I’ve been interested in why organizations work (or seem to not work,
despite everyone in them being good people). Another book cited the
book “The Unaccountability machine”
(wikipedia,
HelMet
libraries)
as being related to this topic, so I checked it out. In the end, the
book did provide some thoughts on this, mainly through the lens of
complex webs of decision making and accountability sinks. The first
half was most relevant to me; the second half ventured into economics
and society (which was still interesting, but not my main focus).
Summary
In modern times, the word “cybernetics” makes one think of
human/machine combinations or maybe computer technology in general,
but the original definition (1940s and onward) was about decision
making, feedback, and control of systems (machines, organizations,
economies, etc.). It’s important to keep this in mind, otherwise the
topic and review below can easily get confused with unrelated
technology matters. Cybernetics and the book are about information
flows.
Systems don’t have motivations. They are made up of people who have
motivations and outside influences. How can a system made of good
people have bad outcomes? How can it be avoided? These are the kinds
of questions I wanted to answer.
There are several main lessons I got from the book:
The number of states a system can be in vs the amount possibly
gradations of control input. This is known as
“variety”.
An example from my university:
The university defines there are four categories of data (levels of
confidentiality), and that should dictate how the data is handled.
However, a university is a complex thing with very different
{operations, teaching, research} divisions, and four categories to
control data (input variety) just isn’t enough to express the wide
variety of actual data (and there isn’t enough variety of other
processes or exceptions). This leads to people doing whatever they
want (ignoring the rules since they don’t seem applicable), or
never-ending discussions about how the system needs to be tweaked to
make it work.
The idea that the internal complexity of a system has to match the
external complexity it faces is the Law of Requisite
Complexity,
and once I realized this, I started seeing almost every
dysfunctional thing of our university being caused by its violation.
Cyberneticists have broken down organizations into five systems
needed for their control (Viable system
model)
(operations, regulation, optimization or integration,
intelligence, and philosophy or identity, see more in Chapter 5’s
summary below). My own team is too small to have these as defined
roles, but thinking of them helps me realize some things we need to
make sure get done.
Still, the broader idea of “systems have higher systems watching
over them” is relatively general, and we should make sure for each
thing we do, someone has the bigger picture and can intervene if
things are going outside of the expected parameters, and make sure
the parameters are adjusted. “Our people are smart and independent”
doesn’t replace the people watching the bigger picture.
Any complex organization isn’t one mind, or many individuals, but
many different parts (people) communicating in a complex network.
This can easily allow decisions to be made and propagated elsewhere
in a way that doesn’t quite make sense, with little feedback or
accountability to the place the decisions were made. This makes the
accountability sinks (which was apparently defined here, though I
would have thought it was older).
A complex network of nodes sending signals to each other, sometimes
having a result that is undesired? Sounds like “artificial
intelligence” these days, with hallucinations and wrong answers,
doesn’t it? Just like with “AI”, there needs to be a feedback
system to keep an eye on things.
The second half of the book is focused on economics and society
(because the author is somewhat of an economist) and less relevant to
my work, but I found that it was quite useful to me anyway. Overall,
I found some good points that I could apply to my own non-economics
life.
Overall thoughts
I liked the book and was happy to read something that combined
something in my comfort zone (science-ish description of cybernetics)
with something outside it (economics). I’ve learned some buzzwords
that I can use in my job to push for changes, though I predict it’s an
uphill battle to get anything actually done.
As my team gets more complex, we need to encapsulate different parts
and have their internal variety and management, while having a more
limited variety that reaches higher levels for the systematic decision
making.
Chapter-by-chapter analysis
Below is a summary of each chapter. I state what the book says (with
some of my opinions or take-away messages mixed in), but I am not
qualified to judge if the book is correct or not.
Part 1: The nature of the crisis
(0) Introduction
The industrialization of society makes larger and more complex
organizations, and they need to be controlled. The theory of these
control structures is “cybernetics” (the original definition).
I liked this intro, because it related to my thing about
industrialization (of finance, control, etc) being the more relevant
problem in our society than just capitalism that most people complain
about. The idea is that when things get too big, they somehow makes
more than their share of problems.
(1) Something’s up
Organizations sometimes do things that just make no sense, for
example, the banking crisis of 2008. No person wanted this, yet
somehow it happened. There were even people who could predict it, but
no one would listen to them because the system was on autopilot and
not taking feedback.
