Who he is and his times
Nikolai Prokofyevich Fedorenko was born on 11 May 1917 in the village of Preobrazhenka in the Zaporozhye Region and died on 1 April 2006 in Moscow. In 1937–1941 he studied at the Moscow Institute of Fine Chemical Technology, then trained at the Military Academy of Chemical Defence, and in 1942–1945 served in the chemical troops, ending the war as a captain. After the war Fedorenko became an economist of the chemical industry: in 1949 he defended his candidate's dissertation on the efficiency of synthetic fuel production, in 1955 his doctoral dissertation on problems of the economics of the chemical industry; in 1949–1962 he headed the department of economics of the chemical industry, and in 1953–1958 he was vice-rector of his institute.
Unlike Kantorovich and Nemchinov, Fedorenko came to the economic-mathematical school not as its founder but as an organizer. In 1962 he was elected a corresponding member, and in 1964 a full member (academician) of the USSR Academy of Sciences. From 1963 to 1972 he chaired the scientific council on the economic problems of chemicalization, and in 1970 he received the USSR State Prize. In 1963, when the Central Economic Mathematical Institute (TsEMI) was created on the basis of Nemchinov's laboratory, Fedorenko became its first director and remained so until 1985.
At the same time he held key posts in the academic hierarchy: he was a member of the Presidium of the USSR Academy of Sciences (1967–1988) and academician-secretary of its Department of Economics (1971–1985). The political window at the start of his directorship was favourable. According to the testimony of N. K. Baibakov, chairman of the USSR Gosplan in 1965–1985, cited by A. A. Belykh, the chairman of the Council of Ministers, A. N. Kosygin, regarded the wide use of economic-mathematical methods and computing technology as one of the reliable ways of improving the work of Gosplan. On 15 April 1966 Gosplan began work on the Automated System of Planning Calculations (ASPR).
The institute that Fedorenko received had been created on Nemchinov's initiative on the basis of the laboratory of economic-mathematical methods organized in 1958. According to Belykh, TsEMI's first projects drew on the works of Soviet economists of the 1920s, as well as on the work of Novozhilov and Kantorovich; from 1965 the institute published the journal Economics and Mathematical Methods (Ekonomika i matematicheskie metody). Nemchinov died in 1964, and the role of defender of the school passed to Fedorenko. The title of a 2018 article by V. S. Balakin brings the two together directly: both academicians defended the economic-mathematical methods of optimal planning, but they did so under different conditions — Nemchinov in a period of recognition, Fedorenko in a period of growing resistance.
Main ideas
SOFE — the System of Optimal Functioning of the Economy — was conceived as an independent branch of economic theory rather than simply a set of mathematical techniques. According to O. Braginsky, theoretical work on it began around 1966; alongside Fedorenko, Lurie, Sukhotin, Volkonsky, Pugachev, Katsenelinboigen, Ovsienko, Faerman and other TsEMI staff took part. In 1968 Fedorenko published On the Development of a System of Optimal Functioning of the Economy (O razrabotke sistemy optimal'nogo funktsionirovaniya ekonomiki); in 1972 the collective monograph Problems of the Optimal Functioning of the Socialist Economy (Problemy optimal'nogo funktsionirovaniya sotsialisticheskoy ekonomiki) appeared, and in 1975 the collection The System of Models of Optimal Planning (Sistema modeley optimal'nogo planirovaniya).
Braginsky identifies three methodological foundations of SOFE. The first is a single criterion of optimality, that is, one overall measure by which all variants of the economy's development are compared; in SOFE it was understood as the mathematical expression of the basic economic law of socialism — the satisfaction of society's needs. The second is the representation of the economy as a hierarchical self-developing system in which the levels of the national economy, sectors, regions and enterprises are linked to one another. The third is a mathematical description of the mechanisms of functioning, that is, of the rules by which participants make decisions and coordinate them.
