Eagle, I don't want to form an alliance anymore.

The Soviet Union turned a blind eye to this.

The UK strongly protested, but it was inconvenient to say so directly, because NATO's firewall was theoretically designed to prevent the ideological infiltration of the Warsaw Pact!

If it's publicly acknowledged that the destination of a large amount of citizens' circumvention traffic is pornographic websites, then the entire narrative of "building walls to protect democracy" becomes ridiculous. Heseltine would find it difficult to say in Parliament, "We need to strengthen the firewall because British citizens are using it to access pornography in Hungary," as this would instead spark a debate about civil liberties, making the firewall policy even more unsustainable.

Therefore, Britain and other countries could only vaguely protest Hungary's cultural export, while the official Soviet position on this was:

"Hungary's internal legal affairs are decided by Hungary itself, and the Soviet Union does not interfere in the internal affairs of its brotherly countries."

Why aren't we talking about Brezhnevism now? Didn't the Soviet Communist Party also not legalize the sex industry? Why aren't we using force to bring our brotherly country back on the right track now?

This was the time when Heseltin showed the most support for Comrade Brezhnev.

Soviet cybersecurity authorities had noticed that a large amount of traffic from users bypassing NATO's firewall was destined for servers in Budapest, and that while these users were browsing various special content, they were also beginning to access other information on the Warsaw Pact internet—news, forums, and social discussions.

Pornographic content is the entrance to the traffic funnel, while ideological infiltration is the exit.

In August 1994, the number of IP addresses in Austria officially exceeded 9 million, surpassing the population of Austria.

Chapter 134 National Consumer Reservation System 1.0 Launched

In September 1994, President Gepphardt convened a special congressional hearing, hoping that Congress would increase the internet budget to strengthen America's competitiveness on the internet and defend its ideological ground.

Congress took this very seriously, because the Warsaw Pact's ideological infiltration of the internet had been keeping the Onsah officials up at night. The US Congress quickly passed a budget of over $50 billion for internet construction over the next year.

During this period, Soviet hackers virtually swept through NATO countries, and data was secretly stolen from the servers of many research institutions. A scandal also broke out at the Pentagon earlier:

The United States modified a large number of Soviet PS1 cores to run simulation data on servers. To save time, the military technicians did not completely uninstall the DEMOS system that came with the Soviet PS1 and install the American system instead. After all, the Soviet DEMOS system was far superior to the MS-DOS system, the mainstream operating system in the United States at the time, in terms of both software compatibility and user experience.

At this time, Microsoft was still catching up with the Soviet Union. Just last month, it released Windows 3.2, which was modeled after the Soviet DEMOS system. However, the mainstream operating system in the international market was already the Soviet DEMOS system.

Thus, Pentagon technicians installed American testing software on the PS1's built-in DEMOS system and ran simulations. Coincidentally, the Soviet Union had recently open-sourced the world's first search engine, "Satellite," so the Americans secretly installed the Satellite search engine on their computers to study it.

To make it easier for NATO internet users to bypass internet restrictions, the Soviet Union equipped its satellite search engine with the ability to access the Warsaw Pact internet through proxy servers in neutral countries. Pentagon technicians used it for only a few days before it was discovered by Soviet cyber security forces. The Soviet cyber security forces directly hacked into the Pentagon using a backdoor in the DEMOS system and used the satellite engine installed on the server to access top-secret documents hidden on the server.

It took the Soviet Union almost two months to be discovered by the Americans. The Pentagon's cyber security forces noticed that network traffic increased at night, with data packets frequently being sent to other regions. After careful investigation, the Americans discovered that Soviet hackers had been secretly downloading their data. In those two months, the Soviets had intercepted all of the US military's wind tunnel data and many test data of the F-22 fighter jet.

Fortunately, the Americans had a backup plan and didn't rashly put all the top-secret documents on their computers, otherwise the Soviet Union could have easily taken them all.

So in October, having learned from its mistakes, the US military adopted the domestically developed search engine "Yahoo!" and the domestically developed operating system Windows 3.2, and incidentally, was forced by the Soviet Union to develop the good habit of physically disconnecting servers from the internet.

President Gephard also said at a congressional hearing that Soviet systems and browsers had backdoors and that the data of citizens of the free world would be stolen by evil communist terrorists. He then banned the Soviet DEMOS system and Soviet software in the country and forcibly promoted the Microsoft domestic system.

This move didn't cause much of a stir internationally. Neighboring Britain is practically a 1984 Oceania, so how could the citizens of the free world not know who stole their data?

The international forum also saw some new topics arising from the US attempt to forcefully promote Microsoft systems and browsers within NATO:

How should we evaluate the phenomenon that the US successfully developed its own technology after the Soviet Union made it open source?

