Even if OGAS had worked as planned, it would have made no difference at all to the Soviet economic situation. Here’s why: the idea of OGAS was merely to enable slightly more efficient production. But so what? Without any way to signal real demand (which is the role of money in a modern economy) there’s no way to truly know what outputs are required, and of what quality. Hence in East Germany a Trabant would actually be less valuable than the value of the raw materials from which it was made — the world’s first large-scale example of a value-subtracting manufacturing process. Soviet goods were notoriously shoddy because without consumer signals to determine outputs, any old rubbish was satisfactory providing quotas were met. This is also, incidentally, why socialism also always fails when attempted at the level of national economics, and why socialist leaders always end up either (i) bankrupting their country, or (ii) back-peddling after a few years of economic catastrophe. Socialism, ironically, can only work in the presence of properly regulated markets (even Adam Smith never once argued for a totally free market approach, warning that such a thing would always lead to producers forming cartels to defraud customers). Marx was perhaps the world’s worst economist, as he couldn’t even come up with an adequate notion of value, never mind begin to grasp the realities of complex economic systems. No wonder Marxist states always have dire economic outcomes; North Korea and Venezuela are merely the most recent exemplars of this basic fact. The nations of the European Union took forty years to learn this truth, and sadly are now forgetting it all over again as mindless populism sweeps the world once more.

Anyone who enjoys my articles here on Medium may be interested in my books Why Democracy Failed and The Praying Ape, both available from Amazon.

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