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1Introduction
21Understanding the emergence and evolution of political states is a subset of the more general problem of understanding the emergence of organizational novelty, which in turn is a subset of the problem of understanding speciation. This does not mean that the principles of social evolution are the same as the principles of biological evolution.2 It means that the foundation of human, chemical, or cultural life in general is reproduction, death, and feedback within and among multiple intertwined networks of transformation. These networks (such as those in figure 2.1a) interact through time, coevolving through feedback: sometimes in competition, sometimes in symbiosis, sometimes in contradiction. Networks are in equilibrium if feedback is autocatalytic—that is, if there exists a set of nodes and transformations in which all nodes can be re-created through transformations among other nodes in the set (see figure 2.1b and below).3 This autocatalytic equilibrium is not static, but dynamic, with change occurring through novelty: the reconfiguration of ways things are done through transpositions and feedback among multiple networks, for example, transposing kinship ties into political networks or vice versa in figure 2.1a through individuals. Equilibrium and change are not different phenomena in this process-oriented view; they are just distinct moments in the same underlying cycle.
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4Political states are networks of interaction, interwoven with and dependent upon other networks such as economic, kinship, religion, and war, among the same or overlapping set(s) of persons (e.g., figure 2.1a). They are thus subject to selection pressures across multiple network environments simultaneously, even while shaping those environments. What we see as change (such as Deng Xiaoping’s reforms, discussed below) at any level of organization or species can be conceptualized as tipping in these underlying networks due to circumstance or perturbation, which can move a system between, for example, (p. 60) (p. 61) symbiosis (“regulation”) and contradiction (“conflict”). Novelty occurs when ties or networks become transposed across networks, which can lead to innovation. When innovations cascade across an entire network domain (horizontal planes in figure 2.1a), they become inventions. Thus, ties are not simply passive conduits, but rather are transformative, changing products through production rules and information through communication protocols. We as analysts may choose to focus our attention on perturbation (“contingency”), equilibrium (“structure”), individuals (“agency”), or any other part of the elephant we find interesting. But a focus on feedback mechanisms and how they preclude or enable novelty provides a window into organizational- and state-level genesis, evolution, and novelty through time. It is the best bet for understanding how any system (well-functioning or not) lurches in evolution through time. Nodes and ties in social networks are not dots and lines; they are the congealed residues of transformational relations: In the short run, actors make relations; in the long run, relations make actors.
5
6In this chapter I further develop this multiple-network perspective about the emergence of organizational novelty. I then apply this perspective to the comparative analysis of communist reform transitions in the Soviet Union under Stalin and Gorbachev, and in China under Mao and Deng Xiaoping.4 The communist formal state structure in both cases was a dual-hierarchy interleaving of two coupled interorganizational networks: the Communist Party in the political domain and the central-command economy in the economic domain. Intertwined informal networks grew around these formal hierarchies and were crucial for practical operation of this dual-hierarchy formal structure, in particular, (a) informal top-down networks of mobilization by leaders interested in reform or change (for whatever reason) and (b) informal bottom-up networks of mutual protection or assistance by those resisting leadership pressure. The system exhibited evolutionary feedback; in the short run both (perhaps overlapping) informal networks were structured by the formal networks that they were trying to make work or to subvert, while in the long run the contending informal networks of attempted control altered the formal hierarchy itself. In other words, formal organizational networks induced informal personal networks, which induced political interests and alliances, which then interacted conflictually to reshape the original formal organizational networks in path-dependent iteration across decades. This political reshaping led to biographical consequences: Gorbachev was constructed by the (historical residues of) Stalin he was trying to reform, and Deng Xiaoping was made by the (historical residues of) Mao he was trying to reform. The past shadows through networks that remain.
7A radical difference in outcomes between the Soviet Union and China does not mean that underlying dynamics of reform were that different: in both, a knife edge separated symbiosis from contradiction among coevolving multiple networks. In particular, in the Soviet Union top-down mobilization through hyper-centralized formal structures (the legacy of Stalin) induced predominantly horizontal networks of passive resistance, whereas in China top-down mobilization through administratively decentralized formal structures (the legacy of Mao) induced predominantly vertical networks of patron clientage. Both wildly divergent trajectories of communist reform to market socialism in the 1980s were rooted in similar-but-not-identical, endogenous networks iteratively (p. 62) generated by communism itself—not by slavish emulation (and supposed envy) of the West, since reproducing linkages between domestic and foreign (including diaspora) economic networks—one secret to subsequent growth—came after the reforms, not before.
8Innovation versus Invention
9Novelty occurs in different degrees. Innovations alter existing ways (i.e., activities, conceptions, and purposes) of doing things, whereas inventions change the ways things are done.5 Under this definition, the key to classifying something as an invention is the degree to which it reverberates outward to alter the interacting system of which it is a part and ends up being taken for granted. To some extent we understand micro-logics of innovative combination and recombination. Yet the invention puzzle is that some recombinations cascade out as inventions, reconfiguring entire interlinked ecologies of “ways of doing things,” creating new organizational forms and functions (speciation), whereas most innovations do not. The ripeness of a system for reconfiguration by an invention is as equally relevant to be explained as is the system’s generation of the invention itself.6 Inventions are permutations of social context and so cannot be understood in the abstract. But to make progress in understanding discontinuous change, we need to embed our analysis of reconfiguration in the routine dynamics of actively self-reproducing social contexts, where constitutive elements and relations are generated and reinforced.
10Figure 2.1a lays the groundwork for understanding this distinction between innovation and invention, viewed through the lens of multiple networks. In a cross-sectional view, all social systems look like this to a social network analyst. Each plane in the figure represents a different domain of activity. In the example of Renaissance Florence illustrated here,7 these are the economic domain, where goods are produced and exchanged among companies; the kinship domain, where babies are produced through marriage among families; and the political domain, where deals are made among factions within the state. Other domains not shown, such as religion and the military, could be added,8 depending on the case. Solid within-domain lines represent the “constitutive ties” of cooperation or partnership in production: firms, families, and factions, respectively. Such relations of cooperation constitute people in particular roles because they teach the people participating in them production and communication practices or skills. Circles are placed around these units when they become linguistically corporate or formal, through having collective names. Dotted lines represent exchanges or resource flows between production units: products, wives, and deals, respectively. When resource flows are recurrent and focused, these constitute “relational ties.” Markets, for example, are networks of dotted lines within domains. The people participating in organizations and markets can be categorized in various ways, through either personal attributes or institutional memberships, as shown.
11Our social science disciplines usually segregate their intellectual activities by analyzing only one domain at a time, as if the other domains and disciplines did not (p. 63) exist. At best, external domains are conceptually black-boxed as reified “environments,” without examining their internal structures, even though those intertwine and cross-cut the network structures of focal interest. In contrast, the whole point of a multiple-network perspective is to superimpose multiple domains, with their respective production and exchange networks, and to examine mutual feedback dynamics.
12Vertical solid lines in figure 2.1a, connecting dots between planes (domains), are people. Each dot in a plane is a role determined by connections to others within that plane. Figure 2.1a is a snapshot; the trajectories of vertical lines over time are biographies, while the trajectories of dots within a plane over time are careers. In the economic domain, for example, a person may be a businessman; in the kinship domain, he may be a father; in the political domain, he may be a politician—all depending on how he is attached to others in that domain. Properly speaking, individuals don’t have goals; roles have goals.9 Consistency of motivations across roles should in no way be presumed for complicated persons.10
13Where you sit across multiple networks enables and constrains your agency. It is well recognized by scholars in the social network tradition that the topological overlay created by multiple-network positions can induce cross-domain behavioral effects. At the social psychological level, different ways of nesting various roles in a single person can induce role strain, autonomy, informational access, or even freedom from social control. At the transactional level, a tie in one domain can induce trust, normative reframing, or changes in time horizons in another.
