Will “computer communism” solve the problems of a planned economy?
Many leftist activists are distanced from social democracy by the illusion that a planned economy can be made efficient. They are convinced that they will succeed where a number of socialist states failed, even though those states attempted to test various options for reforming the planned economy. The most fundamental pillar of this illusion today is "computer communism". That is what we will talk about today.
We have already written a piece on the fact that a planned economy is an inefficient and unviable concept, and we have provided examples of its specific problems. In communist discourse, there is no objective and critically substantiated answer to the question of how these problems will be resolved. There exists only a general notion that if one computerizes the planned economy and adds democratic institutions to it, all of its problems will resolve themselves as if by magic, but no one knows exactly how each individual problem will be solved, and no one is capable of providing an answer.
Contents
Computer communism in theory
Computer communists say that their planned economy will not lead to what happened in the USSR and that arguments against a planned economy are incorrectly applied to their concept. What exactly will they change so radically within it? To answer this question, we will take an article from the Russian leftist movement “Socialist Alternative”1, as it is one of the few organizations attempting to provide a detailed justification for this concept in the Russian language.
Here, we will not analyze how this organization labels all critics of a planned economy as “right-wing” (“the political consciousness of workers and youth is under the influence of the ideas of right-wing economists talking about the ‘lack of information’ and ‘lack of innovation’ in a planned economy”) and uses other mind-manipulation tactics. We also will not catch them in amusing contradictions when they criticize the concentration of capital (“centralization and concentration of capital into huge transnational companies occurs”) and suggest centralizing it even further (nationalizing enterprises, after which “when planning in each sector of the economy, we will not be talking about thousands of companies, but, most likely, about approximately hundreds”) as a solution. We are only interested in their proposals — “Socialist Alternative” at least has them, unlike many other computer communists, which already allows for constructive criticism.
“Socialist Alternative” writes that they will take their example from capitalist corporations (“firstly, we can look at forms of planning that exist under capitalism, which can be used under socialism (but with the elimination of the authoritarian planning element)”). Then they write about how much Walmart exploits its workers (“a terrible company with low wages, an ardent opponent of unions”). Then they suggest taking that corporation as an example. You can read what exactly SA proposes in their article, in the section “Forms of planning: one approach does not fit all production”.
If you remove all the fluff, it comes down to approximately this: methods of “real-time planning” will solve the problems of a planned economy. Walmart shares information from cash registers in real time with its suppliers and its suppliers’ suppliers; Walmart’s planning model anticipates demand for consumer goods based on its real-time changes. Such a system differs from order-based planning, where production begins only when an order arrives. With the help of input and output data analysis, communists will be able to calculate “how many schools and teachers we need”, “how many wind turbines and solar panels we should build”, and so on. What part of the budget goes into which sector will be decided “by democratic discussion”. Discussion will be carried out at all levels of the workers’ state — starting from thousands of workplaces and ending with regional and national elected bodies of the working class. It will be reflected in the workers’ press, where all points of view and opinions on the main points of the program and plan regarding these sectors of the economy will be represented.
Basically, the ideas of computer communists are based on communist literature such as the book “People’s Republic of Walmart”2 by Leigh Phillips and Michal Rozworski (which lacks sources), or the book “Towards a New Socialism”3 by W. Paul Cockshott and Allin F. Cottrell, which is filled with communist clichés.
Now, let us analyze all of this. Computer communists do not disclose what specific information Walmart shares with its suppliers, for what purposes, or how this will solve the problems of a planned economy (which we will consider once again below). It is enough for them to take one of the largest transnational corporations, which they hate, and do it like them (i.e., it is suggested to build a state economy on the model of a corporation without understanding that these are completely different economic units functioning according to different principles), but do it “well”. Well, at whose expense? At the expense of “democratic discussion”. How exactly it will be implemented is written nowhere. Computer communists do not have a concrete plan for state structure, such as the one Russian progressive social democrats have. Phrases in the vein of “democratic discussion” were used by the Bolsheviks (for example, Leon Trotsky also wrote that criticism of the Soviet bureaucracy by worker-correspondents was needed4, and Vladimir Lenin wrote that “the workers of a social-democratic organization must be united, but in these united organizations, free discussion of party issues, free comradely criticism and assessment of phenomena of party life must be widely conducted”5), but as we have seen, words and desires turned out to be insufficient, and their political system was not democratic and could not become a counterbalance to the establishment of Stalinism and the Stalinist coup d’état.
