Introduction

The systems approach to the real economy is simply concerned with what works, rather than theoretical detail or political ideology. First past the post democracies swing to and fro between the two ideals of left and right, wasting time and resource, undoing the initiatives of the previous orientation, frustrating the achievement of continuing progression without destruction which has now become urgent.

The previous swing to the capitalist right ended in the 1929 crash and subsequent austerity driven Great Depression – a notable failure of neoclassical belief. That was ended by the Roosevelt/Keynesian move to the middle ground social democracy. At the same time, the socialist experiment was also failing, having mutated into totalitarian communism.

The 1970s ‘stagflation’ was a coincidence of stagnation arising from the slowing of the second industrial revolution technologies combined with inflation arising from abandoning the gold standard, printing money to ease debt burdens, and OPEC-inflicted oil price rises. Nominating it as the failure of Keynesian economics helped to justify the reverse swing back to the currently still ruling version of neoclassical capitalism, further reinforced by the collapse of communism.

The 2008 repeat of the 1929 learning experience was followed again by an ideologically driven decade of austerity applied to the real economy in accord with neoclassical ideology. At the same time, funds were pumped into the financial sector following the crash, variously estimated at, around US$4.5 trillion in the US and ￡435 billion in the UK and US$14 trillion worldwide.

That crude approximation of the political-economic swings to and fro indicates the systemic movements that have taken place. We appear now to be approaching the end of the current neoclassical swing right, with its reducing levels of taxation and reduced public investment in the social– infrastructural economy disguised by outsourcing and privatisations and the euphemistically named light touch regulation, all aided by the new opportunities for both good and ill provided by the new 4IR technologies.

Democratic governments have repeatedly indicated their commitments to what has been described as civilised society. Politicians have not been slow in proclaiming heroic commitments to such as universal human rights, equal opportunities, fairness, justice and freedom for all.

Commitments have also been set regarding the now recognisably fragile ecosystems within which the world operates, reminding this generation that they also have responsibilities to all future generations.

Knowledge of that fragility requires the amendment of human activity and the refocusing of invention and innovation onto achieving a fully sustainable planet.

Economic progression has made it possible to fulfil all such societal and ecological commitments. But achievement has fallen far short, with the destruction of ecological systems continuing apace, while a few people gain extremes of wealth, and others are trapped in squalor, ignorance, want, idleness and disease.

The opportunity to achieve permanent sustainability is apparently still available. If this generation succeeds in achieving sustainability, then future generations will recognise our contribution to their safe abode. If we fail, those fewer generations who follow will blame us for our greedy destruction of life on Earth.

These opening three chapters identify what appear to be the critical dimensions of our current position and direction of travel. We are not in a good place and we are not headed in the right direction.

We are allowing ourselves to be guided by misconceived and unrealistic neoclassical microeconomic theory which bears little relation to economic realities. Despite having been shown many times to be utterly false, the theory remains, even in 2020, dominant as a belief system which influences behaviour.

The prime beneficiaries of that system have established themselves as an apparently self-perpetuating establishment, which continues to extend its control across an ever increasing proportion of the global economy.

The result has been all manner of ecological destructions, inequalities, frauds and criminality which, unless controlled and reversed, will in the end make planet earth uninhabitable.

That's where we are.

We don't need to be here – there is an alternative.

We know where we are right now and we know the direction in which we’re headed, and we know it's not good. That is the result of the world being guided by neoclassical belief, funded and promoted by its prime beneficiaries, constituents of organised money. The result is all manner of profound wrongs, destructions, inequalities, frauds and criminality which are making life on Earth progressively less sustainable.

We have identified where we want to be. As a species, our most fundamental motivation is to survive, which requires each generation to pass on to their successors, a planet that is at least as sustainable as the one inherited, so that they too, and their successors, might survive.

As sentient human beings, we also want to relate to our fellow humans and to progress and achieve in whatever way we can. We have expressed commitments to making basic human rights universally available and providing equal opportunities for all, as well as some degree of social balance, making it possible for all people to survive, relate and achieve.

Those commitments have been repeatedly expressed, but not enough has been done for their fulfilment. That will depend on human enterprise, people working individually and collaboratively in a huge variety of organisational systems to remake the real economy so that it is socially and ecologically sustainable.