14Multiple-network topologies also can shape the dynamics of emergence and evolution of organizational actors over time. Innovation in our usage occurs through recombination of ties or network components across domains, through one of a variety of organizational genesis mechanisms of network folding, discussed below.11 Invention, then, is the system tipping that might ensue, as a cascade from the original innovation out through the multiple networks that originally induced it.
15Network recombinant mechanisms of organizational genesis thus involve transposing social relations from one domain into another. Sometimes this begins as a small-scale transposition, which then reverberates. For example, marriage and economic ties were transposed into the political and social domains by the Medicis.12 Sometimes this involves larger population transpositions, where entire subsets of new networks from one domain are rewired into old ones in another.13 Rewiring then reconstructs both sides. Whatever the variant, the resultant topological overlay defines the routes through which innovative relational practices are transported. Transport occurs either via strategically located persons operating in multiple domains (the first case) or via biographies that wend their way across domains (the second case). Where you sit in a multiple-network array affects both whom you can reach and who can reach you. In genetics, this network reachability constraint on recombination has been suggestively labeled “the topology of the possible.”14
16Organizational innovation, whatever its source, must reproduce in order to survive. To reproduce and to grow, organizations must succeed in attracting resource flows (dotted lines) and people flows (solid lines) into their primary fields of activity. For example, (p. 64) economic companies must succeed in product markets. But because companies’ component persons and resources are embedded in other domains as well, organizations actually must survive in multiple network selection environments. Politics, kinship, and perhaps even religion, military, or science networks must also reproduce for particular styles of economic entities to exist. Treating multifaceted people as reproducing flows across domains makes the point about multiple selection environments more transparent than does focusing on products and financial flows alone.15
17In sum, in figure 2.1a organizational innovation is vertical transposition of relational ties and practices across domains. Invention, if it occurs, is horizontal spillover that reorganizes relational and constitutive networks within domains. Organizational innovation becomes systemic invention (if it does) when local network transpositions spill over or cascade throughout a domain through reproductive feedback into the multiple global networks to which local relations are linked. If and when this chain reaction occurs, the selection environment itself for the organizational innovation is altered. This can lead to nonlinear rates of tipping—in other words, to the dynamics of punctuated equilibria. Sometimes (though rarely) invention spillover may even readjust the differentiation of domains themselves, through restructuring vertical lines of multifunctional embeddedness.16
18The full array of inductively discovered network folding mechanisms that produce organizational invention (Padgett and Powell, 2012) is listed in table 2.1.
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20Table 2.1 Organizational Genesis (= Multiple-Network Folding) Mechanisms Discovered in Padgett and Powell (2012)
21Genesis Mechanism (& Empirical Case)
22Definition
23Transposition and Refunctionality (Renaissance Florence, chapter 6; Biotechnology firm, chapter 13)
24the translation of an old practice to a new purpose, which thrives in new setting (like S.J. Gould’s “exaptation”)
25Incorporation and Detachment (medieval Tuscany, chapter 5)
26absorbing old networks into new ones, which hybridize and then leave
27Migration and Homology (early-modern Netherlands, chapter 7)
28mass migration of people with different practices to new setting, which successfully absorbs them
29Purge and Mass Mobilization (Stalin and Mao, chapter 9 [and here])
30wholesale elimination of upper layers, to be replaced by social mobility from below
31Conflict Displacement and Dual Inclusion (Bismarck in Germany, chapter 8)
32attack on third party that splits second party, then absorption of splinter
33Robust Action (Cosimo de’ Medici, Padgett and Ansell 1993; Deng Xiaoping, chapter 9 [and here])
34brokerage between contradictory segments, with multivocal attribution
35Anchoring Diversity (Biotech industrial districts, chapters 14, 15; Silicon Valley inventors, chapter 17)
36brokerage among overlapping networks, linked through career flows
37
38(p. 65) Other labels for network folding exist in the evolutionary literature. Whereas the selection environment remains fixed in evolution, in coevolution it is altered. When a selection environment is fixed, the performance criterion for any subunit is given, and the concept of optimum becomes well-defined in principle (even if it is impossible to reach or even perceive in practice). When selection environments are endogenously molded by the innovations they select, however, performance criteria migrate, and “optimum” loses the supporting scale upon which it is defined. Coevolution retains notions of “fit” between systems, but it does not retain the notion of an objectively fixed optimum. Social Darwinist fantasies of Panglossian progress thereby usefully vanish into an ethereal mist.
39To make these general observations about innovation and invention more systematic requires precision in the motor behind multiple-network feedback. In the research of Padgett and Powell (2012), that engine is primarily autocatalysis. Figure 2.1b is a snapshot from what is actually a movie through time. Autocatalysis brings this otherwise static picture to reproductive life.
40Autocatalysis
41In the Padgett and Powell (2012) book and in this chapter, I take the following as my mantra: In the short run, actors create relations; in the long run, relations create actors. The difference between methodological individualism and social constructivism is not a matter of religion; it is a matter of time scale. In the short run, all actors—physical, biological, or social—appear fixed, atomic. But in the long run, all actors evolve, that is, emerge, transform, and disappear. To understand their genesis requires a relational and historical turn of mind. In longer time frames, actors congeal out of iterations of transformational relations, which shape ideas and products as they move among nodes. Thus, if actors—organizations, people, or states—are not to be assumed as given, then one must search for some deeper transformational dynamic out of which they emerge. In any domain, without a theory of the dynamics of actor construction, the scientific problem of where novelty comes from remains unsolvable.
42The example of the human body may help to fix the idea. Viewed from the perspective of ourselves, we seem solid enough: well bounded and autonomous. But viewed from the perspective of chemistry, we are just a complex set of chemical reactions. Chemicals come into us; chemicals go out of us; chemicals are transformed within us. Solid as we may appear from the outside, no single atom in our body has been there for more than a few years. It is possible (and flattering) to see our physical selves as autonomous bodies exchanging food and other nutrients, but it is also possible to see us as an ensemble of chemicals that flow and interact. Stability of the human body through time does not mean mechanical fixity of parts; it means organic reproduction of parts in flux. Viewed as chemical reactions, we are vortexes in the communicating material of life that wends through us all.
43(p. 66) The emergence of new organizational actors operates through analogous mechanisms to the emergence of life in biochemistry. At the theoretical level, this approach is a merger of social network analysis with autocatalysis models from biochemistry.17 Social network analysis brings an empirical commitment to fine-grained relational data on social and economic interactions through time. The emergence of organizations is grounded in transformations of products and information in social networks, which wend through organizations, bringing them to life. Autocatalysis brings a commitment to discovering and formalizing processual mechanisms of genesis and catalysis (creation and transformation), which generate self-organization in highly interactive systems. Nodes and ties in social networks are not dots and lines; they are the congealed residues of transformational relations derived from iterated production rules and communication protocols in interaction. Learning at the human level is generated by processes analogous to the coevolution of rules and protocols at the “chemical” level. Actors thereby become vehicles through which autocatalytic life self-organizes.
44To be more precise, network autocatalysis can be defined as a set of nodes and transformations in which all nodes can be re-created through transformations among other nodes in the set. In the context of the biological origins of life in which this concept was originally developed,18 nodes were chemicals, and transformations were chemical reactions. Chemicals bump into other chemicals, triggering reactions that make new chemicals. If a chemical reaction network contains an autocatalytic set within it, then it reproduces itself through time, given appropriate energy inputs. Positive feedback loops or cycles of self-reinforcing transformations lie at the core of autocatalytic sets. Such cycles are at the foundation of chemical growth.19
45The implications of autocatalysis, if it emerges, are profound: reproduction can be sustained even in the face of turnover in network components. Destroy a segment of the network, and an autocatalytic network often (not always) can reconstruct its deleted segment. Self-reconstruction and self-repair, in turn, are the crucial dynamic features of autocatalytic sets that gives them continuity through perilous times. Autocatalysis, in other words, allows for an understanding of the generation and reproduction of life across fields. In the context of biological life, the origin-of-life problem is finding prebiotic experimental conditions under which an initial random set of chemicals can self-organize and reproduce itself into an autocatalytic set; similarly, in organizational life, it is finding sets of network ties under which an organization can continually re-create itself. The maintenance-of-life problem is finding conditions that support self-repair and resilience.