Accountability sinks are ways that decisions can be made such that
no individual person is accountable. A decision may come out of the
organization, but all the individuals of the organization can say “I
don’t agree with this but it’s not me who decided” - so where does it
come from? Who takes accountability? These are quite common when you
start looking for them, when everyone can pass off the responsibility
for a decision/rule to someone else (often laundering it through
various policies or laws).
I will choose to not mention one example the book gives involving
animals, since it’s just too tragic. Another example given is
academic publishing. Professional publishers have managed to insert
themselves into the academic system and extract huge amounts of money,
and most people agree there are serious problems with relying almost
exclusively on citations for academic career purposes. Yet, still, it
stays, because it’s now part of the system and the politics of making
any other decision about careers would be too much.
There are two types of decision-makers, kings (who are humans and to
whom decisions can be appealed), and priests (who speak the word of
god and thus you can’t appeal to them). Too often, a decision may be
made by a “king” but gets conveyed by “priests”, and there is no way
to send feedback that something is wrong. This can cause unrest.
All the above isn’t just an accident. It’s a trade-off, discretion
(to do the right thing) vs following the rules. What’s the balance?
This is the next chapter.
Overall, this chapter said what I wanted to hear about
organizations, bad choices, and and unaccountability and left me
wanting an analysis.
(2) Stafford Beer
This chapter is about the historical context.
Stafford Beer was one of the founders of management cybernetics - as
discussed above, how decisions get made. Beer looked at systems as
composed of black boxes (something with defined inputs and outputs,
but the internals can’t be examined): different components, and each
component had some behavior. You couldn’t/didn’t look into the boxes.
Of course, you could recursively look into them if you wanted, or
package multiple black boxes into another black box. Still, at some
level, one has to draw black boxes around some parts of the system and
analyze the parts outside of that.
Management cyberneticists looked at systems as black boxes and that
interact with each other, to discover various theories of control.
Thinking in terms of black boxes gives the saying “the purpose of a
system is what it
does”.
This is important to keep in mind so that one doesn’t blame the
individuals for what the system does - you have to look at the
connections and control structures.
In the end, systems/organizations are controlled by meetings between
the different levels and components. This often happens by resource
bargains between different components, so that each part can focus on
its internals with a defined interface to the outside.
I understand the concept of the black boxes, it took some time to
fully internalize the recursive nature of them. I’m still not quite
clear where one should decide to draw the black boxes (what level and
what size), but I guess that’s part of the art of the field. You
should probably draw them at the places that are most useful for your
current problem. In the end, this question doesn’t matter too much
for my understanding.
(3) Aliens among us
So, a system is made up of black boxes once you go deep enough.
These are all connected and sending signals to each other. It becomes
a… neural network? There are clear metaphors to “artificial
intelligence” here, where the system takes on a mind of its own, but
each individual part can’t have accountability. This also relates to
the Chinese room (translation) thought
experiment.
This applies to all kinds of things, from social media algorithms to
corporate management. Yet, we know the organization itself is not
sentient. So, the organization itself isn’t accountable, but neither
are the independent parts (because they are just playing their role).
The more connections a system has, the harder it is to understand.
However hard you look, you will probably miss something.
If you are interacting with one of these systems, you can be given the
policies/documents in response to a query about why a decision was
made a certain way. But that never explains why the policies are
made a certain way. The accountability for them has been sunk into
the network itself, and if people only try to hold individuals
accountable, everyone can escape accountability.
So, in the end, you see the same thing over and over again. Comments
about an organization that say they admire all the people inside, but
despise the overall organization.
This part of organizations being a computing network really made
sense to me and started to build my understanding of why it is so hard
to change broken policies (and certainly matches with my “most people
I know are well-intentioned and good at their jobs”). When we need
something to change, we can’t just blame individuals. We should
definitely start thinking of organizations as their connections, not
only as their individuals. It doesn’t give a solution yet, though.
Intermission: Computing ponds and rabbit hole
This was about the idea of a pond of decaying matter sending signals
to each network and becoming sentient or otherwise a network of
intelligence. Or other ways of making systems of “dumb” objects
sending signals to each other to form a larger whole that appears
capable of purposeful action.
As a person in computing, this all flowed quite naturally and makes
sense in the concept of neural nets/artificial intelligence.
Part 2: Pathologies of the system
(4) How to psychoanalyze a non-human intelligence
This starts off with an explanation of why “cybernetics” these days
refers to computers: because people got too good at building
transistors and computing devices. It took all the attention from the
decision making part of the field.
This chapter talks about how systems can be controlled and analyzed.
