A COMMUNIST FAIRY TALE.

Francis Spufford opens his Red Plenty with "This is not a novel.   It has too much to explain, to be one of those.  But it is not a history either, for it does its explaining in the form of a story ... The idea is the hero. ... Best to call this a fairytale, then — though it really happened, or something like it."  A blurb on the cover of my paperback edition adds, "A hammer and sickle version of Altman's Nashville, with central committees replacing country music."  There's even a web site providing all sorts of contextual material, should you be so inclined.

I'm going to limit Book Review N^o. 9 to the material I'm more conversant with, namely mathematical economics and political economy, and keep still about the forms of fiction.  When it comes to fiction, give me readable stuff with clear outcomes.  Division of labor is a useful thing, which the characters real and imagined in Red Plenty never could wrap their minds around.  My Chicago Boyz colleague David Foster posted a review a few years ago that fleshes out some of the details, and introduces the dramatis personae.  In the comments are links to all sorts of observations from diverse perspectives, and many of those are technically daunting.

I cannot help but think about how the intellectual discussions, whether at Akademgorodok or in the gatherings of the middle managers of Gosplan, don't give pause to the True Believers in critical studies.  (Try speaking freely in a culture studies workshop.)  The Soviet Union was in reality governed by gangsters pretending to be social scientists, never mind that people Politically Reliable at Akademgorodok or in upper management might have been allowed to read the works of "bourgeois" academicians or selected articles from Western newspapers.  See page 184:

This is a privileged place, and one of the privileges is speaking freely.  Or more freely.  You live here, and you get a flat and a fridge and food delivered to your door, all exactly in accordance with your seniority, and you also get to talk.  I'm not sure they know why we like it, the powers that be.  They just know we do like it, and they want to keep us happy, within reason.  But within reason, you see.  There are limits.  You mustn't ever question the fundamentals.

Those fundamentals?  The circumlocutions senior academicians go through to distinguish their algorithms from price discovery are amusing, artistic license in their composition or not, page 100.

Whereas market prices are formed spontaneously, objective valuations — shadow prices — must be computed on the basis of an optimal plan.  As the plan targets change, the valuations change.  They are subordinate to the very different production relationships of a socialist society.  Yet, yet, the scope for their use is actually bigger under socialism.

Yes, if you can write down all the resource requirements as linear constraints, and if you have enough sharp pencils, or a big enough computer, once headquarters tells you how many tons of steel and how many bottles of vodka to build, then the simplex algorithm (scroll to slide 13) allocates the resources and determines the shadow prices, which you can then post in the stores.  Unfortunately, in a country where chess is a spectator sport and theoretical mathematicians almost as respected as ballerinas, the dimensionality of the problem is too large.  Don't let reality get in the way of ideology.

We still have an opportunity before us which is closed to the capitalists.  Capitalism cannot calculate an optimum for a whole economy at once.  We can.  There is a fundamental harmony between optimal planning and the nature of socialist society.

Evidently nobody at Akademgorodok or Gosplan knew about the First Optimality Theorem of Welfare Economics.  It got even better when the boffins got around to rebalancing the food sector, page 178.  Yes, the collective farms got the shadow price for beef, but at market it's another story.

There'll be much more beef in shops.  I know, I know, people won't be able to afford it — but in a way, like I was saying, there's no real bad news there, is there?  There isn't much logical difference between not being able to find something you can afford, and being able to find something you cannot afford.  Is there?

A reasonably competent principles of economics student can spot the meaningful logical difference instantly; and in either of those instances, whatever the shadow price of collective farm labor is, it cannot be an equilibrium price.  The errors concatenated from there.  David Foster's post also quoted from Red Plenty, this time where what looked like a straightforward administrative error got people killed.

[The supply system moronically misclassified Novocherkassk] as a college town, in need of the calorific intake required to lift pencils and wipe blackboards, but there were forty thousand people living and working in the industrial zone out by the tracks now, and between the students and the loco workers, a locust would have been hard put to it to find a spare crumb. White bread was a distant memory, milk was dispensed only at the head of enormous queues. Sausages were as rare a comets. Pea soup and porridge powered the place, usually served on half-washed plates.

And if something goes wrong, the rains don't come or a critical machine breaks, somebody has to improvise.

In theory ... you would need to revise all the balances a minimum of six times over, and a maximum of thirteen times, to make them consistent with one another again, and if all 373 commodities were evenly interconnected, each iteration would require 373 x 373, or 139,129 separate calculations.

And 373 commodities is a gross simplification.  From an essay sympathetic to the idea of indicative planning, we read, "Let’s say it’s just twelve million. Even if the USSR could never have invented a modern computer running a good LP solver, if someone had given it one, couldn’t Gosplan have done its work in a matter of minutes?"  No, and even that twelve million doesn't disaggregate enough between shapkas in Moscow and shapkas in Novosibirsk, let alone rabbit farms in Estonia and shapka factories in Astrakhan, let alone matching the milk production with the pasteurization and the intended consumption, taking into account the perishability of the stuff.  The calculation problem is daunting enough that the essayist concludes with a bet on emergence.  "We will not be able to turn everything over to the wise academicians, or even to their computers, but we may, if we are lucky and smart, be able, bit by bit, make a world fit for human beings to live in." Even if, as a Khrushchev-era wag suggested, by 1980 the entire population of the Soviet Union had been put to work balancing the plan, it would still, because it rules out local and distributed knowledge, would not work.  "Good computers, bad computers—it doesn’t matter. Markets just require less information from their individual participants. This was made precise in the 1970s and 1980s in a series of papers on the “informational efficiency” of competitive markets."

Yes, and the (petit-bourgeois) butcher who saw people lining up for meat he didn't have would react differently than would the butcher with unsold inventory.

Red Plenty concludes, "The dance of commodities resumes.  And the wind in the trees of Akademgorodok says: can it be otherwise?  Can it be, can it be, can it ever be otherwise?"

No.  Next question.

Cross-posted to Fifty Book Challenge.