This project is funny because the outcome was so inevitable:
1. Every large corporation in the world has tried a similar "Let's get a bunch of statisticians to quantify our business and we'll manage the company by looking at the graphs" experiment at least once, and it always explodes in a combination of manipulated metrics and Goodharts's Law
2. Every centrally-planned economy in the world that makes plans based on data from individual factories has been massively impacted by a combination of falsified metrics and Goodharts's Law
But because it was destroyed in a CIA-backed revolution, we don't actually know how it would have turned out, so modern Communists can convince themselves that it would have ushered in Utopia!
So, seems like the logical way to run a business would be to create a bunch of internal metrics but never let any of your reportees know what they are.
Or even better, "leak" that there might be metrics (that are in reality false), and then see who allocates resources towards maximizing them. Favor allocating resources to those who hit your internal metrics, favor de-allocating resources towards those that hit your "honeypot" metrics.
This all kind of depends on having direct reportees who have a great degree of latitude in how they spend their resources I suppose.
Back when I read "Cybernetic Revolutionaries" I followed it up with "People's Republic of Walmart" and came away with a bit of a different conclusion to your point 1. IMO lots of US-based hyperscalars are managing what are effectively command economies, and it's allowed them to ex. scale their infrastructure so aggressively these last ~2 years.
FMCGs work very much like command economies, including specialized tooling to shift production between customers when orders fall through.
Unlike USSR they simply do it on shorter timescales, too, and with better customer feedback. Something Cybersyn actually targeted, as it's closer to Toyota Production System (as much done at lowest level in small decision loops) than centrally managed GOSPLAN or large american FMCG giants
Yeah, the economy is basically a bunch of oligarchical/dictatorial command economies, or what we like to call companies. It's funny, a lot of leftist people use them as examples of how a larger command economy could work (usually the reaction a lot of leftists I know had to People's Republic of Walmart), whereas it makes me wonder what more democratic, free market companies would be like.
> it makes me wonder what more democratic, free market companies would be like.
I was wondering the same after PRW lol. Recently I had the chance to ask a friend of mine who worked in Google Infra (years ago) if they had ever tried to 'liberalize' their infrastructure planning; something like having internal business units bid on space, power, and compute instead of distributing it top-down. He said that yes, this was actually something like their original operating model, and the outcome was that YouTube basically bought up every piece of hardware in the company and then leased them out to other verticals at a profit.
That's pretty interesting. I always found the idea of democratizing a company pretty easy to understand (can easily just mirror civilian governmental structure in some sense), but creating an internal free market system harder to wrap my head around so pretty cool to see an example of it.
> whereas it makes me wonder what more democratic, free market companies would be like.
There are a few small examples that come to mind (co-ops and communes mostly), but I can’t think of any that have been successful at scale. Running an internal market would be almost pure overhead, so if it worked it would really have to be efficient to be worthwhile.
I imagine it might look something like a company-internal gig economy; someone puts out a request for a code review and a bunch of fellow employees bid on doing the job, and the requester provides a tip for good service at the end, etc.
Well, at the extreme end of free market, Sears CEO Eddie Lampert drew from Objectivism and had his company's divisions internally compete with one another:
Internal pricing always turns out to be problematic because the various divisions have neither the incentive nor the leverage to negotiate prices in the way that "real" customers do.
In addition to your Samsung example, I know of a major tech company whose services division often buys hardware from competitors because they get a 40% discount and priority deliveries when stock runs low. If they were to buy the in-house alternative, they'd be paying list price and be at the back of the queue for deliveries.
There's also huge scope for "funny money" Hollywood accounting-style practices, where internal prices become entirely disconnected from any underlying value, which actually results in the organisation being even more dominated by the whims of senior leadership than they otherwise would be.
(These problems are very similar to those experienced in country-level command economies too, of course)
Right. WalMart and Amazon are closer to command economies than Gosplan ever was. They're not choking on the scale of what they do; they're thriving on it. Gosplan, the USSR's central planning system, ran on monthly reporting and annual plans. WalMart at one point ran on daily reporting and weekly plans. It's probably even faster now.