46The contribution of Padgett (1997), Padgett, Lee, and Collier (2003), and Padgett and Powell (2012, esp. chs. 2–4) was to extend the Eigen-Schuster autocatalysis insight about chemical networks to social networks. In particular, Padgett and Powell propose three nested subtypes of social autocatalysis: (1) production autocatalysis, in which rules (or practices or skills) reproduce through products flowing through them in production chains; (2) biographical autocatalysis, in which people reproduce sets of roles through rules (or practices or skills) flowing through them via constitutive social interaction (p. 67) such as teaching and learning; and (3) linguistic autocatalysis, in which signs and symbols (including corporate names) reproduce through conversations among people. Padgett and Powell (2012) developed the subtypes of production and biographical autocatalysis in considerable modeling and empirical depth, but only pointed to the possible additional significance of linguistic autocatalysis.20
47Autocatalysis suggests a modification in how social network analysts should conceptualize and measure network ties. Autocatalytic networks are networks of transformations, not networks of mere transmission. Neither products nor information are inert sacks of potatoes passing through passive networks-as-pipes. Products are transformed through production rules, and information is transformed through communication protocols. Either way, social networks don’t just pass things; they do transformational work. Under this view, diffusion should be reconceptualized from mimicry or contagion to chain reactions. The autocatalytic self-organization of these chained transformations is emergence.
48Communist Economic-cum-Political Transformation in the Soviet Union and China
49This multiple-network perspective produces considerable insight into the coevolution of economics and politics in communist systems.21 Whether the innumerable details of the complex cases analyzed below are all accounted for is less important than whether the structure of the logic produces a tractable way of understanding the coevolution of states and markets.
50Just to be formulaic, following is the search strategy employed for such a coevolutionary schema:
51
521. Array political and economic systems or networks next to each other, something like figure 2.1b in the introductory chapter, but rotated 90 degrees such that the planes are vertical instead of horizontal.
532. Pay careful attention to organizational linkages between systems, since these are likely to be loci for dynamic evolutionary feedback and the emergence of new actors. In the context of this chapter, this means looking for the politics induced by economic reforms and for the economics induced by political reforms.
543. Trace historically how intentional change in one system, either in economics or in politics, spilled over (positively or negatively) into often unintentional change in the coupled system. Multiple feedbacks induce chain reactions, possibly contradictory.
554. Induce from these macro histories the micro autocatalytic networks that caused politics or economics to take off (or not) into observed self-reinforcing feedback (p. 68) loops of new political alliances and/or new economic exchange systems. At their base, these network micro-foundations are reproducing flows of resources and biographies.
565. Find social network data to verify or disconfirm the hypothesized autocatalytic mechanism that induced the observed evolutionary transformation. In my previous research on Renaissance Florence, I had such data (as does Powell for biotech), but in this chapter on communist transitions I do not. This chapter therefore proceeds only through the first four of these research stages—namely, learning and interpretation, but not definitive proof.22
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58To put this theoretical search in didactic terms: to think about economic reform without thinking about the politics that it provokes is to not think very deeply about economic reform. To move from vision to reality, economic reform has to induce the interests that can carry it through. Interests triggered in support of a reform or in deflection of it always emerge on a lattice of prior economic and political networks, which have been laid down in previous iterations. This was the flaw of Western economic advice to Soviet leaders in the 1980s and 1990s and perhaps of Gorbachev himself: to assume that communism could be transformed by decree. Network systems are never designs; they are organic living reproductions and transformations, often turbulent and unintended, of older network systems that have descended into the new. Whatever the fantasies of utopian reformers and leaders, blank slates do not exist in real history. All understanding of innovation must begin with a deep analysis of what was there before.
59Dual Hierarchy
60I start with a simplification. The Soviet Union, China, and Eastern European states differed in many important respects, but they all shared the dual-hierarchy skeleton sketched in figure 2.2.23 All communist systems were dual hierarchies in this sense: an economic pillar of centrally planned, state-owned enterprises was paralleled by a political pillar of communist party branches and cells, which interpenetrated, monitored, and attempted to control the economic pillar. One pillar was economics, the other was politics, but they both linked organizationally to each other at multiple levels, like a ladder.
61Communist economies, at least at their cores, were central-command economies. The leader (general secretary in the Soviet Union, chairman in China), in consultation with his politburo and council of ministries, established priorities for economic development. Under Stalin and most of his Soviet successors, the economic development of heavy industry and defense was top priority, sometimes almost exclusively so. Central economic ministries developed annual production targets for state-owned enterprises, which implemented the leader’s priorities. Lower priority sectors fed into higher priority sectors through mandated supply flows. “Central ministries” included both central (p. 69) planning departments (e.g., Gosplan), charged with designing control figures for input-output material flows by industry, and industry-level ministries, charged with disaggregating the industry control figures into specific production orders for state enterprises. The percentage of the overall economy covered by the plan varied across time and across communist country, with the Soviet Union being almost completely planned, Hungary over half planned, and China fluctuating over time. The detailed content of production orders also varied over time—sometimes with few, sometimes with many, aspects or indicators of production conveyed—but the core command was usually a physical output (e.g., “make x tons of steel this year”). Positive salary and promotion incentives and negative sanctions, sometimes extreme, were attached to the fulfillment of an enterprise’s annual production orders.
62
63Click to view larger
64Figure 2.2 Communist dual hierarchy.
65N.B.: The appointment loop from Leader to Provincial Secretaries to Central Committee to Leader has been called “the circular flow of power” by Daniels (1966, 1971).
66
67The second hierarchy was the Communist Party apparatus. This paralleled all levels of the central-command economy, monitoring and enforcing fulfillment of the plan. At the very top, the politburo and the council of ministers overlapped through shared members. The Central Committee formally was the governing body of the Communist Party, in charge of appointing the leader and politburo (albeit usually in a rubber-stamp manner24). Meeting only occasionally, it was composed of high-level officials from both of the pillars: provincial secretaries, economic ministers, and the like. The secretariat or bureaucracy of the Central Committee was structured into departments that monitored the work of the Moscow-based economic ministries. Lower down at the provincial level, provincial first secretaries were held responsible for the overall economic performance (p. 70) of enterprises in their region. They, jointly with the industrial ministers, appointed and fired enterprise managers in their region through the nomenklatura system.
68At the micro level of the economic enterprise or the “firm,” dual hierarchy looked like figure 2.3. Communist workers and managers formed party cells at all levels (top management, middle management, and workers) of each plant.25 The basic organizational ideas of this interlocking, formal structure were not complicated. From the perspective of the economy, dual hierarchy operated to send management orders down the economic hierarchy and to monitor performance (including laxity and corruption) through information feedback, called kontrol, up the political hierarchy. The two hierarchies were separated to inhibit lying. From the perspective of politics, dual hierarchy operated to instill communist values (e.g., “the Soviet man” or “the thought of Mao”) into the productive personnel of the economy. Economics under communism was never just economics; it was also mass political mobilization of the nation for the future. Needless to say, things rarely worked as smoothly as this organizational chart implies. In subsequent sections I outline actual operations and compare across regimes.
