Beer’s ideas - applying cybernetic ideas to management science

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Copyright 2017 Graham Berrisford. One of more than 100 papers on the “System Theory” page at http://avancier.website . Last updated 02/05/2019 13:21

 

This is one of many companion papers that analyse some systems thinkers’ ideas.

·         Read Ashby’s ideas for an introduction to his ideas about cybernetics, mostly integral to general system theory

·         Read Ackoff’s ideas on the application of general system theory (after von Bertalanffy and others) to management science.

·         Read Ashby’s ideas about variety on his measure of complexity and law of requisite variety.

·         Read Beer’s ideas on the application of cybernetics (after Ashby and others) to management science.

·         Read Von Foerster’s ideas on ideas attributed to Heinz von Foerster and his second order cybernetics.

 

Further reading on the “System Theory” page at http://avancier.website includes:

Boulding’s ideas, Checkland’s ideas, Luhmann’s ideas, Marx and Engels’ ideas, Maturana’s ideas and Snowden’s ideas.

 

This paper serves to illustrate some points made in Ashby’s ideas about variety.

Contents

Beer’s inspiration. 1

Ashby’s cybernetics. 1

Ashby’s “variety”. 2

Project Cybersyn. 3

The five systems of the Viable System Model (VSM) 7

Beer’s use of the biology-sociology analogy. 8

Conclusions and remarks. 11

References. 12

 

Beer’s inspiration

This section is a brief summary.

The explanations and examples and conclusions formerly here have been moved into Ashby’s ideas about variety.

So if the ideas in this section are not clear to you, then read that other paper first.

Ashby’s cybernetics

W. Ross Ashby (1903-1972) was a psychologist and systems theorist.

He popularised the usage of the term 'cybernetics' to refer to self-regulating (rather than self-organising) systems.

 “Cybernetics is a "theory of machines".

“Our starting point is the idea, much more than a century old, that a machine, in given conditions and at a given internal state, always goes to a particular state.”

·         “A variable is a measurable quantity that has a value.”

·         “The state of the system is the set of values that the variables have.”

·         “A system is any set of variables which he [observer] selects from those available on the real machine.” (Introduction to Cybernetics” Ashby, 1956)

 

In “Design for a Brain” (1952), Ashby, addressed biological (rather than mechanical or electronic) homeostatic machines.

He presented the brain as a regulator that maintains a body’s state variables in the ranges suited to life.

This table distils the general idea.

 

Generic system description

Ashby’s design for a brain

A collection of actors

that interact in regular behaviors

that maintain system state and/or

consume/deliver inputs/outputs

from/to the wider environment.

A collection of brain cells that

interact in processes to

maintain body state variables by

receiving/sending information

from/to bodily organs/sensors/motors.

 

Stafford Beer (1926- 2002) was a theorist, consultant and professor at the Manchester Business School.

And perhaps best known as a cybnertician.

"If cybernetics is the science of control, management is the profession of control."

 

Beer regarded Ashby as a grandfather of cybernetics.

They knew each other, and I believe Ashby was a godfather to one of Beer’s children.

 

Beer sought to extend the applications of cybernetics from biology and engineering to management science.

Management science can be seen as a mix of sociology, economics and other schools.

Ashby’s work was the primary inspiration of Beer's work in management (the profession of control, as he called it

 

In 1972 (the year Ashby died) Beer’s “Brain of the Firm” was published.

The book title echoes Ashby’s “Design for a Brain” 20 years earlier; and it easy to see why.

In Ashby’s “Design for a Brain”, the human is a homeostatic machine that maintains essential state variables; the brain-to-body relationship is seen as a regulatory system with feedback loops.

In Beer’s “Brain of the Firm”, a business is a homeostatic machine that maintains essential state variables; the management-to-worker relationship is seen as a regulatory system with feedback loops.

Ashby’s “variety”

Beer leaned heavily Ashby’s ideas related to variety, a few of which are summarised in this section.

"According to the science of cybernetics… there is a natural law that governs the capacity of a control system to work.

It says that the control must be capable of generating as much "variety" as the situation to be controlled."  "Management Science" Beer, (p. 37), 1968.

 

Variety as a measure of complexity

 “A system's variety V measures the number of possible states it can exhibit.” Ashby 1956

Ashby said the complexity of a system = its variety.

Variety is not an absolute measure of a thing, it relates to a controller’s interest in that thing as a system.

The possible states a target can have are relative to the interest the controller has.

Different controllers - with different interests - perceive a target as having different varieties.

 

The law of requisite variety “only variety can absorb variety”

"The larger the variety of actions available to a control system, the larger the variety of perturbations it is able to compensate".  Ashby 1956

Perturbations are changes in the values of a target system’s variables that need to be regulated by the controller.

 

Ashby’s law of requisite variety tells us something useful; but it can be misinterpreted and there is more to know.

Three things the law does not say:

·         The law does not say variety is all a controller needs

·         The law does not mean a controller knows all the state variables of the thing controlled

·         The law does not imply a controller should maximise its variety.

 

Three other things to know:

·         One real world entity may be regulated by several controllers

·         Controllers may compete to regulate one entity

·         The real world can be seen as mess of more and less tightly coupled systems.

 

Managing complexity (variety)

Where a controller has insufficient variety, design options include:

·         Amplifying (increasing) the variety in the control or management system

·         Attenuating (reducing) the variety in the target or operational system.

 

Amplifying and attenuating variety were major themes in Beer's work in management.

Note that there are other design options for managing complexity.

 

Some points made in the section above can make it difficult to apply cybernetics to sociology and management science.

Project Cybersyn

“For Beer, in fact, corporations are homeostats.

They have a clear goal—survival—and are full of feedback loops: between the company and its suppliers or between workers and management.

