In the years when it looked like things were going well, the central banks developed a view of the world in which the changing structures of global finance weren’t part of their job. They didn’t pay attention to the debt bubble, and they had got rid of the communication channels that might have carried the red-alert warnings up to the highest levels of policy-making. More precisely, they had got rid of the translation systems. There was no shortage of people warning that there was a problem in 2006 and 2007, but none of these warnings was given in a form that could be recognised by the world’s central bank governors as requiring action. A failure to build System 4 and balance its variety against System 3 is itself a failure of System 5 — that’s the function that has the job of balancing ‘here and now’ against ‘there and then’. So, using the viable system model to diagnose the causes of the global financial crisis, we end up with a rather interesting conclusion. Where things went wrong was a matter of philosophy. The central banks had an identity-creating function, but it had failed; it defined their purpose in such a way that they failed to understand that particular kinds of information were relevant to them.

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.

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.

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.