As conceived, SOFE was a multi-level system of models that was supposed to inform planning. In broad terms the logic was as follows: the upper level sets aggregated goals and valuations of resources, the lower levels optimize their decisions guided by these valuations, and discrepancies are reconciled through repeated calculations. SOFE therefore required not only models but also a corresponding system of economic relations: prices reflecting optimal valuations, credit, self-financing (khozraschyot) and incentives consistent with the overall criterion. As V. S. Balakin sets it out, Fedorenko stressed that a socio-economic optimum requires taking into account the scarcity of resources in meeting the needs of the population.
Intellectually, SOFE was a synthesis of its predecessors. In Belykh's assessment, the concept drew to a large extent on Kantorovich's optimization ideas; from Nemchinov it inherited the idea of combining the plan with self-financing, and from Novozhilov its attention to the measurement of costs. SOFE differed from Gosplan's balance-based approach and from the input-output models associated with the name of W. Leontief in that it sought not only to reconcile resources and needs but also to choose the best variant according to a single criterion.
What became of the ideas in practice
Relations between TsEMI and Gosplan were tense, but not hostile in every respect. I. Boldyrev notes that the organizations cooperated and that TsEMI's proposals influenced a number of planning initiatives; the most important linking project was ASPR, which was meant to build input-output and optimization models into the planning process. According to A. V. Safronov, the preliminary design of ASPR was ready by May 1969, the first stage was put into operation in 1977 and the second in 1985. The system covered about 600 planning calculations of the USSR Gosplan and the republican gosplans, with tens of millions of indicators for material balances and distribution plans.
But what entered practice was the automation of the old method, not optimal functioning. Safronov shows that the authors of the preliminary design recognized the optimal plan as the ultimate goal, but could not define optimality mathematically and set themselves the task of producing balanced plans that ensured sufficient use of resources and the attainment of control parameters. About 5 % of indicators were to be obtained through expert judgement, without formalized algorithms, and in some areas up to 20–30 % of resources were allocated by expert judgement. The limitations of the hardware were serious: the Ural-4 computers had about 80 kilobytes of memory, while more than 26 megabytes were needed. D. V. Didenko adds something essential: Gosplan could use ASPR independently of its developers, and after the 1970s the influence of scientists on current planning declined.
The informational side of SOFE's failure runs deeper than a shortage of computer memory. A multi-level system works if the lower levels pass truthful data about their capabilities upwards, and the upper level passes downwards valuations that the lower levels trust and obey. In the Soviet system neither condition was met. Didenko shows that the ministries, as representatives of producers, engaged in administrative bargaining, pushing for more capital investment and lower plan targets. A model that receives its data from a party to the bargaining cannot produce an optimum: it produces the outcome of the bargaining in mathematical form.
The institutional side is even more important. SOFE assumed that the allocation of resources would be determined by prices and valuations derived from the overall criterion, rather than by decisions of Gosplan's sectoral departments and the ministries. This meant shifting power from the apparatus to the calculation, and the apparatus had no reason to agree. Didenko sums up the result: an institutional mechanism for the direct and systematic participation of scientists in planning work never took shape, and competition between the institutes of Gosplan and the Academy of Sciences did not lead to coalitions that would improve planning. SOFE competed methodologically with Gosplan's institutes, but was not built into the real decision-making process.
The conflict then moved onto political ground. According to Balakin, in October 1974 Gosplan's journal Planned Economy (Planovoe khozyaystvo) published a harsh article accusing TsEMI's leadership of propagating bourgeois economic theories; on 1 November 1974 Fedorenko wrote to the CPSU Central Committee, protesting against the substitution of political labels for scientific debate. In May 1975 the bureau of the Moscow City Committee of the CPSU examined shortcomings in TsEMI's work: its resolution noted that more than 40 % of the 63 heads of laboratories were not party members, that eight staff members had signed letters classed as anti-Soviet, and that the institute was proposing for implementation developments that had not been tested in practice. According to the same author, the deputy director S. S. Shatalin and the economist N. Ya. Petrakov were subsequently removed from their posts.
