Vital Systems Security

Not really, but almost. The Times today has a truly amazing article about an attempt during the Allende administration to use computers to manage the Chilean economy. For those of us who have spent time thinking about OEP, it will all seem familiar, if strangely displaced. Seems that beginning in 1971 the government set out to use a network of telex machines and an IBM 360/50 to manage the Chilean economy. The telex machines were used to rapidly collect information about the “real” economy — daily output, energy use, and labor — in order to manage crises. The system was called Cybersyn.

(Image from the website of Eden Medina)

One success, the article claims, was management of a strike by truckers and retailers in 1972:

Cybersyn’s turning point came in October 1972, when a strike by truckers and retailers nearly paralyzed the economy. The interconnected telex machines, exchanging 2,000 messages a day, were a potent instrument, enabling the government to identify and organize alternative transportation resources that kept the economy moving.

The strike ended within a week. While it weakened Mr. Allende’s Popular Unity party, the government survived, and Cybersyn was praised for playing a major role. “From that point on the communications center became part of whatever was happening,” Mr. Espejo said.

On the one hand, this is a classic logistics problem of the type many economic planning organizations inherited from military planning: identify bottlenecks in a system of material production and flow, and find ways to overcome them. This was economic planning as in WWI, as in the Soviet 1920s, as in WWII, with different levels of technical formalization, of course, in each case. It also resonates with the kind of economic crisis management through an information system that was imagined by OEP in the wage-price freeze, which precisely relied on a dispersed network of data collection points to inform centralized decision-making.

One interesting contrast that might be worth thinking through more is the difference between managing “real” flows (physical output, labor, etc.) versus “nominal” flows — i.e. prices. OEP was actually trying to deal with inflation, of course, not production bottlenecks, and the object domain was prices (particularly of labor). In this sense, although the information network sounds very much like what OEP tried to produce, it was actually closer to Soviet planning in its substance. What the different experiences shared was the informatics system, and, no doubt, much of the underlying math. Onur can tell us more.

A couple more notes of interest. First, apparently the group of specialists operating the system did not have a specific political orientation. Despite the purportedly “leftist” orientation of the Allende government, this was a very technocratic operation. A good reminder that this kind of planning was not a political project of left or right per se:

Most of the Cybersyn team scrupulously avoided talking about politics, and some even had far-right-wing views, said Isaquino Benadof, who led the team of Chilean engineers designing the Cybersyn software.

Second, it is useful to bear in mind what happened after Allende. After the coup, Pinochet and the military leadership actually did not have very clear ideas about economic policy. But as we all know, a group of economists from the Catholic University, trained at and supported by the University of Chicago (and notoriously aided directly by Milton Friedman), soon gained the ear of the military government and sent Chile on the path of a very early experiment in “neoliberal” economics (for details a good book is Pinochet’s Economists by Juan Gabriel Valdez). This economics, of course, inherited from Hayek and others an emphasis on the price system in a market economy as a system for communicating the “subjective” preferences of economic agents. From this perspective, the kind of “substantive” planning being attempted under Allende was incoherent, both because the computational challenges were overwhelming, and, more importantly, because it inevitably rested on an incoherent theory of value.

Third, a key figure in this story is a guy named Stafford Beer, a British Cybernetician, the key figure in the field of management cybernetics. This would be a very interesting example of something that we have talked about a lot: namely, that techniques used for modeling and managing “the economy” are discredited in this function, but continue to become incredibly significant in other domains. Clearly the area of disaster modeling is one example of this, and more continue to emerge.

For more on this, someone named Eden Medina, who is an Assistant Professor of Informatics at Indiana University, has written on Cybersyn, including a recent article in the Journal of Latin American studies on the Cybersyn project, and an upcoming book on computing and government in Chile from the 1960s to the early 1970s. (Chris Kelty may be familiar with Medina, who has written on free software in Chile as well.)

This entry was posted on Friday, March 28th, 2008 at 5:29 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.