Nikolai Veduta – a Soviet pioneer of introducing AI in economic planning

The book “Digitalization of economic planning” by N. I. Veduta is being prepared for publication.  The cybernetic approach”. We introduce our readers to the abstract and reviews of the publication

The crisis of 2020 was a turning point that revealed the inability of profit-maximizing capitalism to solve economic, social, and environmental problems. In this regard, the attention of the scientific community and the public is attracted by the alternative planned experience of the USSR and the reasons that prompted the USSR to abandon it. To understand what is happening today, we need to go back to the early 50s of the last century, when there were problems of rebuilding the Soviet economy from the military rails and increasing the flexibility of planning for increased production volumes and complicated production relationships. At the same time, in the 50s, a vicious theory of commodity production under socialism emerged. The followers of this theory  saw the future of the country in granting more and more rights to businesses, considering it as democracy. They were opposed by the movement of professional production organizers, who saw the huge potential of cybernetics (the creation of artificial intelligence (AI)) to manage the economy. Today, without the creation of such an automated control system (AI), the implementation of those global tasks, which the President of the Russian Federation speaks  about today, is impossible.

In 1961, the Central Research Institute was established in Minsk under the leadership of the cybernetic scientist a corresponding member N. I. Veduta, who, like the Institute of Cybernetics of the Academy of Sciences of the Ukrainian SSR and the CEMI of the Academy of Sciences of the USSR, faced the same tasks in the field of economic and mathematical modeling and control automation. The main success of N. Veduta was the development of a dynamic model of intersectoral balance by the method of successive approximations, which serves as the core of the automated control system (AI) to improve the efficiency of management decisions.

Today we have entered a decade of technological acceleration and competition of natural intelligences to create AI. Copying Western AI preemptively condemns us to defeat in this third undeclared world war. The solution lies in the digitalization of economic planning based on the cybernetic approach, which develops our unique experience of economic planning by the method of sequential approximations. Today, more than ever, it is necessary to “unlock” the cybernetic approach of N. I. Veduta to the digitalization of economic planning. For this purpose, the book “Digitalization of economic planning. Cybernetic approach“, consists of three parts. The first part contains his book “The economic efficiency of new technology”. In it, special attention is paid to the modeling of the iterative process (the method of successive approximations) of the coordination of planned calculations, simulating the practice of planning in the USSR and justifying the choice of effective technological methods of production. This study was the basis for a qualitative transformation of the econometric model of V. Leontiev “input – output” into the dynamic model of intersectoral balance, which meant, in essence, the birth of a new science – economic cybernetics.  The principles of economic cybernetics in building a dynamic model of intersectoral balance are described in N. I. Veduta’s  book “Economic Cybernetics”, which is presented in the second part.  The third part contains the latest book by N. Veduta “Socially efficient Economy”, which synthesizes all his research in the field of building AI for managing the economy in the direction of increasing the quality of life.

To the contest commission for the competitive selection of applications from publishing organizations for the provision of subsidies for the publication of socially significant literature in 2021.

“We ask you to include in the support program  for the publication of socially significant literature for 2021, dedicated to the 60th anniversary of the founding of the Central Research Institute of Technical Management (TSNIITU), the book “Digitalization of economic planning. The Cybernetic Approach” by the famous Russian cybernetic economist N. I. Veduta, who was the founder and first director of this institute.

The economic crisis we are observing is caused by objective long-term patterns of cyclical economic development, changes in technological and world economic structures. This crisis is so deep that the leaders of Western public opinion are already shouting either about the “end of capitalism” or about a radical change in the development model. But what will this new model be like? The notorious “market mechanism” of self-regulation of the economy is not able to perform the most important functions for human life and prosperity – the distribution of resources by industry and market, the regulation of market prices, the balancing of supply and demand, etc. In the conditions of the “invisible hand of the market”, the model of gradual transition from low-tech industries, which for a significant number of developing countries are the main weapons of war on the fields of the world economic war, to higher, technological levels will not work either. The planning economy  should replace the economy of the market. The economic growth that is observed today in China, India, and Indonesia is the result of the functioning of national planning institutions.