The main consideration is what kind of information controls it, and
this gets to the concept of variety of information.
Variety, in my
own words, somehow relates to the number of states a system can have,
or its inherent complexity. It can also refer to the number of
possible outside stimuli or control settings a system has. Variety of
internal states (or complexity) needs to somehow be aligned with
variety of control.
Example: Let’s take a room’s thermostat. It has one input, the
temperature, and has one output, amount of heat applied. The variety
of control matches the variety of internal states of the system. If
we wanted to control temperature and humidity, but only have heating
control, it is quite possible that we can’t react to all possible
states of the room and bring it to the desired state.
When you have a complex system consisting of lots of black boxes,
there are many different states you can be in. What happens if you
can’t measure enough information about the state, or have enough
control knobs to affect it? You have a problem. The Law of
Requisite
Variety
says you need as much control variety as you have variety of internal
states.
This is a general argument and note that it doesn’t require knowing
exactly what the measurements and controls are. You can reason that a
system has lots of internal variety but not that many ways of control,
and know you have a problem - even without knowing exactly what the
states or controls are.
This chapter resonated with me and I like the general theory of
variety. It provides me a powerful tool to say “you are
over-simplifying the policies you are making” - though I imagine it
will be hard to get the right people to understand this, if they don’t
want to understand what is wrong with their policy from the policy
itself.
(5) Cybernetics without diagrams
This tries to get into the deep theory of cybernetics without being
too technical. It says this is hard, and perhaps it’s not so
interesting. However, one part was quite interesting:
A system that maintains its state needs different parts to be a
viable system
that is capable of maintaining control over itself. There are
different standard functions needed to stay in homeostasis with its
environment. The cyberneticists thought that such a system
needs to have:
System 1: operations. What the system actually tries to do for
the real world. It does the main thing (say, run a computing
cluster), but left alone it could go out of control and over- or
under-build what is needed or not coordinate maintenance and use.
System 2: regulatory. This is the basic regulation of operations
to make sure that operations stays synced. In our computer cluster
example, it may coordinate hardware upgrades, software
installations, and maintenance to make sure the system works. This
makes the basic resource bargains for how stuff works. This is
about preventing clashes and managing conflicts (things everyone
thinks are necessary).
System 3: optimization or integration. This directs different
components towards a main purpose and allocates things between
different System 1 operations. This is about the overall mission
(compared to System 2). This is the first real “management” level
and what some people complain about being unnecessary. In our
cluster example, this might include allocating resources from
hardware upgrades to support and vice versa depending on overall
needs of the users.
Systems 1 and 2 absorb most of the variety of customers, but sometimes
customers will need something beyond what they can provide. In this
case, System 3 needs to step in and adjust the mission by escalating
to the level above. Too much System 3 involvement in System 1 (rules
with no exceptions) can result in breakdown, since System 3 can’t
process all the variety coming in to System 1. This is
micromanagement and takes time away from what System 3 should be
doing. The other system, of leaving everything to System 1, can
result in no planning. The book makes a point that there can be an
informal System 3 by System 1 managers; this is OK as long as they
make sure it gets done - this is the value of informal meetings.
System 4: intelligence. If System 3 manages what is happening
now, System 4 is planning for the future by looking outwards to the
world (not just the current state but predicting what is coming).
In our cluster example, this might be looking at emerging
technologies that change the way clusters are run.
System 5: philosophy or identity. In some sense this balances
changes identified by System 4 with the need to keep unit running
from System 3 (you can’t change too fast or you lose your identity,
and then maybe you cease to exist). It balances the broad
organizational units. System 5 decides what the system does, and
thus its purpose. In our cluster example, this might involve
thinking of the role of clusters as cloud computing and AI become
more common.
These systems are recursive throughout the organization. The whole
organization has its five systems, then each sub-unit will have its
five systems, and so on all the way down.
It doesn’t say these have to be different people or units, just that
they need to happen. I do sort of wonder how rigorous the
justification is for separating all of them (the book didn’t go into
detail about how they were decided).
These systems also have their own amount of variety of signals going
in and out. They variety in control signals to each system to be
matched to the complexity of the task they are performing.
If they don’t have enough variety to handle an emergency, they need to
be able to “declare an emergency” and call a higher level in order to
bring the resources needed to solve a problem. The book uses the
example of a red handle in a train that means you have to do an
emergency stop and notify the control center. All schedules are now
messed up and you need a higher level of the organization to fix the
problem. (This doesn’t just mean a higher System number; it means the
higher recursive “viable system” level with all its boxes).
