Project Cybersyn

Driving around with the radio tuned to KALW the other day I stumbled across a great episode of 99% Invisible on Project Cybersyn, which first aired a couple years ago. Project Cybersyn was a plan to use networked computers to connect and coordinate Chile's factories under Allende's socialist government. I had no idea. The whole scheme reminded me of the earlier Soviet plan that inspired Francis Spufford's Red Plenty.

As a believer in the virtues of market coordination, I'm pretty skeptical that Cybersyn could work under the best of circumstances, and it's clear that even frontier computer technology of the early 1970s was not remotely up to the task of coordinating an industrial economy. Regardless, in 1973 the generals, with a little help from the CIA, put the kibosh on the whole episode.

Still, you have to wonder. Once Amazon is the intermediary for all transactions between producers and consumers, will decentralized markets still play a role as a coordinating device? Or will Amazon's AI set the market-clearing prices to match orders on both sides? Red Plenty, by capitalist means?

Marshall on economic freedom

Here is a nice post by Tim Taylor quoting Alfred Marshall at length on competition and economic freedom. Marshall expresses some views on "backward people" using language that we would not choose today, but his observations about the traits of deliberation and trustworthiness exhibited and reinforced in modern market societies are nuanced. I was reminded of this famous paper measuring prosocial behavior across cultures, which finds that "the higher the degree of market integration and the higher the payoffs to cooperation in everyday life, the greater the level of prosociality expressed in experimental games."

This felicitous view of economic freedom is not shared by all... e.g., Marx and Engels:

The bourgeoisie... has pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors”, and has left remaining no other nexus between man and man than naked self-interest, than callous “cash payment”. It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade.