Fresh audio product: new Marx translation, Israel after October 7
Just added to my radio archive (click on date for link):
October 10, 2024 Paul North and Paul Reitter on their new translation of Marx’s Capital • Nimrod Flaschenberg and Alma Itzhaky, authors of this article, on the political culture of Israel after October 7
Rashid Khalidi on settler-colonial Israel: an interview
This interview with Rashid Khalidi, author of The Hundred Years War On Palestine: A History of Settler Colonialism and Resistance, was broadcast on Doug Henwood’s Behind the News, October 3, 2024. Khalidi’s family was a member of the old Palestinian elite that was destroyed in 1948 when Israel, freshly born as a state, expelled three-quarters of a million Palestinians from their homes to make way for the settlers. Along with the larger history, he writes extensively about that family in the book. It’s not a new book—though BtN has never been impressed with novelty for novelty’s sake—but it has acquired a new relevance given the latest phase of that century-long war. Khalidi has been an academic for much of his life, but he’s also been deeply involved in Palestinian politics over the years. He’s just retired from teaching at Columbia University, where he now has emeritus status. It’s been lightly edited for publication.
Applying the term “settler colonial” to Israel really annoys its supporters. But not only is it accurate, it’s the language the early Zionists used. Could you review the history of that discourse?
The early Zionist leadership, people like Theodor Herzl, Chaim Weizmann, Ze’ev Jabotinsky, David Ben-Gurion, all believed they had a right to take over Palestine. They believed they had a Biblical right, they believed had a right as people persecuted in Europe in need of a refuge. They represented a national movement, an attempt to develop a national movement out of Judaism and the Jewish people, a modern national movement. At the same time, none of them made any bones about the fact that they were doing this as part of a settler colonial process. The names of the institutions, like the Jewish Colonization Agency, one of the major institutions that was involved in taking over land from Palestinians, indicates that they understood that this was a process of colonization.
The one who was the most open about it was Jabotinsky who said that this is a colonial process: we have a right here, but we understand that this is like any other colonial process and colonized peoples always will resist. Others were less forthright about it, but they all understood the same thing, that whatever their rights were, whatever the justice of their cause in their eyes was, they were doing something that involved displacing an entire people in a colonial process. Nobody ever contested that really before World War II, when suddenly decolonization began, and colonialism had a bad odor globally. And so the Zionist movement and then later Israel began to describe itself as an anticolonial actor because they had come into conflict with the British for a number of years during anf immediately after World War II. But the colonial settler nature of this was confirmed after Israel’s victory in 1947, ’48, ’49, when they expelled three-quarters of a million Palestinians stole their land, refused to allow them to return, took over all of their property. This is settler colonialism. There’s no other description for it really. And anybody with eyes to see who has watched the process of the colonization of the West Bank, the Occupied Territories, Jerusalem, and the occupied Golan Heights since 1967 cannot see anything but settler colonialism. I mean, I cannot imagine how you would describe it unless you’re a Biblical fanatic and say, this is the return of the Jewish people to land to which only they have rights. Well, if you believe that we are not involved in the same discourse.
A striking thing, reading the history is how the Zionist project has relied on imperial patrons—which counters all the David and Goliath metaphors,—the settlers just to sell their project. First it was Britain. Now the US. Sometimes one wonders what was in it for the patrons. So let’s talk a bit about the British—why their fervor from Balfour onwards? The British ruling class is a long history of antisemitism. Did they just want to get the Jews out of Europe? What explains the fervor for the project?
Two things explain the fervor for the project. The first is ideological. It goes back to the early 19th century before modern political science had ever developed, before even the first modern political Zionist writings were committed to paper. And this has to do with a movement in the Anglican Church in England, and among Protestants generally, a great renewal of faith and a rereading of the Bible such that the return of the Jews to the Holy Land was seen as a bounden Christian duty in order to hasten the Second Coming of Christ and so forth. We get the same view among many Evangelicals in the United States today. This starts in the early 19th century, both in the United States and in Britain. The figure most closely associated with it is a very influential British aristocrat by the name of Lord Shaftesbury. He was the father-in-law of the British Prime Minister Lord Palmerston.
He and many others pushed this and this became ingrained in the British Protestantism, this understanding that it was a bounden duty to return the Jews to the holy land. Now, it just happens that at the same time, you have, as you pointed out, a deep strain of antisemitism in England, which goes back to the 12th century when King Edward kicked all the Jews out of England. It was one of many cases where European rulers expelled the entire Jewish population. The King of France did it in the 13th century. The kings of Spain and Portugal did it at the end of the 15th century. And that virulent, theologically based antisemitism was there at the same time as you had this, I guess you’d call it philosemitism or Christian Zionism, among members of the British ruling class. The great irony is that Lord Balfour, who obviously is the person who pens the Balfour Declaration on behalf of the British cabinet in November 1917 in a previous incarnation as conservative Prime Minister, was responsible for one of the most antisemitic acts since King Edward, which was the Alien Exclusion Act to prevent Jewish refugees from the pogroms, the deadly pogroms that were going on in the Russian Empire at the turn of the 20th century, from coming to Britain.
