Red Plenty, Blue Nightmare


One of the recurring leitmotifs of Kevin D. Williamson’s 2010 book, The Politically Incorrect Guide to Socialism, is that socialist regimes consistently misunderstand the role of prices in an economy. And that’s no small thing:

Socialism’s main defects are the inability of political decision-makers to make rational decisions without the information provided by prices generated by marketplace transactions; the misalignment of incentives and resources; and the subjugation of economic necessities to political mandates with no basis in material economic reality. It is the last of these, above all, that makes socialism dangerous.

To help illustrate to what lengths the Soviet Union attempted to function without the prices set by a market-based economy, at one point, Kevin quotes from Red Plenty, the 2010 book by British author Francis Spufford, which blends real and fictional characters from the Soviet Union of the 1950s, and sounds like a cross between Gorky Park or Fatherland, and A Beautiful Mind, or possibly Pirates of Silicon Valley. As Red Plenty’s Amazon description notes:

Strange as it may seem, the gray, oppressive USSR was founded on a fairy tale. It was built on the twentieth-century magic called “the planned economy,” which was going to gush forth an abundance of good things that the lands of capitalism could never match. And just for a little while, in the heady years of the late 1950s, the magic seemed to be working. Red Plenty is about that moment in history, and how it came, and how it went away; about the brief era when, under the rash leadership of Khrushchev, the Soviet Union looked forward to a future of rich communists and envious capitalists, when Moscow would out-glitter Manhattan and every Lada would be better engineered than a Porsche. It’s about the scientists who did their genuinely brilliant best to make the dream come true, to give the tyranny its happy ending.

Red Plenty is history, it’s fiction, it’s as ambitious as Sputnik, as uncompromising as an Aeroflot flight attendant, and as different from what you were expecting as a glass of Soviet champagne.


In The Politically Incorrect Guide to Socialism, Kevin quotes this passage from Spufford:

For much of the 80 years during which the USSR was a unique experiment in running a non-market economy, the experiment was a stupid experiment, a brute-force experiment. But during the Soviet moment there was a serious attempt to apply the intellectual resources of the educated country the Bolsheviks had kicked and bludgeoned into being. All of the perversities in the Soviet economy. . . are the classic consequences of running a system without the flow of information provided by market exchange; and it was clear at the beginning of the 60s that for the system to move on up to the plenty promised so insanely for 1980, there would have to be informational fixes for each deficiency. Hence the emphasis on cybernetics, which had gone in a handful of years from being condemned as a “bourgeois pseudo-science” to being an official panacea.

The USSR’s pioneering computer scientists were heavily involved, and so was the authentic genius Leonid Kantorovich, nearest Soviet counterpart to John Von Neumann and later to be the only ever Soviet winner of the Nobel prize for economics. Their thinking drew on the uncorrupted traditions of Soviet mathematics. While parts of it merely smuggled elements of rational pricing into the Soviet context, other parts were truly directed at outdoing market processes. The effort failed, of course, for reasons which are an irony-laminated comedy in themselves. The sumps of the command economy were dark and deep and not accessible to academics; Stalinist industrialisation had welded a set of incentives into place which clever software could not touch; the system was administered by rent-seeking gangsters; the mathematicians were relying (at two removes) on conventional neoclassical economics to characterise the market processes they were trying to simulate, and the neoclassicists may just be wrong about how capitalism works.

In response, Williamson writes:

Today, Khrushchev’s “cybernetic” approach has passed into disrepute—to the dust-bin of history—but faith in “scientific” and “rational” management of incomprehensibly complex economic systems remains a fixed fact of political life. Other models of scientific understanding have replaced Soviet cybernetics—evolutionary biology, network systems, complexity theory—but the central conceit remains as fatal as ever. The main question is the scale of the attempted planning; the socialism applied to the U.S. healthcare, agriculture, and education sectors is fairly limited, so its effects are relatively mild. More comprehensive central-planning regimes produce more comprehensive failures—and a more comprehensively perverse feedback loop for the central planners.


But first, the computer system has to get off the ground. Even if a little magical thinking is required to simply roll the beast out of the hanger, as Bruce Webster writes at his And Still I Persist blog, in a post titled “Obamacare, IT, and magic thinking”:

A very common pattern in a IT project such as the website is that those in the trenches know how bad things are, but those at the top don’t — or don’t want to know, leading to a phenomenon I noticed many years ago and named “the thermocline of truth“. What usually happens is that the ‘truth layer’ moves up the ranks as the scheduled deadline approaches, and the whole project is suddenly delayed just weeks or even days before going live.

Sometimes, however, the folks at the top insist that the system go live, even though everyone below them knows the system is not ready for prime time (or ready for late night or even ready for the wee small hours of the morning). They have this wishful belief that any “kinks” or “glitches” can be worked out after the system has launched, possibly by taking it off-line from time to time late at night or over weekends. They also believe that the vital importance of this system means that it just must somehow work, and that their sincerity and good intentions will overcome any technical issues.

This is, of course, feeble-minded crap. Software is very, very unforgiving, and if you haven’t taken the right approach to ensure proper functionality, performance, and quality, no amount of wishing and hoping and planning and dreaming is going to make it work right.

Here’s what I wrote in a rather blunt assessment of a troubled IT project at a major financial firm (my third such review of that same project in three years):

Such assertions don’t hold water. I can be in a great mood and have a team of very sincere and committed people, but if we try to build a commercial airliner without the proper expertise, requirements, engineering, materials, and testing, the plane will crash and people will die, assuming it ever gets built and off the ground (which is extremely unlikely). The fallacy that software is somehow different is just that — a fallacy, and one that costs corporations millions (if not billions) of dollars a year in missed schedules and failed projects. When it comes to engineering, sincerity and commitment, while important, can never substitute for expertise and quality of work.