The return to the basics of correct, “live” planning is the work of the Soviet economist-cyberneticist, a man who managed to scientifically generalize the practice of economic planning in the USSR and create a dynamic model of intersectoral balance, which serves as the basis for economic harmonization of the activities of all sectors of the economy to increase the quality of life. The legacy of N. I. Veduta, expressed in the collection of his works, is the algorithm, meaning and ethics of the planned economy, new ideological, methodological and instrumental approaches to the problem of planning the development of the national economy.

It is worth noting that there are currently almost no training courses, programs, and textbooks on economic cybernetics. And we are very lucky that this collection covers more or less fully the whole range of issues related to this science. This book can serve as a textbook for training Russian cybernetic economists with knowledge of planning taking into account global trends in world economic development. Of course, the publication of this work will serve to restore the Russian economic school” – Deputy Head of the Department of Economic Theory of the Financial University under the Government of the Russian Federation, Doctor of Economics, Professor Sergey Tolkachev.

“I ask you to consider the possibility of including the book by the famous Russian economist-cyberneticist N. I. Veduta “Digitalization of economic planning. Cybernetic Approach” in the program of support for the publication of socially significant literature for 2021., the publication of which is dedicated to the 60th anniversary of the founding of the Central Research Institute of Technical Management (TSNIITU), the founder and first director of which was N. I. Veduta.

In the twenties of the twenty-first century, as eighty years ago, humanity again faces a difficult choice: to change the existing system of industrial relations through the implementation of the national sovereignty of the state, ensuring the growth of the quality of life and the comprehensive development of the individual, or to maintain the current system through higher coordination of the activities of transnational corporations (TNCs). The coming digital revolution creates opportunities both for the realization of national sovereignty in the interests of people, and for increasing the degree of coordination of the activities of TNCs to establish total control of society, the suppression of the individual.

The beneficiaries of the established world order in the interests of TNCs, in contrast to their critics, occupy a leading position. One of the main reasons for their leadership is that their critics are unable to offer society clear algorithms that design a better future for humanity using the achievements of the digital revolution.

The publication of the works of the Soviet cybernetic economist N. I. Veduta opens up an opportunity to construct an alternative to the strategy of the World Economic Forum to reset the economy on the basis of inclusive capitalism, which transfers total power to TNCs with the suppression of the individual. The dynamic model of intersectoral balance (MIB) developed by him allows creating artificial intelligence to increase the efficiency of management decisions in the economy for the mankind to enter the growth trajectory of the public good, the comprehensive development of the individual. In his works, he develops the method of successive approximations for drawing up a plan for the proportional development of the economy, including in this process feedback on the information of equilibrium prices in the consumer market and the choice of effective technological methods of production to replace the old technological methods of production. The books, in fact, set out the principles and algorithms for building artificial intelligence to improve the quality of management decisions in ensuring the development of the economy in the direction of improving the quality of life, comprehensive personal development.

His first two books were written in the era of state economic planning, when the state was faced with the task of automating the management of the economy to improve people’s lives. The last book summarizes the first two. In it, the author justifies the reasons for the loss of the Soviet planned economy to the market economy, and concludes with a statement of the principles and algorithms for planning a mixed economy in the interests of citizens. Therefore, today, in the conditions of competition of artificial intelligences of states, the works of N. I. Veduta can become a kind of alphabet for the introduction of artificial intelligence in the economy, allowing Russia to design its future and become the author of a new global project that competes with the project of inclusive capitalism of the Vatican.

The publication of the book will certainly contribute to improving the level of economic knowledge and the effectiveness of using the achievements of the digital revolution to strengthen the national sovereignty of Russia” – Corresponding Member of the Russian Academy of Sciences, Chief Researcher of the CEMI RAS, Doctor of Economics, Professor Viktor Dementiev.