The Managerial Revolution

Thomas L. Knapp has a good think-piece at Knappster tying together various strands including liberal corporatism, Burnham's managerial revolution, and the ex-Trot component of neoconservatism.

Although Burnham's work is provocative in many ways, I disagree with his treatment of managerialism as a radical breach with previous capitalist class rule. In fact, managerialism as it exists in the state capitalist present, and the more radical managerial collectivism that may exist in a post-capitalist future, are more likely to be the work of the capitalist plutocrats themselves.

For a historical parallel, we need to go back to the transition period from manorialism to capitalism. Immanuel Wallerstein has argued that there was "a reasonably high level of continuity between the families that had been high strata" in 1450 and 1650. According to Wallerstein, the old landed aristocracy was forced to make this transition in response to a large-scale crisis of the old system.

Capitalism, far from being "the overthrow of a backward aristocracy by a progressive bourgeoisie," "was brought into existence by a landed aristocracy which transformed itself into a bourgeoisie because the old system was disintegrating." [Historical Capitalism 105-6] In The Modern World-System, he described the process as one of "embourgeoisment" of the nobility--especially in England, where "the aristocracy to survive had to learn the ways of and partially fuse with the bourgeoisie." [I: 62, 286] Some families in the old landed aristocracy lost out; those adaptable elements who survived absorbed large elements of the bourgeoisie into their ranks. This combined class, which also included the old merchant oligarchs who were canny enough to invest in modern methods of production, enriched itself at the expense of the increasingly proletarianized peasantry. [I: 245-6, 256]

Christopher Hill's analysis was quite similar. The great landowners who thrived in the new economy were those who adapted to "the new society in which money was king." They took less interest in court affairs, ostentatious expenditure, and hospitality, and instead turned their attention toward estate management, rack-renting, the leasing of mining rights, etc. By the seventeenth century, the elements of the old landed aristocracy who had been unable to make this transition had largely disappeared. The surviving aristocracy consisted almost entirely of those "capable of taking advantage of the intellectual and technical revolution in estate management." [Reformation to the Industrial Revolution 50]

The Civil War, as Wallerstein understood it, was between the old and the new landed class. The former, the decadent rentier class that infested the royal court, was defeated; the latter went on, as the Whig oligarchy, to achieve political supremacy in 1689. Although the Civil War was followed by a resurgence of the landed interest, this interest consisted of the new capitalist agricultural class: those elements of the old landed aristocracy who had adopted capitalist methods of agricultural production and learned to thrive in a capitalist economy, along with merchant-capitalists, yeomen, and gentry who had had sufficient capital to invest in the capitalist revolution. [Modern World System, I: 283, 290]

Although perhaps only a minority of landed aristocrats survived the transition, those who adopted capitalist methods of agriculture and carried out the enclosures and other expropriations eventually evolved into the Whig landed oligarchy.

And the continuity persisted into the industrial revolution. Contrary to Mises' myth of an industrial revolution funded largely by abstemious Calvinistic craftsmen working their way up from the ranks, such people were decidedly junior members of the owning classes. The bulk of investment capital for industrialization came from the great Whig landed fortunes, and from the big merchant houses. Although such humble upstarts engaged in most of the entrepreneurship of the industrial revolution, they were able to make money off their own small savings only through the favor and patronage of the old ruling class.

Which brings us to the present. It is quite possible that the position of the New Class today is comparable to that of the bourgeoisie in the development of capitalism, at least as Wallerstein described it. It is possible, in other words, that the present capitalist plutocracy will similarly transform the system into a post-capitalist yet non-socialist form of state collectivism, with themselves running the state. Although many lesser capitalists, even a majority, may be liquidated, those who survive will be those who successfully superceded market relations with state ownership and planning, and incorporated large elements of the New Class as junior partners.

For the present capitalist class, as for the landed aristocracy of the late middle ages, the transition is mandated by a crisis of the old system. Wallerstein argued that the capitalists may try to control and ride the transition to collectivism, in the same way some of the great landlords controlled and rode the transition from manorialism to capitalism.

...the controlled changes... need not be 'progressive'.... Therefore, we must distinguish between the kind of structural transformation that would leave in place (even increase) the realities of the exploitation of labour, and one that would undo this kind of exploitation or at least radically reduce it. What this means is that the political issue of our times is not whether there will be a transition from historical capitalism to something else. That is as certain as we can be about such things. The political issue of our times is whether this something else, the outcome of the transition, will be morally fundamentally different from what we have now, will be progress.

Progress is not inevitable. We are struggling for it. And the form the struggle is taking is not that of socialism versus capitalism, but that of a transition to a relatively classless society versus a transition to some new class-based mode of production (different from historical capitalism but not necessarily bette).

The choice for the world bourgeoisie is not between maintaining historical capitalism and suicide. It is between on the one hand a 'conservative' stance, which would result in the continued disintegration of the system and its resultant transformation into an uncertain but probably more egalitarian world order; and, on the other hand, a bold attempt to seize control of the process of transition, in which the bourgeoisie itself would assume 'socialist' clothing, and seek to create thereby an alternative historical system which would leave intact the process of exploitation of the world's work-force, to the benefit of a minority. [Historical Capitalism, pp.106-07]

And the coalition of corporate capitalists and their pet managers are capable of coopting the rhetoric of socialism, in the same way that the great landed capitalists around the time of the Glorious Revolution were able to coopt bourgeois liberal rhetoric of "English liberty."