And if we can make homeostatic corporations why not homeostatic governments.” Ref. 3

 

On taking office in 1970, the new Chilean president, Allende faced a problem.

“How was he to nationalize hundreds of companies, reorient their production toward social needs, and replace the price system with central planning,

all while fostering the worker participation that he had promised?” Ref 3.

Beer was hired to help, and named his project Cybersyn, short for “cybernetics synergy”.

 

The use of the hub and spoke pattern

Having nationalised hundreds of companies in key industries, the aim was to help and direct them.

One goal was to monitor critical variables so managers could detect and head off problems.

What resources and supplies—fuel, tin cans, sugar, fruit—were critical to the economy?

What variables - fuel stocks, peeled fruit stocks, the number of cans in the factory line, delivery times – mattered?

How could those variables be obtained (mechanically or manually) and reported to managers both locally and in the center?

 

Given very limited computing resources, Beer used what might be called a hub and spoke communication pattern.

The project relied on central IT resources to facilitate inter-business coordination.

“one central computer, analyzing reports sent by telex machines installed at state-run factories,

could inform the firm of emerging problems and, if nothing was done, alert agency officials.” Ref. 3

 

In 1972, this pattern was used successfully in an impromptu way.

“A nationwide strike by truck drivers, who were fearful of nationalization, threatened to paralyze the country.

Fernando Flores had the idea of deploying Cybersyn’s telex machines to outmaneuver the strikers, encouraging industries to coördinate the sharing of fuel.” Ref. 3

 

(Today, the hub could be a web page with information about fuel resources.

Any actor with a fuel stock can post a message; any actor with a fuel need can sort the messages by stock location and volume.

Distributed actors can create and operate countless such hubs – independent of each other – and countless overlapping social networks.

Each central hub models only a fraction of what the actors it connects are interested in.)

 

In practice, the hub-and-spoke communication did not always beat point-to-point communication.

“In one instance, a cement-factory manager discovered that an impending coal shortage might halt production at his enterprise,

so he travelled to the coal mine to solve the problem in person.

Several days later, a notice from Project Cybersyn arrived to warn him of a potential coal shortage—a problem that he had already tackled.

With such delays, factories didn’t have much incentive to report their data.” Ref. 3

 

Beer also used the central IT resources to help each factory set production goals, optimise resource use and make investment decisions.

So far, the project looks like a central IT function doing what it can to support remote business units.

So where did Beer’s own cybernetic ideas come in?

 

The vision of a homeostatic control system for business as usual

In “Brain of the Firm”, Beer had introduced his Viable System Model for business management, supposedly based a human’s central nervous system.

You can read the Wikipedia entry on project Cybersyn for a summary of how Beer designed a central nervous system for the Chilean economy.

The aim was to monitor and direct the actions of actors in Chile’s nationalised businesses.

There would be four levels of control

·         Total

·         Sector

·         Branch

·         Firm

 

So-called “algedonic alerts” would be sent upwards when a resource or performance measure strayed outside a defined range, typically after a timeout.

The higher levels would respond by cascading directions downwards to restore the state of business operations to a homeostatic norm.

 

Managers in an operations room at any level would:

·         be notified when a variable in a lower level system moved out of range, for an unacceptable time

·         read the report, make a plan, then

·         cascade advice and directives using telex messages.

 

The system prescribed a management hierarchy and some bureaucratic actions expected of managers.

In February 1973, Project Cybersyn delivered the first operational version of the system.

 

The vision of a forecasting system for central planning

The vision went beyond enabling and coordinating regular business operations.

Beer argued that “information is a national resource” and anticipated what we might now call big data.

“At the center of Project Cybersyn” was the Operations Room, where cybernetically sound decisions about the economy were to be made.

Those seated in the op room would review critical highlights… from a real-time feed of factory data from around the country.” (Ref. 3)

Data gathered from business operations was to be input into economic simulation software.

So government planners could forecast the possible outcomes of different economic decisions.

 

Moreover, data would be collected from citizens as well.

Around 1970s several thinkers had spoken of the imminent collapse of government institutions.

Beer believed governments did not have enough variety –enough data to control an economy or society.

Project Cyberfolk was to track the real-time happiness of the Chilean nation in response to decisions made in the Operations Room.

“Beer built a device that would enable the country’s citizens, from their living rooms,

to move a pointer on a voltmeter-like dial that indicated moods ranging from extreme unhappiness to complete bliss....

so that the total national happiness at any moment in time could be determined... to show whether government policies were working.” (Ref. 3)

 

(Other cyberneticians have promoted a “maximize internal variety” principle.

"Since the variety of perturbations a [control] system can potentially be confronted with is unlimited, we should always try maximize its internal variety (or diversity),

so as to be optimally prepared for any foreseeable or unforeseeable contingency." Principia Cybernetica.

This can result in redundant design effort, inefficient system operation and data quality issues.

When people come to use the data, they find it is out of date, doesn’t mean what they thought, or is simply inaccurate.)

 

The vision of worker participation in the planning of nationalised businesses

The aim was to involve workers in planning by applying cybernetics. Was it achieved?

 

Who defined the target system?

Project analysts modelled the processes workers performed and resources they used.

“One of the participating engineers described the factory modelling process as “fairly technocratic” and “top down”.

It did not involve “speaking to the guy who was actually working on the mill or the spinning machine.” Ref. 3.

 

Who monitored workers in the performance of defined processes?

In normal operations, factory managers did this.

Exception conditions would be reported to a higher level Ops Room.

 

Who planned what to do when an algedonic alert was sounded?

Those in Ops Room would decide what to do and cascade directions by Telex.

 

Who made plans about factory expansion or closure, and the national economy?

Government planners would do this based on collecting data and using forecasting software.

