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by sudosysgen 1622 days ago
The big idea of cybernetic centralized planning is exactly to not have to compute how much to charge for an item, but instead to set a lower margin and let supply and demand be processed with consumer markets. It's not explicitly written that way, but it's the actual effect.

So instead of having a quota of ton-miles, you will simply have a bunch of goods on sale. If a lot of people are buying them, you can increase their prices and at the same time increase production.

Once you compute how best to minimize the difference between demand and supply, you compute what goods have to be produced, and work backwards from there until you can calculate what inputs they need.

There are a few proposed metric. Essentially the idea is to completely do away with any quotas outside of exceptional circumstances, and respond to demand dynamically in a way to reduce the amounts of hours worked and increase the consumer satisfaction, as measured by their comparative subjective value for various goods.

We both agree that the quota system and the inefficiency of the Soviet system was considerable. However, another interesting statistic you may not be aware of is that, outside of times of war and for the last few months, Soviet GDP per capita never decreased, while still providing fairly acceptable living standards, and good ones by global standards.

The fact that it was actually not really doomed to failure at all and it's comparative performance compared to the rest of the world, as well as that it lasted quite a while shows that there is enough value in the good sides of the historical centrally planned economies to partly make up for the atrocious and seemingly obviously debilitating issues.

The idea of cybernetic central planning is to reduce stress, offer more social safety, reduce economic inequalities, all while doing away with quotas, inflexible plans, precomputed prices, inflexibility to demand, and sensitivity to fraudulent information.

Basically, give up on trying to guess what to make and in what quantities, and let the consumer decide what they prefer, but then intelligently use that information to determine how to organize production as well as possible, and then measure the results of these organizations in real-time to provide feedback and adjust various processes.

An interesting way to look at it is that, in capitalism, Capital has a mind of it's own and basically acts as a control system. In essence, in capitalism, capital wants to grow, and it does so by estimating all of the returns it could be generating, and if it is credible to increase returns, re-allocate itself to the most profitable return. So, through a few dozens of layers of price signals, it can control the economy to increase it's own profit, and in doing itself it also increases productions and allows capital pledged to consumption to have goods and service. Cybernetic planning intends to directly measure the price signals as close to the source as possible, and when possible even underlying signals before that, and use those to optimize some function that will allow people to work as little as possible but have as many goods and services as possible. The idea is that, as with the control systems humans program, we deal with the lower complexity of the model (at least for the foreseeable future) with more direct access and dynamic access to the data and to the levers of action.

1 comments

Just saw this, after writing my lengthy reply to you elsewhere (plus a couple of edits), and I think we agree on quite a bit. Cybersyn certainly was a substantial improvement in thinking over strict central planning. At the same time I think it still it aimed for unnecessary levels of complexity vs. using market mechanisms as a large part of both the input and control mechanisms, and trying to assert too much control.
And how is the global market not unnecessarily complex? It is optimized for the wrong metric (profit) at the cost of every other one, causing additional complexity and hurting overall resiliency.

The market is a constant failure at the only thing it should do, properly distributing resources. It's failing clamorously to distribute covid vaccines globally, for example. Additionally, it is easily exploitable everytime there is any unbalance, see bargainers.

The lack of control you seem to present as an advantage is exactly what makes it controllable by a very small minority of powerful entities.

Actually I start to see some parallels with the theoretical "lack of control" that is claimed to be the advantage of cryptocurrencies by enthusiasts.

You're conflating market mechanisms as a general concept to the current global market. You can use market mechanisms as a resource allocation method in all kinds of different models. Market mechanisms are used in all kinds of settings to match prices of all kinds of things, and they work well when they are designed to be fit for purpose.

A market is ultimately nothing more than the iterative application of a function that takes a list of buy and sell orders and outputs matches. It can be entirely unregulated or however regulated you want. There can be no constraints on who accesses it, or lots. There can be synthetic manipulation on one or both sides to adjust the functioning of the market, or not.

I'd argue for all kinds of regulations - I don't think unregulated markets are a good thing at all. But a well regulated market is simply a consensus mechanism that reduces what is a fundamentally computationally intractable control problem if you try to handle it in a centralised manner by dividing it into a range of smaller problems and distribution the effort of figuring out the best way of meetings goals. It's never going to give an optimal outcome, but you can mitigate the risk that it will produce really bad outcomes, and get closer to decent results.

I'm also not arguing for one market, but for many, I favour using market mechanisms to price externalities whenever possible.

The current global market is not set up to "properly distributing resources" because that is not the goal of its participants, so you have a good argument against current global markets for products. If you were to create a market actually intended to fairly distribute scarce healthcare supplies and it would look very different, with pricing based on e.g. predicted outcomes and benefits for different bidders.

You can still plan in the face of well regulated markets, but the planning process would involve packaging up incentives and regulating the pricing of externalities without trying to guess what will work best in ways that forces the planners to become experts in everything.

> The lack of control you seem to present as an advantage is exactly what makes it controllable by a very small minority of powerful entities.

Even if we were to agree this was unavoidable (I'd agree it's unavoidable in an unregulated market with vastly different access to resources, but that is just one subset of possible markets), a planned system is potentially controlled by an even smaller entity of even more powerful entities. We've seen that fail time and time again, because of the hubris of people with power thinking they knew best. Decentralising power is if nothing else a risk mitigation, and the failure of current markets to do so well enough is not an argument for a mechanism with a distinctly worse track record.

You're largely hitting the points I wanted to make, there fundamentally is no replacement for the market price setting mechanism.