The Managerial Revolution

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The Managerial Revolution:
What is Happening in the World
Managerial-revolution.jpg
Author James Burnham
Language English
Subject Political philosophy, Political science, Sociology
Publisher John Day Company
Publication date
1941
Publication place United States
Pages214

The Managerial Revolution: What is Happening in the World is a book written by James Burnham in 1941. It discusses the rise of managers and technocrats in modern industrial societies, arguing that they would replace the traditional capitalist class as the rulers of the economic system, though mechanisms such as economic planning. [1] [2]

Contents

Summary

Burnham's seminal work, The Managerial Revolution (1941), theorized about the future of world capitalism based upon its development in the interwar period. Burnham begins by saying that "It is a historical law, with no apparent exceptions so far known, that all social and economic groups of any size strive to improve their relative position with respect to power and privilege in society". He then weighed three possibilities: (1) that capitalism was a permanent form of social and economic organization and would continue indefinitely; (2) that it was temporary and destined by its nature to collapse and be replaced by socialism; (3) that it was currently being transformed into some non-socialist future form of society. [3] [4] Since capitalism had a more or less definite beginning in the 14th century, it could not be regarded as an immutable and permanent form. [5] Moreover, in the last years of previous economic systems such as those of Ancient Greece and the Roman Empire, mass unemployment was "a symptom that a given type of social organization is just about finished." [6] The worldwide mass unemployment of the depression era thus indicated that capitalism was itself "not going to continue much longer." [6]

Burnham agreed with Marxists that the capitalist class would inevitably lose the class struggle, but disagreed that they would lose to the working class due to this class being too disorganized and weak. He instead argued that a new class called the managerial class would win against the capitalist class. Burnham defines this new class as the individuals responsible for "the tasks of the technical direction and coordination of the process of production." The managerial class is responsible for directing technical experts, including "operating executives, superintendents, administrative engineers, supervisory technicians; or, in government… administrators, commissioners, bureau heads, and so on." According to Burnham, the managerial class has risen due to the increasing complexity and large scope of modern economies. Because doing certain tasks requires hyper specific technical knowledge, the capitalist class cannot perform all of the necessary tasks by themselves. This means that the capitalist class has to employ individuals who manage other individuals engaged in technical work. By doing this, the capitalist class has made themselves obsolete, since the managers are the individuals who actually control production. Although the managerial class is still employed by the capitalist class, Burnham argued that this arrangement was irreconcilable. This would eventually result in the managerial class who actually owns production seizing it from the capitalist class who owns it in name only. According to Burnham, the managerial class would seize power by implementing state ownership of production. Due to the complexity and large scale of modern economies, Burnham argues that this form of state ownership would prove more efficient than rule by individual capitalists. The "managerial revolution", according to Burnham, would result in the decline of capitalist democracy and the rise of managerial control of production while using "the unlimited state" as a vehicle. [4]

Analyzing the emerging forms of society around the world, Burnham saw certain commonalities between the economic formations of Nazi Germany, Stalinist Russia, and America under Roosevelt's New Deal. Burnham argued that in the short period since the First World War, a new society had emerged in which a social group or class of "managers" had waged a "drive for social dominance, for power and privilege, for the position of ruling class." [7] For at least the previous decade, there had grown in America the idea of a "separation of ownership and control" of the modern corporation, notably expounded in The Modern Corporation and Private Property by Berle and Means. [8] Burnham expanded this concept, arguing that whether ownership was corporate and private or statist and governmental, the essential demarcation between the ruling elite (executives and managers backed by bureaucrats and functionaries) and the mass of society was not ownership so much as control of the means of production.

Burnham emphasized that "New Dealism", as he called it, "is not, let me repeat, a developed, systematized managerial ideology." Still, this ideology had contributed to American capitalism's moving in a "managerial direction":

In its own more confused, less advanced way, New Dealism too has spread abroad the stress on the state as against the individual, planning as against private enterprise, jobs (even if relief jobs) against opportunities, security against initiative, "human rights" against "property rights." There can be no doubt that the psychological effect of New Dealism has been what the capitalists say it has been: to undermine public confidence in capitalist ideas and rights and institutions. Its most distinctive features help to prepare the minds of the masses for the acceptance of the managerial social structure. [9]

Burnham argued that the power of the capitalist class would decline, while a new managerial class would rise to take its place, directing the state and industry. He described both Nazi Germany and the Soviet Union as having a managerial class based on an economic model he considered to be superior to liberal capitalism. Because of this, he incorrectly predicted that the Nazis would win World War II. [4]

Deeper themes

The book explores the transformation of capitalism into a managerial society where the control and administrative decisions are made by a new class of managers, rather than the traditional capitalists or the owners. [10] [11]

Description of capitalism:

  1. Individual Ownership: Capitalists own the factories, resources, and tools required for production.
  2. Profit Motivation: The primary goal of economic activity in capitalism is to generate profit for the owners.
  3. Market Competition: Enterprises compete in relatively free markets where prices and production are determined by supply and demand.
  4. Labor as a Commodity: Workers sell their labor to capitalists and are paid wages, which are generally less than the value of the goods and services they produce.
  5. Decentralized Decision-Making: Economic decisions are made by individual owners and consumers based on market signals rather than centralized planning.