So, you have both of those elements which have to do with philosemitism and Christian Zionism and antisemitism. And secondly, and I think much more important, you have a strategic element. Britain realized early on in the 20th century that it was absolutely vital to its strategic interests, control of the shortest route to India, which meant control of the Suez Canal in Egypt, which meant protecting the eastern frontier of Egypt, which they saw as vulnerable, and which in fact turned out during World War I to be vulnerable, by controlling Palestine and the related realization that there was a possibility of the building of a railway between the Mediterranean and the Gulf, which would become the shortest land route through the Mediterranean, then via railway to the Gulf. And the British decided they had to control that as well. That’s why you have some very peculiar shapes on the map today.
That eastern arm of Jordan, which connects with the western edge of Iraq, is a British concoction to ensure British control of that shortest land route between the Gulf and the Mediterranean. And Palestine is the Mediterranean terminus of that. So for multiple strategic reasons, the British had decided long before Chaim Weizmann, came along, long before Balfour was foreign secretary, that they needed to control Palestine. This was a decision of the Committee of Imperial Defense, of the British General Staff, of British ministers in 1906, ’7, ’8, ’9, ’10, ’11, ’12, long before the Balfour Declaration. So strategic reasons and the idea that the Zionist movement would be a useful pawn in this that enabled Britain after World War I to ignore their promises to other countries to have an international regime in Palestine and to take Palestine for themselves. So, there are strategic reasons and the ideological reasons that I mentioned.
Over time, the Zionists proved very skilled at playing their imperial masters to their advantage.
One of the things you have to understand if you accept that this is a settler colonial project, is that it’s unique. It’s different than any other. Most of the others are extension of the sovereignty in the population of the mother country. Zionism didn’t have a mother country, but it needed an external metropole. And so Herzl ran around Europe to the Kaiser, to the French, to the Ottoman Sultan, to try and find that external patron. Weitzman hit pay dirt in London with the British government. That was something they always understood. That is absolutely vital to keep these external patron or patrons because the project necessitates that anchor in Europe and later on in the United States. That’s something that they used to their advantage when the British decided to limit their promises to the Zionists in 1939, and they pivoted very quickly to the United States and the Soviet Union who became their patrons in the immediate postwar period, pushing through the Partition resolution, which is the birth certificate of the state of Israel, the 1947 General Assembly resolution, partitioning Palestine, both recognizing the state of Israel immediately—it’s established in May 1948—and providing Israel with the arms, which enable it to defeat the four Arab armies that it fought against in the 1948 war.
This attentiveness to external patrons. They later on shift to Britain and France who supply most of their weapons in the fifties and sixties. The weapons that they win the 1956 war and the 1967 war are mainly French and British weapons, and it’s the French who gave them the wherewithal to develop their nuclear weapons. Later on, they pivot to the Americans. So, there’s always been a concern to maintain an anchor in a western European/American metropole for this project, even as it became based in Israel after the establishment of the state.
I don’t want to emphasize the flaws and weaknesses of the Palestinian side too much given the overwhelming power and brutality of Israel and its patrons. But there are some issues to talk about here. One, you write a lot about your family in your book, which was part of a Palestinian elite. You’re critical of that elite. It didn’t seem up to the task, to use the Marxist language, of forming a national bourgeoisie. What were its limitations?
Well, the first thing is it was largely not a bourgeois leadership. The first thing is that it was largely a leadership rooted in the traditional notable class, which were people who were landowners, which were people who were part of the bureaucratic elite of the Ottoman Empire, and who hoped to continue that role under the British and their brethren and sistern, or mainly brethren, in other Arab countries did that. They were not a bourgeoisie. The bourgeoisie was a junior partner in that leadership of the 1920s and 1930s. They were not particularly democratic. They were not engaged in mass politics for the most part. They were traditional leadership of what Albert Hourani called notables, the kind of people who had been part of Ottoman governance for generations and generations, centuries actually. And they hoped and assumed that they could continue to play that role under the British
They were sorely mistaken because they fundamentally misunderstood what the British were doing. The British intended to replace them and their people with an entirely different leadership and an entirely different people. That’s what the Balfour Declaration said. That’s what the mandate for Palestine said. And one of the great failures of this leadership was to realize this early enough. Eventually, Palestinians realized this and rose up in revolt, but it wasn’t a revolt that was organized by or led by this traditional leadership. It was a grassroots, popular uprising that led to a three year rebellion that the British only put down with great difficulty. And the leadership doesn’t come off well in my reading and in the reading of most historians during this period from World War I to 1948.
And you also write about how over the decades the leadership of the PLO has been ill-prepared, no match for the Israeli counterparts, no political strategy to influence outside opinion. The leadership enjoyed its perks and forgot their constituents. Now, we shouldn’t overlook how many of the most dynamic leaders Israel assassinated—even in the cultural sphere—but the leadership has been fairly unimpressive. Why?
A couple of things. I’m very critical of them. But they achieved certain things. You have to give them credit for resuscitating the Palestinian national movement in the fifties and sixties at a time when everybody thought that Palestine had disappeared from the map. The Israelis were gloating. I believe it was Golda Meir who said, the old will die and the young will forget. Well, the old died, but the young did not forget, and it was this leadership that revived the Palestinian national movement, to their credit. It had been completely destroyed, shattered. The previous leadership was discredited. They were all scattered to the winds. That class and those individuals and those families that had dominated Palestinian politics up to 1948 disappeared from the political map. And the new ones, to their credit, resuscitate the Palestinian national movement and get the Palestinians a seat at the table.