"Would capitalism stagnate if communism hadn't been the source of its open source?"...

However, just when everything was thriving, the international situation suddenly changed, and the Soviet Union's production and consumption system fell into chaos, causing the entire Council for Mutual Economic Assistance (COMECON) to worry about the accident that had occurred in its Big Brother.

------

This story begins in July 1994.

Moscow Kremlin in July

On this day, the Ministry of Electronics and Information Technology sent a proposal to Slava:

Feasibility report on piloting the “National Consumer Reservation System” using the World Wide Web platform.

The core idea of ​​the report was to move the consumer goods planning and scheduling function to the Internet, allowing Soviet citizens to pre-order consumer goods online through the World Wide Web.

After reading the report, Slava thought it was very promising. It was e-commerce, something he was familiar with! So he called in Boris Malinowski, the Minister of Electronics and Information Technology.

"Is it feasible enough for us to do this now?" Slava asked.

Boris Malinovsky was the successor to Viktor Grushkov, the father of the Soviet OGAS system, at the Kyiv Institute of Cybernetics. After Grushkov's death from a cerebral hemorrhage in 1982, he took over his mentor's work. Following Slava's rise to power and the implementation of a major informatization initiative, he was highly regarded and appointed Minister of Electronics and Information Technology at the central level, responsible for the Union's informatization efforts.

Malinowski thought for a moment and replied:

"Comrade General Secretary, the Alliance's consumer goods allocation currently operates as follows: stores and supply and marketing cooperatives in various regions upload their inventory data to the regional information center, and the regional computing center predicts demand based on inventory and historical consumption data and then issues production instructions to the factories."

Currently, we've got the system adjusting production orders to a frequency of once a month, which is a huge improvement over ten years ago. Back then, production targets were often set by the central government on a whim based on inflated statistics reported by local governments each year. Things are so much better now!

"But many of our colleagues in our ministry believe that this is not enough!"

The problem with this system is that we're not predicting real demand. We guess how many pairs of shoes and coats we'll sell next month based on data from the same period last year and data from regional supply and marketing cooperatives. But guessing is guessing—we're wrong when the weather changes, we're wrong when fashion trends change, and we're wrong again when the economy of a certain republic improves and people want to buy better things.

What if we let consumers tell us what they want?

Malinowski explained his plan.

He created a platform on the World Wide Web, which he called the "National Consumer Reservation System." Soviet citizens could log on to this platform via the internet, browse a catalog of consumer goods ranging from clothing and appliances to furniture, and select the items they wanted to place a reservation.

The reason why only non-essential items are currently being listed is that the Soviet Communist Party has already solved the problem of essential goods. All regions can fully ensure a continuous supply of basic materials such as bread, salt, and sugar, and everyone can use them. Therefore, there is naturally no need to put these items online.

His plan was that once the system received a pre-order, it would transmit the demand data back to the computing center in real time. The computing center would then dynamically adjust the production plan based on the actual, real-time consumer demand, informing the factory how many pairs of shoes to produce that week, what style, what size, and where to ship them.

"While information technology can certainly solve the transparency problem, to understand real needs, we should just ask consumers directly, let them tell us what they want, and then we'll produce that!"

In theory, this would solve the problem of queues in the Soviet command and planning system that had plagued the country for decades.

Slava knew that Malinovsky wanted to make a name for himself; he was a pure technocrat who wanted to prove Grushkov right—a point that no proof was needed—while also wanting to surpass his teacher.

Malinovsky did not like being seen as "Grushkov's disciple"; he wanted to explore new avenues based on his teacher's teachings.

Grushkov died at the age of 58. He had spent many years traveling between Moscow and Kiev, enduring immense political pressure, and was ultimately forced to bury his dreams.

He was lucky; his superior was Ivanov, not Brezhnev. He had better opportunities and a broader platform than his teacher, and he was determined to realize his dream!

Slava carefully considered the feasibility of this plan.

Having served as General Secretary for seven years, he is well aware that the root cause of the current shortages in the planned economy is not that a certain commodity is not being produced, but that demand exceeds supply at a given price.

The government-mandated low prices encouraged consumer demand, causing it to exceed existing supply capacity. This was a structural characteristic of the Soviet Union's "shortage economy": frequent, intensive, chronic, and widespread, occurring in almost all sectors of the economy.

This phenomenon does not exist under a market economy system, because the market can achieve a relative balance between supply and demand by raising prices to curb demand. Therefore, the argument that there is a lack of goods in a market economy will not arise.

A planned economy lacks goods because the government genuinely wants everyone to be able to afford them; a market economy doesn't lack goods because it can raise prices to the point where you can't afford them.

Solving your needs doesn't mean providing you with what you want; eliminating your needs would also be considered a solution.