What worked and what did not
TsEMI worked as a scientific institution. In Boldyrev's assessment, the institute enjoyed relative intellectual autonomy and employed many scholars who would otherwise have found it hard to secure a place in the academic system; for years Fedorenko defended both the institute itself and its programme, and not without success. Individual models and methods were incorporated into ASPR and into sectoral calculations. During perestroika and the first reforms, economists associated with TsEMI became influential experts.
The link between ASPR and broader projects for automating management also worked, if only partially. In a separate article A. V. Safronov examines Gosplan's ASPR as a necessary step towards the nationwide automated system for the accounting and processing of information — OGAS, promoted by V. M. Glushkov. The fates of the two projects are similar: the technical part was built, but the logic of decision-making remained departmental. ASPR made it possible to speed up the compilation of the annual plan considerably and to solve many balance problems, for example matching the commissioning of production capacity with the volume of design and survey work. However, speeding up the balance method did not turn into the transition to optimal planning for which TsEMI's models had been created.
SOFE did not work as a system of management. It did not become a working mechanism of planning either in the 1970s or in the 1980s. After the collapse of the USSR and the turn to market policies, as Braginsky notes, many came to regard SOFE merely as a subject of study for economic historians. Fedorenko himself, in his later works, according to the same author, insisted that SOFE's systems approach met modern requirements for forecasting, planning calculations and economic management.
There were also limitations in the very design. A single criterion of optimality presupposes that society can agree on one measure of welfare and that this measure can be expressed as a formula. In the Soviet political system this criterion could not be a matter of open public choice: it was to be proposed by scientists and approved by party bodies. A model in which the goal is set by experts without a procedure of public agreement remains technocratic even if its mathematics is flawless.
Debate and criticism
Criticism from Gosplan and the supporters of traditional planning was twofold. Ideologically, SOFE was accused of smuggling in bourgeois theories — a line that culminated in the 1974 article and the city committee inquiry of 1975. On substance, sectoral balance-based planning was set against it. This position is alive today: a journalistic article by S. Rybas in Literaturnaya Gazeta (2025) claims that SOFE drifted towards visionary, unrealistic forecasting, whereas Gosplan's journal defended long-term sectoral planning on the Leontief model; the author links the supporters of SOFE with the later market reforms. This is the assessment of a commentator, not the result of research.
Western scholarly literature regards SOFE as perhaps the most systematic attempt to develop mathematical methods for planning and managing the Soviet economy. R. Ericson titled his 2019 article in a journal on the history of political economy The Growth and Marcescence of the “System for Optimal Functioning of the Economy” (SOFE). Earlier, in 1973, M. Ellman devoted a separate book to the contribution of mathematical economics to solving the problems of Soviet planning in 1960–1971.
Criticism from the standpoint of information economics, going back to Hayek's arguments in his debate with Lange, strikes at the very foundation of SOFE: the centre cannot obtain knowledge that is dispersed among millions of participants, and participants have no interest in disclosing it if their assignment depends on it. The Soviet experience described by Didenko is consistent with this objection but refines it: the failure was due not only to the fundamental impossibility of gathering knowledge, but also to a specific arrangement of responsibility in which those who supplied the data were at the same time bargaining for resources.
Fedorenko himself replied to his critics that a scientific dispute cannot be conducted with political labels. This position defended the right to research, but did not answer the institutional question: even if the ideological accusations had been dropped, SOFE had no established right to influence the allocation of resources and no mechanism that would compel the parties to disclose their data.
Legacy today
The Central Economic Mathematical Institute exists today as TsEMI of the Russian Academy of Sciences, and attached to it is the International Scientific Foundation for Economic Research named after Academician N. P. Fedorenko. From 1987 until his death Fedorenko was an adviser to the Presidium of the USSR Academy of Sciences, and later of the Russian Academy of Sciences. In 1994 he summed up thirty years of research in the book Issues of Economic Theory (Voprosy ekonomicheskoy teorii), and in 1999 and 2001 he published the memoirs Recalling the Past, I Look into the Future (Vspominaya proshloe, zaglyadyvayu v budushchee) and Russia: Lessons of the Past and Faces of the Future (Rossiya: uroki proshlogo i liki budushchego).
