(2024-07-04) Delong A Return Of Management Cybernetics As A Way Forward Out Of Economics-based Neoliberalism

Brad DeLong: A Return of "Management Cybernetics" as a Way Forward Out of Economics-Based Neoliberalism? I signed up to write an 800-word review of Dan Davies’s brand-new The Unaccountability Machine. (2024-07-04-DelongHowHumanityLostControl)

The problem is that what I now have is more than 5000 words....here is THE WHOLE CURRENT THING

By reviving the ideas of cybernetics pioneer Stafford Beer, Davies suggests we can build organizations that are not just efficient, but truly accountable

We have built a world of vast, interlocking systems that no one can fully understands.

Can there be a way to tame these monsters of our own creation, to give them human faces? Dan Davies thinks the forgotten discipline of “management cybernetics” might provide a way.

is a little book, and is a great book

So what do we do? Davies says the first step is for him to write his book, attempting to revive what was once an important intellectual movement of the post-World War II world, cybernetics.

Davies’s argument is thus an optimistic one—that we can understand what appear to be the opaque workings of large systems because if there is not yet we can build a functioning intellectual discipline to help us manage them. Davies writes as if this conundrum we face is a product of the post-WWII history of the so-called “managerial revolution”. (cf (2020-09-25) Rao Fifth Generation Management)

But Henry Farrell argues that it is in fact much older than that. And I agree with him. Davies has chosen what Farrell calls the “Vico” as opposed to “Kafka” prong of the fork: Vico-via-Crowley and Kafka-via-Jarrell present the two prongs of a vaster dilemma. (cf (2024-04-17) Farrell Cybernetics Is The Science Of The Polycrisis)

I see five pieces spun together:

(1) revive the influence and reputation of counterculture-era management cyberneticist Stafford Beer.

ensures that the internal flow of information between deciders and decided-upon is kept in balance so that they become and remain viable systems that are useful to humanity.

(2) Our current world is beset by accountability sinks—places where things are clearly going wrong, but it is nobody’s fault

(3) Every organization needs to do five things: operations, regulation, integration, intelligence and philosophy.

(4) Sometimes you need to get all the things done by simplifying-and-optimizing: delegate

(5) Most of the time what you really need to get all the things done is to build better feedback loops

The organization needs to better match in its internal structures the complexity of the environment it is dealing with

Critical decisions increasingly made by systems and processes rather than by individuals with a stake.

A significant strength of the book lies in its ability to connect these abstract concepts to tangible, real-world consequences

Note that nowhere in this management cybernetics is a primary task one of making sure that people have the right incentives to act on the information they have

I need to stress here that economists’ advice and counsel is, in Davies’s view, worse than useless in solving these problems

In the 1980s British Chancellor of the Exchequer Nigel Lawson argued that since Britain’s foreign-exchange current-account deficit was generated by a free market, it must be good. But it was not good at all, Davies argued on his weblog

the self-regulatory mechanism didn’t have enough information processing capability to regulate this problem quickly enough…. It didn’t have enough bandwidth…

Davies appears especially angry at what he sees as the intellectual wasteland and on-the-ground rubble left by Milton Friedman, and his shareholder value-maximization doctrine. It took a post-WWII oligopolistic-company system that was in rough, effective, and useful cybernetic balance—what John Kenneth Galbraith called the “technostructure”—and destabilized it by turning its components into harmful paperclip short-term profit maximizers. (cf paperclip maximizer)

Any system which is set up to maximise a single objective has the potential to go bonkers (hmm north-star metric?)

The top level of any decision-making system that’s meant to operate autonomously can’t be a maximiser. (autonomy)

Still, is this more than mere handwaving? I think not quite, but almost:

Groups of humans that achieve outcomes or “decisions that are distinct from the intentions of their members…”—now that leads me to reach for Adam Smith and his Wealth of Nations

For Adam Smith, the fact that the market economy considered as a slow-AI has a mind of its own is not a bug but a feature.

But the market economy was not alone as a human-made but inhuman-scale and incomprehensible societal mechanism. We have others. And all of our global-scale societal mechanisms are Janus-faced. (BigWorld)

They are extraordinarily, massively, mind-bogglingly productive

But these mechanisms are also horrifyingly alien, inhumanly cruel, and bizarrely incomprehensible. Franz Kafka saw this. As Randall Jarrell wrote: “Kafka says… the system of your damnation… your society and your universe, is simply beyond your understanding…”

what Ezra does not appear to recognize is that his metaphors of finding ourselves in a room with possibly malevolent THINGS that have escaped confining pentacles applies not just to programs running on NVIDIA-designed GPUs. Mary Shelley saw that it applied to science, Karl Marx to the market economy, Franz Kafka to bureaucracy. Theodor Adorno to the creation and transmission of culture, Henri Marcuse to modern democracy, and so on.

We are under the dominion of sophisters, calculators, and most of all economists. So we have systems that are highly efficient at managing the wrong things in the wrong way. They are maximizers, where the goal is to make as much money as possible

Every decision-making system set up as a maximiser needs to have a higher-level system watching over it. There needs to be a red handle to pull, a way for the decided-upon to indicate intolerability

This is what I see as Davies’s major action-item conclusion: [In] the decision-making system of a modern corporation… one of its signals has been so amplified that it drowns out the others. The ‘profit motive’ isn’t…. Corporations… don’t have motives. What they have is an imbalance

the short-term planning function has to operate under the constraints of the financial market disciplinary system…. Take away that pressure [and] it’s quite likely…corporate decision-making systems will be less hostile

And the tasks of management cybernetics will never end: Complexity is constantly increasing…. Reorganisation is the way in which environmental variety is brought back into balance with the capacity to manage it….

In the final analysis, therefore, The Unaccountability Machine is a guide to action—or at least to thought to how to take action. It is a great book: a crucial addition to the discourse on governance, ethics, and the role of social-organizational as well as nature-manipulation technologies in society.