer is that during communism no one wants to work hard.
They do as little as they can get away with, then slack off because they dont reap the rewards of their own labor. Red Plenty doesnt really have theses. In fact, its not really a non-fiction work at all. Its a dramatized series of episodes in the lives of Russian workers, politicians, and academics, intended to come together to paint a picture of how the soviet economy worked. But if I can impose a thesis upon the text, i dont think it agreed with this. In certain cases, russians were very well-incentivized by things like we will kill you unless you meet the production target. Later, when the state became less murder-happy, the threat of death faded to threats of demotions, ruined careers, and transfer to backwater provinces. And there were equal incentives, in the form of promotion or transfer to a desirable location such as Moscow, for overperformance.
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Under communism, there is no need to play these zero-sum games and that legs part of the budget can be reinvested to grow the industry more quickly. Under capitalism, everyone is working against everyone else. If Ford discovers a clever new car-manufacturing technique, their first impulse is to patent it so gm cant use it, and GMs first impulse is to hire thousands of lawyers to try to thwart that attempt. Under communism, everyone is working together, so if one car-manufacturing collective discovers a new technique they send their blueprints to all the other car-manufacturing collectives in order to help them out. So in capitalism, each companies will possess a few individual advances, but under communism every collective will have every advance, and so be more productive. These arguments make a lot of sense to me, and they definitely made sense to the communists of the first half of the 20th century. As a result, they were confident of overtaking capitalism.
They were officially quite certain that any day now Communism was going to prove itself better at economic growth, better at making people rich quickly, than capitalism. Even unofficially, most of their leaders and economists were pretty certain. And for zoo a little while, even their capitalist enemies secretly worried they were right. The arguments are easy to understand. Under capitalism, plutocrats use the profits of industry to buy giant yachts for themselves. Under communism, the profits can be reinvested back into the industry to build more factories or to make production more efficient, increasing growth rate. Under capitalism, everyone is competing with each other, and much of your budget is spent on zero-sum games like advertising and marketing and sales to give you a leg up over your competition.
era when, under the rash leadership of Khrushchev, the soviet Union looked forward to a future of rich communists and envious capitalists, when Moscow would. Its about the scientists who did their genuinely brilliant best to make the dream come true, to give the tyranny its happy ending. And this was the first interesting thing I learned. Theres a very settled modern explanation of the conflict between capitalism and communism. Capitalism is good at growing the economy and making countries rich. Communism is good at caring for the poor and promoting equality. So your choice between capitalism and communism is a trade-off between those two things. But for at least the first fifty years of the cold War, the soviets would not have come close to granting you that these are the premises on which the battle must be fought.
The consciously arranged alternative? A dance of another nature. 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. Needless to say, this is Relevant to my interests, which include among them poetic allegories for coordination problems. And I was not disappointed. The book begins: Strange as it may seem, the gray, oppressive ussr was founded on a fairy tale. It was built on the twentieth-century magic called database the planned economy, which was going to gush forth an abundance of good things that the lands of capitalism could never match.
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I decided to read, red Plenty because my biggest gripe after reading. Singers book on Marx was that Marx refused to plan how communism would actually work, instead preferring to leave the entire matter for the world-Spirit to sort friend out. But almost everything that interests me about Communism falls under the category of how communism would actually work. Red Plenty, a semi-fictionalized account of the history of socialist economic planning, seemed like a natural follow-up. But Id had it on my list Of Things to read for even longer than that, ever after stumbling across a" from it on some blog or other: Marx had drawn a nightmare picture of what happened to human life under capitalism, when everything. Then the makers and the things made turned alike into commodities, and the motion of society turned into a kind of zombie dance, a grim cavorting whirl in which objects and people blurred together till the objects were half alive and the people were half. Stock-market prices acted back upon the world as if they were independent powers, requiring factories to be opened or closed, real human beings to work or rest, hurry or dawdle; and they, having given the transfusion that made the stock prices come alive, felt their. Living money and dying humans, metal as tender as skin and skin as hard as metal, taking hands, and dancing round, and round, and round, with no way ever of stopping; the quickened and the deadened, whirling. And what would be the alternative?