The Soviet Cybernetic Economy

Posted 1/30/20

The Soviet Union designed and redesigned a national computer network that would deliver all economic information to a central database, input it into a feedback loop cybernetic economic model, and make autonomous decisions about resource allocation and production subject to broad objectives set by party leadership.

So that’s a fun opening. A 2008 paper titled “InterNyet: why the Soviet Union did not build a nationwide computer network” details the early 1960’s project, with an emphasis on the social history and political context in which it was ultimately crushed. In this post I’ll write briefly about the project, my own take-aways from the paper, and how this informs related ongoing efforts like the Pursuance Project.

The Academic Field

Cybernetics classically* refers to a study of communications and automatic control systems, usually recursive feedback loops where the output or result of the system is also an input determining the further behavior of the system. This study of recursive systems refers both to artificial constructs, like a thermostat using the temperature to determine whether to activate the heater to adjust the temperature, and living constructs, from ecological self-regulation between predators and prey, to societal behavior.

On the Eastern side of the Cold War, cybernetics was particularly applied to economics, and the creation of computer models where a combination of economic output and public demand drives economic creation.

* The modern understanding of cybernetics referring to cyborgs and biotechnology is derived from classical cybernetics, but is quite distinct.

The Communist Opportunity

One of the primary differences between communism and other political theories is a public-controlled economy. Rather than independent corporations choosing what to produce and in what volumes, a government agency (ostensibly representing the will of the people) assigns resources and quotas, and the factories produce what the state requests. This model is frequently imagined as a centrally-controlled economy (i.e. Moscow decides what is to be produced throughout the Soviet Union), but through most of the history of the U.S.S.R. there were a number of agencies based on either physical location or shared industry that directed the economy, with little top-level collaboration.

The difficulty is in bureaucratic scale. Ideally, a central agency with perfect knowledge of the public’s consumption and desires, and the resources and production levels across the country, could make mathematically-optimal choices about how much of what to produce where and have economic output far more responsive, with far less waste, than in a capitalist model. After all, competing corporations do not share information with one another about their sales or upcoming production, necessarily leading to conflicting choices and waste. Unfortunately, collecting sales information from every store, manifests from every warehouse, production output from every factory, and collating it at a central governing body takes immense resources by hand. Making decisions based on this information requires a small army of managers and economists. It is no wonder the Soviet Union opted for localizing decision-making, sharing only high-level information between agencies to limit overhead. Then the advent of digital computers and electronic networking promised a chance to change everything.

The Soviet Plan

The Soviet plan* was relatively straight-forward: They had existing cybernetic models for a recursive economy that relied on simulated data, now they have communications technology capable of providing real numbers. Combine the two, and the economic model transforms from a theoretical simulation of academic interest to an active decision-maker, guiding the activities of the entire Soviet economy in real-time.

For the late 60s, early 70s, this was an ambitious plan. Every factory and storefront would need to install a computer and digitize all records. A nation-wide (or at least in major cities and at primary distribution centers) computer network would be installed to send records to a number of central data centers. Communication would run in both directions, so the central computer could send instructions back to the fringes of the community.

Ultimately, however, it was not the technical limitations that doomed the project (remember that the Soviets successfully built space and nuclear programs), but political ones. Turning over all minute economic decisions to the computer would eliminate a wide number of bureaucratic posts - the same bureaucrats that were to vote on the implementation of the system. Power struggles between different ministries ensured the full plan would never be deployed. Instead, each ministry implemented a subsection of the plan independently, digitizing their own records and networking their computer systems, with no cross-networking or any serious attempt at cross-compatibility. The result solidified existing power structures instead of revolutionizing the nation.

* I am dramatically simplifying here by combining several iterations of project proposals from a number of Soviet cyberneticians, economists, and politicians.

Ongoing Dreams

The core mission of the Soviet project was to automate away bureaucracy, enabling coordination and decision-making at a high scale that would be infeasible with human decision makers. The depth of the hierarchy, amount of information involved, and near real-time response constraints make automation an absolute necessity.

This is fundamentally the same mission as the Pursuance Project, albeit with different motivations: Delegate bureaucracy and administration to the machine, to allow the rapid creation of social groups that traditionally have significant starting costs. Automation has an added boon of providing a constant presence when the membership of the organization shifts.

The problem space for Pursuance is comparatively small: We already have the physical infrastructure for collaboration (the Internet), and since most groups are built around clear short-term objectives there is a limited need for long-term sustainability in any bureaucracy created. Critically, Pursuance does not face the brunt of the Soviet political entrenchment; by focusing on the creation of new activist groups we bypass any sense of “replacing” a person, and only augment what is possible.

Cybernetic models provide an opportunity to expand what work we offload to the machine in a Pursuance, perhaps enabling greater community adaptation and automation by incorporating human choices as inputs in feedback loops chosen by the community. This is all speculation for the moment, but worth further examination as the Pursuance design grows.