Public Reason: One way of looking at the Neoliberal Order is that it was the era in which people thought that the skeleton key to understanding societal reality was contained in Seven Pillars of Economic Wisdom: (1) opportunity costs, (2) incentives, (3) alignment of private profit with public societal well-being, (4) then prices carry all the information you need, (5) think systemically and about equilibrium, (6) light demand-management planning by central banks, & (7) A.C. Pigou will save us by teaching us how to use taxes & subsidies to compensate for externalities. And things went so wrong during the Neoliberal Order/Globalized Value-Chain Economy Era because (6) and (7) were casually, callously, & catastrophically thrown over the side by a sinister alliance of plutocrats, predatory grifters, & partisans of right-neoliberalism.

I tend to think that way when the Moon is in the 9th House of Sagittarius.

But Dan Davies thinks different—he thinks the problem was not throwing concern over aggregate demand externalities & Pigovian externalities (& wealth-distribution externalities) over the side. He thinks that the problem is with Economics as a discipline: that it assumes that the market system is capable of transmitting enough bandwidth for homeostatic societal regulation, and that that is false. Instead, he thinks, society needs to be managed by people steeped not in Economics but in Cybernetics:

Dan Davies: Taming the unaccountability machine: ‘“Public choice cybernetics” for the 21st century…. Before… Thatcher and Reagan years, people used to complain that government bureaucracy was monolithic, inefficient, and unaccountable. Today… a strange network of bureaucrats, agencies, and private sector providers… fragmented, dysfunctional, and unaccountable…. Outsourcing and delegation… brought neither cost savings nor improvements in delivery…. Lacking are… “accountability” and “capacity” – the ability of the state to respond to feedback and make changes in response to it…. There is no very complicated or intractable problem of the state’s ability to command real resources or physical objects. The problems we keep facing relate to its ability to process information – to reliably make good decisions based on the state of the world in which it finds itself….

Twentieth-century… public choice is based on… (1) Incentives matter and must be made compatible…. (2) Opportunity cost must be used for measuring success or failure…. (3) Outcomes are to be judged systemically and in equilibrium… [taking account of] second-order and longer-term consequences….

Public sector agencies… outsourcing… have a nest of information problems. They are required to buy an underspecified non-commodity…. Information about the true nature of their needs and what they have purchased is revealed… outside their organizational boundaries… an ongoing problem of “not learning by not doing”… [as] public sector… understanding degrades, which affects its ability to successfully manage the consultancy relationship, never mind the actual service….

The true problem of public services is… the difficulty of establishing accountability and control in a system where the people who are meant to be managed have more information than you do. Methods… change; what they all have in common… [is] reducing the… information to… the bandwidth available to process it… “make things manageable”, while preserving a sufficiently accurate representation of the system so… control decisions… correspond to workable solutions…. Considering the relationship between the state and the consulting/outsourcing nexus as a “cybernetic” problem – one of information and control – gives us a way to understand and think about the tradeoffs in the design of contractual arrangements….

Customers and users have one huge cognitive advantage… which is that they live in the real world, rather than a representation or model of that world made out of standardised reports and collated data points…. [In] governance systems which are viable… there… [must] ways for their perspective to be communicated. Otherwise, we are destined to gradually drift away from reality without noticing it, until catastrophe results… <hypertext.niskanencente…>

But what, then, when the rubber hits the road, are the Seven Pillars of Wisdom of Cybernetics?