Now, what they did with that seat is where the burden of my criticism comes in, which is that they utterly failed to understand the global balance of power, to understand the United States and Western Europe, to understand how those places functioned and how hard it would be to overcome the visceral nature of Western support for the Zionist project and for Israel. I think a comparison with the Zionist movement and Israeli leaders is quite useful here. You’re talking in the case of people like Herzl, Ben-Gurion, Weitzman, people like later on, Abba Eban, Golda Meir, Benjamin Netanyahu, of people who are Americans, Europeans in their origins, in their education, in their outlook, in their training, in their language, and their culture, and are also Israelis, or Zionists for the ones who like Herzl who die long before the state is created Jabotinsky. All of these are people who are at home in the European milieu.
They understand Europe and the United States. Golda Meir lived in Milwaukee for years. Netanyahu lived in Philadelphia and at Cornell where his dad was teaching for years. You listen to them, you listen to Golda Meir, you listen to Benjamin Netanyahu, and you hearing the accents of natives from this country. And that’s true of Abba Eban and speaking perfect Oxford English. He was South African by origin. So, you’re talking about an elite in the Zionist movement and later in Israel, a large proportion of whom profoundly understand Western culture and politics because they were part of it. That’s not the case for the Palestinians. Until the present generation you do not have people who’ve grown up and have been steeped in Western politics, Western culture, Western languages, Western law, and they therefore were in an enormous disadvantage by comparison with Zionists and later Israeli leaders in dealing with the West, whether strategically or in terms of public relations or diplomatically or in any other way. And that has shown unfortunately in the performance of the PLO, well, the Palestinian leadership of the twenties and the thirties, but the performance of the PLO and more recently of the Palestinian Authority. They’re pathetically out of their depth in dealing with the United States and Western countries. The PLO did a pretty good job dealing with the Third World. They were relatively successful. They could understand that Global South because they were part of it. They could relate to it, they could speak to it. They did not have the same facility with the United States and Western Europe.
I can understand the Cold War logic of an alliance with Israel as a bulwark against Communism. The USSR has been dead for over 30 years. Most Arab regimes are now very reliable US allies. So how do you explain the lingering support for Israel and its absolutely manic intensity?
Well, there’s multiple elements. I mean, you have the Evangelical element, which is a throughline from Britain in the 1930s and 1940s through the United States in the 2020s. That is a base of support that is solid in every era, given that it’s theologically grounded. Second thing that you have that’s important is that all of the leading institutions of the Jewish community have been won over to Zionism between the 1940s and the 1960s. Most Jewish communities in most parts of the world were not particularly favorable to Zionism until Hitler comes to power in the thirties and until the Holocaust. That’s true in the United States. It’s true in Europe. People voted with their feet. Thousands went to Palestine, [laughs] millions went to the United States and Canada and Australia. Or they stayed and tried to change their societies or keep their heads down. They were not convinced of the tenets of Zionism until European antisemitism reached this mad paroxysm of the Holocaust.
And that understandably changed a lot of people’s minds. And by the 1960s, the American Jewish Establishment, the leading institutions of the American Jewish community, had come to treat Israel as a central element in Jewish identity as they came to treat the Holocaust as a central element of self-understanding. And the two were seen as linked, of course. So that’s another element. It’s increasingly unrepresentive of younger generations of people in the Jewish community, but it’s certainly true of the people in the sixties and seventies who own most of the money and controlled most of the institutions. The Conference of Presidents and the ADL and the American Jewish Committee and so forth are run by people whose political consciousness was formed in the fifties, sixties, and seventies. And that was an era in which an Israeli narrative took root in that community.
And then finally, you have strategic elements. You’re absolutely right that Israel was a particularly valuable ally during the Cold War. It was seen as the trump proxy against Soviet proxies. But you’re also right that the Cold War ended in 1991 with the demise of the Soviet Union and that the United States has continued to see Israel as a valuable ally because the United States has found other bogeymen to justify its strategic stranglehold over the Middle East—the Islamic Revolution in Iran and the regime that grew out of that, and then later on, various terrorist outfits like al-Qaeda and ISIS. And Israel successfully sold itself at the turn of the 21st century to the United States as an indispensable ally in the global war on terror. And we see this today in the seamless cooperation between the American intelligence services and the American military with Israel in hunting down Hamas leaders in Gaza and in hunting down Hezbollah leaders in Lebanon.
There’s reportage in the New York Times, which is the main propaganda outlet for Israel in the United States, this is taking place, and this goes back to this idea that these things are joined at the hip. Everything that the United States finds objectionable in the Middle East, including global terrorist outfits like al-Qaeda and ISIS are no different than Hamas and Hezbollah, which of course have national roots and national causes, and are rooted in the Palestine issue and in Israel’s occupation of Lebanon, and not in some global Islamism. But there’s a narrative that Israel succeeded in selling in this country—Netanyahu played a crucial role in this, but it was Ariel Sharon who was really the most successful salesman at the outset—such that the United States has hitched itself essentially to Israel’s war on a variety of actors in the Middle East, with the complete illusion that these are America’s enemies just as their Israel’s enemies. It’s hard to see exactly how Hamas is the United States’s enemy, except that it’s linked to Iran and this hostility between the United States and Iran. this enmity, goes back to the Iranian revolution.
