Every branch got a dashboard that provided read-outs on cost-income ratio, customer defections, profit per employee, loan performance, and per-customer profitability. The goal was to turn every branch into something close to a stand-alone business, a goal expressed in Wallander’s oft-repeated mantra that “the branch is the bank.” Where other banks saw branches as mere stores, charged with selling products and handling transactions, Handelsbanken saw branches as full-fledged businesses charged with building long-term relationships.

You’ll notice that the bank’s SG&A expenses (selling, general, and administrative costs) average less than 40 percent of revenue, versus an average of 67 percent for its rivals. This massive efficiency advantage gives Handelsbanken the ability to resolve the high-touch/low-cost paradox. When compared to its competitors, Handelsbanken underinvests in bureaucrats and overinvests in customer service. In so doing, it rejects the black-and-white thinking that is typical of other big banks.

Even when an organization is led by a pioneering CEO like Jan Wallander or Zhang Ruimin, crafting a new management model is more about “discover and test” than “engineer and impose.

From a cybernetic point of view, it’s interesting as an example of how the systems and structures mattered so much more than the individuals involved. The development of the Friedman doctrine into the intellectual backing for the leveraged buyout boom and the private equity industry are best seen as a conflict between two comprehensive systems of interest, both of which might have regarded the other as a threat. 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. And as we’ve seen, the combination of the blind spots in management and the blind spots in economics came together to produce an ideology which was bound to remove management capacity. And that created further blind spots, and further reduced the system’s ability to cope with shocks. The story of how we got to where we are is a story of the attempts of the system to cope with this, and to search for short-term equilibrium.

There are a number of models, most of them ignored for decades, in which the corporate sector provides a stabilising function, insuring the working class against fluctuations in the business cycle, rather than expecting them to soak up the volatility.

The intriguing thing is that Simon and Galbraith didn’t write polemics to the effect that this was how corporations should behave — they just described what was in front of them at the time. Before Milton Friedman’s essay, lots of people assumed that this was just naturally the way things would tend. Without the Friedman fiction by, without very great re-engineering of the systems of corporate finance, the industrial economy might have just gone on and developed into a technostructure.

Maybe they were right? It would certainly be good if they were, because that might indicate a much easier path to defuse the immediate source of crisis. If the problem with the modern corporation is the result of the capitalist counter-revolution against the managerial class, we just need to change the terms of the battle.