* Book: Red Plenty, by Francis Spufford
URL = http://redplenty.com/
"This is the website for Francis Spufford’s new book Red Plenty, published by Graywolf Press in February 2012. Is it a novel? Is it non-fiction? It all depends on your definitions. It tells a true story, but it tells it as a story. Whatever you call it, it’s about the moment in the mid-20th century when people believed that the state-owned Soviet economy might genuinely outdo the market, and produce a world of rich communists and envious capitalists. Specifically, it’s about the last and cleverest version of the idea - central planning via cybernetics - and about how and why, in the 1960s, it failed. To give the economics some human depth, Red Plenty generates a miniature Soviet Union on the page, peopled by scientists and politicians, fixers and managers, dreamers and cynics." (http://redplenty.com/Red_Plenty/Front_page.html)
A Road Not Taken – Cybernetic Socialism in the USSR, a review by Paul Cockshott:
"This is a marvelous and unusual book. It sits in a remarkable way in between science popularisation, social history and fiction. The author describes it variously as a novel whose hero is an idea and a fairytale. The hero idea is that of optimal planning. The idea of running a planned economy in just such a way as to ensure that resources are optimally used in order to deliver the ’red plenty’ of the title.
Combining real and imagined characters, politicians like Khrushchev, mathematicians and economists like Kantorovich and Nemchinov with fictionalised minor characters, it gives a gripping and apparently realistic picture of life in the USSR during the 50s and 60s. It is not a single narrative as one expects from historical fiction. Instead it gives us a series of snapshots from the lives of individuals, separated by years. The common link is the project of the Cybernetic economic reformers, and the ambitions of Khrushchev to attain communist plenty.
The author shows real skill as a science populariser, explaining such diverse topics as how the Pentode valve logic of the early BESM computers worked, to the molecular mechanics of the carcinogenesis mechanism that eventually killed its designer. He vividly portrays the enthusiasm and self confidence of the USSR in the late 50s when Khrushchev’s boasts that they would overtake the USA by 1980 and achieve communism seemed plausible. He gives a good didactic account both of the basic mechanisms of the Soviet Economy, and, through the lives of incidental characters paints a picture of its real operation that is more detailed and convincing than any academic history.
He traces the idea of cybernetic economic management from the hope of the 50s and early 60s to its sidelining under Kosygin, and the eventual relegation of Kantorovich to the less ambitious task of optimising steel tube output for the oil and natural gas industry. Ironically, says Spufford, as growth rates slipped in the 70s, it was only the exploitation of petroleum for export that allowed Soviet living standards to rise.
This is a book that should be read by anyone who is seriously interested in the possibility of a different sort of economy from the one we now have. It shows both the strengths, and the hidden weaknesses of the most serious attempt so far to construct an alternative to capitalism, an attempt that was born when the idea of a communist future was taken very seriously by a whole society. To read it is to be convinced that whatever the truth of standard leftist criticism of the USSR as being undemocratic and bureaucratic, there was much more than that at issue in this tragedy.
It raises real political and philosophical issues that would have to be faced by any future socialist project, and draws attention to a forgotten history that today’s socialists ignore at their peril.
The bulk of what we read and hear about the USSR focuses on the 20s and 30s. The remaining 50 years of its history fade before the glamour, grandeur and horror of the early years. But the early 1960s, when Russia was already an industrial country, with many areas of internationally competitive technology in aviation, space, computing holds more relevant lessons for the European left than its early years.
It is clear what lesson orthodox economists will draw:
"It’s a timely exploration, now so many people have gone off the idea of markets, of why the alternative is worse."
But such conclusions betray an unjustified and callous smugness. It is a smugness not justified by the elegaic last paragraph of the book. The restoration of the market mechanism in Russia was a vast controlled experiment. Nation, national character and culture, natural resources and productive potential remained the same, only the economic mechanism changed. If Western economists were right, then we should have expected economic growth and living standards to have leapt forward after the Yeltsin shock therapy. Instead the country became an economic basket-case. Industrial production collapsed, technically advanced industries atrophied, and living standards fell so much that the death rate shot up by over a third leading to some 7.7 million extra deaths.
If you were old, if you were farmer, if you were a manual worker, the market was a great deal worse than even the relatively stagnant Soviet economy of Brezhnev. The recovery under Putin, such as it was, came almost entirely as a side effect of rising world oil prices, the very process that had operated under Brezhnev.
But this does not excuse us from seriously considering the problems so vividly raised in the book. Spufford recounts how the attempt to follow the reformers' recommendations and raise the price of food to provide more income for farmers provoked strikes by industrial workers, which were suppressed with great brutality. The same scenario played itself out in Poland in the 70s and 80s, when any attempt to raise the ridiculously low subsidised meat prices led to strikes.