69No matter how simplified this starting sketch of dual hierarchy, it is still useful enough to identify constrained trajectories for the politics of communist economic reform, were such a thing to become desired. First of all, it is obvious but worth saying that all reform must come top-down from the leader. The basic dual-hierarchy organizational system had too many cross-checking veto points for political initiative to have been possible from any other quarter. In addition, the “circular flow of power” (see note 25) gave to any communist leader a secure base from which to launch initiatives. But leadership initiative alone was never enough to accomplish reform. For it to become more than just a decree, leadership initiative had to be taken up by others in the system and then achieve self-sustaining reproduction of those interests. The basic dual-hierarchy skeleton (p. 71) defined the alternative set of potential political allies that communist leaders looked to in order to carry their initiative, whatever that might happen to be. The options within the system were four: to reach down to provincial secretaries, to reach down to local party cadres, to reach down to economic ministries, and to reach down to state enterprises. A leadership initiative that appealed to none of these constituencies was greeted only by silence and obstruction. But if it appealed to at least one, then a sequence of events might ensue, tipping into reform or not.
70
71Click to view larger
72Figure 2.3 Dual hierarchy at the enterprise or firm level.
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74As a first cut, the various reform drives observed in communist Soviet and Chinese history can be classified according to the primary constituency the leader reached out to. The most tumultuous of such reform drives—Mao’s Cultural Revolution and Stalin’s Great Purge—involved the leader reaching around provincial party leaders directly down to local party cadres. Such extraordinary mass-mobilization events were not outside of “normal” communist history; they were simply the most dramatic of the inbuilt modalities of reform available to communist leaders. Indeed, seen from the internal perspective of communist reform history, not from our perspective of the West, Gorbachev’s revolutionary call for political democracy in 1989 was similar in strategic style to that of the demagogues Stalin and Mao.26 I demonstrate below that all three of these leaders used “purge and mass mobilization” (wholesale elimination of upper layers, to be replaced by social mobility from below) to attack their own party hierarchy.
75A second, less threatening way to mobilize the political pillar for economic reform was for the leader to work through the party hierarchy, not against it. Mao’s Great Leap Forward and Stalin’s first Five-Year Plan were examples of this.27 Khruschev’s regional economic councils and Deng Xiaoping’s fiscal decentralization (“playing to the provinces”) were also examples of mobilizing provincial first party secretaries for reform. These cases differed in important details that were consequential for their subsequent evolution, but the point here is that in their constituency politics (“top-down informal network a,” in the language above) they are members of a family.
76The third political option that dual hierarchy presents to communist leaders interested in reform is mobilization through economic ministries. This modality of reform includes Berliner’s categories of Brezhnev-style “conservative” or Andropov-style “reactionary,” which is to say, incremental not radical reform. One should not forget, however, that this was the modality that Stalin shifted into, after his Great Purge, in order to build the economy rapidly for war against Hitler. World War II itself shifted Stalin’s heavy-industry-defense approach into hyperdrive. Thus economic mobilization through ministries is not only an antireform approach, although in more recent times it was.28
77Finally there is the fourth, “Hungarian style” of economic reform, which involved leaders reaching around ministries directly down to state enterprises, by loosening ministerial control and increasing enterprise autonomy. Typically this involved not privatization but reorienting central planning away from material flows and toward socially regulated prices and profits. Ministries essentially become state banks in such a transformation. In addition to Hungary as a successful example of this approach to economic reform, the Kosygin reforms of 1965 and the Gorbachev reforms of 1987 stand as unsuccessful Soviet examples of this approach.
78(p. 72) I do not list private property as a politically viable route to reform under communism, because a constituency for that did not exist within dual hierarchy. There were noncommunist constituencies for such a reform. Around the consumer margins of the economy—handicrafts, small consumer goods, small plots in agriculture—a private market might become tolerated.29 But this would always remain marginal, because private property amounts to a dismantlement of dual hierarchy. Any communist leader proposing this would be overthrown.
79Deng Xiaoping superficially seems to be the miraculous exception to this political constraint: a communist leader who successfully transformed his central-command economy into a Western-style market. But I show below that actually, Deng employed traditional political strategy number two: the mobilization of provincial and local government cadres to lead his reform.30 As I explain below, the peculiarly decentralized structure of state ownership in China, bequeathed to Deng by Mao’s Great Leap Forward and Cultural Revolution, induced Chinese party cadres to behave as precocious entrepreneurs, without owning private property. While it is fair to hold Deng responsible for successfully managing China’s economic transformation,31 it is less widely appreciated that Mao was responsible over the longer run for rewiring the Soviet version into a party-dominated, decentralized version of dual hierarchy that Deng then could tip into quasi-markets. Mao made accessible what Deng achieved.
80On the Soviet side, Gorbachev, like Deng, wanted to be an economic reformer to strengthen communism, not to unravel it. But the dynamics of the reform process turned him into a political revolutionary, more like Stalin and Mao in strategic style than Gorbachev acknowledged. There are many sides to the dynamics of communist economic reform. One is the politics of reform: how leaders’ proposals self-organize alliances to support and oppose them. Another is economic feedback: how alliances and policies spill over into the interaction of economic enterprises. But also there is biographical feedback: how reaction from dual hierarchy reconstructs the leader across domains over time. Below I highlight these three interlinked dynamics in the communist-reform cases of Joseph Stalin, Nikita Khrushchev, Mao Zedong, Deng Xiaoping, and Mikhail Gorbachev.
81Stalin
82The organizational invention of the central-command economy emerged in two stages. The first stage was mobilization of provincial Communist Party officials in the first Five-Year Plan of 1927–1932. The second stage was the purging and mass mobilization of those same Communist Party officials in the Great Terror of 1936–1938.
83Given space constraints, I cannot linger on either of these two well-documented episodes of Soviet state formation.32 I only summarize the core informal network highlights, both on the side of top-down mobilization and on the flip (or “duality”) side of bottom-up resistance.
84(p. 73) Stalin’s first Five-Year Plan is well characterized as a “bacchanalia of planning” because of the astonishingly overoptimistic industrial development goals it set, including the building of entire cities of mass production from scratch.33 Stalin quite accurately predicted: “We are fifty or a hundred years behind the advanced countries. We must make good this distance in ten years. Either we do it or we shall go under” (Harris 1999, 131). Stalin’s economy and his politics were both aggressively built for war—first and foremost war (past and future) with the capitalist West, but as a corollary, war against anyone who stood in his way. The inefficiency of this and subsequent Soviet economic development plans is well known.34 Less appreciated is the enthusiasm and energy with which the party hierarchy launched itself into this economy-cum-war mobilization task.35 Measured by the standard of achieving its own absurd targets, the plan was a failure. But measured against the sterner yardstick of defeating Hitler in World War II, the plan was a breathtaking success.36
85Why did it work at all? The reforms appealed to one of Stalin’s constituencies in the two-pillar system: “high up” party officials who were given incentives to maximize production. These incentives in turn created the need for “storming,” or seizure of raw material and capital. “The successful Soviet manager during the first Five-Year Plan was less an obedient functionary than a wheeling-and-dealing entrepreneur, ready to cut corners and seize any opportunity to outdo his competitors. The end—fulfilling and overfulfilling the plan—was more important than the means; and there were cases when plants desperate for supplies ambushed freight trains and commandeered their contents, suffering no worse consequences than an aggrieved note of complaint” (Fitzpatrick, 2008, 133). Provincial party officials and the factory directors appointed by them worked together in their hunt for supplies. The infamous mature Soviet informal economy of barter (blat) and reciprocity (tolkach) was there in spades from the Stalinist beginning, to make the plan actually function. This is not “market” managed by the Communist Party (as the CP itself imagined); this is “market” through the Communist Party—a theme that re-emerges in the case of Communist China. “The economy through politics” need not be the non sequitur that it appears to be in the eyeglasses of neoclassical economics.