 

Of course, people at the higher levels in a bureaucracy always delegate some responsibility to those at lower levels.

And it is said that the system in Chile delegated more responsibility to factory managers than the system in the Soviet Union.

Still, both were based on the idea of a hierarchical bureaucracy that monitors the values of variables designed to measure lower level activity.

Workers were expected to perform processes and use resources in ways that had been planned and modelled.

Exception conditions would be reported upwards; corrective directives would be cascaded downwards.

Bureaucratic feedback loops led from bottom up reports to top-down directions.

 

Did this particular application of cybernetic principles herald the advent of a participatory democracy?

“Frustrated with the growing bureaucratization of Project Cybersyn, Beer considered resigning.

“If we wanted a new system of government, then it seems that we are not going to get it,” he wrote to his Chilean colleagues that spring [1973].

“The team is falling apart, and descending to personal recrimination.”

Confined to the language of cybernetics, Beer didn’t know what to do. (Ref. 3).

 

In 1973, six months after its launch, the project ended when Allende was overthrown and Chilean politics swung away from central planning.

The Nobel prize-winning economist Hayek knew Beer, but they never agreed about planning.

In 1974, Hayek gave a famous prize acceptance speech called “The Pretence of Knowledge”.

He coined the term “scientistic” meaning “a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed.”

This distillation of Hayek’s “Pretence of Knowledge” speech includes this expression of Hayek’s view.

“Fooled into believing that the measurable variables are the most critical, economists propose “solutions” that actually worsen the problem.”

Did Hayek have had in mind the application of cybernetics to the requirement for worker participation in planning?

Is it a coincidence that in a New Yorker article (ref. 3), Evgeny Morozov used the word Hayek invented when concluding the project was utopian and scientistic?

Beer learned from the project.

The five systems of the Viable System Model (VSM)

After Project Cybersyn, Beer retreated from the world for a while (ref. 3).

Over the following years, he polished his ideas about applying cybernetics to business management, and gathering feedback from workers.

He refreshed and detailed his “Viable System Model”.

Find “Diagnosing the system for organisations” (1985) on the internet and look at Figure 37, or else the exemplar here.

You’ll see the VSM is much more complex than shown below.

Still, in essence, the VSM is a structural view of a business (and/or unit of a business) that divides it into 5 subsystems, each with its own functions.

 

This table is a view of the VSM (further simplified from the already simplified list in this Wikipedia entry) with my own very naïve interpretation.

Its only purpose in this paper is to inform the discussion in the next section.

 

VSM System

Responsible for functions

One naïve interpretation

5

makes policy decisions to steer the whole organization and balance demands from different units.

Executive

4

looks out to the environment and monitors how the organization must change to remain viable.

Strategy and planning

3

establishes the rules, resources, rights and responsibilities of System 1 and interfaces with Systems 4/5.

Enterprise architecture

2

information systems that enable primary activities to communicate

and enable System 3 to monitor and co-ordinate those activities.

IT operations

1

the primary/core business activities (each may, recursively, be described as viable system)

Business operations

 

Being a cybernetician, Beer was interested in information flows between systems – both within one level, and between recursive levels.

As in project Cybersyn, alerts escalate up the levels of recursion (to higher management) when control actions require more knowledge or resources than the current level has.

This hierarchically recursive structure (monitoring exceptions, and directing exception handling) is topped by a top level or central authority.

 

Beer wrote: “There is no 'correct' interpretation of the VSM. We have spoken instead of more or less useful interpretations.”

Some have indeed found VSM useful as tool to make "interventions" in business structures and operations.

“Few organizations have adopted the VSM as their formal organizational structure.

But many consultants have used it to diagnose the way an organization is operating and where improvements are needed.” (Stuart Umpleby).

Beer’s use of the biology-sociology analogy

The VSM may be seen as an expression of Beer’s insights into business management.

The question in this paper is not about those insights, or how the VSM is used; it is about how far the VSM is based in science.

Beer followed in the long tradition of social systems thinkers who have drawn a biology-sociology analogy

He wrote: "We will seek the source of effective organisation in the cybernetics of natural processes - the brain itself.”

 

Note first, it has turned out that cybernetic models of the brain made in Beer’s time differ from the natural processes – the brain itself.

McCulloch's model of neural networks may be used in Artificial Intelligence but “Artificial neural networks are very poor imitations of brain.” (ref. 4.).

And it appears human brains do not work in the digital or logical way Ashby supposed in “Design for a Brain”.

There seems no realistic prospect of building a viable system that mimics the natural processes of the brain - based on those cybernetic models.

Also, Beer didn’t address the six layers of the cerebral cortex (the information flows to and from these layers are diffuse and complex).

 

Beer followed in the long tradition of social systems thinkers who have drawn a biology-sociology analogy

He looked for inspiration in the structure of the human central nervous system (CNS).

This table is my naïve attempt to present a CNS-VSM mapping.

                                          

Human CNS

Responsible for functions

VSM System

Responsible for functions

Higher brain

voluntary movement, speech and cognition

5

makes policy decisions to steer the whole organization and balance demands from different units.

Mid brain

involuntary movement, the eye, auditory and visual processing.

4

looks out to the environment and monitors how the organization must change to remain viable.

Base brain

basic functions like breathing and sleeping

3

establishes the rules, resources, rights and responsibilities of System 1 and interfaces with Systems 4/5.

Nervous system

fight, flight and freeze; resting, breeding and digestion.

2

information systems that enable primary activities to communicate

and enable System 3 to monitor and co-ordinate those activities.

Body

organs, sensors and motors

1

the primary/core business activities (each may, recursively, be described as viable system)

 

Ashby defined “isomorphic” as “similar in pattern”, as a photograph is to its negative, or map is to the territory it describes.

