64 Chapter 2
over his years in power, further splintering and territorializing the single
national economic administrative hierarchy into 105 economic-admin-
istrative regional councils that were overseen by ten general and fifteen
union-republic ministries. The 1957 economic decentralization, Khrush-
chev hoped, would help streamline and localize the planning process for
a monstrously complex and administratively top-heavy postwar economy
with over 200,000 industrial enterprises.
The causes and effects are hard to sort out. It is estimated that of the 44.8
million workers in the Soviet Union in 1954, the administrative personnel
made up 6.5 million of them, or 15 percent of the national workforce.^17
No doubt Khrushchev also harbored some hopes that his decentralizing
reforms would release him from bearing sole responsibility for the health
of the whole Soviet economy. And yet the reforms did not work as hoped:
GNP growth plunged from 8.4 percent in 1956 to 3.8 percent in 1957, the
year of Khrushchev’s major reforms, and bounced around a 5 percent aver-
age until the Khrushchev-toppling disaster that was the poor harvest of
1963 (-1.1 percent decline, the only year with a negative GDP growth until
the end of the Soviet Union).^18
Cybernetic economists quickly learned a point that network theorist
Alex Galloway has subsequently clarified: control does not necessarily dis-
sipate with decentralized or distributed networks.^19 It exists in the protocols
and the (network) administrators and their rulings, and planning protocols
were periodically scrambled. Instead of accounting production by volume,
piecemeal targets were set after decentralized planning decisions. Instead
of empowering and streamlining the local economy, the decentralizing
reforms enraged the old guard in Moscow against its reformer and enlarged
the nation’s economic administrative apparatus. The overwhelming politi-
cal effects of widespread decentralization among economic administrations
alienated and frustrated many party officials, exacerbating the disarray and
discontent already attached to Khrushchev’s volatile leadership. Nonethe-
less, Khrushchev’s decentralization allowed for several schools of economic
thought in the early 1960s to percolate into public discussion and to cohere
in the debates among the top party leadership about the best path of reform.
Orthodox, Liberal, and Cybernetic Economists
In the transition from Khrushchev to Brezhnev, several camps (schools
presumes too much order) of thought coalesced around the question of
economic reform. The first camp included a generation of orthodox econ-
omists who clung to positions that many had gained under Stalin, held