The problem of getting accurate data started to be solved when bar codes and RFID tags came in. It's possible for a factory to fake "we made 431 washing machines today." It's hard to fake "we made 431 washing machines today, their serial numbers were scanned as they left the factory, scanned again as they arrived at the various distribution centers, and scanned again when they were shipped to a customer, and scanned again when the customer received them." It's not airtight, but faking it requires a sizable fakery operation which tends to be detected eventually. Much real world activity is driven by all that "where's my stuff" data, and if the data is way off, people notice.
For large classes of products and services today, there is no real price competition. There just aren't enough players to make a market. The magic number seems to be four, from an EU study. Less than four major players in direct competition, and prices don't go down.
Yeah, I don’t think Land is a great recommendation.
The CCRU produced a lot of talented philosopher/writer/artists but Land definitely went a bit far out there and never came back.
The connection between what the CCRU did and Wiener-style cybernetics is also a little strained. I don’t think a layperson would be all that interested in the former if they were looking for more of the latter.
I personally think Land is worth reading (critically), but to say he cooked his brain with methamphetamines is a vast understatement. I agree that there's not much to learn from him on cybernetics specifically: he's sort of "post-cyber" (in the same sense as post-Marxist), musing on the philosophical implications of cyber-positive feedback loops (including but not limited to Capital/AI), before veering off into explicitly anti-human negentropy-maxing (accelerationism). Whether shrugging off potential human extinction is more or less vile than his far-right political turn and extremely naked racism, you can decide for yourself.
For similar ideas on cyber-positivity without the insanity, I'd recommend Michael Downs' "Capital vs Timenergy" (soon to be republished as "Capital vs Subjectivity"), and Poliks & Trillo's "Expocapitalism" [0].
> I personally think Land is worth reading (critically)
I agree, perhaps... I think I got something out of slogging my way through Fanged Noumena (although I did throw in the towel near the end--there's an essay written entirely LiKe ThIs and I just bounced off of it, DNF).
If we are talking about accelerationism(s) instead of cybernetics, I much preferred Gruppo Di Nun's Revolutionary Demonology. It's at least written in a human register.
I think commentators here are missing what is really exciting about this. Back in the 70s it was impossible to calculate all the labour inputs to product, so socialist economies had to refer to capitalist economy pricing. This doomed Cybersyn and any other attempt to use the LTV to work backwards.
The problem isn't that it's impossible to calculate all the labor inputs, it's that labor inputs alone don't fully represent the price of a good. To be fair neither does supply & demand, although that seems more accurate in practice.
Even assuming we should consider Cockshott's work to be valid (we should not), that coefficient does not apply to individual prices. It's possible literally every single good is priced incorrectly and still get this figure.
The equilibrium price is based on both the supply and demand of a good. Demand is not really determined by the cost of labor of a good, and since demand is a component of the equilibrium price, the "value" described by the LTV cannot be the same as the equilibrium price.
Also consider that unemployment exists, thus the quantity demanded of labor is lower than the quantity supplied, meaning the price of labor is above equilibrium. If you claim equilibrium price == value, you imply that workers are paid more than the value of their labor. Heh.
It's not a circular definition, unless you also think "freezing point" is a circular definition because it refers to the freezing point of a substance. Supply and demand are both functions dependant on price, equilibrium is the intersection point Qd(P)=Qs(P).
If supply and demand set the equilibrium price, and "value" is just defined as that equilibrium price, labor does zero explanatory work. You must explain how socially necessary labor time independently calculates the price before looking at supply and demand. The moment you say "value is just whatever price supply and demand balance out at," you have abandoned the LTV and adopted neoclassical market theory while keeping the word "labor" as an empty label.
If you don't use "equilibrium price" to mean the equilibrium of supply and demand, you're just using it as a synonym for "value" as defined in the LTV. Which is meaningless.
