Technocracy
For those of JC’s generation — we came of age in the Eighties, and run sniper’s alley now — our radical departure from the wisdom of our elders was to reject centralisation. Ever the practical ones, we latchkey kids took our parents’ hippy suspicion of the Man and formalised it. Our movement’s leaders were not all of Generation X, but they spoke to us. They grokked our aspirational, optimistic, hopeful, individualistic ethic.
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Ronald Reagan captured the vibe:
Government is not the solution to the problem: government is the problem.[1]
And the Walkman symbolised it: Individualistic, technophiliac, selfish.
We were wired for sound.
Wired for sound
Results were good. The Iron Curtain fell. Markets boomed. Pits closed. Shipyards shuttered. [Where are you going with this? — Ed]
Sure, there were ugly skirmishes, but the ideological war was won.
Call it what you will: Reaganomics, Rogernomics, Thatcherism, Perestroika, laissez-faire, deregulation, monetarism, around the world the Man got out of the people’s hair. The market ruled.
Of course there were losers, as there whenever the social order radically rearranges, but it wasn’t us.
We were on the right side of history, which had finished, anyway.
The basic gist: bottom-up beats top-down. In a free society, individuals are best placed and best incentivised to make their own decisions. Abrogate that principle only where those criteria do not apply.
Those criteria:
Formal: there is better, fresher information at the edges of the network than there is in the middle. Communication channels are slow and clogged. Audio degrades. Central machines are heavy, slow, lossy and costly. Informed decisions were best made at the point of sale, by those doing the buying.
Substantive: buyers at the edge of the network — like you and me — have the most skin in the game. It is their life, their school, their community, their personal stereo. As long as they have enough information and enough choice their strong incentives mean they will make good, efficient decisions because they have the most to lose if they don’t.
As it always does, to the revolting masses the conversation felt over. The riddle of socio-politics was solved.
The drift away from freedom
As it always does, history had other ideas. Now we are Generation X, our kids sing different songs. (Enjoy it, kids: the next generation is on your tail.) Along the way our laissez-faire ideal got lost.
Partly because the pristine ideological logic of the market did not always match the facts: the required information and choice were not as omnipresent as we expected. Privatising utilities didn’t work so well. We got raw sewerage in the UK, crappy railways in Germany an full-blown oligarchic kleptocracy in Russia.
But this was no theoretical rejection of a substantive ideal. There was no new Lenin, Trotsky or Marx. No pamphleteers whipped up a modern socialist synthesis. There was no firebrand manifesto calling for return to collective governance. It just kind of happened.
The overpowering ideas of the 1990s and 2000s were more libertarian and more anarchic: the internet could set us free. (Some Burmese Junglers out there still believe it: their saviour of choice is crypto. Their time is nigh).
We can, so —
But, sans white paper, our liberating technology worked to re-centralise and exert control. It nullified our formal objection: no longer was centralising slow, lossy or costly. The network was free, bandwidth unlimited and information travelled, literally, at lightspeed. Lossless centralisation promised massive economies of scale.
De facto centralisation was possible, even as we distributed our physical selves yet further away. The network facilitated outsourcing and right-shoring: offshore operations teams acted like thin-client terminals to a centralised CPU. The network threw out gossamer spurs and nodes to new markets, from Belfast to Bucharest to Bangalore.
Technology facilitated the reassertion of central control. No one broached the substantive question of whether re-centralisation of command and control was such a good idea.
We could, so we did.
The tendency to centralisation is a predictable system effect in a modern corporation. The org chart rolls everyone up to a small band of executives at the centre who are both empowered to mandate central control and heavily incentivised to do so.
But, call to mind JC’s Malmsteen paradox:
Just because advances in guitar technology mean you can play 64th note flattened Mixolydian arpeggios at 200 beats per minute, this doesn’t mean you should.
Development in network technology — packet switching, routing, the end-to-end principle, substrate neutrality of data, and latterly machine learning, large language models and so on — made the information transmission needed for centralised decision-making feasible: infinite fidelity, infinite speed, minimal cost.
None of this addressed laissez-faire’s substantive objections to central control: that those at the edge of the machine, who are encountering situations, are disproportionately affected by those situations and generally best placed to react to them. That was increasingly assumed away: major moral and social questions had finally been resolved — liberal democracy had won! — meaning there weren’t any moral decisions to be made. There were only practical decisions, but these were in principle soluble by calculation. And calculations didn’t require decisions or judgments or discretion: there algorithms: all forward conundrums could be solved with enough data. This is a high-modernist standpoint, and it is totally wrong, but it is widely held. Especially in the tech community. I call it data modernism.
