Much has been made of “central planning” in the Soviet Union. But it really was central, so much so that most of it took place within a single building. This gloomy, looming gray structure in Moscow housed the State Planning Committee, also known as Gosplan. It’s job was simple yet grand — to create the infamous “Five-Year Plans” that dictated the working of the Soviet economy in a push toward rapid industrialization. The first of these was delivered in 1928, and so kicked things off by engineering a famine in the Ukraine that killed around five million people in the early 1930s.
Like so much of the communist system, Gosplan emphasized technocratic rationality as a cornerstone of its processes. It also applied a “Year-Zero” liberal ideology to the workings of complex human systems, and so was unable to respond to the past or the future. Prior conditions and probable eventualities that didn’t conform to the Soviet worldview were not factored in — couldn’t be factored in. Nor could the vast size and diverse cultures of the Soviet Union. All that mattered were quotas and targets that became more arbitrary the more the system became detached from reality.
The economy became rife with absurdities. Scrap metal quotas meant that scrap metal plants were ordered by bureaucrats to scrap their own hardware in order to meet the expectations of “the plan.” Crop harvest targets were to be met regardless of changes in demand, and so wild swings occured wherein entire fields were left to rot one year and then couldn’t produce enough food the next. Prices were fixed to what was known as the “Price Book,” which was literally a collection giant books that set the price of every single commodity five years out. Smuggling of foreign currencies surged, seeing as in a given year you might be able to buy a new car for less than a package of toilet paper.
Of course, when things really began to break down in the 1980s, the Soviet response was to become even more “rational.” Gorbechev and his cabinet of sycophants believed the emergence of the computer might save them. So they began “Intensification 90,” a project aimed at making The Plan more rational than it had been before (when it was supposedly focused on exactly that). This was to be accomplished by computers, which made sense given that Gosplan had always viewed itself a sort of computer. An information filtering and sorting mechanism. Good in, bad out. Undesired data bits discarded. They were very proud of themselves when they turned all the price books into floppy disks. Information condensed. Efficiency achieved.
Of course, Intensification 90 failed. As the Soviet Union cracked, the economy was ripped apart by foreign price adjustments and manipulations. People ignored the Price Book en masse. A black market backed by foreign currency and international capital took over, and the “oligarchs” were born. Within a few years the Soviet Union had collapsed, Gorbechev was gone, and Gosplan was shuttered. The entire economy came up for bid at prices that would soar and plummet by the minute. The looting of Russia began.
A completely depoliticized economy is a myth. Even in a healthier system, the economy serves the nation and its people, who have specific interests. But the Soviet system was based on delusions and lies, and this is what ultimately doomed Gosplan and the Soviet Union itself. The ideology was a strange one in that it saw people as completely mutable — they did not believe in “human nature” as such — and yet human systems and their foundational behavioral patterns as within the power of the state to perfectly predict and control over a long time horizon.
Gosplan was in some ways at its most powerful just before the Soviet Union collapsed. Its bureaucrats had sandbagged themselves within Moscow and wielded total control in a way they hadn’t during the days of more autocratic leaders like Jospeh Stalin. Everything went through them to the point where they became immobile, deluded, and silly.
But we have such grand computers now, don’t we? Such bountiful data. Surely it’s time to try again, some will say. Good in, bad out. All so rational.
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