Economics is one domain in which

cybernetics Cybernetics is the transdisciplinary study of circular causal processes such as feedback and recursion, where the effects of a system's actions (its outputs) return as inputs to that system, influencing subsequent action. It is concerned with ...

has had application and influence.

In the Soviet Union

The

Great Soviet Encyclopaedia The ''Great Soviet Encyclopedia'' (GSE; , ''BSE'') is one of the largest Russian-language encyclopedias, published in the Soviet Union from 1926 to 1990. After 2002, the encyclopedia's data was partially included into the later ''Great Russian Enc ...

defines Economic cybernetics as a

scientific field The branches of science, also referred to as sciences, scientific fields or scientific disciplines, are commonly divided into three major groups: * Formal sciences: the study of formal systems, such as those under the branches of logic and mat ...

wherein

cybernetic Cybernetics is the transdisciplinary study of circular causal processes such as feedback and recursion, where the effects of a system's actions (its outputs) return as inputs to that system, influencing subsequent action. It is concerned with ...

approaches are applied to

economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...

. It facilitates a dialogue between

microsystem A microsystem is a self-contained subsystem located within a larger system. It generally constitutes the smallest unit of analysis in systems theory. Ecological systems theory Urie Bronfenbrenner uses the term in his ecological systems theory Ecol ...

s and macrosystems. The design of self-regulating control systems for a real-time planned economy was explored by economist

Oskar Lange Oskar Ryszard Lange (; 27 July 1904 – 2 October 1965) was a Polish economics, economist and diplomat. He is best known for advocating the use of market (economics), market pricing tools in socialism, socialist systems and providing a model of m ...

, cyberneticist

Viktor Glushkov Victor Mikhailovich Glushkov (; August 24, 1923 – January 30, 1982) was a Soviet computer scientist. He is considered to be the founding father of information technology in the Soviet Union and one of the founding fathers Soviet cybernetics. ...

, and other

Soviet cyberneticists Cybernetics in the Soviet Union had its own particular characteristics, as the study of cybernetics came into contact with the dominant scientific ideologies of the Soviet Union and the nation's economic and political reforms: from the unmitig ...

during the 1960s. By the time information technology was developed enough to enable feasible

economic planning Economic planning is a resource allocation mechanism based on a computational procedure for solving a constrained maximization problem with an iterative process for obtaining its solution. Planning is a mechanism for the allocation of resources ...

based on computers, the Soviet Union and eastern bloc countries began moving away from planning and eventually collapsed.

Project Cybersyn

Hayek

Friedrich Hayek Friedrich August von Hayek (8 May 1899 – 23 March 1992) was an Austrian-born British academic and philosopher. He is known for his contributions to political economy, political philosophy and intellectual history. Hayek shared the 1974 Nobe ...

attended the 1960

Symposium on Principles of Self-Organization The Symposium on Principles of Self-Organization was held at Robert Allerton Park#Allerton House .28The Farms.29, Allerton House on 8–9 June 1960. It was a key conference in the development of cybernetics and was in many ways a continuation of the ...

, organised by

Heinz von Foerster Heinz von Foerster (; November 13, 1911 – October 2, 2002) was an Austrian-American scientist combining physics and philosophy, and widely attributed as the originator of second-order cybernetics. He was twice a Guggenheim fellow (1956–57 and ...

. Hayek mentions cybernetics as a discipline that could help economists understand the "self-organizing or self-generating systems" called

markets Market is a term used to describe concepts such as: *Market (economics), system in which parties engage in transactions according to supply and demand *Market economy *Marketplace, a physical marketplace or public market *Marketing, the act of sat ...

. Being "complex phenomena", the best way to examine market functions is by using the feedback mechanism, explained by cybernetic theorists. That way, economists could make "pattern predictions". Therefore, the market for Hayek is a "communication system", an "efficient mechanism for digesting dispersed information". The economist and a cyberneticist are like gardeners who are "providing the appropriate environment". Hayek's definition of information is idiosyncratic and precedes the information theory used in cybernetics and the natural sciences. Finally, Hayek also considers

Adam Smith Adam Smith (baptised 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the field of political economy and key figure during the Scottish Enlightenment. Seen by some as the "father of economics"——— or ...

's idea of the

invisible hand The invisible hand is a metaphor inspired by the Scottish economist and moral philosopher Adam Smith that describes the incentives which free markets sometimes create for self-interested people to accidentally act in the public interest, even ...

as an anticipation of the operation of the feedback mechanism in cybernetics. In the same book, ''

Law, Legislation and Liberty ''Law, Legislation and Liberty'' () is a work in three volumes by Nobel laureate economist and political philosopher Friedrich Hayek from 1973 to 1979. Background ''Law, Legislation and Liberty'' is a book by Hayek that was written from 196 ...

'', Hayek mentions, along with cybernetics, that economists should rely on the scientific findings of

Ludwig von Bertalanffy Karl Ludwig von Bertalanffy (19 September 1901 – 12 June 1972) was an Austrian biologist known as one of the founders of general systems theory (GST). This is an interdisciplinary practice that describes systems with interacting components, app ...

general systems theory Systems theory is the transdisciplinary study of systems, i.e. cohesive groups of interrelated, interdependent components that can be natural or artificial. Every system has causal boundaries, is influenced by its context, defined by its struc ...

, along with information and

communication theory Communication theory is a proposed description of communication phenomena, the relationships among them, a storyline describing these relationships, and an argument for these three elements. Communication theory provides a way of talking about a ...

and

semiotics Semiotics ( ) is the systematic study of sign processes and the communication of meaning. In semiotics, a sign is defined as anything that communicates intentional and unintentional meaning or feelings to the sign's interpreter. Semiosis is a ...

Towards a New Socialism

A proposal for a "New Socialism" was outlined by the computer scientists

Paul Cockshott William Paul Cockshott (born 16 March 1952) is a Scottish academic in the fields of computer science and Marxist economics. He is a Reader at the University of Glasgow. Since 1993 he has authored multiple works in the tradition of scientif ...

and Allin Cottrell in 1995 (

Towards a New Socialism ''Towards a New Socialism'' is a 1993 non-fiction book written by Scottish computer scientist Paul Cockshott, co-authored by Scottish economics professor Allin F. Cottrell. The book outlines in detail a proposal for a complex planned socialist ...

), where computers determine and manage the flows and allocation of resources among socially owned enterprises.Allin Cottrell & W.Paul Cockshott
''Towards a new socialism''
(Nottingham, England: Spokesman, 1993). Retrieved: 17 March 2012.

References

{{Authority control Cybernetics Economics