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WATCH LIVE PRESIDENT BIDEN HOLDS A PRESS BRIEFING ( https://www.bostonglobe.com/2021/03/25/nation/watch-live-president-biden-holds-press-briefing/?p1=BGHeader_BreakingBar_Headline ) More from Globe Ideas ( https://www.bostonglobe.com/opinion/ideas/?p1=Article_Utility ) | Submit to Globe Ideas ( https://bostonglobe.com/2020/05/14/opinion/submit-globe-ideas/?p1=Article_Utility ) | Submit a Letter to the Editor ( https://www.bostonglobe.com/2011/09/10/bgcom-lettersubmit/XHnJoyNpBDC80qGtpMGSsL/story.html?p1=Article_Utility ) IDEAS *********************************************** Was the Soviet Union an idea ahead of its time? *********************************************** --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- The dream of central economic planning died with the USSR. Thirty years later, technologies for matching supply and demand are a reality in America — as is the potential for surveillance Lenin and Stalin could only have dreamed of. --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- By Marcel Fafchamps Updated March 24, 2021, 9:22 a.m. ( https://www.facebook.com/sharer/sharer.php?u=https://www.bostonglobe.com/2021/03/24/opinion/was-soviet-union-an-idea-ahead-its-time/?event=event25 ) ( https://twitter.com/intent/tweet?text=Was%20the%20Soviet%20Union%20an%20idea%20ahead%20of%20its%20time%3F&url=https%3A%2F%2Fwww.bostonglobe.com%2F2021%2F03%2F24%2Fopinion%2Fwas-soviet-union-an-idea-ahead-its-time%2F%3Fevent%3Devent25&via=BostonGlobe ) 74 ( https://www.bostonglobe.com/2021/03/24/opinion/was-soviet-union-an-idea-ahead-its-time/?p1=Article_Feed_ContentQuery#bgmp-comments ) A Soviet poster from 1918 that urged women to work on cooperative farms. WIKIMEDIA COMMONS When the Soviet Union was created, beginning in 1917, its rulers wanted all profits, all returns to capital, to accrue to the state. This would not have been possible with decentralized markets, since the state could not know the profits made by individual entities, regardless of whether they were privately or publicly owned. This, they anticipated, would lead to underreporting of income and defeat the rulers’ objective. To circumvent this problem, they turned to scientific planning to replace the market with algorithms. Production units were asked to declare their plans and capacities. Retail chains were asked to project the demand for consumer goods. Government ministries were asked to stipulate their needs for investment in various kinds of infrastructure. These numbers were then put together in matrices, and a mathematical method known as linear programming was used to optimize the allocation of workers and productive capacity so as to achieve the objective of the plan at the lowest resource cost. While this system could more or less handle large planned investments in heavy industry — steel mills, coal mines, and the like — it was woefully insufficient at handling consumers’ demand for varied goods and services once the Soviet economy started to develop. The problem was that the rulers at the time had only simple mathematical algorithms and no computers. Running an entire complex economy via algorithm was simply not feasible. This probably explains why after several Eastern European countries fell into the orbit of the Soviet Union in the late 1940s, some of them did not even attempt to adopt its full-fledged central planning system and instead allowed a modicum of market exchange to remain. By the time the Soviet Union was disbanded in the early 1990s, its central planning system of exchange was judged a failure, and it was rapidly replaced with a decentralized market system. -=-=-=-=-=-=-=-=-=-=-=- Groups.io Links: You receive all messages sent to this group. View/Reply Online (#7518): https://groups.io/g/marxmail/message/7518 Mute This Topic: https://groups.io/mt/81598391/21656 -=-=- POSTING RULES & NOTES #1 YOU MUST clip all extraneous text when replying to a message. #2 This mail-list, like most, is publicly & permanently archived. #3 Subscribe and post under an alias if #2 is a concern. -=-=- Group Owner: [email protected] Unsubscribe: https://groups.io/g/marxmail/leave/8674936/21656/1316126222/xyzzy [[email protected]] -=-=-=-=-=-=-=-=-=-=-=-
