Stafford Beer takes an approach to this problem that helps to mark the distinction between information theory and cybernetics. That solution is to say that information and action are one and the same; variety coming in from the environment, or being transferred from one system to another, only counts as ‘information’ if it has a causal role in decision-making. Otherwise it’s just ‘data’ — collections of facts that hang around on disk drives, waiting to be erased* or for the format to become obsolete.

*There are a lot of people is Silicon Valley who might do well to consider how much money they have invested in ‘data’ without bearing this distinction in mind.

This is how the cybernetic problems of the post-war industrial state have been shaped by economics. There are three major blind spots: the belief in markets as computing fabric, the flattening of time and uncertainty and the commitment to Ricardianism.

The belief in markets as computing fabric is such an obvious source of blind spots as to hardly require explanation. Faith in the power of free markets to solve problems is so great as to support the reverse inference of economists that if something appears to be a market equilibrium, then it must be an optimal solution.

Intermission

Meanwhile, in Chile

The great misconception about the Chilean experiment is that it was an attempt to apply computer technology to the task of organizing a command economy. This is a handy myth for those who want to use it as an example for whatever argument they’re trying to make. Neoliberals and apologists for Pinochet and Friedman can pretend that it was a quixotic project with no more hope of working than the Soviet system; socialists and other apologists can pretend that it nearly worked. Neither is the case, and by now it ought to be obvious why — management cybernetics demonstrates quite clearly why a centrally planned economy doesn’t respect the law of requisite variety and can’t get the information it needs to function.

I wanted to write a sort of cybernetic political thriller, but it didn’t quite work out that way. It seems that in order to get to the point where the story begins, you need to write eight chapters explaining the construction of the murder weapon. But here we are. To recapitulate, the basic problem is that systems in general need to have mechanisms to recognise themselves when the complexity of their environment gets too much to bear. But the high-level governing systems of the industrial world — economic policy and business management — had some defects and blind spots which prevented this from happening. How did that turn into an economic crisis, and how did it mature into an ongoing political polycrisis? How did we get from the Friedman doctrine and leveraged buyouts to Trump, Brexit and populism?

The first part of the story involves expanding on the conclusion of the last chapter. A key part of recent history has been a story of class struggle, but not the usual kind. There’s been a class war between the capital-owning class and the managerial class.

If every maximising system has to have a higher-level system governing it (to make sure it doesn’t go bonkers), then that logically implies that the top level of any decision-making system that’s meant to operate autonomously can’t be a maximiser. And so, the governing philosophy of the overall economic system can’t be based on the constrained optimisation methodology that’s currently dominant in the subject of economics. Otherwise there’s a risk that the system will go bonkers, and that it will start pushing maximising objectives, oblivious to the danger that it’s on course for making human life impossible. Like it actually has done.