86The resistance flip side of “storming,” however, was “family circles.” The penalties for nonfulfillment of the plan included death. Dual-hierarchy horizontal collaboration between party officials and factory managers (see figure 2.3) could easily turn from jointly hunting for supplies to jointly colluding to lie to Moscow superiors, if their factories started to underperform. This was not active resistance in the sense of revolt. This was passive resistance in the sense of sluggish sandbagging. Moreover, the stronger the top-down pressure, the stronger the sandbagging—a problem that continued beyond Stalin to bedevil both Brezhnev and Gorbachev. To complete the vicious-circle feedback: contra Hayek, the core problem with the plan was not the limited cognitive capacity of its linear-programming algorithms to maximize; the core problem was that those algorithms were more or less efficiently maximizing a pile of lies. These family circles of collaboration between political and economic officials were effectively created by Stalin’s Five-Year Plan to mobilize the economy through informal networks. (p. 74) 
87Stalin, given his understanding of the economy as war, labeled sandbagging not a “problem of incentives,” but rather “sabotage” and “wrecking”; those who lied to him were “traitors.” This recognition of the failures created by reform through party officials led him to switch tactics to reform against party officials through the Great Terror, which I categorize (along with Mao’s Cultural Revolution and Gorbachev’s aborted democratization) as “Purge and Mass Mobilization” in table 2.1. As illustrated in figure 2.4, 681,692 people were murdered by Stalin in 1937–1938; 70 percent of Stalin’s own Central Committee was murdered; only 3.3 percent of delegates to the 27th Party Congress remained from 1934 to 1939; and almost all obkom first secretaries were removed from office in 1937 (Padgett and Powell, 2012, 282).
88
89Click to view larger
90Figure 2.4 Purge and mass mobilization: the Great Terror of 1937–1938.
91
92(p. 75) A bacchanalia of planning in 1927–1932 was followed by a bacchanalia of terror in 1937–1938. It is difficult to dismiss the sense that there was something beyond rationality going on there, but before being too quick to label Stalin insane, never forget that Stalin beat Hitler in World War II.
93How did he do it? “Mass mobilization,” or as we would say “social mobility”—indeed, astronomically high levels of social mobility given the vacancy rate. Who was left after the murders to run the economic and political machinery? The removal of “high up” party officials could not have occurred if Stalin didn’t make the Great Terror appeal to a different constituency, in this case the tens of thousands of communist youths who were beginning to pour out of the engineering training schools that Stalin had set up during his earlier purge of noncommunist technical experts. At thirty years of age, newly minted graduates with no experience whatsoever found themselves summoned to be appointed as new factory directors, ministerial officials, and party secretaries. The job openings above them were enormous in number, so this “generation of ’38” experienced the most rapid upward social mobility imaginable. These were the beneficiaries of Stalin’s murders. Along with glorified Stakhanovite workers and Komsomol teenagers, these young educated cadres, not surprisingly, were grateful and personally very loyal to Stalin, even though of course underlying structural contradictions that had led to the lies of the family circles did not go away. This bulging cohort of young engineers—Khrushchev, Brezhnev, Kosygin, Andropov, and their like—aged together, fought a world war together, and eventually ran the country together as elderly men, until Gorbachev succeeded them in 1985. For Stalin a crucial advantage of this cohort, besides its zealous personal loyalty to him, was that these were no longer reds versus experts; they were reds and experts. Structural contradictions were to be solved through personnel. Padgett and Powell (2012) call this “biographical autocatalysis.” The career system that routinized biographical mobilization into autocatalysis was nomenklatura.
94The organizational consequence of this vast turnover in cadres was a strengthening of the economic pillar of ministries, relative to the political pillar of the party. Almost everybody in administration, ministries and party, was now an engineer. In 1941 the number of ministries grew to forty-three, compared to seventeen in 1933 and nineteen in 1937. Most ministerial proliferation was in the heavy-industry sector. Administrative differentiation implied tighter central supervision and control of industries, even if also greater difficulty in coordination across industries. The portion of the Soviet gross national product devoted directly to military expenditures rose from 7 percent in 1937 to 15 percent in 1940. That was still a far cry from the 55 percent it attained at the height of the war in 1942, but it was a significant escalation in a direction that already had been prepared.
95A simplified picture of the autocatalytic economic vision to which Soviet ministries aspired is given in figure 2.5, reproduced from Harrison (1985, 123). Input-output planning in the heavy-industry sector of the Soviet economy was supposed to be like a modern, well-engineered machine, smoothly circulating supplies among gigantic factories that were maximally efficient due to specialized, mass production. Free markets were not (p. 76) required for this circulation because production orders and transfers cleared through state bank accounts at administered prices, reflecting public, not private, demand. This “scientifically designed” economic machine was built primarily for war. Agriculture and consumer goods were squeezed mercilessly to feed it, but success was measured in terms of heavy industry and the military, not in terms of those other sectors.
96Ever since Kornai (1980) and even before, it has been fashionable to denigrate the efficiency of the Soviet planned economy; supply bottlenecks, hoarding, and lack of technical innovation were chronic. Without denying that clear reality, it is too easy to overlook the power and efficiency of the military-industrial complex at the core of the Soviet economy. Part of the economic trouble in the Soviet Union was due to informational problems and collusion, as mentioned above. But part of the trouble was due to the intentional diversion of so many resources to war. In a highly concentrated domain like heavy industry, without too many factory nodes, central planning can work. The autocatalytic production and supply economic network feedbacks sketched in figure 2.5 are matters of supply-chain topologies and of balanced input-output volumes, not matters of capitalism. In principle they can be attained either by central command or by private markets. In the Soviet Union, I claim, central command did indeed attain autocatalysis in the military, heavy-industrial core of its economy.
97The organizational lock-ins—that is, the emergent actors—for autocatalysis in heavy industry were the centralized economic ministries. Economic concentration in heavy industry reinforced the political power of central ministries, and central ministries protected the centrality of heavy industry in the plan. It is true that the rest of the economy was exploited to serve that military-industrial core, but agriculture and consumer goods were not the goals. Whatever the Soviet citizen thought as a consumer, as a patriotic soldier, he or she could feel proud.
98
99Click to view larger
100Figure 2.5 Production autocatalysis in the Soviet heavy-industry sector (Harrison 1985, 123).
101
102(p. 77) That was the organizational invention of dual hierarchy under Stalin. The original two-pillar formal network enabled Stalin to take two routes toward reform: first through party officials with the Five-Year Plan, and then against party officials through the “purge and mass mobilization” of the Great Terror. Each of the informal networks associated with these reforms led to the creation of new political interests and alliances in response. The plan led to the family circles, while the Great Terror created the new ranks of the class of ’38. However, only the latter became “locked in” and was able to redefine the two-pillar system in favor of economic power. World War II provided a powerful stimulus and coevolutionary lock-in to the central-command system that emerged from the terror. Organizational catalysis, which routinized all this, was the nomenklatura appointment system of social mobility. This made organizational biographies for the “generation of ’38” and also “circular flows of power” for leaders. In contrast, family circles were induced by structural conflict within the system. But they were mitigated by high rates of upward social mobility and returned when rates of mobility slowed down.
103Mao
104I spend more of my available space on the Soviet Union than I do on China37 because Stalin was the dual-hierarchy starting point, which established the set of evolutionary trajectories (“topology of the possible”) reachable for both cases. Within this range of potential trajectories, variation in degree of administrative centralization (historically rooted in Mao’s Great Leap Forward) produced, I argue, divergent developmental paths out of similar organizational and network feedback dynamics. The informal networks generated in China in reaction to Mao’s administrative decentralization were predominantly vertical patron-clientage trees, not horizontal family circles of resistance (and storming) as in the Soviet Union.
