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The Almighty Buck Government Politics

Maximizing Economic Output With Linear Programming...and Communism (medium.com) 519

Slashdot reader mkwan writes: Economies are just a collection of processes that convert raw materials and labour into useful goods and services. By representing these processes as a series of equations and solving a humongous linear programming problem, it should be possible to maximize an economy's GDP. The catch? The economy needs to go communist.
"[P]oorest members would receive a basic income that gradually increases as the economy becomes more efficient, plateauing at a level where they can afford everything they want to consume," argues the article, while "The middle classes wouldn't see much change. They would continue to work in a regular job for a regular -- but steadily increasing -- wage... Without the ability to own real-estate, companies, or intellectual property, it would be almost impossible to become rich, especially since the only legal source of income would be from a government job."
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Maximizing Economic Output With Linear Programming...and Communism

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  • Question (Score:5, Insightful)

    by ArchieBunker ( 132337 ) on Saturday July 23, 2016 @01:39PM (#52566667)

    I'm lazy and don't want to get up in the morning. Why should I continue working when I could quit and get paid less? I would still get food stamps and reducing income housing. Sounds like working is for suckers.

    • Re: Question (Score:4, Insightful)

      by Fwipp ( 1473271 ) on Saturday July 23, 2016 @01:58PM (#52566793)

      Because having more than a subsistence existence is pretty nice, actually. And holding down a job and being rewarded for it also feels nice for your self-esteem (provided that it's not a terrible abusive job).

      Please note that basic income does away with the poverty traps of means-based assistance (housing assistance, food stamps). So you'll still have enough money to live on, but you won't have much discretionary income and won't be able to afford the things you like.

      • And holding down a job and being rewarded for it also feels nice for your self-esteem

        So does playing video games which reward you for doing meaningless tasks while you do nothing useful with your time.

        • Re: Question (Score:5, Insightful)

          by Anonymous Coward on Saturday July 23, 2016 @02:42PM (#52567071)

          Most people will get off their asses and do something. Paint, govern, design, play, engineer, fly, race, write, analyse, try to understand, you get the idea. The idea that most people will do nothing is laughable. Many people have drive, motivation and curiosity and would view the 'stoner' lifestyle as a form of torture. Sure there is a percentage of useless individuals in society that will just sloth, but it doesn't hurt anybody, so it doesn't matter.

          • What you say would be true if any form of addiction were a choice. But it's not. Even addictive behavior is governed by brain chemistry so it is, in fact, chemically induced. To assume that without disincentives people would not experiment with habit-forming destructive addictive behaviors is unjustified. And addiction (by definition) takes hold as a result of initial experimenting with addictive behavior. If less people were disincentivised to be addicted, then more people would become addicted. It's
          • by HiThere ( 15173 )

            I would go further than "doesn't matter". As jobs are increasingly automated, people who are capable of enjoying not being employed become increasingly socially beneficial.

            In past eras many of the "idle rich" became authors, philosophers, artists, etc. Some became quite good at it. James Branch Cabell, e.g., is still in print about a century later. It's not clear how many such people society has room for, but they only arise from those who don't need to work for a living. (This is in opposition to thos

          • Re: Question (Score:4, Insightful)

            by sjames ( 1099 ) on Saturday July 23, 2016 @07:42PM (#52568135) Homepage Journal

            Even many stoners back their way into the workforce. It starts with constructing ever more entertaining and artistic ways to smoke and eventually ends up in a small informal business doing the same for others. From there it's a slippery slope down to general woodworking and non smoking related decorations.

            It's not just Carlin, I've seen it happen.

        • Why is playing games 'not useful'?

          You don't know if the mates you play with are workers or 'relax' (a term in a SF story I read as a youth, relax, the non working class living from UBI only)

          Also: if you play youo oay your subscription or at least buy the game, so you contribute to the workers producing the game, marketing it, and running the infrastructure, and if it is a online game you contribute to the internet infrastructure and the hardware vendors involved as well as the power companies etc.