Think more about your own problems, instead of always blaming the country for not providing you with what you want. It's your own lack of effort that's the issue! Don't just raise questions, be the one who solves them!

Before Slava came to power, the Soviet Union's shortages had three main causes:

The first layer is the information problem—the central government doesn't know what consumers across the country actually want, where they want it, or how much they want. The channels for transmitting planning directives from top to bottom, and for feedback on grassroots needs from bottom to top, are extremely slow and distorted. Factories, in order to meet planned targets, will exaggerate production and conceal inventory; bureaucrats in the middle will inflate figures at each level for personal gain and rent-seeking; and at the top, decisions are made on a whim, disregarding scientific indicators.

The second issue is pricing—goods are sold at a fixed price, and they are not available everywhere. Some goods are sold at a loss, and since adjusting prices cannot regulate supply and demand, queuing becomes an alternative rationing method to the pricing mechanism.

The third layer is the incentive problem—factories have no incentive to increase production efficiency because profits go to the state, and producing more doesn't mean earning more. The soft budget constraint under the planned economy meant that loss-making enterprises wouldn't go bankrupt, and profitable enterprises couldn't expand on their own.

The second issue, pricing, was fundamentally difficult to resolve under a planned economy, unless the Soviet Union could eventually ensure that the vast majority of goods met the needs of its citizens. The third issue is being gradually addressed through Slava's reforms in recent years, aiming to incentivize enterprises to research and improve processes while preventing profit-driven motives from taking precedence.

Slava's information technology reforms in recent years are addressing the problem of information asymmetry. Previously, the planning department didn't know what the people actually wanted; it could only guess. If it guessed correctly, everyone was happy; if it guessed wrong, the absurd scene would occur where warehouses were piled high with unsold goods while people lined up in line to buy what they wanted.

OGAS now improves forecast accuracy by collecting sales and inventory data from various locations. However, data is ultimately lagging—the system collects consumer behavior that has already occurred, not consumer intentions that are about to occur.

If this "National Consumption Reservation System" succeeds, it will be equivalent to directly integrating consumers' wishes into the production decision-making chain!

Consumers place orders on the front end → OGAS schedules production on the back end → factories produce according to orders → logistics delivers to consumers.

This was the ultimate goal of the Soviet Union's computerized planned economy, which was based on cybernetics—perfect planning under perfect information conditions.

Perhaps the day it is realized will be the day when the Soviet Union takes a half-step into a communist society in terms of material life.

"Can our existing information infrastructure execute your plan?" Slava asked.

"It should be feasible. We have already mastered the platform technology of the World Wide Web, and the back-end scheduling system of OGAS can be connected. The logistics and distribution channels—the postal system and the railway network—are also readily available."

"So, my dear Comrade Malinovsky, what are the risks?"

Malinowski hesitated for a moment.

"I think the biggest risk is the volatility of demand data after the system goes live," he said.

“Currently, OGAS’ production planning is based on historical data. Once real-time consumer demand is integrated, I believe the volatility of demand will be much greater than that of historical data.”

Consumer behavior is volatile—this trend is popular today, that trend is popular tomorrow; a news item or a forum post can cause a surge or plunge in demand for a particular product.

“I understand,” Slava said. “The system may not be able to keep up with the pace of changes in real needs.”

"It's even more serious than that; it might... cause oscillations."

Oscillation is a cybernetics term.

When a feedback system overreacts to changes in the input, the output will swing wildly around the target value—like a novice driver swerving on the highway, turning too far to the left and then correcting to the right, and then turning too far to the right and then back to the left, resulting in the car becoming increasingly unstable and eventually overturning.

"Can it be solved?" "Theoretically, yes, by adjusting the algorithm's response parameters, increasing damping, setting buffers... but these adjustments require actual operational data for calibration."

We had never tried this before, and none of us knew what the parameters should be set to.

Moreover, who can guarantee that our current demand data is accurate? We are at the very top of this country, and the consumption demand data of more than 3 million people in the entire alliance is currently obtained through local supply and marketing cooperatives and state-owned stores. Who knows if the grassroots data is accurate?

The sales clerks in state-run stores controlled the power to allocate supplies. They could use back channels and falsify demand to maintain their control over resources. Layers of bureaucrats still sought to engage in rent-seeking, and there were even special stores for cadres, like the "Little Birch Tree"...

Comrade General Secretary, if I may be so frank, the variables currently hindering the OGAS system from meeting real needs are more related to the state apparatus. Your reforms will one day put you in opposition to the bureaucrats, who have been using this system for personal gain for decades. We want to stop them from sucking the lifeblood out of the state.

Malinovsky became more and more agitated as he spoke, saying that it was this damned, corrupt, and bloated system that buried Grushkov's dreams!