You wrote in The Hundred Years War, which was published in 2020, so I guess you wrote these words in 2018 or ‘19, about how American public opinion was changing, and we’ve certainly seen that accelerate over the last year. How wobbly is the Zionist discursive hegemony these days in the US?
Well, it depends on who you talk about. If you talk about public opinion in general, that hegemony has disappeared. It’s fighting a rearguard action, and because its narrative is so threadbare, it’s obliged to resort to completely spurious allegations of antisemitism to smear people who are calling for Palestinian freedom or people who are decrying the slaughter of civilians in Gaza now in Lebanon. On that level, it’s fighting a rearguard action. On the elite level, however, on the level of the mainstream corporate media, on the level of the great institutions of our society, the universities, the museums, the foundations, on the level of our politics, it’s still hegemonic. There’s not a politician who doesn’t repeat some drivel that’s drawn from this Israeli playbook every time they open their mouth. “The only democracy in the Middle East”—a country that’s kept a population almost as large as the Jewish population of Israel under prison camp conditions and military occupation since 1957 is the “only democracy in the Middle East”?
Millions of Palestinians have lived under the jackboot of a military government locked up in Gaza or held in cantonments all over the West Bank by Israeli walls and Israeli checkpoints without any right to determine anything about their lives, whether they can go, they can come, they can import, they can export, that they can’t register their children in the without Israeli permission. That’s a democracy? There isn’t a politician who doesn’t repeat that nauseating lie. Roger Cohen, today’s New York Times, shared democratic values. So let me see. Torture in prison camps is a democratic value. Slaughtering civilians at a ratio of three to one or four to one, as against your nominal enemies, is it in a democratic value? That bilge is repeated ad nauseum by all of the elites, whether the political or the media or the corporate or the other elites. So, on one level, that narrative is still hegemonic, and that’s unfortunately the level of the people who own and control our politics and our economy and much of our cultural production. At a grassroots level among artists, among students, among unions, among churches, and among minorities, that narrative is in deep, deep trouble.
Is there a way out of where we are, one secular democratic state sounds appealing but impossible to imagine. The old two state solution with the Palestinian one fully sovereign and not an apartheid style bantustan—that seems almost as dreamy, more dreamy than ever after this latest round of bloodletting. And given the destruction of the civilizational infrastructure, the Palestinians, and the hardening of Israeli attitudes, can you imagine any kind of plausible solution at this point?
Well, I don’t think anything is possible in the immediate future, given what you just said. Israel suffered a series of traumatic shocks on October 7th. It was the first invasion of Israeli territory since 1948. It was the largest civilian death toll in Israel since 1948. It was the most severe defeat of Israel’s military, certainly since 1973, and 800 civilians were slaughtered. It was a massive intelligence failure. The traumatic shock of all of that is still reverberating in Israel and has very much hardened Israeli attitudes. The slaughter of 42,000 people in Gaza, as you can imagine, has hardened Palestinian attitudes and the ongoing slaughter of, whatever the toll is, 1,200 people, most of whom as always with the Israelis are civilians, is going to harden attitudes in Lebanon and other parts of the Middle East.
So, nothing can be envisaged in the short term. In the medium and long term, you’re going to see decreasing support for Israel in the West. This ludicrous idea of shared values is going to be tattered. Now, Western values may change. The West may become more autocratic, more undemocratic, more hostile to the rest of the world. That’s certainly possible. The rhetoric of a Trump or the rhetoric of an Orban or the rhetoric of the Austrian party that just won the election indicates that that’s a possibility. In which case, Israel is a perfect ally. Tramples all over international humanitarian law, spits at the United Nations, is hostile and racist towards non-Jews. That’s an attitude that I think a lot of major political parties, including the Republican Party, would find perfectly congenial. But unless that is the future of Western European countries and the United States, there’s going to be a separation of ways between this absolutely essential metropole and this project in Israel.
And there’s going to be a problem within Israel because a lot of people are going to say, is this the country I want to bring my children up to live in? There’s a flight of people from the Middle East. There’s a flight of Israelis from Israel. There’s a flight of Palestinians and Lebanese as well. A hundred thousand Lebanese left for Syria in the last 24, 48 hours. Imagine going to Syria, a war-torn country because you’re in such danger in Lebanon. But Lebanon, Palestine, Jordan, Egypt, Syria, those countries are going to endure. Israel is going to have a problem because the kind of people who are leaving are the doctors from the hospitals, the high-tech folks, the investors, the professors, the more liberal element of Israeli society, and also the more educated and more productive members of Israeli society. And this is going to be a problem going forward. Do you really want your children to be occupying South Lebanon in 2030? Do you really want your children to be occupying Gaza in 2028? Well, that’s the future that this regime, this government in Israel is plotting for that country. I don’t think that that’s a future a number of Israelis at least, are going to enjoy living with.