          Your idea

    • Comment removed based on user account deletion
      • The poor and middle classes actually suffer living standards that are on par with Poland, the Check Republic and Malta.
        On paper.
        In reallity the living standard in the countries you mention is far above the average american, not even to mention the poor or middle classes.

    • plateauing at a level where they can afford everything they want to consume

      Are you f-ing kidding me?
      In what alternate universe can the author live to write utter dreck like that?

      Any hood will tell you they want to live in a mansion with a pool, servants, drive Ferraris, and get served caviar by scantily clad objects of desire with champagne on the side.

      There is no plateau.

    • Why for heaven's sake aren't you on welfare now??
  • Comrade! (Score:5, Insightful)

    by cheesybagel ( 670288 ) on Saturday July 23, 2016 @01:41PM (#52566683)

    In this 5-year plan we will crush the imperialist pig-dogs with the highest steel and electricity production per capita in the world!

    Comrade Lysenko is working on improving our agricultural yield and we successfully cut of all useless cybernetics research to focus on more useful research.

    • Re:Comrade! (Score:5, Funny)

      by Mashiki ( 184564 ) <mashiki&gmail,com> on Saturday July 23, 2016 @02:11PM (#52566851) Homepage

      Comrade Boris is instituting the Great Leap Forward! All intellectuals and authors will be executed or reassigned by the state to hard labor. Peasantry will be expected to melt down tools in their home forges when party leadership visits. And our 5 year plan will also include agricultural reforms to ensure that there are more hungry people!

      Remember Comrades, we're here...for YOU!

  • by clovis ( 4684 ) on Saturday July 23, 2016 @01:43PM (#52566709)

    Economies are just a collection of processes that convert raw materials and labour into useful goods and services

    You can prove anything if you start with a bad enough premise.

    • Economies are just a collection of processes that convert raw materials and labour into useful goods and services

      You can prove anything if you start with a bad enough premise.

      I know, right. Like this:

      "[P]oorest members would receive a basic income that gradually increases as the economy becomes more efficient, plateauing at a level where they can afford everything they want to consume,"

      I mean, seriously, even a cursory reading of the worst written history book in the world will expose this simple undeniable principle: there is no limit to human greed.

      In this new Utopian economy, the de facto currency would become power and control over other people. Sort of like now, but wor

      • I noticed that too. "they can afford everything they want to consume"? That doesn't even make any sense. The really rich don't do it for money after a certain point: they do it for power and control.
    • We didn't think it was such a bad premise when Asimov made it [google.com].
  • by XxtraLarGe ( 551297 ) on Saturday July 23, 2016 @01:46PM (#52566731) Journal
    We probably would have solved it by now. But it's not. That's why 5 year plans and great leaps forward never worked. That's why there was mass starvation in rich agricultural areas. Central planning, even with genius elites running linear equations are going to read their own personal biases into the results.
  • and limits on foreign workers like a big h1b cut down.

  • by Anonymous Coward on Saturday July 23, 2016 @01:48PM (#52566747)

    To quote the summary:
    "[P]oorest members would receive a basic income that gradually increases as the economy becomes more efficient, plateauing at a level where they can afford everything they want to consume," ...
    "The middle classes wouldn't see much change." ...
    "Without the ability to own real-estate, companies, or intellectual property, it would be almost impossible to become rich, especially since the only legal source of income would be from a government job."

    So you're telling me I can get ~everything~ I want and need to consume. Even if I put the bare minimum effort (or no effort.) However no matter what I do, I can not become more than "middle class."

    To quote Office Space, "I'm not lazy, I just don't care." I have the feeling most of society will agree with me. we'll all become couch potato breeders. In the short term the elites will have all the power and money. (Of course they're not rich, they're our rulers!) In the long term, no one will work, and the whole thing will collapse on itself. As socialism and communism always does.