“Comrade Minister, now is not the time to talk about this.” Slava patted Malinovsky on the shoulder.

This is why Malinowski was a technocrat rather than a politician, and this is why Slava admired him.

"Only by taking down our biggest external enemy can I have the necessary resources to deal with the cancer that is ingrained in this country. We'll talk about that later."

"Yes, Comrade General Secretary." Malinowski expressed his understanding and saluted Slava.

Slava then gave the order:

"Let's start with a pilot program. We'll see how it goes in Moscow and Leningrad. If the pilot is successful, we'll expand it further."

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

The pilot program was launched on August 20, and the results were unexpectedly good.

Internet users in Moscow and Leningrad (the two cities with the highest internet coverage) flocked to the website of the "National Consumer Reservation System." The interface was very simple, just a directory categorized into clothing, home appliances, daily necessities, furniture, etc., with each item having a description and a picture, although the pictures loaded very slowly.

After selecting your items, click the "Book Now" button to withdraw money from your electronic account, and finally enter your shipping address to complete the process.

Consumers are happy because they no longer have to queue at stores. No more going to the store, waiting in long lines, only to find the item is out of stock. They can order online, the system tells them the estimated delivery time, and then they just wait for the delivery person to bring it to their door.

The factory was also happy because they no longer had to guess. OGAS directly told the factory what the orders were for the week, and the factory simply produced. There was no need to worry about not being able to sell the produced goods, because production was based on batch orders; nor was there any need to worry about producing too little to meet demand, because the orders accurately reflected the actual needs.

For the first two weeks of the pilot program, everything seemed to be going very well.

Then the news spread, and not only in Moscow and Leningrad, but throughout the Soviet Union, netizens heard about the system. Forum posts exploded:

"Did you hear? You can buy things online now! No need to queue!" "Is that really true? Are there any in Leningrad or Moscow? Can you order for me? I really don't want to queue!"

"I'm speechless! We don't even have many internet access terminals in our remote areas, and here we can already shop online!" "But as far as I know, the Soviet Union only had about 600 million internet users. What about the remaining 3 million people...?"

In early September, Slava, perhaps blinded by the positive data from the pilot program, or perhaps harboring wishful thinking because the internet had never had an accident before, made a decision that he later admitted was too hasty: to end the pilot program ahead of schedule and roll it out throughout the Soviet Union.

On September 5, the "National Consumption Reservation System" was opened to users throughout the Soviet Union.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

Unsurprisingly, it crashed.

The server crashed, and more than a dozen additional computing centers were added on the day of the reopening to allow users to log in. But the worst part was that the production system crashed.

Not only were internet users across the Soviet Union interconnected, but the entire Warsaw Pact network was also interconnected. Many businessmen from NATO and neutral countries sensed the business opportunity and began to commission others to place large orders on the system.

After all, prices were low in the Soviet Union, but the same goods would be priced very differently in the international market where prices were regulated. The huge profits in between could make capitalists risk their lives to participate in smuggling!

Massive amounts of demand data flooded into OGAS's central computing center. Malinowski's fears came true—the volatility of demand far exceeded the design capacity of the OGAS algorithm, and due to the large number of orders placed by COMECON countries and neutral countries, the system's perceived "real demand" increased by 700% in just a few days!

A shoe factory in the suburbs of Moscow received an order for 600 pairs of shoes from the system in one week. This number is about the same as its usual production capacity, and the factory is operating normally.

Then the following week, the system sent an order for 7,000 pairs of shoes, and everyone stared at the week's targets with wide eyes.

Back when the Uzbekistan cotton scandal occurred, the central government's quota was 6 million, while the local actual production capacity was only a little over 3 million. Secretary Rashidov worked tirelessly to meet the quota, but now the factory is facing orders that exceed its production capacity by several times!

What?

The factory's Party Committee and the factory's Soviet held an emergency meeting. Everyone felt that this was too outrageous and impossible to complete. So someone went to find out why. Two days ago, there was a hot post on the forum. Someone posted "I recommend these boots. They are very comfortable to wear." The post went viral for some reason (it was later found that the poster had been paid to advertise). Tens of thousands of people flooded the reservation system within a few days to pre-order the same boots.

Agents in COMECON countries and neutral countries see this as a good opportunity. After people place orders online, the system will provide a tracking number after a period of time, indicating the order's position in the production batch and the estimated production time.

These agents indirectly learned about the demand from the OGAS system through forum surveys and by constantly placing and canceling orders, and then started production themselves, attempting to sell to the Soviet Union and make a fortune.

It must be said that as long as there is enough profit, businessmen will use their brains to come up with amazing ideas.

Clearly, there was never just one such clever person. More and more European agents realized that they could sell goods to the Soviet Union in this way, which greatly increased the pressure on the system.