Likewise, when problems do arise, there is this similar wishful belief that just a few more “bug fixes” and “enhancements” will clear everything up. This was the case in the project I mentioned above, and the client was very unhappy to hear me say just how far back to the beginning they were going to have to go to make things work. They refused to do so, and the entire project was cancelled within a year.


Magical thinking and the Obama administration? I just can’t see it myself.

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Last week, Richard Fernandez compared the Obamacare Website to the Krell Machine, the giant, ultimately civilization-destroying technology built by the original inhabitants of the 1950s sci-fi classic Forbidden Planet, who forgot that as brilliant as their technology made them appear, ultimately, their brains still contained within them the same monstrous primitive urges as their prehistoric forefathers.

Fortunately, there’s no one more experienced at building Krell Machines than Kathleen Sebelius:

Obama administration Health and Human Services Secretary Kathleen Sebelius’ failure at designing websites to provide government services began during her term as governor of Kansas, long before the Obamacare website debacle, Kansas political insiders told The Daily Caller.

Sebelius oversaw numerous costly and disastrous government website projects during her six-year governorship (2003-2009), including a failed update of the Department of Labor’s program to provide unemployment pay and other services and similar updates pertaining to the Department of Administration and the state’s Department of Motor Vehicles (DMV) services.

The Department of Labor’s overhaul of its computer programs was a notable boondoggle, according to 14-year former Kansas state senator and former state Labor Secretary Karin Brownlee.

“In the Kansas Senate, I chaired the Commerce committee. We had oversight over the Department of Labor. For years, we watched as the Department of Labor under Sebelius worked on that computer program. After seven years and $50 million, something should work,” Brownlee told TheDC.

“In Kansas if you have a 40 or 50 million dollar project, that’s a lot of money,” Brownlee said, noting that the Labor Department project was funded by federal money while other Sebelius website projects sucked up state taxpayer dollars. “They started and stopped that project with at least 3 different major contractors.”

When Brownlee was appointed to head the state’s Department of Labor under new Republican governor Sam Brownback in 2011, she was tasked with cleaning up Sebelius’ technical mess.

“When I walked in the door at Labor [the computer update] was half-done. There were about 240 errors in work-around. It was not functional,” Brownlee said.

“The agency was spending more than $1 million per month on contractors and other things. So as soon as we found out how much was going out per month we had to shut that down. That wasn’t workable,” Brownlee said. “In the private sector, that would never be acceptable.”


In sharp contrast, in the public sector, tolerances for failure are much more slack; bosses are much more forgiving. Disaster is merely a path upward; sometimes, all the way to the Oval Office. Sebelius told CNN that, as Mary Katharine Ham paraphrases, “Obama didn’t know about website problems until after launch”:

Hey, he reads about every other crisis in the paper. Why not this one, too?

Health and Human Services Secretary Kathleen Sebelius told CNN’s Sanjay Gupta that President Obama was completely clueless about serious problems with pre-launch. This despite troubles with the minimal testing done on the site and serious concerns from insurance companies, who were even pushing for delay.

President Barack Obama didn’t know of problems with the Affordable Care Act’s website — despite insurance companies’ complaints and the site’s crashing during a test run — until days into its now well-documented abysmal launch, the nation’s health chief told CNN on Tuesday.

In an exclusive interview with CNN’s Dr. Sanjay Gupta, Health and Human Services Secretary Kathleen Sebelius admitted that there is concern in her department and the White House over the technical debacle surrounding the Obamacare website rollout, saying “no one could be more frustrated than I am and the president.”

The site was supposed to make it simple for people to search and sign-up for new health care policies starting on October 1, but instead it’s been clunky and, at times, inoperable.

“We’re not at all satisfied with the workings of the website,” Sebelius said. “We want it to be smooth and easy and let consumers’ compare plans.”

So, was the president so very uninterested in making sure his legacy law got launched with a modicum of competence that he never checked to make sure this was going well? Is he so surrounded by yes men and women that no one could bring themselves to tell him about this? Was Sebelius just straight-up lying to him day in and day out? Or, is she taking one for the team because he knew there were problems and was too stubborn to delay? I have pretty low expectations for Obama and government in general, but I remain a bit mystified at just how negligent it appears he was. If there’s one thing he is intensely interested in, it’s his own legacy, right?


But hey, I suppose it could have been worse. And that’s what NPR is reduced to exclaiming, Tim Graham notes at Newsbusters spotting this “Actual NPR Headline: ‘Healthcare.Gov Could’ve Been Worse”:

NPR is looking quite desperate in its promotion of Obamacare. This was an actual headline at the NPR website: “Despite Glitches, Could’ve Been Worse.” Jonah Goldberg told me “I thought you made up that headline!” He cracked on Twitter: “For instance, logging on could have permanently blinded you!”

On Tuesday night’s All Things Considered, anchor Melissa Block borrowed this oddly optimistic concept inside the liberal bubble from Rusty Foster of The New Yorker magazine. He said “I’m sort of amazed at how well it does work, actually, which is, you know, where it kind of — it could’ve been worse.”

Yes, I suppose it could have been worse.

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Related: In 2011, Ben Smith, then still with the Politico, wrote that “more than half” of his fellow Democrats believed that 9/11 was an inside job to one degree or another. Are growing members of the left starting to believe that the ObamaCare Website debacle was a conspiracy as well? Cue the Beastie Boys’ awesome “Sabotage” tune!

More: Or perhaps the Talking Heads’ “Life During Wartime,” which reminded listeners, “We got computers, we’re tapping phone lines, I know that that ain’t allowed.”

Finally, the perfect exit quote:

(Thumbnail on PJM homepage based on a modified image.)


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