Video of Rashid Khalidi’s conversation with Carrington Morris, a September 22 event organized by New York City DSA’s political education committee, is available here.
fresh audio product: a century of war on Palestinians, Hezbollah after Nasrallah
Just added to my radio archive (click on date for link):
October 3, 2024 Rashid Khalidi, author of The Hundred Years War on Palestine, talks about Israeli settler-colonialism and its imperial patrons • Aurélie Daher looks at Hezbollah and the challenges it faces after the assassination of its leader
Fresh audio product: wildfires in Brazil, transition in Mexico
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September 26, 2024 Forrest Hylton, author of this article, on wildfires in Brazil and the political impotence of Lula’s administration • Edwin Ackerman on politics in Mexico as AMLO hands over power to Claudia Sheinbaum, having engineered a controversial overhaul of the judiciary (article here)
Fresh audio product: boys talk, economists on inequality
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September 19, 2024 Niobe Way, author of Rebels with a Cause, on the emotional and social lives of boys and what they’re telling us about society • Branko Milanovic, author of Visions of Inequality, reviews what economists have said about the topic over the centuries
Fresh audio product: durability of slaveholder wealth, a conservative looks at the election, effects of teachers’ strikes
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September 12, 2024 Neil Sehgal, co-author of this paper, on the durability of slaveholder wealth, via a look at Congress • Emily Jashinsky with a conservative’s view of the election • Melissa Lyon, co-author of this paper, on the effects of teachers’ strikes
fresh audio product: German neo-Nazis, the superrich
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September 5, 2024 Robert Pausch of Die Zeit on the far right’s strong showing in German regional elections • Rob Larson, author of Mastering the Universe, looks at the superrich
Fresh audio product: upsurge in Bangladesh, writing the Indian constitution
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Fresh audio product: better approach to China, reviewing Petro in Colombia
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August 22, 2024 Jake Werner on a progressive China policy (paper here) • Gabriel Hetland, author of this article, on the record of Colombian president Gustavo Petro, a leftist trying to govern a deeply conservative country
Fresh audio product: a look at Jeff Yass, another look at the “pro-worker” GOP
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August 8, 2024 Arielle Klagsbrun of the All Eyes on Yass Campaign on the insufficiently known right-wing funder Jeff Yass • Sohrab Ahmari and Hamilton Nolan debate the existence, real or imagined, of pro-worker Republicans
Fresh audio product: World Court v Israel, crypto throwing money at politicians, psychoanalyzing Biden
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August 1, 2024 Heidi Matthews analyzes the World Court’s declaration of Israel’s occupations illegal • Molly White on how crypto is spending its money in politics • Nausicaa Renner psychoanalyzes Joe Biden (article here)
Fresh audio product: French elections, the world that launched Vance, power
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July 25, 2024 Cole Stangler on the monumentally inconclusive French elections • David Palumbo-Liu on the Silicon Valley world that launched JD Vance as a politician • a brief bit from Jane McAlevey on power
Fresh audio product: Vance, fake friend of the working class; American political parties are weird
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July 18, 2024 Brandon Mancilla of the UAW looks behind the GOP’s pro-worker facade • Adam Hilton, author of True Blues, on the bizarre nature of the US political party system
We can manage
Dan Davies, The Unaccountability Machine: How Systems Make Terrible Decisions and How the World Lost Its Mind
Profile Books, £22.00
by Michael Pollak
why Hayek was wrong
Here is what mainstream economics thinks we know about managing the economy:
There was a debate in the 1920s and 1930s and central planning lost. It was proven, by people like Hayek and others, that central planning couldn’t work. Its outcomes would always be inferior to the market, and usually far inferior. Over the next century, with some fits and starts, everyone eventually accepted this conclusion and that’s where we are today. All that remains is a residual fight between those who think we ought to regulate a little bit around the edges and those who think every little bit hurts. That is the current division of the world’s ruling class, between neoliberals and ultras.
The problem is that large-scale planning is everywhere, and it started pretty much the same time as it was supposedly proven impossible. Admittedly it was still somewhat new even in the very last years of that debate. James Burnham wrote The Managerial Revolution in 1941 with the same air that many people wrote about the computer revolution in our lifetimes: it’s going to change everything. And then it did, vastly accelerated by the large-scale economic planning of World War II.
Huge corporations were not in themselves something new by then. The great trust boom of 1896-1904 consolidated most of US GDP into a small number of firms that persisted for most of the 20th century. But in the beginning, although they were enormous, they weren’t complicated. John Paul Getty used to read progress reports from all his wells every morning at breakfast. So, they were missing the fundamental problem that the entire debate was about: they weren’t drowning in information. The whole point of trusts was to produce single commodities for which there was practically infinite demand. All they had to do was focus on getting production costs down and the profits gushed in. Size didn’t make things more complicated; in many ways it simplified their situation.
Except that, as they began to integrate themselves vertically and horizontally and move into consumer marketing, this changed, for reasons that will be easy to comprehend once you’ve read this book: in an information management system, things don’t add up, they multiply up. In a flow of decisions, the number of total possibilities increases exponentially with each new option.
But that didn’t stop anybody from managing. There have been many fads, but the basic principle of management has remained the same, which we all know by experience and common sense. It’s called management by exception. That is, things in each department more or less run themselves, and higher management only intervenes when a problem is beyond the local resources. There are reports and monitoring and directives. There are budgets and internal negotiations. But this is basically how it works. Management of large entities is the management of self-governing units that contain self-governing units that contain self-governing units.