While I wouldn’t go building these into my teams, it is a good
checklist I would use to make sure our team is handling everything
that needs to be done. It also provides some good abstraction levels
for dividing up tasks, once a team gets large enough.
Intermission: decerebrate cats
This tells a metaphor about how you can cut the link in a brain
between the cerebellum and the rest of the brain. The living being
still seems alive (walking, eating, grooming itself, etc.). But by
any measure, it doesn’t think or have purposeful actions anymore. It
can keep living and functioning as long as the environment is what it
is used to, but once the environment changes, it can’t adapt. This
was apparently part of real experiments done.
Stafford Beer talked about decerebrate organizations which similarly
have lost the ability to adjust to the world. It will keep surviving
until a shock comes up, and then goes into crisis. If it can’t
re-establish the higher-level Systems, it will simply collapse. It
warns that if someone sees their organization decerebrate-ing itself,
start updating your CV and looking for new jobs.
The book gives the example of universities as typical decerebrate
organizations, and this is when I started getting sad. It’s exactly
what I have been seeing with some parts of my university, in
particular about challenges challenges with legal compliance processes
or data classification. The world is more complex than it was before
and it’s trying to apply old processes to new things, but no one can
take a step back and say “wait, we need to adjust how we see ourselves
to fit the current state of the world.” It might be more about
feedback rather than the System 5, but still I got feelings from
reading this
Part 3: The blind spots
Now, the book makes a clear shift and starts connecting to economics
and society. This was interesting to me, but not the main thing I
intending to learn about. You could say this part attempts to explain
how “late-stage capitalism” works (and has become such a buzzword for
everything that’s wrong in the world).
If you don’t care about the society-wide aspects, capitalism, and
economics, you can scan the rest of the summary. Even the book’s
conclusion focuses on economics and society and was not exactly
relevant to my work.
(6) Economics and how it got that way
First, what is an economist? The book says that economics is the
science of optimizing scarce resources (and since everything is scarce,
economists get to play the rulers of society by making models to say
the best way to run everything in the world). It does this by trying
to express everything in terms of money.
Like many fields, economists have “physics-envy” and have tried to make
models and predictions. However, economists can often forget that
these are just models and many assumptions have gone into them,
and the assumptions can pre-determine the conclusions. You can also
forget that the model is just a model, and the real world can do
things outside what you predict (this is especially the case since
humans are complex) - it calls this the Ricardian Vice.
This is obvious to physicists but worth making clear: just because
something is proven in your nice model with the complexity stripped
out doesn’t mean it is true in the real world.
One of the dominant models is that an economy is so complex it’s
impossible for any normal control methods to handle it - you can’t
bring enough variety to control all the components. Thus, the
assumption is that a free market composed of many different parts
making their own contracts and looking after their own needs serves a
computing fabric that can work to control the economy.
Everything can combine into a “the market knows best” (if you make the
right assumptions), with the market serving as a computing fabric for
making complex decisions - and is the seed of unaccountability.
“Market as computing fabric” matches with mainstream western
thought, and I don’t really object to that. Later the book explains
what is wrong beyond “capitalism bad”.
(7) If you’re so rich, why aren’t you smart?
This starts by talking about how economics is a theoretical and not
practical science. Economics is not accounting and most economists
couldn’t deal with real businesses, and the book claims this is
because economists want to be seen as their own special profession
above accountants, managers, and similar.
Accounts and accounting are the basic ways to measure a business, and
they serve two purposes. One is to control the business, another is
to tell outsiders how the business is doing. Accounting is difficult
in any big enough business, and while there are standard practices,
there are some choices made. The same set of numbers aren’t
necessarily good for all purposes (mandatory reporting for public
companies vs internal bookkeeping for how it’s going).
Financial reporting also by its nature reduces variety, and makes
fewer signals than there are internal states of the company.
So, what signals does one use to manage a company? It’s easy to hire
management consultants and they work to optimize the short-term public
financial results at the cost of long-term operational value.
We need to be careful that our reports match with what we need to be
measuring.
Intermission: Meanwhile, in Chile
Stafford Beer went to Chile during its socialist era with the idea of
applying management cybernetics to a command economy that was
nationalizing industries (and thus had to manage them). They had
computers and were trying to get enough information all in one place
(the futuristic-looking “operations room”) to manage it. While it
sounded like an interesting idea, applying the law of requisite
variety makes one think even this wasn’t enough.
In the end, the US supported a coup (as usual) before it could go far
enough to get results (or not).
