.comment-link {margin-left:.6em;}

Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

My Photo
Location: Northwest Arkansas, United States

Sunday, January 01, 2006

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.


Anonymous Anonymous said...


For a very interesting SF novel from a moderately leftist perspective, I'd recommend Richard K. Morgan's Market Forces. It chronicles a possible future with an exceedingly small upper class, almost no middle class, and a seething violent. "Captitalism" has essentially disappeared, leaving the world with an amoral and power-hungry elite.

Bob Wallace

January 01, 2006 4:20 PM  
Blogger Kevin Carson said...

Thanks, Bob. It's now near the top of my must-read list. As a matter of fact, your description of it reminds me of Marge Piercy's He, She, and It (by the author of Woman on the Edge of Time). Piercy briefly sketched a much more extreme version of the same dystopia in a chapter of the latter work, a sort of Rollerball on steroids, where the human race are serfs and the world is divided up among a handful of "multis" like Mobil-Dupont and Rockemellon.

If you haven't read the original Stephen King novella "The Running Man" (the movie is a total piece of shit), I also strongly recommend it.

January 01, 2006 5:33 PM  
Anonymous Anonymous said...

KC, much of the historical background of the transition from the Middle Ages is just plain wrong, though that doesn't mean that all the inference are incorrect, merely not backed by it. I'll digest all this and report back on it later, but for now consider the effects of endemic warfare on the landed group, and just when and how often it turned over (court cliques weren't the old landed but the non-court aristocracy was).

Meanwhile, one thing holding me back is that I'm working on that IMF/developing world material I promised you. I'm using a letter I wrote as a starting point; it's at http://member.netlink.com.au/~peterl/publicns.html#AFRLET6 (remember, we write our dates properly here).

January 01, 2006 11:40 PM  
Blogger Jesse said...

I'm not familiar with their earliest writings, so there may well be a Trotskyist current there that I'm not aware of, but I never thought of the Frankfurt Schoolers as "Trot-flavored." And I only know Schachtman as a historical figure -- haven't read any of his actual work -- but I never thought of him as coming out of a Frankfurt mode of thinking. Is there a connection I'm missing here?

January 02, 2006 8:05 AM  
Blogger Kevin Carson said...

PM Lawrence,

But there's a high rate of turnover of the largest corporations over a series of decades; what matters is that the class structure persists, and there's a fairly stable oligarchy at any one time.

I look forward to seeing the material you're working on. On the developing countries' kleptocracies, there was a good article at Monthly Review a few years back on the Russian oligarchy, arguing that it fulfilled the same function as primitive accumulation by landed elites in the early modern West.


The missing connection is my attempt to telescope too much stuff into one paragraph. I'm pretty sure that Trostskyism was a big influence on the Frankfurt School, although I'll have to double-check. But you're probably right about Schachtman.

January 02, 2006 9:23 AM  
Anonymous Anonymous said...

What a great post.

My interest is peaked as well in the reading material, thanx.

I have a book in my library, "Canadian Society, A Macro Analysis" by Harry Hiller, that (in one chapter) follows the family names of the most influencial elites in Canada from early British rule right up to the last decade.. By and large, the same families managed to remain among the 'most influencial elites'. I'm not convinced that historical materialism can be evidenced in such short time frames as those being discussed here. But interesting, nonetheless.

January 02, 2006 11:18 AM  
Blogger Kevin Carson said...

Thanks, ricia.

Another good one, if you haven't read it, is Persistence of the Old Regime, by Arno Mayer. He shows a lot of continuity between the old landed elites and the modern plutocracy from the 19th century on.

BTW, I notice in your profile you're in Calgary, which is where my printer (Blitzprint) is. The shipping costs are eating me alive.

January 02, 2006 4:17 PM  
Blogger Kevin Carson said...

You appear to have me dead to rights, Jesse. I checked out Bottomore's Dictionary of Marxist Thought, and did some Googling, and came up empty on any Frankfurt-Trot connection. Guess that'll teach me to rely so much on old notes from a secondary source.

January 02, 2006 4:30 PM  
Anonymous Anonymous said...

Well, it is a quite a long ride to Calgary from where you are. The courier would need food, shelter, extra clothing... Extra cash for the border patrol... Insurance (case he or she gets mulled by a porcupine)... And then of course the company would have to provide a fairly substantial bribe in order to ensure they return back south over that border.

; )

January 03, 2006 12:00 AM  
Blogger Kevin Carson said...

No wonder FedEx's rates are so high!

January 03, 2006 7:09 AM  
Blogger Ken said...

While we're on the subject of corrections, Rosa Luxemburg most certainly did not identify the Leninist regime as barbarism: she was a critical but firm supporter of it. And what she meant by barbarism wasn't some new and unpleasant social system after capitalism - it was the collapse of civilization, probably through war. In this she was probably right!