Once you have that model, plus a rigorous theory of information, there are lots of things to work out before you get a rigorous theory of management. But in practice the entire central planning problem has been dissolved. There is no “central” planning in the sense of people in the center having to deal with all the information and make all the choices. That never happens. Instead, new information is dealt with immediately, and usually definitively, by people closest to the action. Information that does get to the center has been filtered through many layers, so there’s exponentially less of it, and it comes with a bullet-point summary. Managing large organizations might still be overwhelming if you’re doing it wrong. But there is nothing inherently impossible about it. And people did it, extremely successfully, for the next 30 years, evolving what John Kenneth Galbraith referred to in a book title as The New Industrial State.
There is one more key point to note in passing that also completely explodes the idea that Hayek disproved the possibility of successful economic management—i.e., management—once and for all. Hayek’s central axiom was that all the information anyone needed to make economic decisions is contained in prices. And once you admit management exists, it’s obvious that isn’t true. Price is certainly a constraint that molds all other decisions. But often your decisions turn on other considerations. This is true at every level of the system. And there is nothing theoretical that prevents this non-price information from filtering up in reports and monitoring. Again, a corporation is not a market, we’re not haggling over prices with each other. We’re projecting and carrying out plans and adjusting them to what actually happens. There are always several factors to consider.
Lastly, as the definitive cherry on top, we’re in the information age. We’ve long had a mathematically rigorous definition of information, and it’s now obvious that anything can be digitized. Prices were the only data that came automatically in number form a century ago when Hayek was debating, but those days are long gone. He did pretty great, to be honest, in getting as far as he did without these tools. But he and his epigones are fully to blame for not showing the slightest interest in revising their favorite theory when everything changed. The theory was constructed to serve a political purpose. It is serving it still, and serves best unquestioned and sacrosanct.
So, what went wrong with the New Industrial State? How did we go from a world in which we thought there was nothing we couldn’t manage to a world in which we think there is nothing that we can?
enter Milton Friedman
Davies wreathes his argument ’round with qualifiers that Friedman was telling both owners and managers what they wanted to hear in a moment of felt crisis, and that if it wasn’t him, it would have been someone else. But he also makes it clear the man was one of the greatest propagandists who ever lived. He changed the way the world thought. There is a decent case to be made that neoliberalism began on September 13, 1970, when Friedman published “A Friedman Doctrine: The Social Responsibility of Business Is to Increase Its Profits” in the New York Times. It’s 3,000 words, and Davies spends 1,500 explicating it. Not because it was opaque at the time—even his worst enemies have always envied Friedman’s punchy clarity—but rather because Davies has to explain to us today why in 1970 this article struck Friedman’s contemporaries like a thunderbolt. It’s because they inhabited a worldview that has now almost completely vanished in large part because of his success.
Just registering the title is a shock. Isn’t that what everyone thought back then? Isn’t the idea that corporations even have a social responsibility the very recent and maybe already fading fad of ESG?
Well, no, actually. At the apogee of all-powerful management, profit was thought of simply as one of several constraints. You had to make enough to pay a dividend. But beyond that, the widely scattered stockholders had almost no say and the corporation was free to explore the space of possibilities. How could make they an impact? What should they be preparing for?
Corporations really used to think like this. And it clearly wasn’t bad for capitalist society, which never thrived so much as during those 30 years still routinely tagged as “Golden” and Wirtschaftwunder. A large part of why they thought like this was because they could. It was the way their postwar decision-making machinery had evolved: to deal not only with predictable variation but with uncertainty—with what can’t be predicted.
Friedman convinced us to dispense with most of that decision-making machinery. In his well-developed libertarian worldview, all those parts of the organization that weren’t immediately making money were stealing from the owners. It was both a moral outrage and a gross inefficiency. And he convinced the world, both through his own prolific writing, speeches and TV series, and by inspiring an army of well-funded tireless zealots. Davies’s intellectual history here is concise and surprisingly new, at least to me. And the religious fervor Friedman inspired hasn’t died down a bit. Just ask Jeff Yass.
For Friedman, the problem with matryoshkas of autonomous units is precisely that there is too much autonomy. They have to be reined in tight, and he and his followers presented two chief ways to do it. The first were stock options, which aligned the interests of the managers with the stock owners. That alignment worked. And the second, which had a much bigger impact—because it affected all firms, not just those who were publicly traded—was the leveraged buy-out (LBO).[1] Once a firm is loaded up with debt, making large and constant profits becomes a literally existential need. At that point, the title of Friedman’s article no longer needs to be argued for; the only choices left are constant profit or bankruptcy. All other concerns have to be pushed aside in the fight for survival. The worst of it is that all firms that aren’t already LBO’ed scurry in its shadow, forced to emulate its imperatives to keep from getting eaten. It’s a pretty straight line from that article, through The Journal of Applied Corporate Finance,[2] to the hellscape of private equity that we live in today.
the road not traveled
Cybernetics is another thing that had its origin in World War II, specifically in the math of trying to program an antiaircraft gun to shoot down a plane. Knowing the speed and direction, and the probable evasive maneuvers, the problem was where to aim. The key was designing a system of self-correction based on past results. It had to correct in such a way that it kept improving, rather than overshooting too far in both directions. It turned out the math that made this possible had already been developed by thermodynamics. Cybernetics applied that math to the science of binary choices and invented information theory.