    • by phantomfive ( 622387 ) on Saturday July 23, 2016 @02:27PM (#52566963) Journal

      plateauing at a level where they can afford everything they want to consume,"

      There is no such plateau. Right now, I want a private jet. Really. And if I get that, I want my own planet, too. And a star. I can't get those, but I want them. And if I get all that, then I want love. There is no limit to what people want.

    • So you're telling me I can get ~everything~ I want and need to consume.
      Nope, the article tells you, you get UBI ... universal basic income. That might be $800 or $1200, depending if you live in a 'government assigned flat' or want one from the free market.
      For everything you want you have to pay from that 'income'.
      If you want more than you can afforrd with that income, you have to work.

      Plain and simple. No idea why you ask dumb questions. (Yes, I know. There are no dumb questions, only dumb answers. However

      • This is the quote:

        members would receive a basic income that gradually increases as the economy becomes more efficient, plateauing at a level where they can afford everything they want to consume

    • So you're telling me I can get ~everything~ I want and need to consume. Even if I put the bare minimum effort (or no effort.) However no matter what I do, I can not become more than "middle class."

      No, you'll get a guaranteed minimum share of the whole pie. If you want that share to be larger in absolute terms, you'll have to grow the whole pie. You can't benefit yourself at other people's expense, you can only benefit yourself by benefiting everyone else as well. On the other hand, all effort you put into

  • China Might Try It (Score:5, Interesting)

    by mentil ( 1748130 ) on Saturday July 23, 2016 @01:48PM (#52566749)

    China is the only country I could see actually attempting this. Yes, I know they're only nominally Communist, but they pay enough lip-service to Communism they might not be afraid to try it. I know their govt. is obsessed with constantly trying to increase their GDP, at least.

    • Comment removed based on user account deletion
      • Face it.
        You are an idiot.
        Having UBI, as your parent proclaimed, China might try soon, has nothing to do with a planned economy.
        How could it? How should it?

        I'm a programmer. The ice in my fridge is colder than yours.
        You see!? Two statements that having nothing to do with each other. No conclusion possible from one to the other. Both even might be false, or true, who knows.

        Regarding the paretn. China does not need UBI, yet. The evonomic growths is much to fast. They likely will invest into education, as they

    • China is the only country I could see actually attempting this

      The Soviet Union used linear programming for central planning from the 1960's onwards. The approach didn't work, and it can't work. See the economic calculation problem [wikipedia.org] for an explanation why it can't work.

  • by goombah99 ( 560566 ) on Saturday July 23, 2016 @01:54PM (#52566771)

    Ecomonies are not a collection of processes all known. They are a collection of agents, mostly unknown with hidden internal states. Another way of saying this is that gathering information for centralization cost money. Economies process that information at many local and global levels and don't share it past the point of economic efficiency. That's in an idealized system. In an non-indeal system there's even wrong ideas.

    A classic example of this is the maxim that the bad apples drive out the good apples. Meaning if you can't tell the difference between a good tasting apple and a bad tasting apple from the look (without tasting it) and if it costs less to produce a bad apple then the good apples won't sell as they are indistinguishable. In order to sell those apples you need to incur some cost. Do something that actually raises the price or lowers the profit like constitute an apple certification board, and set up a set of agents to test apples regularly for different farms, and persuade the consume your certification is valuable by giving away free taste demos. Otherwise there isn't information available to make a decision other than price. A similar thing occurs in how bad (debased) money drives the good (full gold) money out.

    You can create systems to optimally manage agent based systems. Interesting there is work now that shows how denying information to consumers can increase econmoic efficiencies as well. This should come as no surprise to people familiar with Braes paradox in traffic control.

    One of the core faults of communism is that while it can achieve some good results from linear programming notions of optimality is that it ignores that capitalist economies actually are information gathering systems that are very efficient).

