These are my recollections of a life behind the iron curtain. I do not aim to give perfect and objective evaluation of anything, but to share my personal experiences and memories. It will explain why I just cannot get misty eyed over some ideas on the political left and why I loathe many ideas on the right.
This seems like a fitting theme for the beginning of a new year.
A few years ago somewhere around FtB I have said that “socialism doesn’t work” and I got immediately criticized for that statement. That day I learned that some people understand the word “socialism” to mean something different from what it means to me. Because when I say the word “socialism” without qualifiers, I mean the economic system that was practiced in the eastern bloc.
Central to the economy were so-called Five Year Plans, which right until the very end of the regime were touted as the bestest and greatest of things ever, a universal solution to every single economical problem there is. And as it is with universal solutions, it was everything but.
So how did it work? The head honchos of the Communist Party got together, looked at what the economy is doing – how much is produced of this, how much is produced of that, how many people work here and there – and then they have drawn a plan for next year delineating what shall be done in next five years – i.e. how much shall be produced of this, how much of that, and how many people will work doing it. This plan was really very detailed and specific, so not only how much steel ore shall be mined, but also how many cars will be produced, even how much of which agricultural products will be grown etc. The planing also included wages and all costs.
And, as the saying goes, the devil is in the details.
There is nothing inherently wrong in setting a specific long-term goal for yourself, for a company, for a country, or even a conglomerate of countries. The problem is too many and too specific goals. Any change of direction or rescheduling was only possible after the party’s say so, and that has proven too slow and sluggish in today’s world.
The results were twofold.
Firstly the economy could not react to demand for new goods. If during the five-year period a new product appeared for which there was demand, or a demand for an existing product increased unexpectedly, there was no room for meeting that demand. This was one of the reasons for the existence of “under the counter” goods that I mentioned previously. For some goods, like cars, there were waiting lists long many years, even decades. Some goods were sometimes scarce, and not only luxury goods, but even toilet paper and menstrual pads – when those appeared on the counters, they disappeared fairly quickly because everybody stocked up since you never knew when you will be able to buy them again. And people’s grumbling was of no consequence to the manufacturers, because as long as they met or slightly exceeded the plan, everything was officially hunky-dory.
Secondly sometimes goods were produced even if there was no longer demand for them, because meeting the planned target was paramount. A huge waste of resources and manpower. And of course another cause for backwardness. Imagine in today’s world the quick transition from old cellphones to smartphones, which happened in a year. Under the five-year plan a goal would be set to produce X cellphones, so cellphones would be produced for five years, even if a year into the plan the invention of smartphone made them nearly obsolete.
This sluggishness was one of the reasons why the eastern bloc was unable to keep up with the west economically. But the regime had all the best answers and critics were not allowed to speak up, so the system was bone headedly used right until the very end, when the regime started to fall apart.
As a side note, I see similar thinking in today’s USA owned corporations. I have personal experience with two of them. The first one was trying to plan everything centrally, allotting manpower from top down according to the numbers in their theoretical tables and allowing little to no space for local decisions. This has led to a lot of problems and actual waste of money, because instead of workers contractors had to be hired for prolonged times – and in Europe, contractors are more expensive than employees, even when taking into account mandatory severance packages. HR manager tried to tell me otherwise, but when he found out that I can count he shut up and said that he knows that I am right, but the commands from USA say it has to be done like this, so he is doing it.
The second company pretends to give local managers some leeway without actually doing so, and in addition to that forces everybody to use one decision tool, a tool they think is the holy grail of all business tools, the bestest there is, the one solution to all problems. Unfortunately I am not allowed to criticize it or point out its many fold problems in the open, but I have done so to my supervisors, who agreed with me, but were powerless to do anything about it – because despite the pretense, there is still heavy top-down management style. I am very skeptical of everyone who says they have a universal solution. Universal solutions do not exist.