Cybernetics was incredibly popular in the 1950s and 1960s. It was cited constantly, and explicitly claimed as a model by everything from self-help books (Dianetics got the second half of its name from there) to high-brow novels (Pynchon) to the dominant school of sociology (Talcott Parson’s Systems Theory aka Functionalism). And then it kind of disappeared in America, because it turned out you could use information theory to make enormous amounts of money in computers. As Davies points out, you had to be an oddball not to take that deal, and the people who continued to develop the original theory were indeed a collection of very British eccentrics. The most productive and charismatic of them was Stafford Beer who, from the very beginning, because it was his job, was developing and applying cybernetics to the management of large organizations. 
That New Industrial State? He was its premiere theorist. He wrote book after book, each building on the last, trying to capture in diagrams and formulas how the new multidivisional corporation worked. It was clear that the bumblebees flew. But how?
Management cybernetics naturally attempted to theorize management as the management of information. And the first problem it ran into was exactly what Hayek ran into when he theorized markets in terms of information: there is just too much of it for the human brain to handle. Or even, they realized, for the biggest computer we can imagine to handle.
Cybernetics, because of its origins, thought about computers and their possibilities from the outset. The standard cybernetic model is “how many possible states of a system are there to choose from?” And how many binary choices do you have to work through to get to each of them? Management cyberneticians soon proved conclusively that if you apply these terms to large corporations, the numbers grow literally exponentially until the number of possible states is more than the number of atoms in the earth. (The proof is in Stafford Beer’s magnum opus, Brain of the Firm. It’s quite followable; unlike Weiner, he joys in childish diagrams and simple math to get his point across.)
So, the ideal of knowing everything so that we can rationally compute the optimal course is even more impossible than Hayek knew. Powerful computers don’t solve it. We’d need a computer bigger than the world we’re computing. And that’s not even counting the always substantial cost of gathering information and keeping it updated.
Fortunately, that’s not how we actually do things. That’s not how any decision-making entity does things. And there are trillions of them around. They’re called living beings.[3]
The subtitle of Norbert Weiner’s 1948 book, Cybernetics (which coined the term), is Control and Communication in the Animal and the Machine. And by “control” he means “regulation.” In Weiner’s model, cybernetic systems are jointed together by “regulators,” aka governors (which keep things within limits), not controllers (which specifically order each move). 
Because the whole soul of cybernetics is that you can’t control everything because you can’t know everything. You can only regulate. In fact, Weiner originally derived the term “cybernetics” from the Greek word cybernet, which means “coxswain on a trireme” (very much a manager position, and not even high one, like a general or even the captain). But cybernetics shows how a very sophisticated and flexible automatic decision-making system can easily emerge from a small set of interlocking simple regulators. It works exactly the same way that a chess program that can beat you arises from a small collection of simple algorithms.
There are two ways we (and all other living things) actually deal with the inconceivable torrent of possible states of things:
- We attenuate the information coming in by filtering out everything irrelevant. Perception itself —inherent in every action, even for amoebas—is always a matter of focusing, of fuzzing out the background.
- We amplify our ability to deal with the relevant by creating maxims or heuristics, which are basically rules for dealing with X that usually work. Every time we do that, whether through developing habits or instincts or writing formal instructions, we are automating the decision-making process. This allows us to largely deal with it below the level of conscious attention until it hits one of those cases where it doesn’t work. Which is management by exception in a nutshell.
It is probably not an accident that cybernetics made much more intuitive sense in the golden age of American manufacturing. Industrial engineering is very much about supervising an interacting system of humans and machines.[4] Human and mechanical regulators of feedback existed on factory floors long before they were theorized. They simply grew out of the facts of factory life: things vary, things break down, every process needs a tender. That’s what it means to manage.
I should emphasize that two qualitatively different things are being managed in this model. One is the flow of product, which goes through predictable mishaps. Or perhaps I should say semi-predictable: you know what might go wrong, and you know what to do when it does, but you don’t know when or how much (or you would have prevented it). This is what leads to feedback loops: stuff goes in; stuff comes out that isn’t exactly what you were hoping for; adjustments are made to the stuff going in. Eventually regularities set in, e.g., you end up predicting a certain amount of loss and producing that much more; you end up with an inventory reserve and monitor its rise and fall; and the process gets increasingly predictable because of the feedback and monitoring.
The second thing that is being managed is the attitude of the firm towards the future. What new activities should we invest in, what old ones should we phase out? What do trends point to? And lastly, but of keystone importance: how do we deal with what we didn’t predict and aren’t set up to deal with? Because you can also count on that happening at semi-regular intervals.
These two classes of things might be thought of as the higher and lower management, the shop floor and the head office. And for management to be effective in a changing world, they have to be closely connected. Because—and this is at the heart of Stafford Beer’s “viable systems” model—the way an organization perceives the large, unpredicted events is through small unpredicted events: by hearing about and studying the anomalies, the cases where the maxims didn’t work, the possibilities that weren’t taken into account.[5]
In the Kuhnian model of scientific revolution, most of the time we do normal science: there is an agreed-upon framework against which everything is interpreted. But there are always things that don’t fit. These anomalies build up, but we only change the framework when someone comes up with a new framework that works better, where better means that it hugely reduces the number of anomalies.
