“The wishes of the people will be made known to the Government at all times”

Way back in 1945, Hayek’s essay “The Use of Knowledge in Society” put paid to notions that any person or institution could ever possess, on an ongoing basis, enough information to plan and run a modern economy in anything resembling efficient, effective, and fair fashion. But of course he was roundly ignored, by politicians and ambitious technocrats the world over, not least in Chile, where Allende’s government, working with the British cyberneticist Stafford Beer, put in place a computer-controlled information collection and distribution system, for the express purpose of rationally managing, and thus improving both the performance of the Chilean economy, and the fairness of distribution of goods. To say it didn’t work isn’t quite fair, as it was in place for only a short time, and technical and budgetary problems meant that it wasn’t implemented in the form intended by its designers. And at a critical point, Beer left on an anchovy-fishing expedition. No matter – clearly Cybersyn, as it was called, even if properly implemented, could not have solved the problems inherent in an economic policy intent on destroying incentives and alienating those with the managerial and entreprenerial skills that are critical to the success of any modern economy.

Fine, but what did Cybersyn accomplish? In this video, and, apparently, a formal paper – which I haven’t yet read – Jem Axelrod and Greg Borenstein show that Beer and his group were concerned not just to help Allende and his ministers rationalize their management of Chile’s economy, but to believe they were doing this. The Cybersyn control center, which Axelrod and Borenstein analyze in detail in this video, was meant, they argue, to give Allende’s government a “futuristic fantasy of control made real,” and, in this, was not just a component of the project, but indeed its central element. By enabling this fantasy, Beer’s team encouraged the Allendistas in their hubris, and drove them to press on with their economic-planning efforts – thus driving the Chilean economy to ruin.

This argument makes a great deal of sense to me, not least because it jibes with what was going on in the Soviet Union of the 30s, not just in economics, but also urban development, which I treat in my disseration on Stalin-era urbanism. For architects and planners, building prominent, recognizably – that is, stylistically – modern buildings was as important an exercise as “actually” modernizing them as places to live and work, or rationalizing their design and construction. The reason? Because this made these buildings into symbols of modernity, which would, architects and planners hoped, would impress and inspire both the Soviet population, and their own politician-patrons – thus ensuring they would get more work, and stay out of the gulag. (Going off fishing anchovies was not an option.) Motivated by these shows, and all sorts of other, analogous shows – consider the degree to which their was puffed by fantastical charts of economic “achievement” – Stalin and his cohorts were motivated to press on with their efforts to “rationalize” and “modernize” the Soviet economy, thus driving it into the ground.

The Soviet Union was still a going concern at the time Allende and Beer were concocting Cybersyn – and indeed, Soviet help was important in helping Allende to make his revolution. I wonder what, if any role, Soviet advisors played in this project. Around this time, Soviet economic planners were quite enthused by the idea of using computers to do just what Beer proposed to do in Chile, and no doubt they were at least interested in his effort. Perhaps they contributed expertise, drawn from their own experience, monitored Cybersyn to see what they could learn from it, or stood by with faint, cynical smiles on their faces, all too aware that it would come to ruin. Any of these possibilities, for historians, would be quite interesting, in not just tracing the long denouement of the Soviet modernizing project, but also understanding the evolving interplay between Moscow, as the socialist world’s would-be metropolitan center, and a key outpost of that world’s periphery.

(Thanks to Marginal Revolution for the pointer to the video.)

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