105Given the Soviet framework imported after Mao’s victory in 1949, the politics and economics of Mao’s Great Leap Forward in 1958–1960 bear a resemblance to the politics and economics of Stalin’s collectivization and his first Five-Year Plan in 1928–1932. And the politics of Mao’s Cultural Revolution in 1966–1969 bears a resemblance to the politics of Stalin’s Great Purge in 1937–1938. Even the temporal gap between their respective stages is similar. The differences are obvious enough: the Chinese Communist Party was rooted in the peasantry, whereas the Soviet Communist Party was rooted in the urban proletariat. And Stalin murdered his opponents, whereas Mao merely “rectified” them. But the broad-scale rhythm of economic-cum-political development in the two communist countries was remarkably similar, with China lagging by thirty years.38
106The budding planned Chinese industrial economy was subject to the same macroeconomic cycles that the Soviet economy had been: namely, sharp bursts of investment-driven growth, mostly in heavy industry, followed by retrenchments due to subsequent supply imbalances. The first year of such retrenchment and economic confusion in (p. 78) China was 1956, as new heavy-industry construction and socialist transformation of previously capitalist enterprises ran considerably ahead of the ability of primitive central planning to manage all of that. In addition, 1956 and 1957 were bad harvest years in China, as the first round of collectivization had just been completed. These economic events were ultimately the stimulus to the Great Leap Forward, launched in 1958. But dual hierarchy linked that cause to that particular effect through the medium of politics.
107Mao and the Chinese leadership did what Stalin had done in the late 1920s: they turned to the party to mass mobilize. Not only did this mean local cadres at the base, but it also meant provincial secretaries anxious for investment, development, and pork for their regions.
108The Great Leap Forward escalated because of an enthusiastic response from the Communist Party, but was initiated in 1956 and 1957 as more incremental reform steps by the central leadership. These empowered the party to engage more deeply in economic management. The first step, in August 1956, was reform at the factory level: a backing away from “dictatorial” management by factory directors toward collective leadership by factory party committees. This was exactly the opposite of what Stalin had done. The second step, in November 1957, was reform at the “ownership” level: factories other than large-scale enterprises in heavy industry would henceforth be administered by governmental planning authorities at the provincial level and below. Mao did not abolish all central ministries—he preserved them for large-scale factories in heavy industry—but he did move 80 percent of the central government’s enterprises down to lower governmental levels.
109The net effect of Mao’s reforms is illustrated in figure 2.6. The Chinese Communist state still owned all of the economy, as in the Soviet Union, but now “the state” no longer meant hypercentralized “Moscow.” Huge Soviet-style enterprises were still administered (p. 79) by Beijing, but now administration of medium-sized enterprises was delegated down to provincial capitals, and of small-scale enterprises to county seats.
110
111Click to view larger
112Figure 2.6 Chinese state ownership of economic enterprises after Great Leap Forward.
113
114The reason this system locked in and became autocatalytic in China was the regionalized (almost autarchic) structure of the more underdeveloped Chinese economy at that time. Regional administration fit regional economic clusters (Donnithorne, 1967). This was in sharp contrast to the uber-specialized and regionally interdependent economy that Stalin had bequeathed to the Soviet Union.39
115Although it began with the same formal network system (two pillar) and choice of constituency to appeal the reform to (party officials), the decentralization of Mao’s Great Leap Forward created very different political alliances than the top-down pressure of Stalin’s Five-Year Plan. Horizontal family-circle collusion and lying between enterprise managers and party cadres were not as valuable for small- and medium-sized enterprises no longer explicitly part of the central Beijing Plan. Now instead of turning to enterprise managers at the same level, the best route for protection for a local party cadre from top-down pressure from his boss, the principal party secretary, was to end-run that boss with personalized connections to his boss in Beijing. Vertical ties of personal loyalty developed between the top and the bottom to circumvent problematic middle steps in between. If ideology aligned them to mitigate the built-in organizational tension, then vertical ties of “principled particularism” could develop between adjacent levels as well (Walder, 1986).
116The net effect of this second-order growth of informal patron-client networks around the trellis of formal economic decentralization is illustrated in figure 2.7. Network trees of clientage grew within regions, culminating at the Central Committee,40 where contending factions faced off. Bottom-up demands for patronage were met with enthusiastic response from the top, as contending leaders struggled over succession. As long as Mao stood above these “lineage” trees of patronage as charismatic unifier/broker, contending regionally based factions could coexist. But if ever the unifying power of the Chairman weakened (as it did after the Great Leap Forward), the political system splintered automatically into potentially deadly factions.
117At that point the weakened CP leader faced the nuclear option of “purge and mass mobilization.” As is well known, Mao in fact chose to push exactly this button during the Cultural Revolution, mobilizing the rabid bottom of the party through his Red Guards. Mao’s own red faction purged the People’s Liberation Army (PLA) after Lin Biao tried to assassinate Mao during an attempted coup; otherwise the PLA might have been able to play a “third-column” control function for Mao during the Cultural Revolution, stabilizing tensions between the political and economic pillars. And thus the Red Guards would not have gotten out of Mao’s control. As it was, Mao (like Gorbachev after him) failed to develop Stalin’s level of feedback control over the powerful bottom-up forces that he had unleashed. The (now more conservative) PLA was then called in to crush the Cultural Revolution, rather than to manage it.
118Call Lin Biao’s attempted assassination a “contingency” or “a butterfly effect” if you will. But attempted coups are not exactly surprising given a decapitated version of the (p. 80) factional structure in figure 2.7. Just as Stalin turned to “purge and mass mobilization” after witnessing the failures of the political alliances (family circles) created from reform through the party, Mao too changed reform tactics once the disparate factions created by the Great Leap Forward swung out of control.
119
120Click to view larger
121Figure 2.7 Catalysis of Mao’s communist economy and party.
122
123Deng Xiaoping
124Westerners like to think that Deng Xiaoping was a liberal who sensibly repudiated the crazy Mao Tse-tung because he finally understood the superior rationality of the West and its “markets.” But this denies that Deng was a communist, trying to strengthen communism, especially after its period of internal troubles, not to weaken it. The path-dependency thesis here, instead, is that socialist “markets” all along were one of the inbuilt trajectories of communist development.41 There just had to emerge communist politics and networks out of dual hierarchy to push communist economics down that (p. 81) road. The aftermath of the Cultural Revolution generated the prerequisite politics and networks, and it generated the leader to broker those political networks. The political alliances and interests created in reaction to Mao, in the long run, were able to alter the formal network from whence they came. Deng’s reforms had nothing to do with imitation of the West.42 Mao instead made accessible what Deng achieved.
125The argument is illustrated in figure 2.8. Factional remnants of the Cultural Revolution were resident in three organizational pillars: (a) the Soviet-style central-command economy, which was the redoubt of Mao’s “Gang of Four” radicals; (b) Deng’s soon-to-become reform supporters, who were fragmented around this Beijing core, in the decentralized regional provinces; and (c) the chastened PLA, who had cleaned up the Cultural Revolution mess. Deng Xiaoping constructed an alliance between (c) and (b), against Maoist (a), through the multiple-network brokerage mechanism of robust action (brokerage between contradictory segments, with multivocal attribution; see table 2.1 and Padgett and Ansell, 1993).
126Deng’s original power base was not the decentralization of pillar (b), but rather the PLA of pillar (c). Mao recalled Deng from Cultural Revolution exile in 1974 for two reasons: to substitute for a terminally ill Zhou Enlai in running the economy and to enable the simultaneous rotation of eight commanding officers of PLA military regions, to weaken their collective potential for a new coup.43 The generals’ support for Deng (p. 82) (which was not necessarily anti-Maoist) was rooted in their shared Long March days, when Deng himself had been a young general. Struggle for allegiance of the military continued as the inflection point in the interregnum politics between the death of Mao in 1976 and Deng’s accession to power in 1978.
