Dan Davies' The Unaccountability Machine

In which Dan Davies revives Stafford Beer and vilifies neoliberalism

Writing about a big, important issue with a light touch is a rare gift that makes Dan Davies’ book so good to read. In The Unaccountability Machine: Why Big Systems Make Terrible Decisions – and How the World Lost its Mind he wants to explain the current polycrisis (i.e. why so many things are going wrong simultaneously) and how the world has got here.

The basic insight is that many decisions are not made by individuals but by organisations and institutions that are following a process or rule, and those processes and rules have been developed to allow an organisation like a large corporation or government department to function in a complex environment. Decisions are made by systems that are ‘Strange, alien intelligences with desires and drives quite different from our own’ (p. 7).

This is the unaccountability sink, something has gone wrong but there is no-one to blame. Examples are banking crises or environmental disasters where the CEO apologises but is clearly not the person responsible, service centres where the computer says no, or the front line staff of an airline dealing with passengers on a cancelled flight. In an accountability sink a system or organisation delegates decision-making to a rule rather than an individual so, when something goes wrong, no one is held to account and society suffers as a result.

To explain this Davies discusses three twentieth century intellectual and organisational revolutions: the managerial revolution that transferred control over business from owners to managers; the cybernetics revolution, which ‘might have helped us understand that what mattered were the systems of management rather than the individual managers’ but never took off; and the neoliberal revolution and financialisation. There is a lot of history in this book, of ideas, of events, and on Stafford Beer, a founder of cybernetics in the 1950s who became a well-known management consultant in the 1960s and 1970s.

The book is in four parts. The first part is about unaccountability and cybernetics. What unaccountability is, how it happens and why it suits modern organisations to have these cut-outs between their customers or clients and their managers and executives. Many problems are not because individuals fail, but because of the opaque workings of decision-making structures. Cybernetics was an early information science attempting to understand communication and control in complex systems, and how to improve system design with better feedback loops. In the 1950s Stafford Beer and a small group of colleagues ‘invented information theory, the architecture of the microprocessor, digital computation and an awfully large proportion of everything which goes to make up the modern world’ (p. 96).

What happened to cybernetics? By the end of the 1950s the research had become focused on profitable solutions to computation and telecommunications problems of information storage and transfer, rather than potentially profound but difficult research on complex systems like organisations. Stafford Beer went on to become the ‘father of management cybernetics’ a method for understanding the corporate and economic world emerging in in the post-war decades. Beer saw companies as forms of non-human intelligence and solving their problems requires the flow of information between deciders and decided-upon being kept in balance. He wrote books with titles like Brain of the Firm and The Heart of Enterprise.

Part two is about organizations. For Beer every organization needs to do five things: operations, regulation, integration, intelligence and philosophy. Operations is doing the work; regulation is making sure the people doing the work have what they need when they need it; integration is making sure people are pulling in the right direction; intelligence is planning so you can modify operations, regulation, and integration based on events and learning; philosophy is why you are doing all of this. In a great analogy Davies uses an orchestra with musicians, conductor, tour manager, artistic director and Elton John representing the five functions.

Part three is about economics. Davies is an economist but he recognises economics has some serious problems and blind spots, such time and uncertainty, and assuming a result in a mathematical model has been proved in the real world, which is obviously not true. He is not happy about the ‘mathiness’ of contemporary economics, and suggests in the 1960s John Kenneth Galbraith (and others) offered managerialism as an alternative to the maximising calculators of equilibrium economics.

In Part four he is particularly unhappy about the baleful influence of Milton Friedman and his doctrine of shareholder value. He rails against private equity and leveraged buyouts as destructive and ‘the great unremarked class struggle that happened in the 1970s and 1980s was that between capitalism and managerialism. The managers lost this struggle pretty comprehensively’ (p. 226).

This is a great book, well written and enlivened with many anecdotes, examples and eccentrics. The idea that organisations are alien intelligences with rules and processes that are unaccountable because they decision-making to a rule rather than an individual is important. The first half is especially interesting, and Stafford Beer’s ideas on viable systems and designing organisations are well worth revisiting. In the second half Davies argues modern economics and private equity provide accountability sinks for poor government policies and predatory corporate finance respectively.

The final chapter suggests institutional and regulatory reforms to address the problem. When the problem is that ‘the artificial intelligences that rule our lives have gone mad’, the solution will be found not in economics and eliminating market failures, but in cybernetics and system design.

Davies, D. 2024. The Unaccountability Machine: Why Big Systems Make Terrible Decisions – and How the World Lost its Mind, Profile Books.