    • I assume you mean a currency backed by gold. A modern economy can't do that. There isn't enough gold to back the currency needed for us to keep track of all the transactions we're doing. You run out and the system slows to a crawl and eventually collapses. Humans do more stuff than we have gold to track it with unless you're driven the exchange rate to the point of being meaningless (1 ounce gold = $1 trillion?). That's why we came off the gold standard. And frankly, we've got better things to do with gold
  • Not a new idea. (Score:5, Informative)

    by Place a name here ( 4508093 ) on Saturday July 23, 2016 @02:00PM (#52566805)
    This isn't a new idea. Kantorovich (one of the inventors of linear programming) considered this venue of economic optimization himself, but the technology of the day wasn't up to the task and the bureaucracy didn't want to be displaced either. Some of his suggestions inspired the reforms that later got implemented by Kosygin, but the Soviet economy was rather distorted by subsidies at that point, so a lot of those reforms got rolled back.

    There was also the fear that linear programming, with its shadow prices, would covertly smuggle capitalism into communism. See also Red Plenty [amazon.com] for a half-fictionalized account of Kantorovich's attempts (or the Crooked Timber post, In Soviet Union, Optimization Problem Solves You [crookedtimber.org]).

    Beyond that, there's Towards a New Socialism [wfu.edu] which is an idea/plan of how to run a socialist centrally planned society with modern technology. It uses sparse linear programming for the plan construction part and is based on sortition for government to diminish the inevitable corruption that comes with concentrating economic power like any CPE does. Would it work? Who knows? It may be interesting in the utopian sense anyway.

    Tangentially related (speaking of scientific communism/socialism), there's also Project Cybersyn [wikipedia.org], the project to use cybernetics to run socialist Chile. That wasn't based on linear programming, though. If linear programming is the neat [wikipedia.org] route, Cybersyn would be the scruffy route. Again, who knows whether it would have worked; if Medina's Cybernetic Revolutionaries [mit.edu] is anything to go by, a considerable part of the problem was that of bureaucracy and what the people were used to. Managers didn't use the system because it felt cumbersome to do so, etc.
  • I've long wondered why models and simulations aren't used a lot more in economic and political matters. They're used everywhere in physics and engineering, even when there are many unknowns (look at the Lorenz equation of climate models and how much it's improved since then). So why aren't modelisations with positive outcomes OBLIGATORY before voting some new laws that nobody really knows if it'll improve things or not ? Models may not be perfect but they provide a starting point and WILL be improved.
    • Business is all about models. I would venture finance also. I also know firsthand that linear programming is heavily integrated [wikipedia.org].
    • They're used. They're also bad at predicting the past, and even worse at predicting the future, which is why you don't hear much about how they solved a lot of problems and made lives better.

    • Because they suck.

      Economic models do exist, and are about as useful as the weather forecast. Economies are subject to chaotic effects, and full of positive feedback loops. Easy enough to predict what the price of housing will be in a month, but good luck predicting it in a year. Even the process of modelling can invalidate the results.

  • by Etcetera ( 14711 ) on Saturday July 23, 2016 @02:13PM (#52566857) Homepage

    If there's ever been a story worthy of the "whatcouldpossiblygowrong" slashdot tag, it's this.

    Technological Solutionism didn't begin with oblivious Bay Area Millennials who never learned any history thinking that any problem can be solved if you just throw enough data, tech, money, cloud, systemd, Elon Musk, VC money, Obama, and Nate Silver's at it.

    Unfortunately, that lack of awareness leads to the hubris in central planning, except that you've moved it from a technocratic paper pusher to a technocratic algorithm writer, an ethically oblivious data scientist, or -- scariest of all -- an app developer. That's how you get Giant Leaps Forward and jackboots.

    Well, it’s a bit of an exaggeration to call it a failure.

