today, this somehow vindicates the Austrian critique. This is not the place for an account of the complex historical reasons behind the crisis of Soviet socialism, but our investigations enable us to identify one component of the problem: the material conditions (computational technology) for effective socialist planning of a complex peacetime economy were not realized before, say, the mid-1980s. If we are right, the most notorious features of the Soviet economy (chronically incoherent plans, recurrent shortages and surpluses, lack of responsiveness to consumer demand), while in part the result of misguided policies, were to some degree inevitable consequences of the attempt to operate a system of central planning 'before its time'. The irony is obvious: socialism was being rejected at the very moment when it was becoming a real possibility.
[WS:] I think that the main problem of central planning was not insufficient computational capacity, but GIGO - or more precisely, false information fed into the system by plant operators. Plant managers systematically under-reported productive capacity they controlled for two reasons: to obtain lower production goals which they could achieve with ease, and to hoard the surplus to barter in on the black market. The planner's response to that was the so-called "taut planning" i.e. setting production goals higher than what their information suggested, to force the managers to put some of the hoarder surplus to the system rather than the black market.
Another known problem was cronyism - production goals could be adjusted and negotiated based on personal connections with the central authorities and party apparatchiks.
As a result of these two factors, efficient enterprises were double penalized - by taut planning and by having to make up for the slacking enterprises, who could do so with impunity thanks to nepotism. That created the impression of the chaotic nature of the planning itself. In reality, it was not the planning process itself, but the pre-modern social relations that failed in Eastern Europe.
With that in mind, central planning indeed came to Eastern Europe too early, but not because of insufficient computational capacity to draw adequate plans, but because of insufficient modernization of social relations, in the sense described by Max Weber in _Protestant Ethics and the Spirit of Capitalism_. If this diagnosis is correct, it further follows that capitalism that does develop modern social relations is a necessary pre-requisite for central planning, and socialism (shortcutting that will lead nowhere) - just like the Old Man had it.
Wojtek