麻豆传媒

IN THE summer of 1959, Sokolniki Park in Moscow played host to a glitzy exhibition showcasing the shiniest of American capitalism. It was supposed to be part of a cultural exchange programme. But on the opening day, the only things being swapped were thinly veiled barbs.

As Vice-President Richard Nixon and Soviet leader Nikita Khrushchev shuffled past gleaming cars and model kitchens featuring dishwashers and TV dinners, they couldn鈥檛 help themselves. Nixon bragged about higher standards of living in the US. Khrushchev pointed out that the average American couldn鈥檛 afford any of this stuff and, besides, the average Soviet citizen would have it all before long. Then he made a promise: 鈥淲hen we catch you up, we will wave to you as we pass you by.鈥�

These days, we associate the Soviet era with bleak images of scarcity and repression: empty shelves, endless bread lines and remote Siberian labour camps. But in the late 1950s and early 1960s, there was a genuine conviction in the USSR that communism would bring prosperity and plenty. In 1957, according to official figures, the USSR鈥檚 gross domestic product was growing faster than the GDP of almost every other nation on the planet, including the US.

Soviet citizens began to move into new apartments with private bathrooms. Some were even splashing out on fridges, radios and televisions. And yet even as Khrushchev was making bold promises, Soviet managers knew that these gains in living standards and growth rates disguised the fact that productivity was low and stagnant, and the economy hugely inefficient. Khrushchev understood that if the Soviet Union were to 鈥渃atch up and overtake鈥� the US, new ideas were sorely needed.

A mathematician called Leonid Kantorovich had answers, if only the authorities were prepared to listen.

Born in St Petersburg in 1912, Kantorovich鈥檚 earliest memories were formed by the Bolshevik revolution, which left his family destitute. He entered the maths programme at Leningrad State University when he was 14, had research published within two years, and was made a full professor in 1934, aged 22. However, in 1937, with German fascism looming large, he vowed to focus on more practical matters. So he was only too happy to help when the plywood industry asked him how it might maximise productivity.

Plywood, like everything else in the USSR, was part of the planned economy. At its heart was Gosplan, the state agency that translated the broad objectives laid down by politicians into specific national plans. No one within Gosplan, or indeed the USSR, was in any doubt that communism was morally superior. But without a market to balance supply and demand, how should planners set targets and prices? The plywood producers wanted to know if there was any way to decide targets that took into account all of the variables involved, such as transportation of raw materials, the number of workers required, and so on.

Kantorovich came up with a solution that contained the fundamentals of what we now know as linear programming 鈥� a way of applying geometry to problems with multiple variables and extracting the optimum strategy. It involves depicting the problem as a multidimensional geometric shape, with each dimension representing one of the variables. The optimum value of the thing you want to know 鈥� how much raw material to use, say 鈥� invariably lies on one of the corners of that shape, immediately reducing the problem to something solvable.

Kantorovich realised that his method would work not just for plywood, but for any problem with multiple variables. What鈥檚 more, he was convinced it could optimise the workings of whole industries or regions, or even the entire national economy. He set out his 鈥渕ethod for resolving multipliers鈥� in a 1939 booklet, The Mathematical Method of Production Planning and Organisation, and sent the proposals to Gosplan, certain of his idea鈥檚 worth.

The agency ignored him 鈥� probably suspicious of a scheme that appeared to contradict the Marxist principle that value was determined by workers鈥� labour rather than geometry. Undeterred, Kantorovich found time during the war years to continue with what he called his 鈥渄eliberations in the realm of economics鈥�, developing his ideas into a book. After the war, he was pleased to be able to employ his methods to optimise the use of steel sheets at the Leningrad Carriage-Building Works, later reporting proudly that he had managed to save raw material.

Yet the authorities remained hostile to the very idea that maths could be applied to economics. In Kantorovich鈥檚 words they 鈥渕et the new methods guardedly鈥�. This was diplomatic: the truth is that pushing his seemingly anti-Marxist ideas too hard could have placed him in harm鈥檚 way.

Times changed, though, after Stalin died in 1953. The American National Exhibition in Sokolniki Park was one part of what is now known as Khrushchev鈥檚 thaw, a relaxation of repression and censorship, and a greater openness towards the West.

In this environment, mathematical economics was no longer seen as dangerous. Kantorovich was given permission to open a lab at the University of Novosibirsk in Siberia to work with the newly created Central Economic Mathematical Institute in Moscow. At the opening ceremony, Kantorovich even felt emboldened to criticise mainstream Soviet economists for their aversion to optimisation and other mathematical methods.

Through the 1960s, mathematical methods became more mainstream. But by then, the Soviet Union was in no state to benefit from optimal planning. In a planned economy, the idea is that everyone sticks to the plan. In reality, factory managers cooked the books to 鈥渉it鈥� targets and workers didn鈥檛 blow the whistle for fear of reprisals.

The Soviet economy was riddled with deep, dark recesses that would confound the cleverest mathematical formulae. Political leaders were not about to implement recommendations based on optimal planning either. For instance, no one was prepared to close down an inefficient factory simply because some calculations said so.

So the truth is linear programming was never substantially incorporated into Gosplan鈥檚 methods, says Robert Service, a Soviet historian at the University of Oxford. Yet it would be a mistake to cast Kantorovich as a failure, because his work really did change the world.

He was unknown in the West until an English version of that first booklet was published in 1960. In the meantime, American mathematician George Dantzig, who was charged with improving the logistical efficiency of the US Air Force during the war, arrived at a strikingly similar solution. Dantzig went further, developing linear programming methods into a series of mathematical instructions known as the simplex algorithm. This soon proved itself the smoothest and most powerful of problem-solvers.

鈥淭hough the authorities ignored him, his work really did change the world鈥�

Unlike their Soviet counterparts, capitalist captains of industry were only too happy to adopt it. Gulf Oil was one of the first to benefit, using the algorithm to find the perfect blend of petroleum products for a high-octane aviation fuel. Since then, the simplex algorithm has been put to work pretty much everywhere you look 鈥� and in lots of places you don鈥檛. You could say it is the algorithm that runs the modern world.

The Soviet Union never came close to catching up with America, let alone overtaking it. But Kantorovich鈥檚 contribution did not go unnoticed: for his co-discovery of linear programming, he received a share in the 1975 Nobel prize in economics. That was welcome reward for a man who had always hoped his work would be useful.

This article appeared in print under the headline 鈥淭he great Soviet rescue plan鈥