    Communism has killed far more people than all the 20th Century wars combined, while Western Capitalism has raised the standard of living. It was a failure. That's why the capitalists won and will continue to win. The ONLY thing that will change this will be a fundamental rewrite of the laws of economics and/or human nature. Humans don't change, and the laws of economics won't change globally until a replicator is invented along with locally-free energy and is actually distributed worldwide. *Then* we can talk about TNG-style post-scarcity. Anyone who thinks we're living in a post-scarcity economy in 2016 is confusing their parents' house for the real world.

  • Anyone who thinks that competition can removed from work-incentive process completely disregards the fact that sexual conquest is present in all societies other than theocracies. So to remove all sources of competitiveness a society would need to introduce a strict moral code (Soviet Union certainly tried). This would mean suppressing natural human urges and would lead to development of authoritarian elements within the society. And authoritarian institutions would attract the most aggressive (most compe
  • In fact, the idea that you can perfectly and rationally optimize economic output in that way has been around for at least a century. The problem is called the economic calculation problem [wikipedia.org]. And in practice, this was how Communism 1.0 was supposed to work in the Soviet Union.

    It is also well understood why it doesn't work; the Wikipedia article provides a good introduction, and von Mises' books provide deeper explanations.

    Once you understand why that kind of rational planning doesn't work, you will also under

  • Communism is like dropping the word "Nazi" but in reverse.

    Besides, the goal isn't necessarily to maximize GDP. If it as North Korea would be doing more trading. For the ruling class the goal is to maximize their cut of GDP. For the left the goal is to raise everyone to the best standard of living possible within the limits of our tech. As for communism: doesn't work. Marx figured workers would seize the means of production and then distribute the result. The trouble is you never get past the "dictatorsh
  • The Soviet Union had rooms full of people trying to calculate these things and build the correct amounts, etc, but it's not just a linear equation, it's a linear equation where the variables (constants, actually) change, new variables appear, and old ones disappear; and even the target goals can change.

    This is one of those things that sounds good on paper.....as long as you simplify and ignore enough things. It's like taking physics 101 and saying, "motion is easy to model, you just need to know the coeff
    • Too bad they had to wait for then capitalists to develop computers to make it work.
      • You still need people, mate. In capitalist countries we have plenty of accountants.
      • Don't knock Soviet tech: They were the second-most-advanced nation in the world. They had a space program. First object in orbit, first man in space, first craft landed on the moon. They had computers too - both of their own design, and clones of American models. They were ahead of the US technologically in some areas, and behind in others, but they were certainly capable of their own research.

    • by Koby77 ( 992785 )
      It seems like communists aren't willing to accept that 100 years of experimentation have always failed to produce the desired result, that if they could control the economy then they would achieve higher standards of living than the capitalists. You're right that the Soviets already tried it, but modern day communists will reject your observation, and claim that the communists of yesteryear simply weren't smart enough. Decades of failure prove nothing! Surely the communists of today are smarter and will suc
  • by argStyopa ( 232550 ) on Saturday July 23, 2016 @02:26PM (#52566957) Journal

    ...is my motivation to work in such a system?

    If I do nothing, but am guaranteed a minimum basic income that lets me live, why should I work?

    • Because if you work, you get to enjoy a much higher standard of living. You don't even have to work long hours. Or make a career of it - you can hold a job for a few months, then resign. That bit of extra work is all money for you to spend on luxury good and hobbies, so have a good time with it.

    • by Puff_Of_Hot_Air ( 995689 ) on Sunday July 24, 2016 @01:35AM (#52569265)

      ...is my motivation to work in such a system?

      If I do nothing, but am guaranteed a minimum basic income that lets me live, why should I work?

      The motivation to work is much more than for simple survival alone. Now granted, when survival is at stake, motivation is going to be very high, and you can get all kinds of people to do unpleasant things in exchange for continuing to exist. But this is not the reality that we (the general /. reader) is facing in general. I work because my work is satisfying and gives a measure of meaning to my life. Granted, I need to do something to live, but in some kind of utopian existence where I didn't "have" to work, the only thing I'd like to see change is a move from an authoritarian work model to a strict consensus one. Automation continues to remove these unpleasant jobs that no one would do without the carrot and stick, so the future is not hugely endangered by the idea of a percentage of the population who doesn't want to work, not working.

