The Unaccountability Machine— Dan Davies

Part 1: The Nature of the Crisis

1.Something’s Up

““Capitalism is disappearing, but Socialism is not replacing it. What is now arising is a new kind of planned, centralised society which will be neither capitalist nor, in any accepted sense of the word, democratic. The rulers of this new society will be the people who effectively control the means of production: that is, business executives, technicians, bureaucrats and soldiers.”

George Orwell, ‘James Burnham and the Managerial Revolution’,1946

Then the 2008 financial crisis happened, followed by a long period of recession and austerity, and suddenly it turned out that the technocratic consensus wasn’t as competent or moderate as it had appeared. Ten to twenty per cent of the electorate suddenly realized that they might have to take an interest in politics after all. So they started paying attention again, and they didn’t have the basic assumptions of the mainstream. All they knew was that the people who used to be in charge seemed to have screwed things up mightily.

J.K. Galbraith, possibly the only other economist of the 1970s with anything like Milton Friedman’s public profile, once said that the essence of leadership was ‘the willingness to confront unequivocally the major anxiety of their people in their time’.

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.