For the history of planning, the fate of SOFE is the most complete example of the fact that computing technology and a strong scientific school do not change planning by themselves. ASPR was built and worked, but it became an accelerator of the balance method rather than the carrier of a new mechanism. The decisive questions turned out to be ones that cannot be resolved inside a model: who supplies the data and is responsible for their truthfulness, who has the right to use the model and whether they are obliged to publish its version, who sets the criterion and how it can be challenged.
The lesson, relevant to today's discussions of strategic planning as well, is that multi-level coordination through valuations is technically possible but requires a separation of roles: those who set goals, those who execute, and those who verify must be separate. In SOFE this architecture was mathematical; in the Soviet state all three roles remained with a single apparatus.
What open planning takes
- A public version of the methodology that cannot be used in isolation from its authors and verifiers. Didenko notes that Gosplan could apply ASPR independently of its developers. In our model the version of the methodology is a legally significant artefact: any application of a calculation refers to a published version, and changes go through an open procedure. This fits into the “reproducible calculation” layer.
- An honest share of expert judgement in every calculation. The developers of ASPR acknowledged that some indicators, and up to 20–30 % of resources in certain areas, were allocated by expert judgement. We publish such a share openly and assign these values to the second column of the two-column rule, while anything unknown is entered in the register of data gaps.
- Multi-level coordination through prices in the execution circuit. SOFE's idea that the centre sets the framework and the valuations while the lower levels optimize for themselves is implemented in our model not through a calculation by the centre but through quota auctions and competitive contracts, where the price is formed from bids backed by a deposit.
- Protecting research from labels through verification criteria set in advance. The dispute of 1974–1975 was about the party membership of staff and the “untested” nature of the developments. In our model a pilot is assessed against criteria announced before it starts, and a negative result is published as a result.
What we do not repeat
- We do not have experts set a single criterion of optimality. In our model goals are set by the democratic goal-setting circuit, and there are several of them; a model in which the criterion is chosen by scientists and approved by the apparatus remains a technocracy.
- We do not pass off the automation of an old process as a new mechanism. ASPR sped up balance calculations but did not change who makes decisions and how. In our model digital tools are secondary: without the separation of circuits they merely reproduce the old bargaining faster.
- We do not take data for the model from a party that is bargaining for resources. A multi-level model based on ministries' data produced the outcome of bargaining in mathematical form; in our model the input data come from the measurement layer and the registries, not from the bids of those who execute.
- We do not assess scientific work by loyalty. The 1975 inquiry judged the institute by party membership and signatures on letters rather than by verifiable results; such criteria destroy the verification circuit itself.
Links between ideas
Whom the author argued with, whose ideas they developed, whom they answered and whose fate they shared. All links are on the shared graph. Graph of ideas
- Vasily Nemchinov
Practice and institutions ←
TsEMI was founded in 1963 on the basis of Nemchinov’s laboratory; Fedorenko became its first director.
- Vasily Nemchinov
Develops ideas ←
SOFE inherited from Nemchinov the combination of plan and self-financing, and after 1964 Fedorenko took over the defence of the approach.
- Leonid Kantorovich
Develops ideas ←
According to Belykh, the SOFE concept relied to a large extent on Kantorovich’s optimisation ideas.
- Viktor Novozhilov
Develops ideas ←
From Novozhilov SOFE inherited its attention to measuring costs.
- Wassily Leontief
Practice and institutions ←
The inter-branch balance reached its widest scope in Gosplan’s ASPR, the project linking Gosplan and TsEMI.
- Viktor Glushkov
Practice and institutions ←
Fedorenko sat on Glushkov’s OGAS commission and in 1964 co-wrote an article with him on a network of computing centres.
- Viktor Glushkov
Shared fate ←
ASPR and OGAS: the technical part was built, but the logic of decision-making remained departmental.