  • 100 million dead can't be wrong

    https://www.hawaii.edu/powerki... [hawaii.edu]

    Let's try it again! The world has 7 billion people to and we can spare another 100 million, right? Surely all the decades of forced ideology by dozens of countries just weren't done the /right/ way. With the patented new and improved right way we can do it right this time. This time we'll do it with 1/3rd fewer dead people!!! /zombie apocalypse //one guaranteed way to make communism work

  • I haven't read the linked wankery on medium.com, but I'm quite comfortable condemning it based solely on the Slashdot summary, since obviously no facts were involved in its authorship.

    It pains me to say it, but resource concentration allows things that would otherwise be impossible. This is very much a two-edged sword, as powerful tools often are, but while resource concentration allows Rupert Murdoch to spew his delusional version of reality into the world, it also allows Elon Musk to build a rocket with

  • What exactly does that mean? I would think maximizing quality of life is the goal. Maximizing output may lead to poor quality of life. Sure you have for clothing, shelter, etc. but if the society a person lives is horrible then you've missed the mark. This is not to say Communism may not be the answer but rather that a hard drive to maximum output and "efficiency" might not be the right answer.

  • by plsuh ( 129598 ) <plsuh&goodeast,com> on Saturday July 23, 2016 @02:57PM (#52567153) Homepage

    I am an economist. Economists have already extensively studied this kind of approach. It's called an Input/Output Model [wikipedia.org]. Communist countries used it in their approach to central planning during the 1970's. It failed miserably for two reasons:

    1) It assumes zero substitutability between inputs. E.g., to make a car you need exactly 1.35 tons of steel, 52.7 kg of rubber, 217 kg of glass, 1.73 KW of electricity, 29.4 hours of labor, etc. No other formula is possible, you can't use more energy and less labor, for instance. For reference, the production function is known as a Leontief production function [wikipedia.org]. To be fair, adding any kind of substitutability between inputs results in a completely intractable problem. However, without substitutability this is a lousy way to actually model an economy.

    2) It assumes perfect information on the part of the central planner. While this is an oft-used simplification in economic models, it's a lousy reflection of reality. It's simply impossible for a central planner to gather and correlate sufficient information to make it work.

    Yet another piece-of-crap opinion article written by someone who couldn't be bothered to do an hour's research on Wikipedia.

    • written by someone who couldn't be bothered to do an hour's research on Wikipedia.

      Well, to quote wikipedia:

      Input-output planning was never adopted because the material balance system had become entrenched in the Soviet economy, and input-output planning was shunned for ideological reasons. As a result, the benefits of consistent and detailed planning through input-output analysis was never realized in the Soviet-type economies.

    • I think the whole idea misses a couple of other important points, as well:

      • Many production processes are highly nonlinear. For any code I write (or any song I write) that doesn't translate into a fixed N minutes of computer time (or entertainment). Especially in the presence of automation, there isn't necessarily a strongly linear correlation between labor hours input and widgets output.
      • The whole innovation process would get stuck. Quickly. Someone would invent a new gadget, say, a computer, and the peo
  • by Megol ( 3135005 )

    No it is not possible due to the dynamics of nature and interactions that are essentially impossible to model having large effects in the long run. Those are the same reasons we can't predict the weather for longer periods of time with any precision.
    +
    No it wouldn't require communism, it would require a planned economy.

  • His "23 Things They Don't Tell You About Capitalism" is a masterpiece of writing, explaining how totally WRONG most economists are about nearly everything they say. e.g.: There is no such think as a "free market," there are always rules, regulations, legislation that--for example, keep practitioners of homeopathy from being considered 'doctors,' because they have no evidence that it is anything but a placebo. Or, for another example, that truckers hauling things for sale still have to adhere to speed lim

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