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Almost immediately after Allende won the election in 1970, the government of Chile sought to resolve the country’s economic problems by nationalising the major industries and putting more money in circulation. It successfully managed to increase wages and employment substantially and the economy grew. But as inflation increased, so did the list of companies the government nationalised, and these became harder to manage. Matters worsened after Allende sent ‘interventors’ to manage the nationally-owned factories and workplaces, as many interventors were incompetent, corrupt, and largely no different to the management they replaced. The government soon found a smarter way of stabilising and controlling the economy.

It was in 1971 Stafford Beer received a request for help from Fernando Flores, a general technical manager appointed by Allende, who was familiar with Beer’s development of a science he called ‘management cybernetics’. Beer and a circle of technicians selected by Flores, started designing a hardware implementation of Beer’s Viable Systems Model of organisation, which they called CyberSyn (Cybernetic Synergy). This would be a network consisting of a mainframe, analytics software, and roughly 500 telex terminals to manage the nationalised industries.

In the conceptual model there was a hierarchy, with the bottom three layers covering the normal operations of the workplaces, and a couple of layers at the top representing management and the government. Each workplace would operate ‘autonomously’ within defined parameters, which actually would have defined the level of autonomy allowed for each workplace.

If a workplace went beyond any of those, CyberSyn would notify each layer of management at specific periods until the problem was resolved. It’s questionable whether this concept fits with workers’ democracy, and there were arguments over this between those involved with the project, but it’s a system that would keep the country’s industry and the economy stable.

Beer thought any factor influencing production, even the political outlook of workers, could be quantified and processed in his cybernetic management network. A set of programs called Cyberstride would monitor all the relevant parameters in the workplaces and create predictive models for the industry. All this would be ultimately controlled by a handful of people, perhaps a workers’ committee, sitting in the control room. There, they could make decisions based on this information, such as whether to send an ‘interventor’ to a particular workplace, or whether to reduce production at a specific plant.

CyberSyn wasn’t just about sending information through a chain of command to a mainframe. The project’s engneers also wanted to install a telex network that facilitated messaging between all the nationalised workplaces by sending teletype signals through the phone lines.

The idea was certainly as revolutionary as Allende’s government. This was less than four years after the first ever network of computers was put together in the US. At the time, computers were little more than switching systems, limited even in their use as calculators. The technology was also the preserve of a few companies mainly in the financial sector, and creating the software to analyse and abstract a country’s economy in those days was a feat of engineering, one that Chile’s government had to outsource to programmers in the UK.
It was also a time when everyone relied on mathematicians and computer scientists to operate this kind of system. Instead, the engineers designing the operations room for CyberSyn worked on interfaces that added another layer (or two) of abstraction to the data, so it would be presented in ways politicians, workers and sociologists could interpret. In fact, the operations room was designed specifically for eventual use by a workers’ committee. Perhaps this was the first ever example of a ‘user-friendly’ interface.

In Designing Freedom, Regulating a Nation (2006), Eden Medina writes: ‘Beer recognised that his cybernetic toolbox could create a computer system capable of increasing capitalist wealth or enforcing fascist control, a moral dilemma that would later plague the project team. In Beer’s opinion, cybernetics made Marxism more efficient through its ability to regulate social, political and economic structures.’
Although the CyberSyn project was never completed in its entirety, the telex network and the Cyberstride software proved invaluable, and it helped the government minimise the effects of a strike in October 1972. As Herman Schwember wrote to Beer, ‘The growth of our actual influence and power has exceeded our best imagination.’ A minister decided the wider political system should also be managed though CyberSyn.

What started out as a tool to stabilise the country’s economy became something ethically ambiguous. CyberSyn could be used to decentralise control, or to extend the power of a minority into every aspect of society, and the engineers putting it together were aware of this. The consequences of it falling into the hands of a dictatorship would have been horrific. That very nearly happened.

On 11th September 1973, the military, led by general Augusto Pinochet, and most likely with the help of the CIA, overthrew the democratically-elected government and replaced it with a brutal regime. Thankfully the CyberSyn engineers escaped with much of the technical documents and destroyed the rest, leaving the new dictator unable to use the still unfinished system.
Fernando Flores was one of many political prisoners under Pinochet’s dictatorship for the next two years, and later went on to set up several management and software firms. Most the others involved with the CyberSyn project now hold influential positions in research and development, applying CyberSyn’s concepts and technology to other industries.