Friday, 3 June 2011

Thoughts on "All Watched Over by Machines of Loving Grace"

Adam Curtis' All Watched Over by Machines of Loving Grace is still available to view, though by the time anyone has read this it will have subsided into the BBC archive, only available to you in 10-30 minutes via torrent, or by sending a polite letter to the BBC with a cheque for £xx.xx, such is the modern world.

Curtis responds to this modern supposedly techno-utopian world by marking the West's demise into rampant liberalism and the creation of a parallel power structure among the world's financial elites, displacing the tradition political order. Thus, we find ourselves in financial crisis, our governments indebted to the financial blackhole created by reckless lending and investment and transference of debt to taxpayers.

Looking through the arguments on other websites, such as this and this and this and this [the joys of liberation from academic referencing], one notes a few sticky hotspots in Curtis' distribution of blame, fault, and wrong-doing. The sloppy causal reasoning, the factual inconsistencies, and the ever-widening conspiratorial interconnected web of self-interest.

Ayn Rand is selected as the epicentre of a new culture of virtue through self-betterment which sharply contrasts to utilitarianism, the doctrine that our sense of ethics should be guided by the betterment of all human beings.

In Curtis' analysis, a new world order of finance in the hands of the few has come into being based on our love of computers and the idea that we might create a new reality based on the inner perfection of the workings of computers. This goes in tandem with the argument that the utopian hyperdemocracy that the internet potentiates creates a false sense of horizontal power which in reality is just another opportunity for the usual suspects to create new markets based on our need to share our feelings. Thus, a blog post - an icon of free thought - is an opportunity for generating revenue directly or indirectly through statistical data collection and advertising.

The model, perfect within its digital realm, is seen to be inept when faced with the forces of love, lust, and above all, power. Hapless politicians delegate in investment experts to oversee the economy, the overseers defer to the market, and when the market fails, 'ordinary people' people pick up the bill. But this seems to miss the point about computing and modelling, tools for the transformation of society perhaps, but not replacements for regulatory bodies. Is it really the fact that we have culturally invested in a model? What is a model? Surely the question is why was such and such model was created, by whom, for what purpose? Who runs the model and who looks over the modeller's shoulder?

If the financial models have failed, then we must investigate the markets and only then return to the models. Surely the pertinent, obvious, and oft repeated question is why did the markets fail us yet again? Every 'ordinary person' will tell you that it was the greed of the bankers, and perhaps they are on to something. We will design our new models of the market based on the evidence that the market can be sabotaged, that the freedom permitted by excessive deregulation allows interference and domination not just from politicians, but rather from the short-termism of executive boards across the financial landscape? If the market were rational, then it would self-correct efficiently. This leaves two assertions:

  1. The market is built on people but people are not always rational, hence the market incorporates irrational decision-making.
  2. The self-gratifying individualism of ‘some’ top-level investors is to the detriment of the holistic market, even as these same individuals act rationally towards their own betterment.

If the latter, then the market needs further mechanisms to prevent those with monopolistic power over the market from pursuiing individual gain above and to the detriment of the economy as a whole. Curtis may be slightly off the mark in blaming our reification of modelled environments, but the point is simply that individual greed does not necessarily scale up to market beneficence.

Lastly, I would say this series is a joy to watch and I recommend you divert your attention five degrees north to the address bar and view it. It is the skill of the visual artist that shines here, weaving together an exciting story, which presents logical argument in the manner of the dramatist, who loves point and counterpoint and chooses his characters wisely to that effect. The soundtrack is also wonderful.


  1. I appareciate your linking to my blog, but as you might expect I disagree with some of your interpretation.

    The only financial model that failed was that of the interventionist, quasi-mercantilist State controlling most of the fundamentals but declaring it was entering a new era of less (never complete absence of) regulation. Contrary to Curtis' odd fairy tale, Clinton never claimed there was no regulation, that the markets were all-powerful - he and his wife were working very hard to institute a full takeover of medicine by the State in the U.S. - or anything like that. Curtis misreads the tone of the times entirely. Clinton was very well-known to be a State guy who was being expedient and pragmatic in finding a "Third Way" that supposedly fused welfare statism and market economics.

    On a broader scale, the markets didn't fail and cannot fail. It's government intervention - and the bizarre idea that markets lead to statis "stability," which no market economist believes - that has failed. If markets failed, we would not be where we are - in a developed world, despite its problems, of astounding abundance. We would be back before the Industrial Revolution, working from dawn to dusk. *That* would be market failure, not some speculative bubbles that are only driven by the odd institution of fiat currency and consequent government abilities to inflate and over-borrow. [cont.]

  2. [Part 2.] Greed is something of a useless concept. If it's so terrible, then why didn't it lead to a crash when Reagan and Thatcher allegedly unleashed it upon their respective countries? Why does it take so long to show results? Yes, the market(s) can be sabotaged - by government distortion. And they were.

    Markets are overall rational over the long term when left free of government interference. That's because they have reality constraints: profit and inventory are two big issues. Fiat currency leads to an overgrowth of the banking sector, which is obviously what happened in the 1990s and 2000s. Too much GDP occurs from pushing money around.

    The charge of "monopoly" is thrown around far too inexactly. The only real and objectionable meaning a monopoly has is a coercive monopoly, and that is only possible through government intervention. The free market defeats attempts to coercively monopolize.

    > individual greed does not necessarily scale up to market beneficence.

    Individual "greed" is not much of a factor in the free market. Yes, you heard it here: "greed" is simply a character flaw - and there are millions of greedy individuals who have nothing. Greed is not fundamental enough. Greed per se produces nothing and is actually anti-production. Aggression is another story - but that is a innate, hard-wired human inheritance, especially among males, and it's what has made our civilizations what they are in the good as well as the bad.

  3. Typo: s/b "appreciate." Apologies.

  4. Thanks for your comments, Fuguewriter, and for clarifying a few points and simplifications I have made.

    It still seems to me that the idea of an absolute free market is unrealistic, given that it will always be subject to interference from within and without. A government will bow to pressure and intervene to preserve its interest, and a bank will hold a nation hostage in the absence of a bail-out.

    I agree that the recent bail-outs of some banks should never have happened, and that the creditors should have accepted the logical consequences of their risky behaviour. This would, as you and the person at have argued, have allowed the market to correct itself.

    The idea of the market failing is perhaps problematic, as this is probably just political speak. What I still find lacking in substance, is that a free market cannot be maintained "free" unless regulators are there to maintain order against speculators and pyramid economics, as well as to prohibit in law the bailing out of such entities (this seems to be the long-term direction in the EU even as we socialise debt in the short-term...). In this sense, any idea of true perfect freedom is flawed and ultimately illusional. Freedom is the ideal, but a regulated market is the compromise with human power struggles.

    I thought this idea was interesting in the documentary, that well-meant ideals can turn out in just new power configurations, as Curtis also argues in Part II.

  5. Fugue: "Greed is something of a useless concept. If it's so terrible, then why didn't it lead to a crash when Reagan and Thatcher allegedly unleashed it upon their respective countries? "

    Good grief man. Given your comments on Curtis's errors, that's a peach.