New Books in Economics

Dan Davies, "The Unaccountability Machine: Why Big Systems Make Terrible Decisions—and How the World Lost Its Mind" (U of Chicago Press, 2025)

Aug 30, 2025
Dan Davies, an expert in economics with a background in banking regulation, dives into his book, examining the pitfalls of modern decision-making in large systems. He outlines how accountability has been lost through revolutions in management and cybernetics, leading to decisions made without clear responsibility. Davies discusses the tension between individual agency and complex organizational actions, exploring how AI complicates these processes. His insights challenge traditional economic theories, pushing for decentralized decision-making to restore accountability.
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INSIGHT

Decisions Without Owners

  • Modern organizations create many decisions that nobody actually owns, producing systemic unaccountability.
  • Dan Davies calls this structural problem an "unaccountability machine" that diffuses responsibility across processes.
INSIGHT

Purpose Defines Relevant Information

  • Cybernetics reframes information as 'variety': the space of possible states relevant to a system's purpose.
  • The purpose is defined behaviorally as what a system reliably does, shaping which inputs matter.
INSIGHT

Cybernetics Is Deeply Historical

  • Early cybernetics and computing sought to model brains and decision-making mechanically.
  • Many foundational neural network ideas date back to the 1950s, so today's math is surprisingly old.
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