Btw Marx himself said that "value" is NOT equal to equilibrium price. If price equaled LTV value at equilibrium capital intensive industries with few workers would have abysmal profit rates compared to labor heavy ones. Since market competition equalizes profit rates across industries, equilibrium prices permanently diverge from labor values. LTV describes a theoretical cost-anchor, not the equilibrium price.
There are a number of very subtle insights contained, in particular there's a tension between the "cybernetic" model he proposes, and sensitive dependence on initial conditions (Lorenz etc.) which as far as I know has yet to be resolved.
There's a big amount of young people in Chile who believe this was a precursor to the internet, and the myth that this type of project would have led to the internet being invented in Chile, that if it weren’t for the Pinochet coup, iit would have led to a sort of scientific luxury communism utopia. There was even a recreation of the Cybersyn control room by the Boric administration -in the government palace grounds, admission free- feeding this myth further.
In the late soviet union, a system called OGAS was also attempted, with the same principles, and famously, the problem about the lack incentives for precise reporting, created the garbage-in, garbage-out outcome that is mentioned in this piece.
35 comments
[ 0.25 ms ] story [ 14.6 ms ] thread1. Every large corporation in the world has tried a similar "Let's get a bunch of statisticians to quantify our business and we'll manage the company by looking at the graphs" experiment at least once, and it always explodes in a combination of manipulated metrics and Goodharts's Law
2. Every centrally-planned economy in the world that makes plans based on data from individual factories has been massively impacted by a combination of falsified metrics and Goodharts's Law
But because it was destroyed in a CIA-backed revolution, we don't actually know how it would have turned out, so modern Communists can convince themselves that it would have ushered in Utopia!
Or even better, "leak" that there might be metrics (that are in reality false), and then see who allocates resources towards maximizing them. Favor allocating resources to those who hit your internal metrics, favor de-allocating resources towards those that hit your "honeypot" metrics.
This all kind of depends on having direct reportees who have a great degree of latitude in how they spend their resources I suppose.
Unlike USSR they simply do it on shorter timescales, too, and with better customer feedback. Something Cybersyn actually targeted, as it's closer to Toyota Production System (as much done at lowest level in small decision loops) than centrally managed GOSPLAN or large american FMCG giants
I was wondering the same after PRW lol. Recently I had the chance to ask a friend of mine who worked in Google Infra (years ago) if they had ever tried to 'liberalize' their infrastructure planning; something like having internal business units bid on space, power, and compute instead of distributing it top-down. He said that yes, this was actually something like their original operating model, and the outcome was that YouTube basically bought up every piece of hardware in the company and then leased them out to other verticals at a profit.
There are a few small examples that come to mind (co-ops and communes mostly), but I can’t think of any that have been successful at scale. Running an internal market would be almost pure overhead, so if it worked it would really have to be efficient to be worthwhile.
https://www.forbes.com/sites/stevedenning/2013/07/16/do-inte...
https://www.versobooks.com/blogs/news/4385-failing-to-plan-h...
In addition to your Samsung example, I know of a major tech company whose services division often buys hardware from competitors because they get a 40% discount and priority deliveries when stock runs low. If they were to buy the in-house alternative, they'd be paying list price and be at the back of the queue for deliveries.
There's also huge scope for "funny money" Hollywood accounting-style practices, where internal prices become entirely disconnected from any underlying value, which actually results in the organisation being even more dominated by the whims of senior leadership than they otherwise would be.
(These problems are very similar to those experienced in country-level command economies too, of course)
The problem of getting accurate data started to be solved when bar codes and RFID tags came in. It's possible for a factory to fake "we made 431 washing machines today." It's hard to fake "we made 431 washing machines today, their serial numbers were scanned as they left the factory, scanned again as they arrived at the various distribution centers, and scanned again when they were shipped to a customer, and scanned again when the customer received them." It's not airtight, but faking it requires a sizable fakery operation which tends to be detected eventually. Much real world activity is driven by all that "where's my stuff" data, and if the data is way off, people notice.