Phenomenal success has already been achieved, developing revolutionary new technologies, products and processes. As at 2020, technologies are still developing but their application and regulation have not yet ensured their most beneficial diffusion, to ensure life on planet Earth is both permanently sustainable and progressively fulfilling. The next technological revolution must be focused, primarily and urgently, on achieving those sustainable outcomes.

The actions that appear essential to enabling that revolutionary change and remaking the real economy are outlined in the following chapter. That dream may seem far off in 2020. Time and resources are being wasted and action is becoming ever more urgent. In the end, appropriate action will be taken, or there will be a terminal response from people who have nothing to lose.

250 years into industrialisation, humanity has achieved considerable knowledge and understanding of how people, individual organisations and markets work. We don't need a theory when the reality is there before us. All we need is the simple truth about what works and how.

Nevertheless, economic theories continue to dominate, divorced from observation of reality, neoclassical belief has been used to explain and justify the predatory exploitation of the real-world economy and its people.

The world is hugely different from what it was in Adam Smith's day when he observed the workings of pin manufacture and the productivity gains from collaborative working. The 1000 per cent rise in per capita income in advanced economies has been achieved by massive progression in technology and its application to existing and new forms of productive activity.

But some things don't change so much. The driving force behind all such invention and innovation is, as it always has been, the individual human being. And their greatest outputs are achieved by working in collaboration with others, within some form of organisation which exists to fulfil some clearly defined purpose.

Only if we understand how people and organisations work, can we identify the necessary actions to achieve progression without destruction. The realities of people and work have been observed in minute detail and the understanding gained has been applied and taught with repeated success.

Remaking the real economy is based on that foundation: real people as the engines of progress and real organisations in which they operate and which are themselves continuously innovating new forms of production, product and service.

There is a huge variety of organisational formats referred to here which are all able to contribute to progression without destruction. They include public and private services and producers, for-profit businesses, artisans, SMEs, LLPs, co-operatives, charities, publicly quoted companies and globally dominant corporates plus the new ‘Big Tech titans’. That variety clearly involves many distinctions. But they also include many basic commonalities related to what Deming identified as the essential characteristics of an organisational system:

Introduction

In 2010, Tony Judt opened ‘Ill Fares the Land’, his valedictory ‘treatise on our present discontents’, suggesting that ‘Something is profoundly wrong with the way we live today. For 30 years, we have made a virtue out of the pursuit of material self-interest.’

Those profound wrongs, carried out largely to serve organised money's best short-term interests, take many forms that damage the real economy, society and planet Earth.

The growth of global population is a further complicating factor in the current context of political-economic decision making, and is generally ignored as too inconvenient a truth. Concerns regarding population are not new. Malthus recognised that population depended on the means of its subsistence, that it would grow when those means permitted, and that it would grow geometrically. Food supplies would only grow arithmetically, and therefore population would ultimately be limited by hunger and starvation, unless previously constrained by war, plague or disease. Until the first industrial revolution Malthus was more or less correct. Since then, innovations in industry, agriculture and healthcare have prevented that global catastrophe, but it remains unclear how much more population growth such developments can be made to support, without inflicting irreversible damage on the environment.

Global population is now forecast to reach 9.5 billion by 2050, which some hold to be peak population, though non-Malthusian reasons for subsequent decline are unclear. Despite the concomitant ageing of the population, Japan and some countries in Western Europe are already experiencing what is probably the start of a reduction in native populations, potentially compensated by migration, which poses a different set of soluble problems.

The Economist described the financial sector as mired in ‘a culture of casual dishonesty’. That culture denies the imperatives of sustainability and population growth as well as social harmony, which are commonly excluded from political-economic consideration. But the culture does accept fines for fraud and criminality, simply as the cost of doing ‘business as usual’. In the aftermath of the infamous Forex trading scandal, which involved banks colluding for at least a decade to manipulate exchange rates for their own financial gain, a Barclays trader succinctly expressed the culture as ‘if you ain't cheating, you ain't trying’.

This text is written from the practitioner perspective, the focus being largely from within organisational systems. The primary concern is to understand what works and how such organisational systems might best contribute to the democratic commitments to ecological sustainability, universal human rights, equal opportunities and some measure of social balance.

An objective assessment of how we are doing requires a different, external orientation. The aim is to assess organisational system impacts in terms of progression without destruction, individually and collectively, nationally and globally.

