ICYMI: In an interview with the Financial Times earlier this year, author Dan Davies discussed his book The Unaccountability Machine, in which he argued that corporate and financial systems are designed to deflect personal responsibility, turning companies into “accountability sinks.”
Davies explained that in such structures, negative feedback is absorbed without resolution. "You get all of the bad stuff, you put it into the sink, and it builds up there for ages, and then sooner or later it starts to overflow," Davies said.
"[F]inance is a tool of control," he argued, where debt often forces companies to prioritize cash flow over all else. In these situations, difficult decisions are treated as "necessities" to avoid scrutiny and deflect accountability.
Davies criticized Milton Friedman's profit-maximization doctrine for allowing managers to justify decisions by claiming they serve shareholder value, often using stock price as a measure of success rather than actual company goals. He also argued that ESG and stakeholder capitalism are "a vague conceptual mess" because they lack clear, enforceable links to business practices.
Accountability sinks are the root of much societal unrest, he contended. "[F]or governments, the market is the ultimate accountability sink," he said. "Whenever you want to make a genuinely unpopular decision about taxation, spending or pensions policy, you blame it on the market." Eventually, those subject to such decisions grow tired of bearing the costs.
"And I think that that's at the root of a lot of populist politics we've got," Davies concluded. “[T]hat's the trouble with accountability sinks. They store negative feedback, but don't deal with it. And then suddenly, you get years and years worth of negative feedback suddenly released.”
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