From the artist's web site:
As a heavy copper ball descends through a tower, it causes a horizontal shaft on the right side of the machine to rotate. (The ball's speed is controlled by a pendulum and escapement mechanism, much like that of a grandfather clock. With each beat of the pendulum, the escapement allows the shaft to rotate only one-twelfth of a turn.)
This right-hand shaft then rotates another shaft on the left through a chain belt wrapped around a pulley on each end. (A simple, weighted 'clutch' removes tension on the chain when the ball is being wound up to the raised position.)
As this left-hand shaft rotates, it not only causes various gears to spin a propeller to the beat of the pendulum, it also makes a cam raise and lower an arm, which, through a series of pulleys, causes the clutch's paddle-like appendage to flit back and forth.
There's a good amount of odd mechanical action taking place as the ball descends, a process which takes about 4 minutes to complete.
See more pictures, a drawing, and a video of A Clockwork Folly on Edmund Dohnert's web site.