The country's socialist government invited British cybernetician Stafford Beer to help design a computerized system capable of coordinating the entire national economy. The project was called Cybersyn.

Factories across Chile would send production data to a central network. Government planners would monitor the economy from an operations room equipped with screens and dashboards. With enough information and computing power, planners hoped they could rationally direct economic activity.

The project reflected a long-standing dream among advocates of socialism: that a sufficiently advanced system could plan economic life more efficiently than markets.

But Cybersyn never solved the problems it was meant to address.

During the early 1970s, the Chilean government imposed price controls on thousands of goods while expanding state control over industry. Shortages multiplied, black markets expanded, and economic coordination deteriorated. Political instability soon followed, culminating in the military coup of 1973.

At first glance, the lesson seemed clear: central planning could not replicate the complex coordination performed by markets.

And yet the idea never completely disappeared.

The New Case for AI Planning

Recent advances in artificial intelligence have revived an old argument. If earlier socialist planners failed because they lacked sufficient computing power, perhaps modern algorithms could finally solve the problem.

Some contemporary writers have openly suggested this possibility. In 2019, Jacobin magazine published an article titled "Yes, a Planned Economy Can Actually Work," arguing that large datasets and powerful algorithms might overcome the classic socialist calculation problem.

Some economists have even entertained the idea. Before receiving the Nobel Prize, Daron Acemoglu remarked that advances in artificial intelligence could make central planning more plausible, suggesting that corruption might be the main obstacle rather than feasibility itself.

At first glance, the argument sounds persuasive. Artificial intelligence can process enormous quantities of information at incredible speed. Modern computing power dwarfs anything available to earlier generations of planners.