Computer communists, it seems, truly do not understand that Walmart, among other things, has a regulator over it in the form of a democratic state, has competitors in the market, and has the ability to choose from competing suppliers. A state planned economy works in different conditions — moreover, as we will see later, SA opposes competition altogether.
As for the fact that communists need computers to calculate how many schools and wind turbines are needed — Gosplan in the USSR handled such tasks quite well. They were by no means imbeciles, but educated people, and they could calculate such indicators without any problems. The problem with the planned economy was not that Soviet economists could not create a plan, but rather, among other things, that the plans were not carried out, or the quality of their execution was low. Computer communists do not explain how to solve these problems; they only tell us how to calculate things that could have been calculated before.
Why do they need a planned economy?
What goals should a planned economy fulfill, and what problems should it solve from the point of view of “computer communists”? This is described in the article by Socialist Alternative in the section “Eliminating massive capitalist waste and inefficiency”. If we remove the fluff, it comes down to the following: the workers’ government (i.e., the communists) will confiscate assets that it deems idle, put them towards the welfare state, and furthermore, there will be no advertising or brokers, and the capital freed up by this will also be channeled into the welfare state. There will also be no planned obsolescence. The luxury goods market will be eliminated, and capitalists will not misappropriate the workers’ money. There will be no unemployment.
Now, let us analyze this. If we allow communists to confiscate assets simply because they appear idle to them, we will pave the way for them to eventually deem the modest savings of ordinary hard-working people idle as well (as happened during collectivization, when people had all their property taken away, down to their linen and kitchen utensils6). But then there will be no one left to stand up for the workers, because the communists will possess enormous capital and resources — meaning no one will be able to sponsor the opposition, and the communists will once again have everything necessary to crush it. We wrote a separate article on why the protection of private property is necessary, where we described that it primarily protects the broad masses from being robbed by communists.
A welfare state exists in developed democratic countries7, and one must fight for its expansion, not for the establishment of a planned economy. A planned economy will indeed help solve the problem of unemployment, except that in a social democratic economy, this is solved through unemployment benefits and can be solved even better through a universal basic income.
The idea that the economy will become more efficient without advertising and brokers is based on the same logic as the Chinese communists’ idea that agricultural efficiency would increase without the “four pests”8 (let us recall that the extermination of sparrows and other “pests” ended in a resounding fiasco, as a result of which China had to import sparrows from the USSR). This logic suggests that communists have no idea how the economy functions as a whole. For example, if advertising were abolished, people would buy fewer goods, which would lead to a lower standard of living (for instance, a person would not find out about a new multicooker that saves them 20-30 minutes a day and would not buy it) and slower economic growth, and the communists would then blame “traitors” for this, rather than the insane idea of abolishing advertising. Advertising establishes and maintains economic ties between economic entities, between producers and consumers of goods. By supporting and intensifying competition between producers and sellers, advertising allows consumers to expand their choice and make it more informed and reasoned. By accelerating the sale time of advertised goods, advertising stimulates faster turnover of funds, thereby increasing the overall efficiency of the national economy and the global economy as a whole. It generates a need for a higher standard of living and sets a goal for a person to provide themselves and their family with better housing, better clothing, and better food9. Both advertising and sparrows have useful functions, and it is not a given that their absence will lead to an increase in economic efficiency.