- Friedrich Hayek
Debate and criticism ←
Hayek’s argument about dispersed knowledge targets the foundation of SOFE: the centre will not obtain knowledge that participants do not wish to reveal.
- Vitaly Naishul
Practice and institutions →
After an institute attached to Gosplan, Naishul worked from 1981 at TsEMI, headed by Fedorenko.
Timeline
- 1917
Born on 11 May in the village of Preobrazhenka, Zaporozhye Region
- 1963
Appointed first director of the Central Economic Mathematical Institute of the USSR Academy of Sciences
- 1964
Elected a full member (academician) of the USSR Academy of Sciences
- 1966
Work on SOFE begins at TsEMI; Gosplan starts creating ASPR
- 1968
On the Development of a System of Optimal Functioning of the Economy (O razrabotke sistemy optimal'nogo funktsionirovaniya ekonomiki)
- 1971
Becomes academician-secretary of the Department of Economics of the USSR Academy of Sciences
- 1974
Harsh article against TsEMI's leadership in Planned Economy (Planovoe khozyaystvo); Fedorenko's letter to the CPSU Central Committee
- 1975
The bureau of the Moscow City Committee of the CPSU examines shortcomings in TsEMI's work
- 1985
Leaves the post of director of TsEMI; the second stage of ASPR is put into operation
- 2006
Died on 1 April in Moscow
Key works
- 1968On the Development of a System of Optimal Functioning of the Economy (O razrabotke sistemy optimal'nogo funktsionirovaniya ekonomiki)
- 1972Problems of the Optimal Functioning of the Socialist Economy (Problemy optimal'nogo funktsionirovaniya sotsialisticheskoy ekonomiki), collective monograph
- 1975The System of Models of Optimal Planning (Sistema modeley optimal'nogo planirovaniya), editor
- 1980Issues of the Optimal Functioning of the Economy (Voprosy optimal'nogo funktsionirovaniya ekonomiki)
- 1994Issues of Economic Theory (Voprosy ekonomicheskoy teorii)
- 1999Recalling the Past, I Look into the Future (Vspominaya proshloe, zaglyadyvayu v budushchee)
- 2001Russia: Lessons of the Past and Faces of the Future (Rossiya: uroki proshlogo i liki budushchego)
Sources
- ИНИОН РАН, материалы к биобиблиографии учёных. Федоренко Николай Прокофьевич. без даты
- Балакин В. С.. Из социальной истории советской науки: академики В. С. Немчинов и Н. П. Федоренко защищают экономико-математические методы оптимального планирования (1960-е — середина 1970-х гг.). 2018
- Брагинский О. Б.. Николай Прокофьевич Федоренко: от химизации народного хозяйства к системе оптимального функционирования экономики (СОФЭ). 2018
- Диденко Д. В.. Изменение качества планирования экономики в позднем СССР: технологическая и институциональная динамика. 2021
- Сафронов А. В.. Автоматизированная система плановых расчётов Госплана СССР и технологические ограничения внедрения ЭВМ в государственное управление в СССР. 2020
- Сафронов А. В.. Автоматизированная система плановых расчётов Госплана СССР как необходимый шаг на пути к общегосударственной автоматизированной системе учёта и обработки информации (ОГАС). без даты
- Boldyrev I.. Soviet Mathematics and Economic Theory in the Past Century: An Historical Reappraisal. 2024
- Ericson R. E.. The Growth and Marcescence of the «System for Optimal Functioning of the Economy» (SOFE). 2019
- Белых А. А.. Экономические идеи Л. В. Канторовича и их восприятие в СССР и на Западе. 2024
- Ellman M.. Planning problems in the USSR: the contribution of mathematical economics to their solution 1960–1971. 1973
- Рыбас С.. По тупиковому пути. 2025
- Википедия. Федоренко, Николай Прокофьевич. без даты
Prepared from open sources. Dates, titles and quotations were checked against the source list at the bottom of the page; where sources disagree, the text says so.