Part 4: What happens next?
Now we get fully into the economics and politics of the modern world.
(8) Enter Friedman
This section first taught me about Milton Friedman, a name I had heard
often but didn’t know the story of. Intentionally or not, he
popularized the “neoliberalism” chain of thought which, more or less,
said that a corporation can’t know what is best for society, so the
best it can do is try to maximize its profits and let the market (the
“computing fabric”) work out the rest.
There’s a distinction between the managerial class (those working to
manage the companies, they may care about it) and the investing class
(or capitalist class) which only cares about profits. The basic idea
of neoliberalism was that, if the management class tries to do
something for the benefit of society, it’s spending someone else’s
money and lacks accountability (taking on the role of a government).
This whole “maximizing shareholder value” concept (combined with
“legal personhood” and “limited liability”) are purely artificial.
It’s simply a choice that could have been made another way, or not at
all. And we’ll see this invented philosophy causes many downstream
effects.
The “leveraged buyout” is when private equity buys a company that is
under-performing to replace the management or otherwise force it to be
more efficient. This was seen as the ultimate threat for any managers
that didn’t sufficiently try to maximize their companies’ profits, to
“keep companies in line”, so to say. Once bought-out, the companies
were given their own debts and forced to cut back anything else in
order to repay those debts, on threat of going bankrupt. All
together, this replaces any signals of “care about society” with
“ignore everything else and maximize your profits in the short term”,
which in the end leads to everything falling apart long-term.
This chapter is the thesis of the book, what is wrong with
“late-stage capitalism” and all that. In summary, the financial
industry is so focused on optimizing profits (one signal) that
everything else is falling apart. This matches what I have seen.
(9) The morbid symptoms
This starts off summarizing the book (this is my paraphrasing):
The basic problem is that systems/companies need to be able to
re-organize themselves as the world changes. However, due to the
financialization of everything, all the other signals needed for
society/companies to react to the world can’t be processed,
because “make profits” and “pay off debt” override it. This leads
to society’s polycrisis.
Stafford Beer’s philosophy was to pay attention to information
crossing boundaries. As companies get sliced up, managers’ ranks
thinned, and functions outsourced, you lose the capacity to convey
this information.
Some theorists had, about 100 years ago, thought the function of the
investing class was to take risks and provide what the working class
needed, while insulating the working class from the ups and downs of
the business cycle. Now that is reversed, where people think the
system is the investing class works to maximize its profits, using the
working class in the process. The rise of things like populism is the
“red handle” that things are not going OK.
The chapter ends by saying this is the nature of the current polycrisis.
The system is growing and getting more complex. It has been assumed
that the free market will take care of things, but the signals of the
computing fabric has been subverted and now all it can care about is
short-term profit maximization. All the middle layers of
communication are slowly being gotten rid of because it’s unnecessary
bloat, but really they were the ones carrying the messages. No one
protests “red tape (of bureaucracy) holds us together”.
**I agreed with the what is here, but then again I don’t have the
knowledge to know if I should agree or not. Still, roughly makes
sense from what else I have read about problems with society.**qq
(10) What is to be done?
“If you can hear the problem, you can hear the solution.”
As for the problem of private equity and leveraged buy-outs, one
proposed solution is that limited liability should be moderated.
Limited liability serves as an accountability sink to whoever buys a
company. The author thinks this might be enough.
Broadly, what the author thinks is needed is more viability and less
maximization of single goals. Right now, financialization has made
one goal take full precedence over everything else, and the very
limited variety of these signals means so much gets left out of the
decision-making process, at least at the highest levels.
Going back to the artificial intelligence metaphor, we have made an
artificial intelligence, told it to maximize profit, and it’s going
wild. Every system set up as a maximizer needs another system
watching over it.
The book hypothesizes that things like social media provides more ways
for more signals to be sent, but how will all these be managed? Can
they be? Will AI (another maximizing system) be assigned to do it?
It’s just another system that can be blamed. I read this as idle
thoughts rather than a fleshed-out proposal (and personally I would be
quite hesitant to go down this path, but it’s an interesting thought).
Overall I didn’t quite think there was a great conclusion for the
book, but as the first quote says, maybe that’s not the point. This
is hard, and if we can see the problem, maybe we can work towards it.
I’m hesitant to for any solution that involves social media sending
signals, but it is an interesting thought to come back to. Anyway, I
don’t need a conclusion or recipe for what to do about our economy,
I’m happy with the lessons I learned along the way.