January 04, 2006 12:09 AM  
Anonymous Anonymous said...

For some reason the following didn't get posted properly yesterday.

KC, I pretty much agree with your comments. Perhaps I didn't emphasise "though that doesn't mean that all the inference are incorrect, merely not backed by it" well enough. The issue for me was that the historical material wasn't accurate. Sure, it may be irrelevant - and I think that the details of just what made the landed classes actually doesn't matter much - but nevertheless it was presented in the support material. If casual readers spot that it is inaccurate, they may well conclude that the inferences are inaccurate too even though the support material was merely flabby and disconnected.

It's a bit like what I posted in another thread earlier, about not overstating the case about someone knowingly lying. Readers may similarly notice that the support material is overstated and mistakenly suppose that it makes a difference - after all, it was cited in support.

I've just bought Market Forces, though it will probably wait a while until it gets to the top of my in tray of reading material (I've only just printed off the book reviews you sent me back in August!).

That brief sketch of the book reminds me of the underlying economics concealed behind the action in Mick Farren's DNA Cowboys trilogy, particularly in the ConLec subculture that produced the antiheroine A.A.Catto.

One thing I found out from searching on Richard Morgan is that, like Professor Kim Swales, he has a background from Cambridge (as indeed have I myself) and then later at the University of Strathclyde. Professor Swales independently researched the material on unemployment that I address in my publications page, so it might be worth putting the two in touch with each other in case they never discovered the similarity of their areas when their paths crossed.

All this htmlising reminds me that I didn't htmlise the link I gave in my earlier comment on this thread, so here it is again.

P.S. Readers may be interested in my recent post at http://blog.mises.org/archives/004510.asp.

January 04, 2006 4:34 AM  
Blogger Kevin Carson said...


(Sigh) I'm gonna have to start fact-checking these things more thoroughly. Thanks for the correction.


Interesting idea at Mises on the government "living off its own" in the sense of a portfolio of land, etc. Sounds vaguely geolib.

January 04, 2006 7:30 AM  
Anonymous Anonymous said...

Not so much geolib as in contrast to it, going in the other direction. Also, it draws on various historical practices that I won't cite here, and it's only incidentally to do with land.

What Georgist tradition fails to do is to separate genuine constructive practices carried out by landowners wearing their other hats from mere rent taking (see the wikipedia entry on turnips), and the fact that improper gains, if any, may well have been taken already leaving victims of the rip off owning land and in debt (I used to keep trying to explain this to Georgists, using Australian examples like Bent who sold off Bentleigh).

Anyhow, this does the reverse, keeping the portfolio rather than selling it off in a way that makes people think that the government was ripped off, and also leaving open the question of whether its own role is ethical; that is, it isn't taken for granted but left clearly unanswered.

Some historical precedents are the Dutch use of semi-fiat currency to fund setting up their "culture system" of exploitation in the East Indies, mediaeval practices of endowing institutions or individuals (Tycho Brahe got the use of a Danish island), prebends etc., US land releases to (supposedly) publicly valuable enterprises like railways and educational institytions (with their scrip money features), and a number of other things.

Henry George seems more on top of the historical background than most of his successors. He at least was aware that English landowners had often got their land as a quid pro quo for feudal obligations like assisting in the defence of the realm, then welched on their obligations while entrenching their title - a wealth transfer.

But even he didn't appreciate that later buyers had often paid them out, leaving them with the gains and the later buyers under a false accusation of ripping the system off. (Not to mention that he assumed the state was the worthy recipient and manager of any excess rents).

Interestingly, a valuable role of the early British building societies, as mutual organisations was, that they let the lucky recipients of the first housing become eligible for the vote as property owners.

These days of course, "building" has come second to land acquisition and the mutual side of things has passed as the organisations gradually became captured and turned into demutualised, manager driven organisations in the name of efficiency and market purity.

In those early days the vote was restricted to those considered to have a stake in society, but this wasn't gaming the system, it really was promoting people out of poverty - a sound aim of the mutual approach.

And, I think, a better approach than achieving universal suffrage by discarding the property requirement.

I draw this conclusion partly from the way that "reform" was staged in such a way as to grow one political party's support (even disfranchising some people), and partly from the way that an impartial property qualification deteriorated into racism into certain areas like South Africa as soon as "reform" was allowed.

At least the property qualification had earlier allowed blacks to vote, in slowly increasing numbers over time - a valuable safety valve that would ultimately have led to full participation with no disruption.

Here's an interesting question that that suggests: which is better, a system in which slavery is still technically possible but with no actual slaves, or a system in which it is banned but people are oppressed in other ways?

That's not a hypothetical, it's all the difference between how Brazil and the USA abolished slavery - though now Brazil too has other oppression, since the liberators were deposed by the former elites.

January 05, 2006 7:40 AM  

Post a Comment

<< Home