We slid, subtly, from discussing technology in human terms — anthropomorphising — to evaluating humans in terms of technology benchmarks — robomorphising — and finding the meatware wanting: humans were, it transpired, irrational, illogical, inconstant, prone to bias, and they took up space, needed holidays and cost a lot of money.
In the name of efficiency, everything that could be managed by algorithm was assigned to algorithm, and so it came to pass we were progressively relieved of the inconvenience of making our own decisions.
Salve, the age of unaccountability machines.
The moral maze
Progressively — if you’ll excuse the pun — our technical ability to micromanage some things well enough by code became a path of least resistance and we began to micromanage everything by code. Lawrence Lessig saw the opportunity for commercial technological regulation early: what need was there for legal enforcement of contracts in an online world where real time compliance could be enforced by code in practice?
The world was still largely in swoon to light-touch, principles-based regulation: congress was busily dismantling Glass-Steagall and throwing the economy into the arms, tooth and claw of nature, but that all changed in September 2008.
A two-decade long leeching of administrative power from the executive to the market was quickly reversed. Politicians and central bankers regained their swagger. They bailed out the bankers — didn’t really punish them as such; the good old tax payers took all that — but the politicians got their pound of flesh. The cost was detailed, technical, code-level regulation regulation of everything. And an end to bankers lecturing politicians.
So the bankers started lecturing their staff.
The regulators’ interest was at first technocratic, but social justice movements — notably Occupy Wall Street and the various Arab Springs began to exert influence and inject a moral dimension into debates, while at the same time new pitches opened up on the rock wall of the burgeoning professional class. Polytechnics became universities and started offering degrees in business and management science, and as production lines vanished the white collar community exploded. Compliance, legal, human resources, marketing, branding, operations — even the production line had white collars — all entertained ambitions of professionalism.
Business became about process engineering and management. Call it the era of unfettered human capital management. The opportunity to fill benches allowed previously radical social justice agendas to escape their traditional confines in liberal arts faculties. They began accumulating in the engine rooms of bureaucracy. In an attempt to get rid of people, most banks had more or less computerised the personnel department’s main function of recruiting, but HR vets are survivors. They know where the bodies are buried.
For the first time, they had technology. There were tools to shape and enforce a new set of agendas. Principally equality. You could now easily count, sum and pivot demographics. It was all there, in the data. The new generations of professional administrators did not like what they saw. They did what administrators do, to counteract unwanted behaviour: enacted policies. They enforced them with technology.
Ironic: they were using the same tools the anarchists thought would set us free.
A word about communications
Meantime, the kids were finding similar ironies attended when they used these tools to set us free. Communication being instant, effortless and free proved a boon and a bane. Screwing up was instant, effortless and free, too. And permanent. Communication became fraught. Dangerous. Immortal.
Exactly how dangerous the world discovered on one day in December 2000. In an ungallant but, let’s face it, run-of-the-mill bit of private blokey banter, a grandstanding young lawyer forwarded an intimate email from his girlfriend to his buddies.
now THAT’S a nice compliment from a lass, isn’t it?
Douche behaviour, for sure. No surprise, his buddies were douches, too. One declared
[It] beggars belief. I feel honour bound to circulate this.
So he did. His douchebag buddies did too. The email swept the globe. It reached an estimated million people. It still features in world’s most catastrophic communications listicles.
It dawned on a few that, hang on, this wasn’t just embarrassing. There were potential disciplinaries here for thousands of accounts, permanently memorialised on the chain, and bang to rights. “Check this chick out!”
Online, what is said is said. The internet does not forget. You can’t take it back. You csn’t claim you were misheard, misread or taken out of context. All the context is there, written to the chain.[2]
The implications of costless, instantaneous, irreversible and permanently recorded, audited record of our every unguarded thought became clear.
We were not free.
The loss of the informal
We learned new ways of interacting. We said less. We stored less. We learned the sort of things you don’t put on email. But since we were physically distributed we did not substitute that with “offline conversations”.
Digitisation dramatically reduced the lost, informal, impermanent nature of internal deliberation and decision-making.
Roll back to pre-computerised 1980: communications outside the firm were for the most part by way of meeting, phone conversation or highly formalised letter. Only the last made it in any shape onto the formal record, but even that was an archived paper file.