“Two machines are isomorphic if one can be made identical to the other by simple relabeling.”

Given what I understand of both, the CNS-VSM mapping is a loose analogy rather than isomorphic.

Even at the high level of abstraction in the table above, some mappings (e.g. from base brain to system 3) look odd.

 

Here are some contrasts that merit consideration.

 

Beer treated the human as his primary exemplar of a viable system.

For the life-long survival of an individual organism or group, biology presents many other viable system models.

And many of those (e.g. a virus, a tree, an oyster, a bee hive) have no central nervous system.

For the cross-generation survival of a species, biology gives us the radically different model of reproduction with change.

And looking for a model stable over countless generations in a changing world, trees and sharks provide a better model than humans.

 

The VSM can be applied recursively to a business

By contrast, models of human biology at different levels of decomposition (the body, organs, and cells) are very different in their structures and behaviors.

 

The VSM can be applied to any size of business

In a small business all VSM functions can be done by one person, or shared between a few, each dealing with one or more functions.

Surely, the whole point of the CNS-VSM analogy is that it assigns different functions to different structures?

Remove the structural division and what remains is a purely functional division, which makes any structure CNS-VSM mapping irrelevant.

(If one actor/structure consciously performs all the VSM functions in a business; that clashes with the VSM functions in the same actor’s biology.)

 

The VSM presumes a business survives in a changing world by using information feedback loops for both homeostatic and evolutionary change.

By contrast, in biology, homeostasis may work that way but evolution works differently – by trial and error.

Inter-generational evolution happens by chance mutation rather than by design.

And rather than evolve to fit a changing environment, an organism dies so as to make room for its descendants!

 

The VSM features homeostatic adaptation – to regulation business operations.

However, business operations are not generally homeostatic; e.g. a business may aim to increase its income rather than maintain it.

A business may aim to expand, or diversify, and change the variables it measures itself by.

 

The VSM features evolutionary change – its “brain” defines and changes the “body’s” structures and functions.

By contrast, in biology, the structure of an organism emerges inexorably from bottom-up self-assembly.

The brain does not tell the liver and the kidney what their roles are, and cannot change their functions.

For the life time of a human, the body’s structures (e.g. kidney and liver) and their functions are fixed.

And the direction of any inter-generational change is steered by changes in the environment (the market place) rather than the brain.

 

The VSM system 2 holds the business memory - maintains models of things the business monitors and directs.

Regular business operations can be performed without involving the “brain” systems.

By contrast, in the human, the higher brain (system 5) maintains models of things the body monitors and directs.

And the everyday business of living involves the higher brain.

We interact with the external world and draw on our memory to choose between possible actions.

A human with no higher brain is vegetative and cannot (for example) feed themselves.

 

The VSM system 5, as in human biology, is where cognition and conscious decision-making functions occur.

Surely a business needs VSM systems 3 and 4 to have these abilities also – and to use them independently of system 5?

 

The VSM systems 3 to 5 sit at the center of a mind-body-environment system.

Descartes viewed the mind and body as distinct; the mind controls, interacts with and reacts to the body.

Likewise, Beer viewed the mind as the center of a nested mind-body-environment system.

In human biology, the modern view is called “cognitive embodiment”.

Biologists see the mind as inseparable from the body; they see mental states and activities as being bodily states.

You might better say they brain the body are related in a symbiotic way?

 

The VSM appears to have no equivalent to some structures and functions of the nervous system

In human biology, the nervous system divides into three subsystems, which interact in some functions.

 

Structures

Functions

Sympathetic nervous system

mobilizes for intense activity: fight, flight and freeze

Parasympathetic nervous system

dampens activity: resting, digesting and breeding

Enteric nervous system

semi-autonomous “second brain” controls digestion in the gastrointestinal system

 

The first two subsystems can be seen as working in opposition; the third is a semi-autonomous “second brain”.

Does the VSM contain analogues for the second and third structures and their functions?

And if not, in what sense can it be called the viable system model?

 

Of course, the business functions that Beer positioned in the structure of his VSM can be found in businesses.

And information does flow into, up, down, around and out of a business.

However, the biology-sociology analogy seems to me a device for teaching and promotion.

Like many analogies, the more you think about it the less convincing it is.

Conclusions and remarks

Beer, Churchman, Checkland and others have given us models for thinking about a business or a system.

They are useful tools, at least when interpreted by a skilled management consultant or systems analyst.

This paper is neither for nor against the use of any such model.

It is about the applicability of hard science ideas in sociology and management science.

It makes some general points about those ideas and their limits.

In my view, Beer stretched cybernetics beyond Ashby’s definition of it, and stretched the CNS-VSM analogy beyond rational analysis.

 

Read Ashby’s ideas about variety for further conclusions and remarks relating to the following topics.

 

·         On the application of general system theory and cybernetics to enterprise architecture

·         On the biology-sociology analogy

·         On the scope of cybernetics

·         On assessing complexity

·         On managing complexity (variety)

·         On decentralisation of what is managed

·         On self-organisation

·         On social networks v. social systems

 

In conclusion

There is some scientism and pseudo-science in social systems thinking discussion.

“There are limits to what science and the scientific method can achieve.

In particular, studying society generally shows how difficult it is to control.

This truth may disappoint those who want to build a science to shape society.

But the scientific method is not a recipe that can be mechanically applied to all situations.” From this distillation of Hayek’s “Pretence of Knowledge” speech

 

Reading and references

Follow the links at the top of the paper for discussions of related ideas.

Some speak of complex adaptive systemswhere the meaning of all three terms is debatable.

Read Complex adaptive systemsfor more on that.

