State owned enterprises have embraced the capabilities of networked computers faster than expected, and many have begun implementing centralized control centers to coordinate production and distribution. This has resulted in some redundancies between these centers, which could potentially lead to wastefulness if left alone. However, this also presents opportunities for greater efficiency when they are properly integrated into each other. To facilitate this process, a series of interlocking committees have been established to integrate the operations of all such entities within a given sector. Each committee consists of representatives from both governmental agencies and private firms operating within its purview. They meet regularly to discuss how best to optimize the use of resources across the entire spectrum of activities within their respective sectors. In addition, they serve as a forum where problems encountered during the course of business can be discussed and resolved.
The first step toward integration involves establishing common standards for accounting procedures among participating companies. Once adopted, these standard practices must then be implemented uniformly throughout the industry. A second phase of integration requires the establishment of uniform pricing policies. Prices charged by individual producers must reflect costs plus a reasonable profit margin. If prices vary widely from firm to firm, consumers will tend to purchase goods from those offering the lowest price regardless of whether they offer better value. As a consequence, competition becomes unfairly distorted and consumer welfare suffers. Finally, once uniform pricing policies have been agreed upon, the next stage of integration calls for the development of joint marketing strategies. Such cooperation enables participants to pool advertising expenditure and thereby reduce unit cost per customer. It also permits the sharing of information about customers' needs and preferences.
Cyberneticization of the economy is not just a matter of replacing paper records with digital ones or automated record keeping with computerized processing. Rather, cybernetics means that the whole economic system is controlled through feedback loops. Cybernetics is based on the idea that the economy is like a machine whose parts interact with one another. For example, the demand for steel depends on the amount of machinery being produced; therefore, changes in output affect demand. Similarly, increases in demand for steel cause mills to increase capacity and hire workers who buy cars, thus increasing sales of autos. Thus, the economy is a complex web of interactions between people, organizations, and markets.
### 1980–2005
In the early 1970s, Soviet economists began to study the possibility of using microcomputer technology to solve certain economic problems. At the time, however, most Soviet scientists were skeptical about the feasibility of applying new technological advances to solving socialist economic problems. Nevertheless, several research projects were launched to investigate the possibilities of developing a national computer network. One project involved linking together a number of small computers (microcomputers) via telephone lines. Another project studied the possibility of connecting a group of microcomputers to a larger minicomputer. Both projects were eventually abandoned because of lack of funding.
By the late 1970s, the Soviets had developed a rudimentary computer network consisting of a handful of isolated local area networks (LANs). LANs connected various institutions, including universities, scientific institutes, factories, and military facilities. Although the network was primitive compared to modern Internet standards, it did provide a rudimentary form of e-mail service.
During the mid-to-late 1980s, the USSR began to implement a strategy aimed at creating a nationwide computer network. The goal was to link up all major industrial, educational, cultural, and defense installations. The effort was led by the Ministry of Communications and Information Technology, which coordinated the construction of a national backbone network. The network consisted of two types of nodes—mainline nodes and terminal nodes. Mainline nodes provided access to long distance trunk lines, whereas terminal nodes served end users. Terminal nodes included personal computers, printers, facsimile devices, and modems.
As part of the overall effort to create a national computer network, the Ministry of Communications and IT created a special department called Glavkompul. Its mission was to design and build a national computer network. Glavkompul was responsible for building the infrastructure necessary to connect the country's mainframe computers to the rest of the world. The organization was headquartered in Moscow and had regional offices located in Minsk, Tashkent, Alma-Ata, Novosibirsk, Vladivostok, and Yekaterinburg.
Glavkompul designed and built a national backbone network consisting of four fiber optic rings. Two of the rings ran north/south, and two others ran east/west. All four rings converged in Moscow. The network was used primarily for voice traffic, although it also carried some video and text messages.
To support the growing number of PCs, Glavkompul installed a variety of peripheral equipment, including laser printers, fax machines, and modems. Modems allowed users to dial directly into the network and communicate with remote sites.
Throughout the 1980s, the USSR continued to expand its computer network. During the same period, the United States was engaged in a similar effort known as ARPANET. Unlike the USSR, however, the U.S. never attempted to construct a national computer network. Instead, American engineers chose to focus on developing a global computer network.