Computer communists say that a planned economy will avoid the situation where capitalists misappropriate workers’ money, but they remain silent about the fact that officials will be the ones misappropriating the money in this case, as they did in the USSR, which we wrote about in a separate article. And, naturally, the luxury market will not disappear either; it is just that the communists, rather than capitalists, will be the ones buying luxury goods, which was also observed in the USSR. How will they avoid this? They think everything will be resolved through the expansion of democracy, but as we have already said, they do not know how their political system will be structured, and as we will show later, they are unaware of the incompatibility of a planned economy with democracy. They will not be able to solve the problem of misappropriation of money by officials or the problem of democracy, because, in the process of solving them, they would have to abandon the idea of a planned economy entirely.
Additionally, we would like to disappoint those communists who hope to realize property equality through a planned economy — in the corresponding article, we pointed out that people prefer fair inequality to unfair equality, which makes the desire of such communists unachievable.
How will this work in practice?
Computer communists think that computers will calculate how many goods and services everyone needs. Let us examine this using the example of sock production. A computer will calculate that, on average, a person needs, for example, 10 pairs of socks per year. Because this is the average figure. However, the average figure is made up, among other things, of results that are much higher than this figure. Therefore, at certain times or in certain places, demand will definitely exceed the supply defined by the plan. And in these places or at these times, a deficit will inevitably arise, just as it did in the USSR. Computer communists say: “Then we will produce them with a surplus!” However, if all goods are produced with a surplus, then where the needs are lower than the production defined by the plan, there will be overproduction and an inefficient waste of resources (which communists supposedly oppose). Furthermore, the country’s resources will not be enough to produce all goods with a surplus, and production plans for some goods will definitely have to be cut, which will lead to deficits. And even if the communists succeed in determining demand, there remains the problem of timely ensuring supply and satisfying that demand with quality.
In addition, computer communists cannot answer the question of how a computer will calculate exactly what kind of socks I need, and how it will determine how many socks with Mickey Mouse I want, how many socks with the inscription “real tough guy”, how many socks painted in Khokhloma style, and so on. A computer is incapable of determining human tastes, much less anticipating fashion trends to incorporate them into a plan. Therefore, under computer communism, store shelves will be full of heaps of unnecessary black socks of dubious quality, and the ones that the buyer likes will be missing; the buyer will end up purchasing beautiful foreign socks from speculators — just as in the USSR.
Computer communists respond to this: “We will democratically decide what to produce!” Meaning, a customer will write to us saying they need Mickey Mouse socks, and we will produce them if there are many such requests. However, not all customers have the time or desire to write to communists about what kind of socks they need. So, the demand of those customers who do not write to the communists about every one of their needs will remain unsatisfied. Secondly, by the time this need is confirmed, entered into the plan, designs are developed, launched into production, and delivered to pickup points, the buyer will no longer need Mickey Mouse socks; they will need Khokhloma-style socks (i.e., “real-time demand determination” does not take into account the time costs for development, production, and logistics). And their demand will remain unsatisfied in both cases. Thirdly, a communist official who wants to fulfill the plan will carry out repressions against complaining citizens who prevent them from reporting excellent results in plan fulfillment. And so on.
The voluntarism of officials in a planned economy, “top-down” pricing, as well as the multitude of layers of implicit information generated during the interaction between consumer and seller, and between seller and entrepreneur, which cannot be algorithmicized and entered into a database — all these are problems for which a solution has not yet been found.
Planned economy and democracy
“Socialist Alternative” proposes to solve the problems of a planned economy through democracy. At the same time, the organization writes that “the planned economy will be divided into several sectors of the economy… planning in these sectors can be either centralized, with the participation of industry representatives, or through workers’ councils in nationalized companies”, and that “the nationalized part of the economy should represent the majority of production”. That is, they admit that centralization and nationalization are necessary for a planned economy (we debunked the myth of some other communists that a “decentralized planned economy” is possible here). Under these conditions, democracy would be impossible for the reasons we examined in the article on a planned economy, in the “Problem of totalitarianism” section. Furthermore, any political force needs funding, and if there are no owners behind the opposition, then this opposition will be destitute and, consequently, weak in relation to the government, and therefore incapable of resisting the establishment of a dictatorship. Conversely, if all or most property belongs to the state, then the nomenklatura has all the necessary levers to establish a dictatorship. The country must necessarily have capital that is independent of the state. And this is a postulate incompatible with the “Socialist Alternative” planned economy.
