The Unaccountability Machine

1. Accountability sinks: How modern systems avoid responsibility

The purpose of a system is what it does.

Unintended consequences. Modern organizations often create "accountability sinks" - structures that absorb responsibility without attributing it to specific individuals. This phenomenon is seen in corporate hierarchies, government bureaucracies, and automated decision-making systems. These sinks emerge as a response to increasing complexity and the desire to avoid personal blame for negative outcomes.

Examples and implications:

• Corporate policies that prevent direct communication with decision-makers
• Automated customer service systems with limited human intervention
• Government agencies with overlapping jurisdictions and unclear lines of responsibility

The proliferation of accountability sinks has led to a general sense of powerlessness among individuals and a loss of trust in institutions. As systems become more complex, it becomes increasingly difficult to identify and address the root causes of problems.

2. The rise of cybernetics: Understanding complex decision-making systems

Complex systems cannot be treated as an interlaced set of more or less independent feedback circuits, but only as a whole.

Systems thinking. Cybernetics, the study of control and communication in complex systems, provides a framework for understanding how modern organizations and societies function. Pioneered by figures like Norbert Wiener and Stafford Beer, cybernetics emphasizes the importance of feedback loops, information flow, and adaptive behavior in maintaining system stability.

Key concepts in cybernetics:

• Black box thinking: Focusing on inputs and outputs rather than internal workings
• Variety engineering: Managing complexity through information filtering and amplification
• Viable System Model: A framework for designing effective organizations

Cybernetic principles can be applied to a wide range of fields, from business management to government policy, offering insights into how to create more resilient and adaptive systems.

3. Economics' blind spots: The limitations of market-centric thinking

Economists ended up solving this problem by denying it.

Oversimplification. Mainstream economics often relies on simplifying assumptions and models that fail to capture the full complexity of real-world systems. This has led to blind spots in economic thinking, particularly in areas such as:

• Time and uncertainty: Flattening complex future scenarios into simple probability distributions
• Non-market interactions: Undervaluing social relationships and non-monetary exchanges
• Systemic risks: Failing to account for interconnected vulnerabilities in financial systems

These limitations have contributed to policy failures and economic crises, as decision-makers rely on incomplete or inaccurate models of how the economy functions.

4. The Friedman Doctrine: Shareholder value and its consequences

If you're so smart, why aren't you rich?

Short-term thinking. Milton Friedman's assertion that the sole responsibility of business is to increase profits has had far-reaching consequences. This doctrine, which gained prominence in the 1970s and 1980s, has led to:

• A focus on short-term financial metrics at the expense of long-term sustainability
• Increased use of stock options and performance-based compensation for executives
• Pressure to cut costs and outsource non-core functions

The emphasis on shareholder value has contributed to rising inequality, decreased job security, and a loss of social responsibility among corporations.

5. Financialization and debt: Tools of control in modern capitalism

Debt becomes an instrument of control.

Leverage and risk. The increasing financialization of the economy has led to the use of debt as a powerful tool for control and profit extraction. This trend has manifested in several ways:

• Leveraged buyouts and private equity: Using debt to acquire and restructure companies
• Consumer debt: Encouraging individuals to borrow for consumption, education, and housing
• Sovereign debt: Using international lending as a means of influencing national policies

The proliferation of debt has increased systemic risks in the economy and shifted power dynamics between debtors and creditors, often to the detriment of workers and communities.

6. The decerebration of organizations: Outsourcing and loss of cognitive capacity

Companies began to hallucinate.

Organizational amnesia. The trend towards outsourcing and cost-cutting has led to a loss of internal knowledge and decision-making capacity in many organizations. This "decerebration" process has several consequences:

• Reduced ability to respond to complex challenges
• Loss of institutional memory and expertise
• Increased reliance on external consultants and temporary workers

The hollowing out of organizational knowledge has made companies more vulnerable to disruption and less capable of long-term strategic thinking.

7. The polycrisis: Economic instability and populist backlash

Everyone in Ireland had the idea that somewhere . . . there was a little wise old man who was in charge of the money . . . They saw him and said, "Who the fuck was that? Is that the fucking guy who is in charge of the money?" That's when everyone panicked.

Systemic failures. The convergence of multiple crises - financial, environmental, social, and political - has revealed the fragility of existing systems and institutions. This "polycrisis" has led to:

• Increased economic uncertainty and inequality
• Loss of faith in traditional political and economic elites
• The rise of populist movements and anti-establishment sentiment

The inability of existing systems to address these interconnected challenges has created a fertile ground for radical change and social upheaval.

8. Rethinking purpose: Moving beyond profit maximization

Businesses ought to be like artists, not paperclip maximisers.

Holistic value creation. A shift away from single-minded profit maximization towards a more nuanced understanding of organizational purpose is needed. This involves:

• Considering multiple stakeholders: Employees, communities, environment, as well as shareholders
• Embracing complexity: Recognizing that organizations can have multiple, sometimes conflicting goals
• Focusing on long-term sustainability rather than short-term financial metrics

By adopting a more holistic view of purpose, organizations can better align their activities with broader societal needs and create more sustainable value.

9. Restoring balance: Addressing variety mismatches in society

The knowledge that something is an organisational problem means that the source of its complexity is the human beings in the organisation. That, in turn, means that the human beings in the organisation have sufficient variety and capability to match the complexity of the problem.

Adaptive systems. To address the challenges of increasing complexity and systemic instability, we need to create more adaptive and resilient social systems. This involves:

• Restoring communication channels between decision-makers and those affected by decisions
• Building redundancy and diversity into organizational structures
• Embracing uncertainty and experimentation rather than rigid planning

By recognizing the inherent complexity of human systems and designing institutions that can adapt to changing circumstances, we can create a more stable and equitable society.

Last updated: August 19, 2024