📚 node [[20210120214919 how_to_make_a_pencil_logic_magazine]]

How to Make a Pencil | Logic Magazine

source : How to Make a Pencil

tags : [[technology]] [[economic planning]] [[post-capitalist economics]] [[socialist planning]]


  • So-called “digital socialists” believe that a socialist economy can be planned through the use of computers, algorithms, etc.
  • The book The People’s Republic of Walmart makes the claim that Walmart already does this, and that we can appropriate this to socialist ends
  • A socialist society would not want to simply optimize production, but would have other goals beyond optimization
  • Socialists must contend with the [[calculation problem]], kicked off by anti-socialist [[Ludwig von Mises]]
  • Mises’s argument was that in socialism workers would have to work more for less because they lack prices
  • For Mises, prices were an expression of living market society, and markets could place pressure on manufacturers to “get prices right”, i.e. equitable to both the purchaser and the seller. This to him is a rational allocation of assets to society
  • Benanav remarks that the way Mises talks about capitalism sounds very algorithmic
  • In the 1930s and 40s, Russians worked to solve the calculation problem by guessing the correct price for an intermediate material, and through trial and error would find the right price
  • Benanav claims that people misunderstand Mises’s challenge. The point isn’t to find prices for final consumer goods, it’s about finding prices for the intermediate goods
  • [[Friedrich Hayek]] observed that a market was a collection of decision makers, not a collection of equations waiting to be solved
    • A pencil manufacturer would need to know the implications of choosing one kind of graphite over another, for example, which a computer probably couldn’t do
  • In a socialist society, the whole world would be involved in making decisions around production, and would be concerned with questions such as working conditions, dignity, justice, sustainability. Things that may not be able to be digitized away
  • [[Otto Neurath]] was an Austrian philosopher who argued that planning necessarily had to be democratic because of the reasons stated above
  • Neurath thought that the price system was a problem to overcome, not replace
  • Neurath proposed that planning should be done via protocols, such as voting, auctioning, etc. within producers. Neurath believed that this process would allow for a new type of rationality to emerge
  • Neurath felt that production would be organized between associations of producers (coming from Marx), and hoped that guilds and councils could set a path forward
  • We should optimize for the betterment of humanity, and for that we need a social solution, not a technical solution, to a social problem


  • We cannot algorithm away the very difficult problem of planning a socialist future
  • Mises’s critique of socialism isn’t taken in its proper context. Benanav claims that what Mises was getting at had to do with organizing the intermediate parts of consumer good production, rather than consumer goods themselves
  • Neurath believed that the socialist planning problem can be overcome by “total planning”, that is, coordination among and within producers
  • Algorithmic solutions to planning would leave out things computers cannot optimize for: happiness, dignity, justice, and so on

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