The results of this ambitious exercise were first presented to the Club of Rome in private and then published, in 1972, in a book, The Limits to Growth. The conclusions Meadows and his team reached were very different from Keynes’s utopian dream. They were also not what the Club of Rome, nor anyone else for that matter, wanted to hear.

Aggregating the outcomes of the various scenarios they fed into their mainframes showed unequivocally that if there were no significant changes to historical economic and population growth trends—if business continued as usual—then the world would witness a “sudden and uncontrollable decline in both population and industrial capacity” within a century. In other words, their data showed that our continued preoccupation with solving the economic problem was the starkest problem facing humankind and that the likeliest outcome if things continued was catastrophe.

Where history is a better guide to the future is on the nature of change. It reminds us that we are a stubborn species: one that is deeply resistant to making profound changes in our behavior and habits, even when it is clear that we need to do so. But it also reveals that when change is forced upon us we are astonishingly versatile. We are able to quickly adapt to new, often very different ways of doing and thinking about things and in a short time become as habituated to them as we were to those that preceded them. This being so, while automation and AI have made it possible for us to embrace a profoundly different future, it is unlikely that it will be the catalyst that causes the dramatic changes in “social customs and economic practices” that Keynes envisaged. Far more likely catalysts take the form of a rapidly changing climate, like that which spurred the invention of agriculture; anger ignited by systematic inequalities like those that stirred the Russian revolution; or perhaps even a viral pandemic that exposes the obsolescence of our economic institutions and working culture, causing us to ask what jobs are truly valuable and question why we are content to let our markets reward those in often pointless or parasitic roles so much more than those we recognize as essential.

Real businesspeople operate in ‘large worlds’, in which problems are ill defined and there are no objectively correct answers. Moreover, the ‘right’ answer will often not be apparent, even in retrospect. Effective decision-makers in large worlds are not maximising; they do not have and never can have the information needed to make the relevant calculations. They confront radical uncertainty. Often they not only do not know what will happen but do not even know the kinds of things that might happen. Although we must abandon ‘the pretence of knowledge’, individuals, institutions and businesspeople need to act in the face of uncertainties.

The focus on the firm as a collection of capabilities gives a different and more illuminating perspective for understanding the extraordinary diversity of business organisations and of businesspeople over geographies and over time. The core ideas in this book – collective intelligence, radical uncertainty, disciplined pluralism, relational contracts and the mediating hierarchy – have been extensively developed and discussed by earlier writers, though much of that work has been outside the context of business organisation. The relevance of each to the argument of this book arises from a belief that in the modern world successful commercial relationships are not simply instrumental and transactional; they are social and are embedded in a wider framework of communities and teams. That transactional view was both incorrect and unattractive. This book is written in the hope that a better account of how business and its stakeholders flourish will point the way not just to a better understanding of business but to the better conduct of business itself. In a successor volume I will try to explain some of the implications of that understanding for both business policy and public

Policy.

And this story repeats itself through the history of management science; almost every classic of the literature seems to have described a way of adapting systems to a more complicated world, and then to have become obsolete itself. If you look past the slogans and think about what things like ‘management by objectives’, ‘focus on core competences’ and so on actually mean, they are all different ways of advising executives to restructure their businesses so that they don’t generate complexity faster than it can be managed.