 

A variety of sources were referred to in the course of writing this paper; they include

·         Ashby’s “Design for a Brain” (1952) and “Introduction to Cybernetics” (1956)

·         Beer’s “Brain of the Firm” (1972) and Diagnosing the system for organisations” (1985).

Links to them on the internet have proved fragile, but you can probably find them.

 

Beer dedicated Brain of the Firm to his colleagues with the words "absolutum obsoletum" which he translated as "If it works it’s out of date".

That might be read to suggest a degree of uncertainty about the universality and longevity of the model.

But this paper says nothing against the use of the VSM by management consultants today.

 

Ref. 2: http://digitalcommons.colby.edu/cgi/viewcontent.cgi?article=2829&context=cq

A source read in the course of writing this paper.

 

Ref. 3: New Yorker article http://www.newyorker.com/magazine/2014/10/13/planning-machine

Just in case the link to the New Yorker breaks one day, a copy is included below.

 

Ref. 4: Are Neural Networks Imitations of Mind?

The linked-to paper says:

“Neural networks are a strategy to emulate directly the behavior of brain and not the behavior of mind.”

“Artificial neural networks are very poor imitations of brain.”

 

The Planning Machine: Project Cybersyn and the origins of the Big Data nation

By Evgeny Morozov © 2018 Condé Nast. All rights reserved.

 

In Allende’s Chile, a futuristic op room was to bring socialism into the computer age. In June, 1972, Ángel Parra, Chile’s leading folksinger, wrote a song titled “Litany for a Computer and a Baby About to Be Born.” Computers are like children, he sang, and Chilean bureaucrats must not abandon them. The song was prompted by a visit to Santiago from a British consultant who, with his ample beard and burly physique, reminded Parra of Santa Claus—a Santa bearing a “hidden gift, cybernetics.”

 

The consultant, Stafford Beer, had been brought in by Chile’s top planners to help guide the country down what Salvador Allende, its democratically elected Marxist leader, was calling “the Chilean road to socialism.” Beer was a leading theorist of cybernetics—a discipline born of midcentury efforts to understand the role of communication in controlling social, biological, and technical systems. Chile’s government had a lot to control: Allende, who took office in November of 1970, had swiftly nationalized the country’s key industries, and he promised “worker participation” in the planning process. Beer’s mission was to deliver a hypermodern information system that would make this possible, and so bring socialism into the computer age. The system he devised had a gleaming, sci-fi name: Project Cybersyn.

 

Beer was an unlikely savior for socialism. He had served as an executive with United Steel and worked as a development director for the International Publishing Corporation (then one of the largest media companies in the world), and he ran a lucrative consulting practice. He had a lavish life style, complete with a Rolls-Royce and a grand house in Surrey, which was fitted out with a remote-controlled waterfall in the dining room and a glass mosaic with a pattern based on the Fibonacci series. To convince workers that cybernetics in the service of the command economy could offer the best of socialism, a certain amount of reassurance was in order. In addition to folk music, there were plans for cybernetic-themed murals in the factories, and for instructional cartoons and movies. Mistrust remained. “Chile Run by Computer,” a January, 1973, headline in the Observer announced, shaping the reception of Beer’s plan in Britain.

 

At the center of Project Cybersyn (for “cybernetics synergy”) was the Operations Room, where cybernetically sound decisions about the economy were to be made. Those seated in the op room would review critical highlights—helpfully summarized with up and down arrows—from a real-time feed of factory data from around the country. The prototype op room was built in downtown Santiago, in the interior courtyard of a building occupied by the national telecom company. It was a hexagonal space, thirty-three feet in diameter, accommodating seven white fibreglass swivel chairs with orange cushions and, on the walls, futuristic screens. Tables and paper were banned. Beer was building the future, and it had to look like the future.

 

That was a challenge: the Chilean government was running low on cash and supplies; the United States, dismayed by Allende’s nationalization campaign, was doing its best to cut Chile off. And so a certain amount of improvisation was necessary. Four screens could show hundreds of pictures and figures at the touch of a button, delivering historical and statistical information about production—the Datafeed—but the screen displays had to be drawn (and redrawn) by hand, a job performed by four young female graphic designers. Given Beer’s plans to build an entire “factory to turn out operations rooms”—every state-run industrial concern was to have one—Project Cybersyn could at least provide graphic designers with full employment.

 

Beer, who was fond of cigars and whiskey, made sure that an ashtray and a small holder for a glass were built into one of the armrests for each chair. (Sometimes, it seemed, the task of managing the economy went better with a buzz on.) The other armrest featured rows of buttons for navigating the screens. In addition to the Datafeed, there was a screen that simulated the future state of the Chilean economy under various conditions. Before you set prices, established production quotas, or shifted petroleum allocations, you could see how your decision would play out.

 

One wall was reserved for Project Cyberfolk, an ambitious effort to track the real-time happiness of the entire Chilean nation in response to decisions made in the op room. Beer built a device that would enable the country’s citizens, from their living rooms, to move a pointer on a voltmeter-like dial that indicated moods ranging from extreme unhappiness to complete bliss. The plan was to connect these devices to a network—it would ride on the existing TV networks—so that the total national happiness at any moment in time could be determined. The algedonic meter, as the device was called (from the Greek algos, “pain,” and hedone, “pleasure”), would measure only raw pleasure-or-pain reactions to show whether government policies were working.

 

Project Cybersyn can also be viewed as a dispatch from the future. These days, business publications and technology conferences endlessly celebrate real-time dynamic planning, the widespread deployment of tiny but powerful sensors, and, above all, Big Data—an infinitely elastic concept that, according to some inexorable but yet unnamed law of technological progress, packs twice as much ambiguity in the same two words as it did the year before. In many respects, Beer’s cybernetic dream has finally come true: the virtue of collecting and analyzing information in real time is an article of faith shared by corporations and governments alike.