127
128Click to view larger
129Figure 2.8 The politics of Deng Xiaoping’s economic reform: robust action.
130
131Deng’s robust-action brokerage emerged through linkage of his old PLA power base with a newly constructed economic-reform leg, assembled out of patronage clusters in the provinces, to build his two-legged political network support structure.44 This second, more dynamic half of Deng’s coalition was his famous sequence of liberalizing economic reforms. Sensibly labeled “playing to the provinces” by Shirk (1993), those economic reforms emerged through standard communist leadership behavior—namely, reaching out and mobilizing local and provincial party cadres through discretionary economic favors directed toward political allies. These famous economic reforms in the late 1970s and early 1980s consisted of three steps: (1) the household responsibility system in agriculture, (2) fiscal decentralization that allowed provinces to keep a negotiable X percent of tax revenue they collected,45 and finally (3) special economic trading zones in coastal ports. In all three cases, reform benefits were not distributed homogeneously across geography, but were distributed discretionarily to Deng’s provincial allies. Economic reform, therefore, was the same as political faction building through patronage, not dissimilar to what it had been in Stalin’s first Five-Year Plan. The content of those two economic reforms was rather different, but the politics was similar. Also similar to that first Soviet Five-Year Plan, entrepreneurial storming at a feverish pace ensued among party cadres (Walder, 1995; Oi, 1999).
132The main reasons, besides lack of historical perspective, that observers often do not recognize Deng’s economic reforms as communist behavior are two twists. The first tactical twist is that usually communist leaders initiated and constituencies responded, whereas with Deng first the constituency responded and then the leader initiated. As a matter of leadership style, this tactic was significant: Deng and his policy goals were inscrutable this way. As a matter of feedback, however, the positive reinforcement that political leaders and party constituencies gave to each other was crucial, whoever initiated the feedback cycle.
133The second misleading twist is that CP leader to provincial secretary feedback in communist dual hierarchies usually led to centralization both in the political and in the economic domains. In the case of Deng, it did lead to centralization (or more accurately to re-centralization) in the political domain, but it also led to decentralization in the economic domain. This is because the plan was now constrained to the politically untrustworthy Beijing leg of large factories.
134Similar to Cosimo de’ Medici in Florence, Deng Xiaoping could plausibly be interpreted as having multiple identities, because of the heterogeneous support structure that he supervised. Because of this structurally enabled multivocality, which Deng did not destroy by uttering words or policies too clearly, he could be seen as a sphinx-like “friend to all” (except the Maoists) and an honest broker. Deng floated above the system, not beholden to any segment. He even imitated his mentor, Mao, by resigning his official (p. 83) offices as chairman (“retreating from the front line”), in order better to rule murkily from behind closed doors. Lest anyone mistake his studied ambiguity for passivity, however, Deng could easily shift back to his original PLA power base, as evidenced by his ruthlessly murdering students in Tiananmen Square.
135By Western standards, there can be no doubt that Deng Xiaoping was the most successful communist economic reformer ever. Measured solely by economic criteria, the transformation of China he pulled off was little less than miraculous. The attributional tendency post hoc is to anoint him a genius. But unlike Mao, Deng had no utopian vision. His famous declaration of pragmatism was: “I don’t care whether the cat is black or white, as long as it catches mice.” While there can be no doubt about Deng’s shrewdness, the nature of that shrewdness was not a brilliant plan, skillfully implemented. Chinese economists interviewed by Shirk seem to have captured best his and his allies’ leadership style when they reported, “When they found loose stones, they pushed through; when stones would not move, they did not waste energy pushing.” Deng, in other words, adapted to what he encountered and to what he inherited. He was not just a leader but an autocatalytic leader, part of the dynamic system he inhabited.
136Gorbachev
137A brief sketch of Gorbachev serves as a contrast with Deng and demonstrates the path-dependent failure of his sequence of reforms in the 1980s, which led to the collapse of the Soviet Union.46 Figure 2.9 presents at least the dual-hierarchy, organizational network skeleton of that analysis of Gorbachev and the fall of the Soviet Union.
138In the present context, the most important conclusion from that analysis was that dense, “family circle”–style, horizontal informal networks, which were bequeathed to Gorbachev by Stalin, deprived Gorbachev of any Chinese-style, vertical, patron-client networks with which to break through those layers of intentional sandbag resistance within the party. Despite Gorbachev’s masterful control of the Kremlin itself, it was the absence of any informal-network leverage to reach outside of the Kremlin47 that led to his fateful decision to go to war against his own CP, through “democratization.” (The right column of figure 2.9 shows the short-lived third pillar that Gorbachev was trying to develop and lead.) Urban liberals, he hoped, would swarm to his charismatic side, giving him the leverage over the party that he needed, without dissolving the CP itself—just as the Stakhanovites had done for Stalin, and just as the Red Guards more problematically had done for Mao. Alas for Gorbachev, those urban liberals chose to swarm to charismatic Yeltsin instead—in the name of nationalist Russia, not Gorbachev’s beloved Soviet Union. Gorbachev’s high-risk purge and mass mobilization control strategy was hardly beyond the realm of built-in communist evolutionary trajectories. In the end Gorbachev, like Mao, failed to control the powerful feedback dynamics that he himself had unleashed. (p. 84) 
139
140Click to view larger
141Figure 2.9 Soviet dual hierarchy, with Gorbachev’s challenge of soviets.
142
143Obstreperous horizontal networks within the party drove Gorbachev toward trying to create reformist vertical networks for himself outside the party, all in the name (and I think the true goal) of reforming, not abandoning, communism. But even to reproduce, much less to work, political networks have to have autocatalytic reality; they cannot be wished out of thin air. Coevolution and state formation, Gorbachev found out to his dismay, require more than good intentions, a clever mind, and dictatorial power.
144(p. 85) Conclusion
145This chapter has been the communist illustration of the general mantra of Padgett and Powell: “In the short run, actors make relations. In the long run, relations make actors” (2012, 2). There are practical evolutionary and research implications, I argue, of even as general a mantra as this. Social and political coevolutionary history is not a teleological march toward some mythical optimum. It is instead a series of branching trajectories, in which only a finite set of accessible futures are contained within the present multiple-network array. That array, in turn, is the selective memory of its history.
146Not unlike the biological evolution of life in general.
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206Notes:
207(1.) I want to thank Alex Montgomery for extremely helpful and thorough suggestions and editing.
208(2.) A conceptual mistake made by social Darwinists of both yesteryear and today.
209(3.) For example, kinship networks raise children to fulfill parenting roles, and guild networks train apprentices to become masters (see figure 2.1a).
210(4.) This chapter draws from chapters 1 and 9 in Padgett and Powell (2012). See those chapters for longer, more thorough analyses of the themes adumbrated in this chapter. Extensive citations are provided there more than here.
211(5.) A distinction developed further in Padgett and Powell (2012).
212(6.) Consider, for example, the meteor that killed the dinosaurs. Yes, it is true that “contingency” did in the dinosaurs. The problem with this analysis, however, is that many similar meteors have struck the earth without ecological catastrophe ensuing. Something about the ecology of the earth at that historical moment made interdependent populations of species vulnerable not just to death, but also to contagions of extinctions. The same logical problem afflicts Tilly’s aphorism: “War makes states, and states make war.” Yes, there are many examples of this in human history. But there are also cases in which wars make coups, wars make fragmentation, wars make social revolutions, and wars make simple collapse. Looking at “war” as an independent variable, abstracted from the multiple-network feedbacks that both produce it and respond to it, is a conceptually thin approach to understanding evolutionary change. (The real Tilly, by the way, was far more complicated than this cartoon that his anti-bellicist critics have constructed of him.)
213(7.) This figure is a cartoon of the relational database structure of Padgett’s actual Florentine data set. See Padgett (2010) for details.
