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Comment by petra | Hacker News Reader

With regards to the innovation question: considering that the soviets we're quite good at military and space innovations, and that defense organizations in general produce a lot of innovation(think DARPA), maybe central planning could work ?

Though of course the required central planning here is quite different, more about smart bets than optimizations, and focusing engineering resources at important problems, which doesn't seem that great at capitalistic economies either(think planned obsolesce, "my generation is optimizing ads", browser in-incompatibilities, etc) .

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The Soviets were really good at military and space innovations but:

1. They weren't much better than the West. Consider that the capitalist world surpassed them at pretty much anything they started with an advantage in.

2. They were also really bad at managing the scarcity of very basic things their people needed. Like, food and medicine. The joke was that Russia had "bad weather" for 70 years under communism.

Soviets where good at military and space innovation because there was competition with the West.

There was no competition on their domestic market, hence it sucked.

>With regards to the innovation question: considering that the soviets we're quite good at military and space innovations

Well, space industry was quite suboptimal in USSR. Successes were achieved because of 1) all resources were spent on space and military and 2) great legacy of Russian Empire (especially great minds like Korolev, Tsiolkovsky and Tupolev). So I see it more like stagnation than development.

Maybe central planning works better on big items than it does on little ones. Gorbachev decided that central planning wasn't working when he realized that the USSR could produce military hardware as well as the US, but couldn't supply toothpaste to its population.

Spufford's book mentions this explicitly: during the description of one of the Central Planning Sessions one of the characters muses (i.e. provides an overview to the reader) about the many unwritten rules that guide each of the calculation steps. One (possibly the most important) is that "The Army always gets first pick to anything".

So the Objective Function assigned much higher "value" to Military production (either explicitly or implicitly) and this of course made military production more "efficient" than consumer goods production. (I put quotes around "efficient" because there still was a lot of waste and corruption even in that, of course).

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