 

Beer was invited to Chile by a twenty-eight-year-old technocrat named Fernando Flores, whom Allende had appointed to the state development agency. The agency, a stronghold of Chilean technocracy, was given the task of administering the newly nationalized enterprises. Flores was undeterred by Beer’s lack of socialist credentials. He saw that there was a larger intellectual affinity between socialism and cybernetics; in fact, both East Germany and the Soviet Union considered, though never actually built, projects similar to Cybersyn.

 

As Eden Medina shows in “Cybernetic Revolutionaries,” her entertaining history of Project Cybersyn, Beer set out to solve an acute dilemma that Allende faced. How was he to nationalize hundreds of companies, reorient their production toward social needs, and replace the price system with central planning, all while fostering the worker participation that he had promised? Beer realized that the planning problems of business managers—how much inventory to hold, what production targets to adopt, how to redeploy idle equipment—were similar to those of central planners. Computers that merely enabled factory automation were of little use; what Beer called the “cussedness of things” required human involvement. It’s here that computers could help—flagging problems in need of immediate attention, say, or helping to simulate the long-term consequences of each decision. By analyzing troves of enterprise data, computers could warn managers of any “incipient instability.” In short, management cybernetics would allow for the reëngineering of socialism—the command-line economy.

 

To take advantage of automated computer analysis, managers would need to get a clear view of daily life inside their own firm. First, they would have to locate critical bottlenecks. They needed to know that if trucks arrived late at Plant A, then Plant B wouldn’t finish the product by its deadline. Why would the trucks be late? Well, the drivers might be on strike, or lousy weather might have closed the roads. Workers, not managers, would have the most intimate knowledge of these things.

 

When Beer was a steel-industry executive, he would assemble experts—anthropologists, biologists, logicians—and dispatch them to extract such tacit knowledge from the shop floor. The goal was to produce a list of relevant indicators (like total gasoline reserves or delivery delays) that could be monitored so that managers would be able to head off problems early. In Chile, Beer intended to replicate the modelling process: officials would draw up the list of key production indicators after consulting with workers and managers. “The on-line control computer ought to be sensorily coupled to events in real time,” Beer argued in a 1964 lecture that presaged the arrival of smart, net-connected devices—the so-called Internet of Things. Given early notice, the workers could probably solve most of their own problems. Everyone would gain from computers: workers would enjoy more autonomy while managers would find the time for long-term planning. For Allende, this was good socialism. For Beer, this was good cybernetics.

 

Cybernetics was born in the mid-nineteen-forties, as scholars in various disciplines began noticing that social, natural, and mechanical systems exhibit similar patterns of self-regulation. Norbert Wiener’s classic “Cybernetics; or, Control and Communication in the Animal and the Machine” (1948) discussed human behavior by drawing on his close observation of technologies like the radar and the thermostat. The latter is remarkable for how little it needs to know in order to do its job. It doesn’t care whether what’s making the room so hot is your brand-new plasma TV or the weather outside. It just needs to compare its actual output (the temperature right now) with its predefined output (the desired temperature) and readjust its input (whatever mechanism is producing heat or cold).

 

Wiener held that a patient suffering from purpose tremor—spilling a glass of water before raising it to his lips—was akin to a malfunctioning thermostat. Both rely on “negative feedback”—“negative” because it tends to oppose what the system is doing. In a way, our bodies are feedback machines: we maintain our body temperature without a specially programmed response for “condition: bathhouse” or “condition: tundra.” The tendency to self-adjust is known as homeostasis, and it’s ubiquitous in both the natural and the mechanical worlds. For Beer, in fact, corporations are homeostats. They have a clear goal—survival—and are full of feedback loops: between the company and its suppliers or between workers and management. And if we can make homeostatic corporations why not homeostatic governments

 

Yet central planning had been powerfully criticized for being unresponsive to shifting realities, notably by the free-market champion Friedrich Hayek. The efforts of socialist planners, he argued, were bound to fail, because they could not do what the free market’s price system could: aggregate the poorly codified knowledge that implicitly guides the behavior of market participants. Beer and Hayek knew each other; as Beer noted in his diary, Hayek even complimented him on his vision for the cybernetic factory, after Beer presented it at a 1960 conference in Illinois. (Hayek, too, ended up in Chile, advising Augusto Pinochet.) But they never agreed about planning. Beer believed that technology could help integrate workers’ informal knowledge into the national planning process while lessening information overload.

 

Project Cybersyn, to be sure, lacked the gizmos available to contemporary organizations. When Beer landed in Santiago, he had access only to two mainframe computers, which the government badly needed for other tasks. Beer chose the “cloud” model: one central computer, analyzing reports sent by telex machines installed at state-run factories, could inform the firm of emerging problems and, if nothing was done, alert agency officials.

 

But computer analysis of factories was only as good as the underlying formal model of how they actually work. Hermann Schwember, a senior member of Cybersyn, described the process in a 1977 essay. The modelling team dispatched to a canning plant, for example, would start with a list of technical questions. What supplies—tin cans, sugar, fruit—were critical to its over-all activity? Were there statistics—say, the amount of peeled fruit, the number of cans in the factory line—that offered an accurate snapshot of the state of production? Were there any machines that might automatically provide the indicators sought by the team (the counter of the sealing unit, perhaps)? The answers would yield a flowchart that started with suppliers and ended with customers.

