Earlier this year I watched Trauma Zone which takes BBC stock footage and interviews to document the dissolution of the Soviet Union and the reemergence of (essentially) Imperial Russia, from Mikhail Gorbachev becoming General Secretary in 1985 and ending with Russian President Boris Yeltin stepping aside to elevate Vladmir Putin in 1999. Well-received, award-winning, fascinating, definitely worth your time.
By the time Gorbachev came to power, the Soviet economy was in dire straits: a planned economy where bureaucrats in Moscow defined in advance how the economy would function (five-year plans) never really worked but as a central tenant of communism could not be abandoned either. When corruption, increased consumer demands, falling oil prices, and support for Warsaw Pact allies is included, failure was guaranteed.
Episode One shows Gosplan‘s an attempt to use computers to define the economic plans, based on similar work done in Leningrad (St. Petersburg) called Intensification-90: enter the variables, let the computer do the work. Simple, right?
Thought I’m fairly positive that computers at that time were not powerful enough at the time – though it is disputed how far Soviet computers were behind the west – my question is this: could modern computers, technology and theory generate a workable planned economy?
My naive answer is no, because there are too many variables to consider and no ability to handle exceptions:
- weather forecasts for life-threatening events – e.g., tornadoes, hurricanes, blizzards – change constantly, and supercomputers and decades of historical data still result in a high level of uncertainty (and the different models often disagree);
- traffic can be free-flowing one minute and immediately slowed or stopped based on a single flat tire, accident or buckled road.
So now I’m waiting for someone to prove otherwise ….