As Rosa Luxembourg argued, although the demise of capitalism was inevitable, the identity of its successor was not. The choices were socialism and barbarism. And the Leninist regime in Russia, she concluded from her experiences, was the latter rather than the former.

This theme has been quite fertile in a number of strands of Marxist thought. It was especially productive among the Frankfurt School, which was among the best in incorporating the New Class into its analysis both of corporate capitalism and of "actually existing socialism." The mainstream of the largely Trot-flavored Frankfurt School considered the Stalinist regime to be a genuine workers' state, if "bureaucratically deformed"--not a new kind of class system. But one offshoot of their thought, the Schachtmanites, decided that Soviet society was a new form of post-capitalist class system, "bureaucratic collectivism." It was quite similar, ironically, to Immanuel Goldstein's description of "oligarchical collectivism" in The Book; Goldstein's description of the class origins of the Ingsoc movement (oddly enough, considering Orwell's abrupt dismissal of Burnham) was quite similar to the mass base of "managerialism" in Burnham's thought:

The new aristocracy was made up for the most part of bureaucrats, scientists, technicians, trade-union organizers, publicity experts, sociologists, teachers, journalists, and professional politicians. These people, whose origins lay in the salaried middle class and the upper grades of the working class, had been shaped and brought together by the barren world of monopoly industry and centralized government.

It was perhaps not by accident that "the Asiatic mode of production" was one area of Marxian scholarship not exactly encouraged under Stalin.

So Burnham was arguably closer to the mark in applying his managerialist thesis to the Soviet Union. There, there was no surviving ruling class from the old regime to survive the transition and incorporate the managers into its own ranks. The pre-revolutionary landed aristocracy and capitalists had either fled the country or been liquidated. By the time Stalin's first wave of large-scale purges had run its course, the Party apparat was made up for the most part of workers and peasants who had flooded the Party after the Bolshevik triumph, and then attended polytechnic school and gone into full-time party work under Stalin.

But in his treatment of western-style state capitalism, Burnham went off the track. The mainstream Frankfurt School were much better analysts.

One of the most productive threads of Frankfurt School thought was their analysis of fascism as an attempt by the ruling class under corporate state capitalism to solve its systemic crises by transitioning to a post-capitalist system. According to Horkheimer and Adorno (Dialectic of Enlightenment), Neumann (Behemoth), and Pollock ("State Capitalism"), Nazism reflected an evolution in which capitalists increasingly acted through the state. They speculated that such a society might, in future, altogether abandon commodity production and the law of value. At some point, in that scenario, the market would be superseded by state administration, and the capitalists would extract a surplus from labor directly through the state. When that point was reached, the market would have been completely transformed into a system of state-owned and state-managed latifundia, and the capitalists would no longer be capitalists. Instead, they would be owners of the state economy by virtue of their control of the state. [Note--I should confess that my knowledge of these writers is largely second-hand, from Michael Harrington's treatment in The Twilight of Capitalism. I guess reading them for myself should be on my list of New Year's resolutions.]

Burnham's biggest mistake was overestimating the New Class' independence from the old capitalist plutocracy. Hilaire Belloc was much closer to the truth of their relationship. As I described his position in "Liberalism and Social Control,"

Belloc believed Fabian collectivism [roughly the British equivalent of American Progressivism] to be less dedicated to state or workers' ownership as such than to the idea of control by "efficient" centralized organizations. It would be politically impossible to carry out expropriation of the large capitalists. Therefore, attempts to regulate industry to make labor more bearable, and to create a minimal welfare state, would lead instead to a system in which employers would be compelled to provide a minimum level of comfort and economic security for their employees in return for guaranteed profits. The working class would be reduced to a state of near-serfdom, with legally-defined status replacing the right of free contract, and the state fitting the individual into a lifetime niche in the industrial machine. Such a society would appeal to the authoritarian kind of socialist, whose chief values were efficiency and control....

The Fabian movement preferred working within existing institutions to make capitalism more stable and humane. Since it coincided with the rise of "Progressive" industrialists--who envisioned cooperation between business, government and labor in the interest of efficiency--the two phenomena reinforced each other to promote class rule by men in suits who sat behind desks. In place of the classical socialist movement of the nineteenth century, aiming at workers' control of production and largely made up of real workers, the Fabians and Progressives substituted management of workers by their betters. As Belloc pointed out, if only their lust to manage and regiment the underclass were satisfied, the Fabians would be quite accomodating about capitalist ownership.

Or as Belloc himself wrote of that kind of "socialist":

Let laws exist which make the proper housing, feeding, clothing, and recreation of the proletarian mass be incumbent upon the possessing class, and the observance of such rules be imposed, by inspection and punishment, upon those whom he pretends to benefit, and all that he really cares for will be achieved.

So long as it has that kind of power to regiment the working classes, the New Class doesn't really care that much in whose interests it exercises it--capitalists or commissars. Despite all the progressive" rhetoric used by New Class intellectuals to sell New Deal corporatism, the ultimate force behind them was people like John Rockefeller, Jr., and Gerard Swope. The New Class just acted as glorified plantation overseers in serving the agenda of their billionaire masters. "The hands are Esau's, but the voice is Jacob's."

Belloc's prediction was largely borne out. The New Class were instrumental in transforming capitalism and the capitalist class along corporate lines, creating the American version of managerial capitalism, and bringing most large organizations under assorted forms of Taylorist administration. But although the capitalist class incorporated many of them into its lower ranks, they remained very much junior partners in the ruling class. In short, the New Class were useful idiots.