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he operations room of “Project Cybersyn” (short for “cybernetics synergy”) was created by Chile’s president Salvador Allende in the early 1970s as a place from which the country’s newly nationalised and socialised economy could be directed. To build it, Allende had hired Staord Beer, a British consultant, who requisitioned a mainframe computer and connected it to telex machines in factories. Industrial managers would input data which would then be centrally analysed; instructions for any necessary changes would be sent back.
Ironically, the socialist system’s most notable success was in outmanoeuvring lorry drivers whose strike threatened to bring down Allende’s government in 1972. After Chile’s generals stormed the presidential palace on September 11th 1973 and Allende killed himself, Cybersyn was destroyed: a soldier is said to have stabbed all the screens in the operations room with a knife.
It was a bloody reprisal of a then half-century-old debate about how best to run an economy. Allende had thought that, with state-of-the-art 1970s communications and computers, it would be possible for government to
optimise an industrial economy. The Chicago-school economists advising Pinochet in Chile thought that the far greater information-processing capacity of the market would do better. In Chile their opinion was imposed by force.
The success of market- and semi-market-based economies since then has made
the notion of a planned economy seem like a thing of the past. But were a latter-day Allende to build a Cybersyn 2.0 it could now gather data via billions of sensors rather than a few telex machines, and crunch them in data centres packed with tens of thousands of servers. Given enough power, might it not replace the autonomous choices on which the market is based?
As part of his plan for socialism in the early 1970s, Salvador Allende created Project Cybersyn. The Chilean president’s idea was to ooffer bureaucrats unprecedented insight into the country’s economy. Managers would feed information from factories and elds into a central database. In an operations room bureaucrats could see if production was rising in the metals sector but falling on farms, or what was happening to wages in mining. They would quickly be able to analyse the impact of a tweak to regulations or production quotas Cybersyn never got o the ground. But something curiously similar has emerged in Salina, a small city in Kansas.
Whatever the concerns, the pandemic has given economists a new lease of life. During the Chilean coup of 1973 members of the armed forces broke into Cybersyn’s operations room and smashed up the slides of graphs—not only because it was Allende’s creation, but because the idea of an electrocardiogram of the economy just seemed a bit weird. Third-wave economics is still unusual, but ever less odd.
The connection you made between the value of real-time information andSalvador Allende’s Project Cybersyn is a reminder of a lost opportunity. One ofAllende’s principal advisers when he was president of Chile was Staff ord Beer, avisionary cyberneticist, then at Manchester Business School, who came up withthe pioneering viable system model. Some of us were not entirely sure aboutStaff ord’s connection with reality, but that was our mistake. Had Allende livedon we might now be much further ahead in this burgeoning fi eld of analysis andadministration. Still, better late than never.