214(8.) And are in Padgett and Powell (2012)—see especially chapter 6 on early-modern Netherlands during the Dutch Revolt and chapter 7 on nineteenth-century Germany under Bismarck.
215(9.) Profit maximization, for example, might be the goal of a businessman. But that is not the goal of a more complicated businessman-father-politician ensemble person. For this reason, “methodological individualism” is a misnomer. “Methodological role-ism” is a more accurate description of modeling practices in the segregated world of contemporary social science.
216(10.) This caveat makes the imputation of any meta- or cross-role utility function to individuals problematic, because Von Neumann-Morgenstern axioms are likely to be violated. Without a well-defined utility function, the definition of maximization becomes unhinged. Cross-role consistency is of course possible, but that would be quite a social achievement. In this sense, rationality (narrowly conceived as individual maximization) is socially produced.
217(11.) We stick with the word “recombination” because it is so prevalent in the literature. But in our empirical cases the elements being recombined are not atomic entities, decoupled from their context, but rather nodes or ties in some network or other. For that reason, the words “network folding” more accurately describe the phenomena we observe than does the word “recombination,” which to our ears has atomistic overtones.
218(12.) See Padgett and Ansell (1993); Padgett and Powell (2012) call this “transposition and refunctionality” (chapters 6 and 13).
219(13.) Padgett and Powell (2012) call this either “incorporation and detachment” (chapter 5) or “migration and homology” (chapter 7), depending upon which half of this process occurs first.
220(14.) Stadler et al. (2001); Fontana (2006).
221(15.) See Padgett, Lee, and Collier (2003).
222(16.) As explained in Padgett and Powell’s chapter 1 section on catalysis, if the analyst looks at figure 2.1b from the top down, viewing through superimposed domains, then he or she sees figure 2.1b as a Venn diagram. Patterns of overlaps among domains in the Venn diagram are defined by patterns of multifunctional memberships of people. Change patterns of multifunctional embeddedness, therefore, and one changes patterns of domain differentiation.
223(17.) Autocatalytic theory, described in more detail in chapters 2 and 3 in Padgett and Powell (2012), is a branch (a chemistry branch) of loosely called complexity theory.
224(18.) Eigen and Schuster (1979). See Fontana and Buss (1994) for further development, and Jain and Krishna (1998) for extension of this Eigen-Schuster insight to ecologies of communities of species.
225(19.) This is not to deny, of course, that negative feedback loops are also important to keep such growth in chemical concentrations bounded.
226(20.) Contra the charge of Emirbayer and Goodwin (1994), this postponement of sustained focus on linguistic autocatalysis was not due to some misguided theoretical commitment that “culture is not important.” Rather, our particular empirical case studies most often revealed tippings in production and especially biographical autocatalysis to precede in time tippings in linguistic understanding of those tippings. This is not surprising during turbulent periods of punctuated equilibria—often people’s consciousness struggles to catch up with huge macro events beyond their control. Since 2012 some limited progress has been made toward understanding and modeling linguistic autocatalysis (Padgett 2015).
227(21.) Success for such an analysis is to be measured not by the vainglorious standard of predicting the future, even in hindsight. It is to be measured instead on the yardstick of whether it can identify finite trajectories of evolutionary economic development, reachable through realistic politics of regimes of the time. The experience of smart but not wise Western economic advisers to Yeltsin should be enough to cure us all of the disease of excessive self-confidence. Interestingly, the impressive success of economic reform under Deng Xiaoping was achieved without any “helpful” advice from Western academics.
228(22.) This is not to apologize. Without the first four research stages, one does not know what to count or where to look for confirmatory data.
229(23.) Schurmann (1968) was the first Western academic, to my knowledge, who analyzed communism explicitly in terms of the concept of dual hierarchy. As for differences, the secret police under Stalin, the people’s liberation army under Mao and Deng, and the military under Gorbachev loom large as background third pillars in the histories of those regimes, episodically used as levers on the two primary pillars.
230(24.) Leadership control over the Central Committee was achieved through the “circular flow of power”: namely, leaders appointed provincial secretaries and ministers who joined the Central Committee, which voted on the succession and renewal of the leaders.
231(25.) One might consider this political spying, except that the identities of CP members in the firm were not secret.
232(26.) People forget that an important part of Stalin’s Great Purge campaign of 1937–1938, which murdered over six hundred thousand party members, was his new constitution, which granted considerable electoral freedom (including the secret ballot) to the lower echelons of the Communist Party. These elections reinforced and fueled denunciations from below.
233(27.) It is interesting that Mao’s Cultural Revolution followed soon after his Great Leap Forward, just as Stalin’s Great Purge followed soon after his First Five Year Plan. The logic of this sequence is explored below.
234(28.) The developmental states of Japan and South Korea, while not communist, are additional apt examples.
235(29.) The New Economic Policy (NEP) in the 1920s under Lenin was an example, considered by Lenin, however, only as transitional.
236(30.) A more complete description of Deng’s strategy will become “robust action” (cf. Padgett and Ansell 1993), once the latent pillar of the People’s Liberation Army is taken into consideration.
237(31.) By this language I do not mean to imply that a great man “did it.” All any reform leader can do is to perturb autocatalytic processes into self-reorganization. The complexity of changing a country is beyond anyone’s intelligence and foresight.
238(32.) For literature and secondary-source evidence behind the brief summaries here, see Padgett, “The Politics of Communist Economic Reform: Soviet Union and China,” in Padgett and Powell (2012, ch. 9).
239(33.) Not “from scratch” exactly: on the agrarian-collectivization backs of exploited and murdered peasants.
240(34.) “Building factories today with future bricks,” Bukharin scornfully snarled (Cohen 1973, 296).
241(35.) “D.B. Riazanov quite aptly remarked at the sixteenth party conference in April 1929: ‘Every speaker from this platform ends with the conclusion: ‘Give us a factory in the Urals, and to hell with the Rightists! [Laughter] Give us a power station, and to hell with the Rightists! [Laughter]’ ” (Kuromiya 1988, 20).
242(36.) As Gerschenkron (1962), among few others, realized.
243(37.) Again, see chapter 9 in Padgett and Powell (2012) for more details and references.
244(38.) The state of economic development in China after World War II was also roughly similar to the prostrate state of economic development in Russia after World War I.
245(39.) Khrushchev, in other words, was defeated by the organizational ghost of the Stalin that he had denounced.
246(40.) Called Politburo in the Soviet Union.
247(41.) Clear evidence for this was Kádár’s Hungary, the model case that most fascinated Gorbachev. Kosygin under Brezhnev and the NEP under Lenin/Bukarin are other examples, albeit ones that did not lock into autocatalysis as in Hungary.
248(42.) Unlike Yeltsin and the East Europeans, for example, Deng never asked Western economists for any advice.
249(43.) “The elements of the bargain were clear. In return for giving up political power, the generals were promised that [the premiership] would be put into the responsible hands of a trusted old comrade” (MacFarquhar 1997, 291).
250(44.) Deng’s two-legged political network support structure was structurally similar to Cosimo de’ Medici’s coupling of old patricians through marriage with new men through business (Padgett and Ansell 1993).
251(45.) Americans of the time period would have called this “revenue sharing.”
252(46.) For those interested, please consult chapter 9 of Padgett and Powell (2012, 297–309).
253(47.) “Beginning in 1985 I flew to Moscow three years in a row, immersing myself in the atmosphere of the capital, and met politicians, journalists, artists and writers. What were my impressions? Perestroika was going at full speed—a real tidal wave! Then I travelled from the capital into the countryside. Go some hundred or two hundred kilometers away and things were completely different—all quiet, no change” (Report of American researcher Ed Hewitt to Gorbachev in 1991, in Gorbachev 1995, 195–196).
254John F. Padgett 
255University of Chicago
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