This article is taken from the July 2024 issue of The Critic. To get the full magazine why not subscribe? Right now we’re offering five issues for just £10.

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Have you noticed that things don’t really seem to work at the moment? Perhaps you have been to Accident and Emergency recently, or tried to catch a train, or are watching the general crisis engulfing British universities. There is lots of dysfunction to go around. Scepticism about claims of a zeitgeist — invariably an argument wrapped up as an observation — is usually correct. Nevertheless, in Britain in 2024 it is very tempting to identify the spirit of the age as the fact that things mostly used to work and now they mostly do not. Why this has happened is perhaps the great question of our times. 

Dan Davies, a former Bank of England economist and investment bank analyst turned journalist and commentator, thought he had an answer. Davies’s last book, Lying for Money, is one of the best studies of financial fraud. What marks it out is its analytical depth, the way that it examines what fraud is and how it works conceptually. What better preparation could there be for a study of why things have gone so wrong? 

The problem, Davies thought, was that modern managerialism had broken the link between power and responsibility. Companies and governments had created “accountability sinks”, where amorphous systems, not clearly identifiable individuals, take the key decisions. Since, however, shouting at a system is both practically difficult and emotionally unsatisfying, people, committees, or organisations, which by design cannot decide anything, find themselves somehow made accountable for what has been decided. 

Think of the man or woman manning the barrier at King’s Cross just after most trains on the East Coast Main Line have been cancelled and you can grasp the concept at once. Things do not work because there is no way for the system to take on board the feedback that its individual agents receive, so problems are simply ignored. Hence everything from bad customer service to populism in politics.

This is a superficially compelling explanation and — now that you know about them — you too will begin to spot accountability sinks all over the place. It is to Davies’s considerable credit that, as he explains, he became unsatisfied with this intuitive and eminently marketable take on modern dysfunction. 

The problem, he realised, was that it was simplistic. “Outsourcing decisions to systems” is another way of saying that you have clear pre-existing procedures for handling difficult situations. In the right light, the law in all its majesty — statutes and common law, courts and bewigged personnel — is a sort of accountability sink, designed to produce outcomes that do not reflect the whim of a single individual. It would seem courageous, or rash, to suggest that arbitrary decision-making would represent a big improvement.

The Unaccountability Machine is the product of that dissatisfaction with a too-convenient diagnosis of the problem. Davies has drunk deep and the book is more interesting, unpredictable, and thought-provoking as a result. It pursues three broad lines of inquiry. 

First, it looks at how decision-making has been industrialised — the way that the power to choose has moved from people to systems, so that decisions are taken without any individual person feeling that they have taken them. 

Second, it offers an intellectual history of cybernetics, the study of complex systems and how to control them, which owes its modern origin (and moniker) to a 1948 book by the polymath Norbert Wiener. 

Third, it concerns itself with how the insights of cybernetics have been rejected by mainstream economics, the intellectual framework for the organisation of modern life. This, Davies argues, is at the root of the present dysfunction: we have handed over all crucial decisions to complex systems and then refused to think about how they work.

If The Unaccountability Machine has a hero, it is Stafford Beer (1926-2002). By turns a British Army intelligence officer, pioneering operational researcher for United Steel, and management consultant, Beer was also one of the leading theorists of cybernetics, and the author of several key texts, most importantly Brain of the Firm (1972). 

It was this guru-like status that saw Beer invited to Chile in the early 1970s by its president, Salvador Allende, where he was asked to put his ideas into practice in the recently nationalised sectors of the economy. That experiment did not survive the 1973 coup led by General Pinochet.

Beer was a true eccentric, his authority latterly enhanced by a beard of prophetic proportions. His characteristic mode of discourse was to say that he was presenting a simplified example and then introduce a hugely complex thought-experiment, accompanied by diagrams so elaborate that he often had to draw them by hand. He had a taste for neologism, both attributing arcane new senses to ordinary words and coining entirely novel ones. He almost invites caricature. 

That is what makes this part of the book so valuable. Beer was on to something and Davies has produced a clear, sympathetic but not uncritical exposition of his ideas. If you have ever worked in an organisation, let alone a large or badly managed one, you will have moments of recognition in reading this, a sense that Beer has rigorously theorised what you encounter every day. 

More importantly, you will get some idea of how structural problems might be fixed, even if I might advise against interjecting in your next staff meeting “of course, what we lack here is a System 4, the intelligence function”. You will also gain a new appreciation for the slippery nature of accounting systems and the profound effect they have on organising the world we know.

The villains of the book are more familiar: Milton Friedman, neoliberal economics in general, and private equity in particular. Davies — leftish rather than leftist — is too intellectually honest to indulge in simple polemic or merely to rehearse the standard indictments, but there are gaps here. 

For an author so interested in dysfunction and crisis, there is very little about why people in the 1970s were so desperate for a new intellectual framework for business and government. In the memoirs of John Hoskyns, a key adviser to Mrs Thatcher and (like Beer) a fan of complex diagrams, it is the sense of seething chaos, of a limited window to avoid total collapse, that drives change. The Friedmans appear only once — Hoskyns sat with Rose (wife to Milton) at a dinner and found her “smug and self-congratulatory”.

Neither arguments over intellectual history, however, nor the fact that the main change advocated by Davies is a relatively technical tweak to limited liability should obscure how important and intellectually stimulating this book is, and how much it packs into a narrow frame. If The Unaccountability Machine does not quite offer a solution to the crisis of the twenty-first century, it at least begins to diagnose the problem.