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Comment by dogma1138 | Hacker News Reader

USSRs problems weren't that they couldn't make production lines work they were extremely good at manufacturing at scale.

The problem was that they were really bad at figuring out what needed to be made and at what amounts because of the worst kind of planned economy you can imagine (take aby soviet era product hammer, clock, lock, radio w/e and you'll see a very peculiar thing a physical price tag embedded on it, if you were a factory you were basically told you are making X now, price, profits and all economic decisions were taken out of your hands).

If anything their problem was that they produced way too much of pretty much everything on a whim.

Additionally there was all the wrong kinds of competition in which the establishment was the selective force rather than the market.

These aren't the problems Tesla is facing.

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They also had problems enforcing quality requirements across different organizations. Aside from the military, it was impossible for a downstream organization to reject the output of an upstream supplier for low quality or non-conformance to spec. Hence each organization was incentivize to produce at as low a quality and at as cheap an interpretation of the central plan as possible, practical usefulness be damned.

Hence not just producing goods unsuitable to demands, but also shoddy build quality for anything that wasn't military supplies.

That was an outcome of having "factories" rather than companies you could have be making razor blades on Tuesday and radios on Friday.

Employment was also non selective you went to school, got your engineering degree did your thesis on jet engine blades and then sent to a factory across the country making mailboxes

Many of the design decisions of Soviet era engineering are becuase of these conditions stuff was designed with high tolerances because it will likely be produced on repurposed tooling not design for it by people who'll be trained every 2 weeks to make something else.

Which, as crazy as it sounds resulted in some products that were extremely durable because of the huge tolerances allowed for in the design.

The Kalashnikov is the product of a perfect storm and a great symbol for that time period.

This isn't unique to the USSR however. There are similar weapons in the US arsenal (M2 Browning for example) that are so well designed that is still in service 84 years after initial introduction.

Back when engineers had to use slide rules, and metallurgy wasn't as sophisticated, designers had to over-engineer machinery (and buildings, and bridges).

It was more core to the system than just the factories/companies distinction. If you allow downstream consumers to refuse products, and penalize upstream suppliers if their output isn't usable, then you have a market system, whatever label you want to attach to it. (Even if it does not include private ownership!) A functioning planned economy, on the other hand, has to encode all of these requirements in the central plan, which Soviet and Eastern Bloc experience suggests is computationally and organizationally infeasible.

In the limit, a central plan that works well is going to contain a detailed simulation of something that looks like a market economy, with rational actors modeled out at every step.

Turns out that at our current state of technology, doing that isn't feasible yet, but that may change at some point.

Except that once you plan hits reality, the rational actors in the real world can look at the plan and change their behaviour to take advantage of it to serve their best interests.

It's like creating a fixed plan for each move in a game of chess where you can't change your game plan once the game starts, but your opponent can and also gets to see your plan at the beginning of the game.

No, it isn't like that. What GP is most likely suggesting is central planning done second-by-second, not year-by-year. Think less "government decrees" and more "closed-loop feedback control".

I suppose there exists a Nash equilibrium, where every actor can't act in a way that will decrease the effectiveness of the plan. Problem is that it's way too computationally expensive to calculate one for a 10 player Hold'em poker game, let alone an economy with millions of decisions and actors.

Eh, not necessarily. Markets don't find the optimal solutions for every problem. Look up "Price of Anarchy" in game theory. I don't claim that it's feasible to come up with central plans that beat markets, but there are cases where central planning can produce objectively better results.

This facilitated movement of high quality engineering talent to military.

The Khrushchev and Brezhnev-era USSR had a fantastic understanding of what needed to be made. Refrigerators, radios, televisions, washing machines, vacuum cleaners, and automobiles. Things that the public very clearly wanted, and that politicians were very clear about the public getting.

All of those things were consistently under-produced, and never met their quantity, or quality quotas.

And that is the problem, politicians were keen on building a TV.

You couldn't just build a TV there would be a great design competition and then a design will be selected.

The selection will be political which means that designs were not selected by market forces which favor merit but rather the whim of a corrupt and inefficient political machine.

The pricing also was an issue, economics in the USSR were screwed it was socialism bubble in a capitalistic world.

Everything had a price but the price was completely detached from the cost and the value of the product (the designers themselves could not gauge the true costs of their designs, and quite often the design that would keep as many people employed would be favored which would cause even more inherent inefficiency)

When your TV was priced at 50$ but cost 500$ to make there will be shortages.

Additionally the USSR had a horrible problem with skilled labor despite probably having one of the better educated workforce in history. This was because again lack of meritocracy and a free market a rocket engineer would be making as much as an engineer working on bicycle gears.

Unless you were well connected politically you also had very little choice on where would you be assigned to work.

Because of this building skills in critical industries in the commercial and consumer sectors was very hard.

There were different appliance manufacturing companies in the USSR, and consumers very clearly expressed their preferences. Different Soviet brands commanded different prices, and had different levels of demand for them.

Pricing was an issue for different reasons - some people had money that they couldn't spend, whereas other people had very little money. Food and housing were heavily subsidized but goods weren't, wages for different professions were very different (And rarely reflected the social/economic value of their work.)

It wasn't some communist paradise where everyone was equally poor. There were absolutely class and wage distinctions. An engineer building rockets was getting paid more, and had access to better stores (And priority on high-end consumer goods, that were less, or not available to the public) then one building bicycles. One way to be 'politically connected' was to work in an important industry (Specifically, defense. Being a senior manager also qualified.)

The Soviet rationing model rewarded both political parasites, and successful people[1]. A bit like 'meritocracy' works in many Western corporations, if you think about it.

The serious problems in the Soviet economy were the absolutely insane military spending, corruption, bureaucracy, theft, inconsistent accountability, and extremely conservative commandments from central management that strongly discouraged, and sometimes punished innovation and optimization.

[1] Unless you were a kolhoznik, or serf, tied to the land, a political problem, had relatives who were political problems, were one-quarter Jewish, etc.

That not true. Ph.D. in University was making the same wages as cleaner working in said University. You underestimate how ridiculous was communism. My parents after getting Masters choose to go into farming as it was better money.

Everyone has plenty money but you could not buy anything, you needed a special token to buy for example new fridge. Used products were more expensive than new. You needed to wait for everything.

People did not revolt because of propaganda and in a technological leap that happened after the war. In 1950 you will still go to the city on the horse but in 1980 everyone had running water, TV, electricity and at least a one car per village.

I visited the Czech Republic while they were still communist. The most hilarious thing I remember was a price stamped into loaves of bread. It appears they had official price brands distributed from a central point, since they looked the same everywhere. This means the price was probably unchanged for long periods of time.

Prices for most common goods (especially food) were fixed by the government in Eastern Bloc countries, usually they stayed the same over decades. The quality, especially for imported stuff (like coffee) could vary drastically, but the price stayed the same. For 'bread buns, rolls' (or whatever they are called outside Germany) the price in Eastern Germany was fixed at 10 Pfennig since forever, and it was commonly called a "10er Semmel" because of this (or a "fiver" for the small version).

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