 

Suppose that the state planners wanted the plant to expand its cooking capacity by twenty per cent. The modelling would determine whether the target was plausible. Say the existing boiler was used at ninety per cent of capacity, and increasing the amount of canned fruit would mean exceeding that capacity by fifty per cent. With these figures, you could generate a statistical profile for the boiler you’d need. Unrealistic production goals, overused resources, and unwise investment decisions could be dealt with quickly. “It is perfectly possible . . . to capture data at source in real time, and to process them instantly,” Beer later noted. “But we do not have the machinery for such instant data capture, nor do we have the sophisticated computer programs that would know what to do with such a plethora of information if we had it.”

 

Today, sensor-equipped boilers and tin cans report their data automatically, and in real time. And, just as Beer thought, data about our past behaviors can yield useful predictions. Amazon recently obtained a patent for “anticipatory shipping”—a technology for shipping products before orders have even been placed. Walmart has long known that sales of strawberry Pop-Tarts tend to skyrocket before hurricanes; in the spirit of computer-aided homeostasis, the company knows that it’s better to restock its shelves than to ask why.

 

Governments, with oceans of information at their disposal, are following suit. That’s evident from an essay on the “data-driven city,” by Michael Flowers, the former chief analytics officer of New York City, which appears in “Beyond Transparency: Open Data and the Future of Civic Innovation,” a recent collection of essays (published, tellingly, by the Code for America Press), edited by Brett Goldstein with Lauren Dyson. Flowers suggests that real-time data analysis is allowing city agencies to operate in a cybernetic manner. Consider the allocation of building inspectors in a city like New York. If the city authorities know which buildings have caught fire in the past and if they have a deep profile for each such building—if, for example, they know that such buildings usually feature illegal conversions, and their owners are behind on paying property taxes or have a history of mortgage foreclosures—they can predict which buildings are likely to catch fire in the future and decide where inspectors should go first. The appeal of this approach to bureaucrats is fairly obvious: like Beer’s central planners, they can be effective while remaining ignorant of the causal mechanisms at play. “I am not interested in causation except as it speaks to action,” Flowers told Kenneth Cukier and Viktor Mayer-Schönberger, the authors of “Big Data” (Houghton Mifflin), another recent book on the subject. “Causation is for other people, and frankly it is very dicey when you start talking about causation. . . . You know, we have real problems to solve.”

 

In another contribution to “Beyond Transparency,” the technology publisher and investor Tim O’Reilly, one of Silicon Valley’s in-house intellectuals, celebrates a new mode of governance that he calls “algorithmic regulation.” The aim is to replace rigid rules issued by out-of-touch politicians with fluid and personalized feedback loops generated by gadget-wielding customers. Reputation becomes the new regulation: why pass laws banning taxi-drivers from dumping sandwich wrappers on the back seat if the market can quickly punish such behavior with a one-star rating? It’s a far cry from Beer’s socialist utopia, but it relies on the same cybernetic principle: collect as much relevant data from as many sources as possible, analyze them in real time, and make an optimal decision based on the current circumstances rather than on some idealized projection. All that’s needed is a set of fibreglass swivel chairs.

 

Chilean politics, as it happened, was anything but homeostatic. Cybernetic synergy was a safe subject for the relatively calm first year of Allende’s rule: the economy was growing, social programs were expanding, real wages were improving. But the calm didn’t last. Allende, frustrated by the intransigence of his parliamentary opposition, began to rule by executive decree, prompting the opposition to question the constitutionality of his actions. Workers, too, began to cause trouble, demanding wage increases that the government couldn’t deliver. Washington, concerned that the Chilean road to socialism might have already been found, was also meddling in the country’s politics, trying to thwart some of the announced reforms.

 

In October, 1972, a nationwide strike by truck drivers, who were fearful of nationalization, threatened to paralyze the country. Fernando Flores had the idea of deploying Cybersyn’s telex machines to outmaneuver the strikers, encouraging industries to coördinate the sharing of fuel. Most workers declined to back the strike and sided with Allende, who also invited the military to join the cabinet. Flores was appointed Minister of Economics, the strike petered out, and it seemed that Project Cybersyn would win the day.

 

On December 30, 1972, Allende visited the Operations Room, sat in one of the swivel chairs, and pushed a button or two. It was hot, and the buttons didn’t show the right slides. Undaunted, the President told the team to keep working. And they did, readying the system for its official launch, in February, 1973. By then, however, long-term planning was becoming something of a luxury. One of Cybersyn’s directors remarked at the time that “every day more people wanted to work on the project,” but, for all this manpower, the system still failed to work in a timely manner. In one instance, a cement-factory manager discovered that an impending coal shortage might halt production at his enterprise, so he travelled to the coal mine to solve the problem in person. Several days later, a notice from Project Cybersyn arrived to warn him of a potential coal shortage—a problem that he had already tackled. With such delays, factories didn’t have much incentive to report their data.

 

One of the participating engineers described the factory modelling process as “fairly technocratic” and “top down”—it did not involve “speaking to the guy who was actually working on the mill or the spinning machine.” Frustrated with the growing bureaucratization of Project Cybersyn, Beer considered resigning. “If we wanted a new system of government, then it seems that we are not going to get it,” he wrote to his Chilean colleagues that spring. “The team is falling apart, and descending to personal recrimination.” Confined to the language of cybernetics, Beer didn’t know what to do. “I can see no way of practical change that does not very quickly damage the Chilean bureaucracy beyond repair,” he wrote.

 

It was Allende’s regime itself that was soon damaged beyond repair. Pinochet had no need for real-time centralized planning; the market was to replace it. When Allende’s regime was overthrown, on September 11, 1973, Project Cybersyn met its end as well. Beer happened to be out of the country, but others weren’t so lucky. Allende ended up dead, Flores in prison, other Cybersyn managers in hiding. The Operations Room didn’t survive, either. In a fit of what we might now call PowerPoint rage, a member of the Chilean military stabbed its slides with a knife.

