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Engineering utopia

Francis Spufford’s Red Plenty is not just any old history of post-war Soviet cybernetic mathematical modelling. This is an account of centrally administered resource allocation quite unlike any other.

Part fiction, part historical narrative, Red Plenty is a brilliant imaginative reconstruction of a moment in time when it seemed an alternative to capitalism as a method of economic organisation might be possible. The book’s subject matter is undoubtedly esoteric, but it does have a contemporary resonance.

Today’s world confronts two serious economic problems, with solutions that seem to cancel each other out. On the one hand, economic austerity for the foreseeable future; on the other, precipitant ecological catastrophe. The planet can no longer support a return to uninhibited economic growth. But some kind of sustainable recovery is required to secure a decent, stable standard of life for all. And not just for people in emerging economies who want living standards comparable to those enjoyed by many in the developed countries for the past few decades, but also for an increasing number in the west now suffering chronic economic insecurity.

On paper, it would seem, we have all the resources we need to work out a just way forward: the world produces sufficient wealth to secure a decent standard of living for everyone, and the technology required to enable sustainable growth already exists, ready for use. There’s just the small matter of actually putting it all together to design the sustainable economic model that will deliver the just, stable world that most us say we want.

It’s one thing to identify the well documented shortcomings of freewheeling global capitalism: chronic fluctuation between economic cycles of boom and bust, great wealth for the few and insecurity for the majority, the exploitative vulgarity of commercialism, the sacrifice of the environment to the pursuit of profit. But it is quite another to devise and realise an environmentally sustainable economic system that fixes those problems, securing a decent and sustainable standard of life for all.

The attempts made during the last century to realise a socialist alternative to the capitalist model failed. The various communist revolutions that forcibly took the means of production and exchange into public ownership ended in impoverished dictatorships. Reformist social democracy managed to harness capitalism with some success, delivering functioning mixed economies with decent public services and social safety nets. But, below the bonnet, social democracy still runs on a capitalist engine . As the socialist historian GA Cohen notes in his little book Why Not Socialism? the perennial issue for radicals has always been one of practical implementation. Socialism poses a ‘design problem’ for which a solution has not yet been found:

In my view, the principal problem that faces the socialist ideal is that we do not know how to design the machinery that would make it run. Our problem is not, primarily, human selfishness, but our lack of a suitable organisational technology: our problem is a problem of design. It may be an insoluble design problem, and it is a design problem that it undoubtedly exacerbated by our selfish propensities, but a design problem, so I think, is what we’ve got.

But Red Plenty evokes a fascinating period during the middle of the 20th century when it did indeed seem possible that a world power might actually have been well on the way to developing a workable alternative to capitalism. During the 1950s and early 60s the Soviet Union achieved the highest rates of economic growth in the world, at some 5 to 10% a year. At that time the USSR was regarded much like present day China: it seemed that the Soviets were making real progress towards dragging an impoverished rural economy towards a hi-tech, industrialised future. Vast new industrial complexes and cities appeared on the Russian plains as production drove forward under the impetus of economic plans implemented in five year sprints . It seemed that something of the collective spirit that had defeated the Nazi advance during the Second World War was being channelled successfully towards the pursuit of robust economic growth. Spufford writes:

For a while, in the late 1950s and early 1960s, people in the west felt the same mesmerised disquiet over Soviet growth that they were going to feel for Japanese growth in the 1970s and 1980s, and for Chinese and Indian growth from the 1990s on. Beneath several layers of varnish, the phenomenon was real.

The Soviets showcased their technological breakthroughs by putting the first satellite into orbit, Sputnik 1 in 1957, followed four years later by Yuri Gagarin’s spacewalk. They claimed their rapid technological and economic advances were achieved through systematic economic planning that made possible the optimal organisation of industrial and technological resources. For the Soviet planners capitalist economies were doomed to stumble blindly through periods of growth and recession, blown hither and thither by the random gusts of a capricious free market. Collective ownership, by contrast, equipped communist societies with the economic tools they needed to allocate resources rationally. Planning allowed Soviet economists to guide the supply and distribution of resources through every stage of the production process towards defined economic objectives. Raw materials and labour would be used efficiently to generate wealth for all through the equitable distribution of the proceeds of growth. There would be full employment, with a job available for everyone that made suitable use of their particular skills and aptitudes. And there would be no economic cycles of boom-and-bust, just steady, stable growth, generating ever greater prosperity and opportunity for leisure. At the start of the 1960s General Secretary Nikita Khrushchev predicted that Soviet living standards would overtake those in the United States by 1980.

This optimistic ‘communist futurism’ was captured in a series of visionary Soviet sci-fi films made during the early 60s, exemplified by this clip from the 1963 movie Mechte Navstrechu, which imagines the kind of future city the planners believed they were working towards:

The subsequent history and collapse of the Soviet Union is well documented, and those dreams now seem no more real than 1960s sci-fi. But Spufford illuminates the thought world of that time and place with such vividness that one sees why the economists, scientists, engineers and administrators of 1950s Russia thought it really was possible. He recreates the heady atmosphere that prevailed during the late 1950s at the ‘science city’ of Akademgorodok, a vast university town built in western Siberia to to allow the USSR’s best minds to research strategies for economic growth. For a time the scientists and economists based here were given all the resources they asked for as they sought to apply mathematical concepts such as cybernetics and game theory to economic planning models. The prospect of putting their theories into practice was made real by the development of the first Soviet mainframe computers, machines capable of carrying out the abstruse calculations necessary to crunch and process endless arrays of economic variables into coherent economic strategies ready for implementation by each link in the economic chain.

In one of many passages making poetry out of maths Spufford imagines the hopes of the Nobel prize winning mathematical economist Leonid Kantorovich as he and his team worked towards the development of processes for efficient resource allocation:

The world was lifting itself up out of darkness and beginning to shine, and mathematics was how he could help. It was his contribution. It was what he could give, according to his abilities. He was lucky enough to live in the only country on the planet where human beings had seized the power to shape events according to reason, instead of letting things happen as they happened to happen, or letting the old forces of superstition and greed to push people around. Here, and nowhere else, reason was in charge.

But even Kantorovich’s brilliance foundered on the challenge of organising the orchestration of the actions of millions of economic actors that a market economy allows to operate spontaneously. After the reformer Khrushchev was forced out by a conservative Politburo the dreamers of Akademgorodok were prevented from implementing their most sophisticated economic models. The politicians chose to stick with older planning models, wasteful though they were, fearing that the system was too fragile to withstand shocks that might arise from significant experimentation.

The fundamental difficulty that faced the Soviet planners, and which besets all command economies remains: experience indicates that systems of resource allocation work best when self-organised from below rather than guided from above. Some kind of price mechanism seems necessary to send the appropriate signals for matching up the supply and demand of goods and services, something, indeed, not unlike the free market that operates in capitalist economies, where production responds to the drift of consumer demand, rising and falling like the waves of the sea. It seems the only economic system that works is a kind of non-system: a simple, free-floating open market from which some kind of unforeseen order emerges. As Spufford puts it in the book’s epilogue:

Years pass. The Soviet Union falls. The dance of commodities resumes. And the wind in the trees of Akademgorodok says: can it be otherwise? Can it be, can it be, can it ever be otherwise?

Red Plenty is a fascinating read for those who wonder about the possibility of designing economic frameworks that might present credible alternatives to some kind of open market, a question that since the financial crisis has been asked again with renewed urgency, and which is unlikely to go away as long as there are still those who sympathise with Albert Einstein’s assessment of the socialist ideal as ‘humanity’s attempt to overcome and advance beyond the predatory phase of human development.’