The orthodox and continuously reported measures of economic progress are GDP and its growth. They have been the focus of much critique as immeasurable, inconsistent and illogical, as well as failing to take any account of the democratic commitments outlined in this text. GDP growth is not a satisfactory proxy for any real assessment of progress.

This final chapter provides an outline of existing objective external measures of progression which can take account of global, national and organisational level impacts.

The displacement of neoclassical belief and restraint of organised money remain the keys to a truly sustainable future, so assessment of that displacement and restraint will be crucial.

Introduction

Systems concepts are widely applicable. Life cycle analysis is recognised in relation to all living and social systems, including human beings and most of their creations: organisations, communities, products, technologies and nation states. It applies equally to planet Earth as the abode for biological species. Its fundamental resources are finite, so humanity and its subsystems have to live within their limitations.

Over the past 250 years, global economy and population have experienced the growth phase. They now appear to be experiencing the phase change volatilities as the global economy enters its mature phase. That requires the current population to learn how to live hopefully fulfilling lives, without further overall economic growth. Population is continuing to grow and will do so for some time yet, but it is also approaching its maturity when growth ceases and will subsequently decline, though the shape of that life cycle is unpredictable.

The initiatives outlined in the previous chapter are intended to help address those phase change volatilities, mostly brought forward by continuing human abuse. If they do not succeed, then catastrophic outcomes threaten. The Easter Island parable is a reminder of what must be avoided. It suggests that measures of real progression must relate first and foremost to such global limitations.

That overall picture relates to individual nations differently, with the continuing growth of the industrialising states led by China, the maturing of the industrialised countries, such as the US, Japan and Germany, and the decline of the post-industrial states, led by the UK, which has taken the financialising route with its real economy being reduced by the ravages of organised money.

That simplification suggests how different nations might wish to measure their real progression differently, by focusing on measures of particular relevance to their individual situation.

The aim in this final chapter is to identify appropriate measures of progression without destruction. Environmental stewardship to achieve protection against the various ecological destructions is clearly a global imperative on which the whole of humanity depends. The pursuit and achievement of universal human rights, equal opportunities and some measure of social balance are also global considerations, with the most urgent emphases being given to those areas where they are least satisfied.

The following are notes of practitioner experience in real organisational systems as they create or extract value. It refers to a 40-year period from the mid-1960s. That may seem like ancient history, but human beings don't change much, and the understanding outlined is far more relevant to today's much changed world than the 19th century neoclassical theorising on which so much present-day decision making is still based. Specific references to issues especially relevant to remaking the real economy and escaping destruction by organised money are italicised. The notes outline the basis for economic understanding on which this text is based. It is the alternative to the maths-based theoretical models that even Friedman accepted were not realistic. The lessons drawn are all explanatory and supportive of the main text analysis.

I Royal Air Force

II Management trainee

III Billposting

IV Site getting, space selling and accounts

V Management education

VI Junior management practice

VII Introduction to manufacturing

VIII Personnel matters

IX Production control and buying

X Work measurement and standard costing

XI Payment systems

XII Quality control

XIII Reflections on manufacturing

XIV Retail and distribution

XV Organising for growth

XVI Standard product range

XVII Centralised warehouse and the travelling salesman

XVIII Corporate planning

XIX Mergers and acquisitions

XX Management sciences

XXI A financialised business

XXII The asset stripping game

XXIII A further step to corruption

XXIV Joining a ‘blue chip’ corporate

XXV Company planning specialist

XXVI Boston box for real

XXVII The view from corporate headquarters

XXVIII A company in context

XXIX Personnel and industrial relations

XXX The Bullock Report

XXXI Preparing for M&A

XXXII Inputs from the City of London

XXXIII Researching industrial innovation

XXXIV Joining academia

XXXV The academic industry

XXXVI Practitioner conclusions

I Royal Air Force

Experience in the Royal Air Force (RAF), based mostly in Aden, supervising the loading and unloading of aircraft, demonstrated the interdependence of organisational roles of all people.

The real work was done by a local labour force. The RAF role was to make sure the freight loads were distributed on aircraft so they could both take off and land safely.

