Red Plenty: Inside the Fifties' Soviet Dream

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Red Plenty: Inside the Fifties' Soviet Dream by Francis Spufford Graywolf Press · 2012 · 448 pages · $16.00 paperback

Cultural historian Francis Spufford 's Red Plenty is a novel about the reform of the planned economy in the Soviet Union during the years of the Khrushchev thaw. It is one of the oddest books written about economics - a fictional approach peopled by computer researchers, planning bureaucrats, Communist Party apparatchiks, and factory managers. While fact and fiction in Red Plenty can initially be difficult for the reader to distinguish, the fictional parts breathe life into the economic reasoning. The author provides an extensive set of notes explaining the historical facts and also where his poetic license diverges from them.

Spufford 's vivid storytelling - the book is very intriguing historical fiction - explores this counterfactual: Could the Soviet Union's planned economy have delivered plenty to its citizens as well as a market economy would? The idea of prosperity under communism certainly did not seem as preposterous in the late 1950s as it does today. The Soviets took the lead in the space race, and their official statistics showed an annual 5 percent growth in GDP, apparently higher than the United States' at the time.

The Soviet economy was, despite those growth statistics, enormously ineffective, consuming far too much capital for little output. Communist Party leader Nikita Khrushchev was prepared to open up the economy to reforms and received new ideas from economist Leonid Kantorovich and computer engineer Sergey Lebedev. They are among the real people the reader encounters. Of course, their dialogues are imaginary, but they're also believable.

Their idea was to replace centrally determined production quotas with a pricing system based on opportunity costs. Linear programming, a mathematical method that could supposedly determine the optimal allocation of resources, would be used instead of bureaucratic output goals. The new, more powerful computers would perform all the necessary calculations. Kantorovich, incidentally, was the only Soviet to receive the Nobel Prize in economics.

But could it work? Readers of The Freeman will recognize here the arguments from the socialist calculation debate in the first half of the twentieth century. Economist Oskar Lange stated that prices are merely rates of exchange of one good for another. Whether they are provided by a central planner or by a market is irrelevant, he maintained, as long as managers of State enterprises were instructed to act as cost-minimizers. "Market socialism" would work. …