For large classes of products and services today, there is no real price competition. There just aren't enough players to make a market. The magic number seems to be four, from an EU study. Less than four major players in direct competition, and prices don't go down.
How many times has that actually happened in real life (opens history book) (oh-no.gif)...
obligatory https://bactra.org/reviews/wolfram/
The CCRU produced a lot of talented philosopher/writer/artists but Land definitely went a bit far out there and never came back.
The connection between what the CCRU did and Wiener-style cybernetics is also a little strained. I don’t think a layperson would be all that interested in the former if they were looking for more of the latter.
For similar ideas on cyber-positivity without the insanity, I'd recommend Michael Downs' "Capital vs Timenergy" (soon to be republished as "Capital vs Subjectivity"), and Poliks & Trillo's "Expocapitalism" [0].
[0] https://becoming.press/exocapitalism
I agree, perhaps... I think I got something out of slogging my way through Fanged Noumena (although I did throw in the towel near the end--there's an essay written entirely LiKe ThIs and I just bounced off of it, DNF).
If we are talking about accelerationism(s) instead of cybernetics, I much preferred Gruppo Di Nun's Revolutionary Demonology. It's at least written in a human register.
It's on my shelf! Haven't gotten to it yet, looking forward to it. Also interested to read Reza Negarestani's "Intelligence & Spirit"
It's on my shelf, next to Cyclonopedia! Regrettably, I haven't made the time to read either. There aren't enough hours in the day.
I’m a big von Foerster and Herbert Brün fan, surprised to see Land mentioned in any adjacency.
That problem is now solved.
https://unlearnecon.medium.com/astonishingly-poor-empirics-c...
What is your preferred alternative theory of equilibrium price?
Also consider that unemployment exists, thus the quantity demanded of labor is lower than the quantity supplied, meaning the price of labor is above equilibrium. If you claim equilibrium price == value, you imply that workers are paid more than the value of their labor. Heh.
https://www.investopedia.com/terms/e/equilibrium.asp
https://en.wikipedia.org/wiki/Economic_equilibrium
https://dictionary.cambridge.org/dictionary/english/equilibr...
It's not a circular definition, unless you also think "freezing point" is a circular definition because it refers to the freezing point of a substance. Supply and demand are both functions dependant on price, equilibrium is the intersection point Qd(P)=Qs(P).
If supply and demand set the equilibrium price, and "value" is just defined as that equilibrium price, labor does zero explanatory work. You must explain how socially necessary labor time independently calculates the price before looking at supply and demand. The moment you say "value is just whatever price supply and demand balance out at," you have abandoned the LTV and adopted neoclassical market theory while keeping the word "labor" as an empty label.
If you don't use "equilibrium price" to mean the equilibrium of supply and demand, you're just using it as a synonym for "value" as defined in the LTV. Which is meaningless.
Btw Marx himself said that "value" is NOT equal to equilibrium price. If price equaled LTV value at equilibrium capital intensive industries with few workers would have abysmal profit rates compared to labor heavy ones. Since market competition equalizes profit rates across industries, equilibrium prices permanently diverge from labor values. LTV describes a theoretical cost-anchor, not the equilibrium price.
There are a number of very subtle insights contained, in particular there's a tension between the "cybernetic" model he proposes, and sensitive dependence on initial conditions (Lorenz etc.) which as far as I know has yet to be resolved.
In the late soviet union, a system called OGAS was also attempted, with the same principles, and famously, the problem about the lack incentives for precise reporting, created the garbage-in, garbage-out outcome that is mentioned in this piece.
Some cool things to watch: - Stafford Beer, On Cybernetics: https://www.youtube.com/watch?v=e_bXlEvygHg - TraumaZone: https://www.youtube.com/watch?v=EDA3hIsf7LA
Note: The coup was the most inhumane and darkest period in Chile's history. I am in no way trying to justify it.