Introduction

We have almost been here before. The 1929 Wall Street Crash, followed by Hoover's ideologically inspired austerity driven Great Depression, ushered in Roosevelt's presidency and his New Deal economic stimulus, the second wave of which he introduced as follows:

It seemed that struggle was subsequently won with the 1944 Bretton Woods settlement creating the International Monetary Fund (IMF) and World Bank, which were largely founded on a basis of Rooseveltian social democracy and Keynesian economics, with the aim of post-war reconstruction. That continued to challenge the predatory activities of international finance which became so destructive of the real economy. The IMF assisted the resumption of economic growth and full employment by promoting international trade and exchange-rate stability, while the World Bank helped poorer member nations with low-cost finance to support major capital investment to assist their long-term development.

The victory over organised money was, however, only temporary. Within three years, economists and representatives of what Roosevelt had referred to as organised money, were conferring in Mont Pelerin over their response to Bretton Woods.

After WW2 and its undoubted ‘war profiteering’, Eisenhower added the ‘military– industrial complex’ to Roosevelt's list of ‘old enemies of peace’. Today, despite the prolonged freedom from global conflict, the military– industrial complex remains a powerful business component, supplying the most primitive destructions for profit, notably through the Middle East.

Organised money has been further expanded to include ‘the … academic-bureaucratic complex’, which includes those strands of academia that Ghoshal warned about – those that develop and teach theories that serve the interests of organised money. They are further reinforced by the media and especially including those elements of social media that energetically promote neoclassical belief at every opportunity, along with a political sector which now includes the think tanks and lobbyists richly funded by the various other components of organised money.

The Big Bang brought the universe into existence almost 14 billion years ago, with the solar system including planet Earth, forming around 4.5 billion years ago. DNA studies have identified Homo sapiens as having emerged as a distinct species around 195,000 years ago, the last few minutes of the Big Bang day. In the last few seconds, humans have created systems which could sustainably satisfy all peoples’ needs, wants and most of our desires, but are instead heading us for oblivion, simply in order to satisfy the predatory gain of a few at huge cost to the whole human race.

The story of Easter Island is sometimes presented as a parable for Earth. The first settlers discovered an island paradise with plentiful food supplies of fish, birds and vegetation, as well as trees providing raw materials for shelter, clothing and boat construction. The islanders prospered, and they carved their giant religion-based Moai statues which remain today, remnants of their particular system of beliefs, but serving no practical purpose.

As the population grew, so did the inevitable consumption and waste of all the island's limited resources. The islanders failed to recognise their interdependence with the island's other species. Eventually they were all consumed, and inevitably population collapsed. It has been said the last survivors, at below subsistence level, even resorted to cannibalism – surely the ultimate inequality. That obvious interdependence of biological species is even more important in today's recognisably fragile world.

Global population remained a few hundred million for thousands of years, limited by recurrent famine and plague. That stagnation was ended by the 18th century revolution in agriculture which produced a reliable food surplus for the first time; this was a major contributor to enabling the subsequent industrial revolution, which changed everything. World population had grown to an estimated 1 billion by 1800, and has since exploded to around 7.75 billion today, forecast to be 9.5 billion by 2050 with some forecasts of over 11 billion by 2100. Moreover, average real income per head in the advanced economies is now estimated at around 1000 per cent higher than before the first industrial revolution.

While those increases of population and affluence clearly present the problems exampled by Easter Island, they were achieved through human enterprise, inventiveness and industry, in which the Easter Islanders were more limited.

Autonomy is one of the most central ideas in both anarchist political theory and in cybernetics. For the former, autonomy provides one of the key motivations that drives political practice. For the latter, it represents the fundamental condition required for a system's survival. While the same terminology is used in both literatures, in this chapter I want to suggest that there are in fact two distinct but connected definitions of autonomy at play – Functional Autonomy, drawn from cybernetics, and Collective Autonomy, developed through a reading of anarchism and related social movement traditions. These reflect two different sides of anarchist cybernetics: the ethical or political side, that champions anarchy and autonomy because they entail the freedoms individuals and groups are entitled to; and the practical side, that proclaims anarchy as the most effective way to structure a complex society. This chapter will also attempt to show how anarchism reconciles individual and collective autonomy, focusing on how the much-maligned practice of consensus decision making is vital in this regard. I begin the discussion with an overview of the role played by the idea of autonomy in cybernetics.