Beer’s model of management is very similar. For him, the main purpose of computers for central managers is not to give them infinite information but the opposite. It’s to run probability filters on everything that is happening to detect the things that are outside the normal distribution (which itself usually has to be constructed through a logarithmic transform or something similar). That way escalation can be preventive—the organization can be structured to notice and investigate before problems get out of hand. And that process culminates in the regular discussion of weird cases, the ones that didn’t fit the decision-making rules. In this system, the guiding question for higher management always has to be: How can we reorganize to improve things; and when will the costs of change be less than the costs of inaction? This isn’t something that can be done mechanically. It’s something creative you learn by experience, and literal trials and errors.
And having explained all this (in greater and funnier detail) Davies explains how neoliberalism plus human weakness in managers has produced exactly the opposite, a world in which the anomalous cases are never considered until it becomes obvious to everyone that the governing framework is wrong, but there is no process in place to change it.
Stafford Beer had a favorite metaphor for this, which he got from hanging out with experimental neurologists: the decerebrate cat, where
neuroscientists cut the connection between the cerebrum of a cat and the rest of its brain. The animal lived the remainder of its short life in a peculiar state of dysfunction—it could walk, eat food that was placed in front of it, and even clean itself, but it was no longer capable of purposive action. It could survive only in an unchanging environment; it could no longer respond to unanticipated stimuli.
And basically, that’s where we are today. Our decision-making machines—our large organizations—in both the economy and government, don’t work. It’s not an accident they consistently turn out bad decisions. They’ve been systematically gutted. And so long as organizations are guided by neoliberal principles, they cannot be fixed. Because the first principle of neoliberalism is to clean out all the dead wood that doesn’t directly lead to profit (or in government, to immediately measurable results). Everything oriented towards analyzing anomalies and adapting is defined as “excess capacity” that a consultant will tell you to cut when you turn to him in despair that you’re overwhelmed. But cut them out, and you’ve cut out the organization’s ability to learn.
Despite this review being so long, I’ve only followed out one string in a book that weaves dozens of them together like a rope. The author is absurdly widely read, and the book is packed with Aha moments while at the same time being short and fun to read.
It also has a simple answer to What Is to Be Done about neoliberalism: get rid of leveraged buyouts, not by banning them (impossible) but by making a simple revision in the law of limited liability corporations so that they are responsible for all the debts of any entity they buy—so that if it goes bankrupt, they take the hit.
But for me, the central reasons you should read this book, besides just the enjoyment, are:
- It gives you a skeleton key to cybernetics so that you’ll read the Stafford Beer classics. I certainly never would have without it. I didn’t even know they existed. Maybe if enough of us do, someone will bring them back into print. The road not travelled is worth reconsidering now that we’ve come to a dead end.
- It uses that same cybernetic skeleton key (along with a subtle intellectual history, and an extremely smart punch list of critiques) to explain very satisfyingly how economics went so wrong—how it created our current “normal” framework in which the market is supposed to do all our thinking and managing for us. And why, if you honestly think of the economy as something that makes decisions based on information, that makes no sense.
Michael Pollak is a writer who lives in New York. Disclaimer: He is also a friend of Dan Davies. But you probably figured that out.
[1] Early grasp of its central significance is why Left Business Observer, founded in 1986, shares the initials LBO.
[2] See the section in Davies’ Chapter 8 entitled “The Most Ideological Journal of Them All”
[3] That image I started out with, of gestalts within gestalts within gestalts? That’s biology from bottom to top, from the cell to the ecology. In fact, the concept of ecology was originally a cybernetic model, first systematically elaborated in the writings of Gregory Bateson, a member of the first Macy’s Conference on Cybernetics. And Stafford Beer’s “viable systems model,” perfected in his masterwork Brain of the Firm, is explicitly modelled on the human body. When he says “viable” he very much means transforming inputs to outputs; with subdivisions (organs) reporting back and forth to submanagement (the spinal cord and cerebellum); and the organism dealing with threats and continuing to survive. Adapting and continuing to survive is what viable means.
You in the head office don’t know how your kidney or liver is dealing with the variable stream of what you are throwing at it. But autonomous and automatic decisions are constantly happening down there, flipping the switches needed to keep a million titers within viable bounds.
[4] Davies provides a wonderful thick description of this in a book he co-wrote (as kind of a visible ghost-writer) about the engineering and manufacturing of the Brompton foldable bike.
[5] There are also of course classical Black Swan events that can’t be perceived even this way, like 9/11. But they are related, insofar as the only thing that will stand a large organization in good stead in such cases is its ability to quickly and successfully reorganize itself, a capacity only gained through exercise. (Ashby famously and confusingly calls this sort of flexibility “ultra-stability,” by which he means “the ability to absorb huge shocks and survive.”)
Fresh audio product: British and Iranian elections, remembering Jane McAlevey
Just added to my radio archive (click on date for link):
July 11, 2024 Richard Seymour discusses the British election (Sidecar article here) • Trita Parsi, the Iranian election • remembering Jane McAlevey with a 2017 BtN interview excerpt (catalog of interviews here)
LBO News from Doug Henwood 