Communications within the firm were mainly oral — personnel were centralised and concentrated — sometimes telephonic, and where reduced to writing, the by laboriously prepared office memorandum. It required drafting, typing — by someone other than its lawyer, naturally: we don’t pay our principals to type, son — editing and being checked.
This meant, firstly, that the amount of “discoverable information” in the organisation was limited and carefully curated. All drafts and preparatory matter was expunged. Secondly, systematically retrieving that information was expensive and slow.
You had to retrieve the information files from storage. You had to rifle through stages of corner-pinned paper files: no pivoting, sorting or text search. If you found what you were looking for, there were telecopier costs, operator costs and postage costs so the extent of a reasonable information request was naturally limited.
And because it was curated, that information was rarely useful or interesting. It was prepared for buttocractic posterity.
The fundamental layer of internal candour in decision-making was inevitably oral, unrecorded and perfectly deniable.
Enter the screens
Template:Drope technology inevitably changed this. Screens appeared on principals’ desks. Young tyros like JC, brought up on Defender, and used to typing essays on 386s, began to ask for them.
Wang and MS Dos gave way to Windows. Digital instant messages flourished. As the hardware got upgraded, the meatware got downgraded: the relentless war on waste saw unglamorous parts of the firm whacked (fax room, typists, proofreaders) or hived off to unglamorous parts of town, then unglamorous parts of the country, then unglamorous parts of unglamorous other countries (contract negotiators and operations).
Face-to-face meetings became impossible, while email was easy. Then came Slack. Then came Skype (as it then was). Then Teams. Then COVID -19.
COVID-19 rocket-propelled it. Not only was the back office nowhere near trading anymore: the people in the back office were now nowhere near each other. For a period easily long enough to form lasting habits, everyone was forced into physical isolation. All interactions were purely online, fully digital and that vital, deniable , erasable informal communication layer disappeared entirely.
That digital habit has lasted: almost two years since the WHO ended the COVID-19 Public Health Emergency of International Concern, and most white-collar workers —JC included — still only go to the office about three days a week.
Therefore, every single impulse that passes between individuals in an organisation is recorded, tracked, logged, audited. It may be used for internal disciplinary procedures. It is externally discoverable by or disclosable to regulators, private individuals making data requests and litigious competitors.
The brain of the firm, as Stafford Beer would call it — its every deliberative function, every flashing synapse, every animal urge, has been laid open for all the world to see and judge.
Radical transparency has its consequences. Not all of them good.
We did not vote for this dramatic change in the state’s powers of intrusion. It was in no party’s manifesto. There is no Ayn Rand novel, Milton Friedman monograph or Troskyite tract that advocates for it. It is not the delivery of any promise. It was not signalled by any legislative programme: it just happened, leading to many counterintuitive behaviours and systems effects.
People contrived to have important conversations away from formal channels wherever possible, such that organisational forums for formal decision became green-lighting, rubber stamping exercises where no dissent or disagreement was logged or recorded or, tacitly, even allowed. The traffic lights on every dashboard must always be green.
Organisations became highly neurotic: hostile towards internal challenge or overt criticism of strategy or decision (precisely because these criticisms were discoverable and could result in regulatory censure). In many case organisations just did not have any processes that delivered effective challenge.
This was all notwithstanding an overt but entirely performative commitment to encouraging challenge, disagreement and diversity of opinion (and protected characteristics, of course).
Crypto technocracy
The crypto-libertarian take: crypto promises to fix the technocratic problem of regulation by substituting it with code. Code is law.
But the problem of regulation is not technological but human. Indeed mistaking it for a technological problem is what got us here in the first place. Libertarians, of all people, should understand regulations not as abstract technical artefacts that create bad incentives — though, sure, they do this — but as a by-product of hard-wired human, self-interested behaviour.
Regulations make and get made by inevitable, self-interested human behaviour: acquiring social influence (and therefore political power); establishing market dominance and then extracting rent. The behaviour is reflexive, and there are feedback loops here. The regulatory ecosystem is as organic a market and complex a system as the market itself. It is part of the market.
Crypto does not — cannot — stop or fix hard-wired human behaviour. This is the the JC’s main objection to crypto maximalism: it is so glib. God knows the current state of trad-fi isn’t optimal, but it got that way because these are hard, deep, ancient, shape-shifting problems of human social organisation. They cannot just magically solved by code.[3]
See also
References
- ↑ Ronald Reagan’s Inaugural Address, January 20, 1981.
- ↑ A bit like a Blockchain really: uncorrectable.
- ↑ see in this regard Neil Postman’s handsome Technopoly and JC’s own bloviations about technocracy