Spufford brings out the disconnection between the recommendations of the reform economists and the real lives of the people that the reforms would impact on. Food subsidies were the bad conscience of inequality. They were necessary because without them, those on the lower wage rates could scarcely have survived. Marx had advocated that in the first stage of communism everybody would be paid in labour vouchers not money - 1 hour's work getting 1 hour's vouchers. Goods would be directly priced in terms of the labour required to make them and social expenditure would be met out of a tax or time-levy on incomes. Soviet prices deviated considerably from labour values for two reasons:
- The well known subsidies on essential foods and housing.
- The turnover tax was, I think, calculated on the basis of total turnover not just wages, as such it was similar to the fixed percent markup Marx posited for prices of production. Given that due to subsidies, wages underestimated the real value of labour power, this sort of markup would mean that the deviation of prices from labor value would actually have been bigger than under capitalism.
To have furthered Khrushchev’s avowed aim of communism, Kantrovich would have had to propose egalitarian pay rates and a shift in state finance from turnover taxes to income taxes, before prices could be rationalised.
Spufford gives greatest emphasis to the policies of those around Kantorovich and Nemchinov, who were advocating price reforms as part of a programme to allow optimal operation of the economy. Kantorovich argued that these prices - objectively determined valuations - arose out of the objective technical structure of the economy. If actual prices corresponded to objectively determined values, then the signals that these prices provided would guide individual factories to produce in accordance to what the plan needed.
There is of course a strong similarity between this argument and that put forward by Western economists about the role of prices in guiding resource allocation in a market economy. It is probably no accident then that Kantorovich was the only Soviet economist to get a Nobel Prize for economics.
But there was a fatal paradox in this whole notion, one that Spufford brought out in a meeting between Kosygin and a leading reformer: how were these optimal prices to be calculated? The maths was well understood, but the technical problems of handling that much data with 1960s computers were vast. And if Gosplan could concentrate the information and could have done the computations, then the indicative prices would have been unneccessary - the whole process of calculation could have been done in-natura with the Objective Valuations only having a fleeting existence as coefficients within the matrices of the planning computers.
So the programme of Kantorovich ended up requiring the same level of computing resources as that of his rival cyberneticist Victor Gluschov who apparently advocated the complete abolition of money - something superficially closer to Krushchev's vision of communism. In this context it is worth reading InterNyet: why the Soviet Union did not build a nationwide computer network by Slava Gerovitch. It would have been interesting had Gluschov appeared as a character in the book, rather than just as someone who is refered to indirectly. In the afterword it becomes clear why Gluschov remains such a shadowy figure to Spufford. Spufford reveals that he relied entirely on English language sources. What he knew of Gluschov came from Gerovitch’s brief account.
All in all, let me say again, this is a book that should be read by anyone with a serious interest in economic alternatives." (http://www.solidarityeconomy.net/2010/07/03/a-road-not-taken-cybernetic-socialism-in-the-ussr)
"Shortly after the great Wall Street meltdown of 2008, a novel about obscure and remote historical events provided an unexpected node for discussion of the ongoing crisis. Francis Spufford’s Red Plenty (2010) offered a fictionalized account of the failed attempt by Soviet cyberneticians of the 1960s to establish a fully computerized system of economic planning. Mixing historical figures – Leonid Kantorovich, inventor of linear programming equations; Sergei Alexeievich Lebedev, pioneering Soviet computer designer; Nikita Khrushchev, First Secretary of the Communist Party – with imaginary ones, and setting them all in motion through Kremlin corridors, rural collectives, industrial factories and the Siberian science-city of Akademgorodok, Red Plenty succeeded in the unlikely mission of making cybernetic planning a page-turner. But the interest it attracted from economists, computer scientists and political activists was not solely due to its narrative of scientific endeavor and political intrigue; it also owed much to timing.
Appearing amidst austerity and unemployment, as the world market still teetered on the brink of collapse, Red Plenty could be interpreted in different ways: a) as a cautionary tale that, recalling Soviet debacles, reminds us capitalism remains the only game in town, even if it has behaved badly (‘There Is No Alternative’); or b) contrawise, as a recollection of unrealized potentialities, whispering not just the quaint altermondialiste slogan, ‘another world is possible’, but what David Harvey (2010: np) identifies as the more cogent and subversive possibility, that of ‘another communism’." (http://www.culturemachine.net/index.php/cm/article/view/511/526)
The history of Cybernetic Planning
"If central planning suffered from a calculation problem, why not just solve it with real calculation machines? This was precisely the point made by Hayek’s opponent, the economist Oskar Lange, who, retrospectively reviewing the ‘socialist calculation’ debate, remarked: ‘today my task would be much simpler. My answer to Hayek … would be: so what’s the trouble? Let us put the simultaneous equations on an electronic computer and we shall obtain the solution in less than a second’ (1967: 159). Such was the project of the cyberneticians featured in Red Plenty, a project driven by the realization that the apparently successful Soviet industrial economy, despite its triumphs in the 1940s and ‘50s, was slowly stagnating amidst organizational incoherence and informational bottlenecks.