 

Today, one is as likely to hear about Project Cybersyn’s aesthetics as about its politics. The resemblance that the Operations Room—with its all-white, utilitarian surfaces and oversized buttons—bears to the Apple aesthetic is not entirely accidental. The room was designed by Gui Bonsiepe, an innovative German designer who studied and taught at the famed Ulm School of Design, in Germany, and industrial design associated with the Ulm School inspired Steve Jobs and the Apple designer Jonathan Ive.

 

But Cybersyn anticipated more than tech’s form factors. It’s suggestive that Nest—the much admired smart thermostat, which senses whether you’re home and lets you adjust temperatures remotely—now belongs to Google, not Apple. Created by engineers who once worked on the iPod, it has a slick design, but most of its functionality (like its ability to learn and adjust to your favorite temperature by observing your behavior) comes from analyzing data, Google’s bread and butter. The proliferation of sensors with Internet connectivity provides a homeostatic solution to countless predicaments. Google Now, the popular smartphone app, can perpetually monitor us and (like Big Mother, rather than like Big Brother) nudge us to do the right thing—exercise, say, or take the umbrella.

 

Companies like Uber, meanwhile, insure that the market reaches a homeostatic equilibrium by monitoring supply and demand for transportation. Google recently acquired the manufacturer of a high-tech spoon—the rare gadget that is both smart and useful—to compensate for the purpose tremors that captivated Norbert Wiener. (There is also a smart fork that vibrates when you are eating too fast; “smart” is no guarantee against “dumb.”) The ubiquity of sensors in our cities can shift behavior: a new smart parking system in Madrid charges different rates depending on the year and the make of the car, punishing drivers of old, pollution-prone models. Helsinki’s transportation board has released an Uber-like app, which, instead of dispatching an individual car, coördinates multiple requests for nearby destinations, pools passengers, and allows them to share a much cheaper ride on a minibus.

Such experiments, however, would be impossible without access to the underlying data, and companies like Uber typically want to grab and hold as much data as they can. When, in 1975, Beer argued that “information is a national resource,” he was ahead of his time in treating the question of ownership—just who gets to own the means of data production, not to mention the data?—as a political issue that cannot be reduced to its technological dimensions.

 

Uber says that it can monitor its supply-and-demand curves in real time. Instead of sticking to fixed rates for car rides, it can charge a floating rate depending on market conditions when an order is placed. As Uber’s C.E.O. told Wired last December, “We are not setting the price. The market is setting the price. We have algorithms to determine what that market is.” It’s a marvellous case study in Cybersyn capitalism. And it explains why Uber’s prices tend to skyrocket in inclement weather. (The company recently agreed to cap these hikes in American cities during emergencies.) Uber maintains that surge pricing allows it to get more drivers onto the road in dismal weather conditions. This claim would be stronger if there were a way to confirm its truth by reviewing the data. But at Uber, as at so many tech companies, what happens in the op room stays in the op room.

 

Stafford Beer was deeply shaken by the 1973 coup, and dedicated his immediate post-Cybersyn life to helping his exiled Chilean colleagues. He separated from his wife, sold the fancy house in Surrey, and retired to a secluded cottage in rural Wales, with no running water and, for a long time, no phone line. He let his once carefully trimmed beard grow to Tolstoyan proportions. A Chilean scientist later claimed that Beer came to Chile a businessman and left a hippie. He gained a passionate following in some surprising circles. In November, 1975, Brian Eno struck up a correspondence with him. Eno got Beer’s books into the hands of his fellow-musicians David Byrne and David Bowie; Bowie put Beer’s “Brain of the Firm” on a list of his favorite books.

Isolated in his cottage, Beer did yoga, painted, wrote poetry, and, occasionally, consulted for clients like Warburtons, a popular British bakery. Management cybernetics flourished nonetheless: Malik, a respected consulting firm in Switzerland, has been applying Beer’s ideas for decades. In his later years, Beer tried to re-create Cybersyn in other countries—Uruguay, Venezuela, Canada—but was invariably foiled by local bureaucrats. In 1980, he wrote to Robert Mugabe, of Zimbabwe, to gauge his interest in creating “a national information network (operating with decentralized nodes using cheap microcomputers) to make the country more governable in every modality.” Mugabe, apparently, had no use for algedonic meters.

 

Fernando Flores moved in the opposite direction. In 1976, an Amnesty International campaign secured his release from prison, and he ended up in California, at Berkeley, studying the ideas of Martin Heidegger and J. L. Austin and writing a doctoral thesis on business communications in the office of the future. In California, Flores reinvented himself as a business consultant and a technology entrepreneur. (In the early nineteen-eighties, Werner Erhard, the founder of est, was among his backers.) Flores reëntered Chilean politics and was elected a senator in 2001. Toying with the idea of running for President, he eventually launched his own party and found common ground with the right.

 

Before designing Project Cybersyn, Beer used to complain that technology “seems to be leading humanity by the nose.” After his experience in Chile, he decided that something else was to blame. If Silicon Valley, rather than Santiago, has proved to be the capital of management cybernetics, Beer wasn’t wrong to think that Big Data and distributed sensors could be enlisted for a very different social mission. While cybernetic feedback loops do allow us to use scarce resources more effectively, the easy availability of fancy thermostats shouldn’t prevent us from asking if the walls of our houses are too flimsy or if the windows are broken. A bit of causal thinking can go a long way. For all its utopianism and scientism, its algedonic meters and hand-drawn graphs, Project Cybersyn got some aspects of its politics right: it started with the needs of the citizens and went from there. The problem with today’s digital utopianism is that it typically starts with a PowerPoint slide in a venture capitalist’s pitch deck. As citizens in an era of Datafeed, we still haven’t figured out how to manage our way to happiness. But there’s a lot of money to be made in selling us the dials.