Autonomy in organisational cybernetics

In her book on Beer's attempt at putting organisational cybernetics into practice in Salvador Allende's Chile in the early 1970s, Eden Medina writes that ‘cybernetic management approached the control problem in a way that preserved a degree of freedom and autonomy for the parts without sacrificing the stability of the whole’ (2011: 29). As discussed in the previous two chapters, this idea of balance, between autonomy on the one hand, and centralisation on the other, is crucial, both with respect to both Beer's cybernetics and with regard to its manifestation in anarchist cybernetics (Duda, 2012). While autonomy is essential for an organisation to be able to flexibly react and respond to complexity and change, at the same time, some degree of coherence between autonomous parts is just as important, because otherwise there would be no organisation, with overarching goals, to speak of. Just as Beer argues that the operational units of any organisation should enjoy a high level of autonomy, he also insists that they should be subject to what he describes as ‘managerial constraint’.

Organising is politics made durable. From co-operatives to corporations, Occupy to Facebook, states to NGOs, organisations shape our lives. They shape the possible futures of governance, policy making and social change, and hence are central to understanding how human beings can deal with the challenges that face us, whether that be pandemics, populism or climate change. This book series publishes texts that explore how politics happens within and because of organisations. We want to explore how activism is organised and how activists change organisations. We are also interested in the forms of resistance to activism, in the ways that powerful interests contest and reframe demands for change. These are questions of huge relevance to scholars in sociology, politics, geography, management and beyond, and are becoming ever more important as demands for impact and engagement change the way that academics imagine their work. They are also important to anyone who wants to understand more about the theory and practice of organising, not just the abstracted ideologies of capitalism taught in business schools.

Our books will offer critical examinations of organisations as sites of or targets for activism, and we will also assume that our authors, and hopefully our readers, are themselves agents of change. Titles may focus on specific industries or fields, or they may be arranged around particular themes or challenges. Our topics might include the alternative economy; surveillance, whistleblowing and human rights; digital politics; religious groups; social movements; NGOs; feminism and anarchist organisation; action research and co-production; activism and the neoliberal university; and any other subjects which are relevant and topical.

‘Organizations and Activism’ will also be a multidisciplinary series. Contributions from all and any relevant academic fields will be welcomed. The series will be international in outlook, and proposals from outside the English-speaking global North are particularly welcome.

This book, the first in our series, offers an exemplary and beautifully lucid contribution by bringing together the social movements of the early 21st century, the technologies of social media and virtual organising, and theories of anarchism and cybernetics. In Anarchist Cybernetics: Control and Communication in Radical Politics the Scottish activist and academic Thomas Swann applies theory and politics to contemporary examples, and wants us to think hard about selforganisation – that is to say, about forms of coordination that do not assume that human beings are too stupid to organise themselves.

In the preceding chapters, I have tried to outline how anarchist cybernetics – defined as a meeting of anarchist theories and practices of self-organisation, on the one hand, and Stafford Beer's organisational cybernetics, on the other – is well positioned to provide insights into and possible solutions to some of the complex problems facing radical left organisation. Primarily through the example of the Occupy movement, the book has explored how taking a cybernetics perspective with respect to issues of organisation can help those involved in radical politics better understand what happens when participatory and democratic self-organisation works as it should and how such organisation might be achieved. Rather than providing a model of organisation, a blueprint that can be followed to ensure success, the book and anarchist cybernetics more generally are intended, like Beer's cybernetics itself, as tools to aid those engaging in organising to identify and address problems that commonly arise. By focusing on control (understood as self-organisation) and communication, the discussion throughout has been focused on how particular functions and mechanisms of organising operate in ways that enable organisations to respond to complexity and change, while achieving the goals they set themselves. Anarchist cybernetics does not prescribe how such organisations should be structured but instead foregrounds some of the necessary functions of self-organisation and suggests how these can be realised, without constructing and reinforcing structural hierarchies. The three central concepts that underpin this framework are selforganisation, functional hierarchy and many-to-many communication.

Self-organisation is a foundational concept that is common to both anarchist politics and cybernetics and has been identified by authors, such as Colin Ward and John McEwan, as a key area of shared interest about which the two traditions can fruitfully inform one another (as outlined at length in Chapter 3). Within anarchism, self-organisation is understood to refer to how groups of people are able to come together as a collective entity, make decisions and act purposefully, without the need for bosses hierarchically above them issuing orders and having oversight over the actions of the whole collective. In cybernetics, selforganisation is a more technical concept and is used to describe how systems – mechanical, electronic, biological or indeed social – have the potential to regulate their behaviour in line with set goals.