I was also told that a brand-new CEO shouldn’t be trying to make huge acquisitions. I was “crazy,” as one of our investment bankers put it, because the numbers would never work out and this was an impossible “sale” to the street.

The banker had a point. It’s true that on paper the deal didn’t make obvious sense. But I felt certain that this level of ingenuity was worth more than any of us understood or could calculate at the time. It’s perhaps not the most responsible advice in a book like this to say that leaders should just go out there and trust their gut, because it might be interpreted as endorsing impulsivity over thoughtfulness, gambling rather than careful study. As with everything, the key is awareness, taking it all in and weighing every factor—your own motivations, what the people you trust are saying, what careful study and analysis tell you, and then what analysis can’t tell you. You carefully consider all of these factors, understanding that no two circumstances are alike, and then, if you’re in charge, it still ultimately comes down to instinct. Is this right or isn’t it? Nothing is a sure thing, but you need at the very least to be willing to take big risks. You can’t have big wins without them.

There are two obvious ways to fail here. The translation and error-correction mechanism might be inadequate, or the managers might intentionally distort the signals in order to follow priorities of their own. The tragedy of senior management is that it can drift into either of these failure modes without realising; if either problem arises, it arises in their information and communication environment, so they won’t notice it. It’s the problem identified by Niccolò Machiavelli — a prince who is not wise cannot be well advised, and a manager who doesn’t have access to excess analytical capacity won’t be able to tell when something has gone wrong with their subordinates. But maintaining that spare management capacity is expensive.

And this story repeats itself through the history of management science; almost every classic of the literature seems to have described a way of adapting systems to a more complicated world, and then to have become obsolete itself. If you look past the slogans and think about what things like ‘management by objectives’, ‘focus on core competences’ and so on actually mean, they are all different ways of advising executives to restructure their businesses so that they don’t generate complexity faster than it can be managed.

The intellectual backing for the leveraged buyout movement was explicitly disciplinary, and the use of debt as both as technology of control and as a way of serving the interests of capital-owners is clear as the moral of the case studies. Companies would pay out huge dividends and take on self-consciously risky Antoine’s of debt in order to ‘create a sense of urgency’ among their management, or to communicate management’s confidence that their accounting policies weren’t as aggressive as they looked.

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.