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.

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.

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.

I think this is what explains the thread between MAGA, Brexit, the Five Star Movement, Hindutva and all the rest. The populist movements of the 2010s all promised a simpler world; they were, in the words of J. K. Galbraith, taking on the great anxiety of their people and addressing it. They were also promising to restore the broken communication channels — to make voices heard, to force the managerial class to listen.

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.