Therefore, there will be no democracy (socialist, representative, deliberative) under the supporters of computer communism, just as there was none during the years of the CPSU’s economic dominance in the USSR. This will not change even if they write a thousand times about how much they want democracy, but never once describe its concrete model. In essence, the concepts of computer communists are just as abstract and impractical fantasies as the projects of Jacque Fresco, which also talk about how a computer will solve everything.
Mikhail Lidin asks an absolutely correct question in his video: let’s assume a computer will manage the economy, but who will manage the computer? Who will create the programs, configure them, enter the data, and select the priorities? People have always done this and will always do this, just as in Soviet planning. And people have always made and will always make mistakes (which, on a state scale, will be far more perceptible than on the scale of individual enterprises). Perhaps, in a computer-based Gosplan, these errors will simply be much faster than in a “paper” one. And since, when a computer-based planned economy fails, fanatics and careerists in the communist party will claim that it is not the idea itself that is at fault, but rather traitors in the higher leadership and in the team that directed the development of the computer programs, the leaders of the computer communists risk becoming the fastest traitors in communist history.
Solves no problems
In the article on a planned economy, we wrote about a whole complex of problems — for example, the implementation problem. How will computer communists solve it? No answers are given. If state enterprises rejected a truly valuable project (because their engineers had already developed the same project, but more expensive and worse, and they do not want to offend them or lose the opportunity to siphon off the budget), in the absence of non-state enterprises, its author has no one to turn to. In a social democratic economy, this is solved through competition — if a project is rejected, competitors will use it. “Socialist Alternative”, however, explicitly writes that “measures to avoid competition between nationalized companies” are necessary. That is, they reject competition.
Another problem is the problem of plan minimization. How will this be solved? Computer communists say it will be done through democracy. But, as we examined above, democracy under a planned economy will not be developed. Thus, the problem of plan minimization will remain, and communist directors will do everything to have the production targets in the plan for their enterprise lowered. The problem of falsification also remains, as communist officials will falsify reports on plan fulfillment just as they did in the USSR, in order to curry favor with their superiors. A computer will not be able to replace a detective and conduct an investigation to uncover falsifications. Theoretically, a free press could, but we explained above that under computer communism, funding and the lion’s share of property will be in the hands of the state, which will be able to instantly stifle inconvenient members of the press, and there will be no strong, independent counterbalances to it. We noted in our article on a free press that one of the necessary conditions for its high level is having different owners.
Now about the quality problem. Let’s assume a computer told the communists that 10,000 pairs of socks need to be produced. How will the computer be able to guarantee their quality? The quality and attractiveness of a product for the consumer are indicators that do not lend themselves to precise measurement. How will the communists combat the fact that all 10,000 of these socks will be of low quality and will not be needed by the consumer even for free (which will lead to both overproduction and shortages simultaneously)? Since the computer cannot solve this question, they will fight it using the same methods as in the USSR, with the same results.
We also wrote that a planned economy implies that production volumes must be planned; they are planned based on consumption forecasts. However, how is it possible to plan, for example, car production, if there is an import of foreign products, and planning bodies cannot know what quantity of foreign cars citizens will purchase? There is a risk of producing a large number of cars that no one will buy. The simplest way to avoid potential huge losses is either to ban or strictly restrict the import of goods into the country. A shadow sector will also appear. In the end, we have almost all the same problems that existed in the economy of the USSR. Therefore, the assertions of computer communists that new technologies will solve the problems of a planned economy are populist demagoguery.
Conclusion
Computer communists do not solve the problems of a planned economy, limiting themselves to populist statements or hopes for the best. Such unworked-out, unconvincing concepts discredit the leftist movement, scare off many competent people, and lead a portion of political activists away from the struggle for social democracy and toward a struggle for unviable concepts, i.e., onto a dead-end path of development. The social democratic economy and its improvement solve the majority of the problems of both a planned economy and the free market.
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