Their effort depended on a conceptual tool, the input-output table, whose development is associated with two Russian mathematicians: the émigré Wassily Leontief, who worked in the US, and the Soviet Union’s Kantorovich, the central protagonist of Red Plenty. Inputoutput tables – which, it was recently discovered, are amongst the intellectual foundations of Google’s PageRank algorithm (Franceschet, 2010) – chart the complex interdependence of a modern economy by showing how outputs from one industry (e.g. steel or cotton) provide inputs for another (say, cars or clothing), so that one can estimate the change in demand resulting from a change in production of final goods. By the 1960s such tables were an accepted instrument of large scale industrial organizations: Leontief’s work played a role in the logistics of the US Air Force’s massive bomber offensive against Germany. However, the complexity of an entire national economy was believed to preclude their application at such a level.
Soviet computer scientists set out to surmount this problem. As early as the 1930s, Kantorovich had improved input-output tables with the mathematical method of linear programming that estimated the best, or ‘optimizing’, combination of production techniques to meet a given target. The cyberneticians of the 1960s aimed to implement this breakthrough on a massive scale by establishing a modern computing infrastructure to rapidly carry out the millions of calculations required by Gosplan, the State Board for Planning that oversaw economic five year plans. After a decade of experimentation, their attempt collapsed, frustrated by the pitiful state of the Soviet computer industry – which, being some two decades behind that of the US, missed the personal computer revolution and did not develop an equivalent to the Internet. It was thus utterly inadequate to the task set for it. All this, alongside political opposition from a nomenklatura that, seeing in the new scientific planning method a threat to its bureaucratic power, compelled abandonment of the project (Castells, 2000; Gerovitch, 2008; Peters, 2012).
This was not the only twentieth century project of ‘cybernetic revolutionaries’; as remarkable was the attempt by Salvador Allende’s Chilean regime to introduce a more decentralized version of electronic planning, ‘Project Cybersyn’ (Medina, 2005). Led by the Canadian cybernetician Stafford Beer, this was conceived as a system of communication and control that would enable the socialist regime to collect economic data, and relay it to government decision makers, even while embedding within its technology safeguards against state micro-management and encouragement for many-sided discussions of planning decisions. This was an attempt at socio-technical engineering of democratic socialism that today perhaps seems more attractive than the post-Stalinist manoeuvres of the Soviet computer planners. But it met an even more brutal fate; Project Cybersyn was extinguished in the Pinochet coup of 1973. In the end the failure of the USSR to adapt to a world of software and networks contributed to its economic/military defeat by the United States. Its disintegration, in which, as Alec Nove (1983) demonstrated, information bottlenecks and reporting falsifications played a major role, seemed to vindicate the Austrian economists. Hayek’s praise of market catallaxy thus became central to the ‘neoliberal thought collective’ (Mirowski, 2009) that led the subsequent victory march of global capitalism.
The combined pressure of the practical disaster of the USSR and the theoretical argument of the Austrian school exerted immense force inside what remained of the left, pressuring it to reduce and reset the limit of radical aspiration to, at most, an economy of collectively owned enterprises coordinated by price signals. The many variants on such ‘market socialist’ proposals have evoked rebuttals from Marxists who refuse to concede to commodity exchange. Perhaps because they grant to the market the automatic information processing functions ascribed by the Austrian economists and market socialists, they may address issues of technological innovation or public data availability, yet do not seem to engage deeply with the potentialities of contemporary computing.
Today, post-crash, claims that markets are infallible information machines may seem less credible than they did a quarter of century ago. The parasitic energy-theft that underlies price-signal transmissions (exploitation at the point of production); the inability of individual commodity exchanges to register collective consequences (the so-called ‘externalities’); and the recursivity of a chrematistic system that loops back on itself in financial speculation, have all become more salient in the midst of global capital’s economic and ecological implosion." (http://www.culturemachine.net/index.php/cm/article/view/511/526)
- Article: Red Plenty Platforms. Nick Dyer-Witheford