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.

The Friedman doctrine forestalls this cacophony of complexity by substituting an abstract ‘representative shareholder’. Rather than thinking about actual human beings working in association, we’re invited to replace them with a black box that only cares about profits, the pretend that we can enter into the same sorts of relationships with that black box as we could with the individuals.

This is what makes the Friedman doctrine, as far as I can see, a lie; it’s an exhortation to executives to reverse the truth. They are meant to ignore the reality of the company and act as if they are directly employed by human beings, but then ignore the reality of human beings, and act as if they are employed by a theoretical construct.

It’s an attractive lie, though, thanks to the combination of the accountability sink with the shift in perspective. The great anxiety of the managerial class was that they were losing their individuality as corporations became more complex, but that they were still subject to criticism. The Friedman doctrine invited them to disassociate themselves from their roles; to attribute all the bad consequences and all the frustrating lack of independence to a separate work-self, which was under an obligation to a simple principle.

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.

The imposition of Friedmanism and the debt burden in the corporate sector gave a clear signal about the new priorities, but the equivalent processes in the public sector just added a lot of noise. The system was calling for ‘reform’ and revolution, but not giving any clues as what specifically ought to be done.

And so the progress of outsourcing and decerebration ended up being even more intense, and the public sector became as big a fee pool as the private sector for the consultancy industry. This had the effect of closing off the other possible way in which the working class might have insured themselves against volatility — through the policies of governments that they elected.

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.