Predictions on post-capitalism:

  1. End of Traditional Capitalism: Burnham argues that traditional capitalism, characterized by private ownership and control by owners, is being supplanted by a new form of economic organization where control rests with a managerial elite.
  2. Rise of the Managerial Class: A new class of managers—administrators, bureaucrats, and executives—emerges as the primary controllers of economic resources, replacing the old capitalist class.
  3. Technological and Organizational Changes: The complexity and scale of modern industry necessitate this shift, as advanced technologies and large-scale organizational structures require specialized management skills that traditional capitalists cannot provide.
  4. Decline of Property Rights: The significance of private property rights diminishes in this new order, as the management of resources becomes more crucial than ownership.
  5. Political Implications: The managerial revolution leads to changes in government structure, favoring a more centralized and bureaucratized form that aligns with managerial needs.
  6. Global Perspective: Burnham views this shift as a global phenomenon, not confined to any single nation, affecting capitalist, fascist, and socialist states alike.
  7. Future Predictions: He predicts that the managerial societies will likely evolve into more authoritarian structures, as managerial elites consolidate power to manage economies and societies efficiently.

Reception

The book has been influential in various fields, including political science and economics, and continues to be relevant in discussions about corporate governance and economic power dynamics. [12] [13] It was most famously reviewed by George Orwell in his essay Second Thoughts on James Burnham written in 1946, Orwell finds the central premise of the book fascinating, but lists a range of criticisms, including problems with the practical war predictions of Burnham.

In June 1941, a hostile review of The Managerial Revolution by Socialist Workers Party loyalist Joseph Hansen in the SWP's theoretical magazine accused Burnham of surreptitiously lifting the central ideas of his book from the Italian Bruno Rizzi's La Bureaucratisation du Monde (1939). [14] Despite certain similarities, there is no evidence Burnham knew of this book beyond Leon Trotsky's brief references to it in his debates with Burnham. [15] Burnham was influenced by the idea of bureaucratic collectivism of the Trotskyist Yvan Craipeau, but Burnham took a distinct conservative Machiavellian rather than a Marxist viewpoint, an important philosophical difference which Burnham explored in greater detail in The Machiavellians.

According to Vox, "Virtually all of The Managerial Revolution's major predictions — the coming collapse of capitalism, an Axis victory in World War II, the superior efficiency of state-run enterprises — were proven wrong. The power of the capitalist class has become more entrenched since the neoliberal revolution of the 1970s and '80s and attendant skyrocketing inequality. The rise of tech capitalism, with firms founded by individual innovators and technical experts, seems to disprove his theory that capitalists cannot themselves perform technical and management tasks at scale." [4]

Burnham's idea of an unaccountable managerial class has gained traction among conservative intellectuals seeking to counteract the power of this class, viewing them as "woke". [4]

Related Research Articles

<span class="mw-page-title-main">Capitalism</span> Economic system based on private ownership

Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. The defining characteristics of capitalism include private property, capital accumulation, competitive markets, price systems, recognition of property rights, self-interest, economic freedom, meritocracy, work ethic, consumer sovereignty, economic efficiency, profit motive, a financial infrastructure of money and investment that makes possible credit and debt, entrepreneurship, commodification, voluntary exchange, wage labor, production of commodities and services, and a strong emphasis on innovation and economic growth. In a market economy, decision-making and investments are determined by owners of wealth, property, or ability to maneuver capital or production ability in capital and financial markets—whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.

Libertarian socialism is an anti-authoritarian and anti-capitalist political current that emphasises self-governance and workers' self-management. It is contrasted from other forms of socialism by its rejection of state ownership and from other forms of libertarianism by its rejection of private property. Broadly defined, it includes schools of both anarchism and Marxism, as well as other tendencies that oppose the state and capitalism.

Socialism is an economic and political philosophy encompassing diverse economic and social systems characterised by social ownership of the means of production, as opposed to private ownership. It describes the economic, political, and social theories and movements associated with the implementation of such systems. Social ownership can take various forms, including public, community, collective, cooperative, or employee. As one of the main ideologies on the political spectrum, socialism is considered the standard left wing ideology in most countries of the world. Types of socialism vary based on the role of markets and planning in resource allocation, and the structure of management in organizations.

State capitalism is an economic system in which the state undertakes business and commercial economic activity and where the means of production are nationalized as state-owned enterprises. The definition can also include the state dominance of corporatized government agencies or of public companies in which the state has controlling shares.

<span class="mw-page-title-main">Anti-capitalism</span> Political ideology and movement opposed to capitalism

Anti-capitalism is a political ideology and movement encompassing a variety of attitudes and ideas that oppose capitalism. In this sense, anti-capitalists are those who wish to replace capitalism with another type of economic system, such as socialism or communism.

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<span class="mw-page-title-main">James Burnham</span> American philosopher (1905–1987)

James Burnham was an American philosopher and political theorist. He chaired the New York University Department of Philosophy; his first book was An Introduction to Philosophical Analysis (1931). Burnham became a prominent Trotskyist activist in the 1930s. A year before he wrote the book, he rejected Marxism and became an influential theorist of the political right as a leader of the American conservative movement. His most famous book, The Managerial Revolution (1941), speculated on the future of an increasingly proceduralist hence sclerotic society. Burnham was an editor and a regular contributor to William F. Buckley's conservative magazine National Review on a variety of topics. He rejected containment of the Soviet Union and called for the rollback of communism worldwide.

<span class="mw-page-title-main">Managerialism</span>

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Bureaucratic collectivism is a theory of class society. It is used by some Trotskyists to describe the nature of the Soviet Union under Joseph Stalin and other similar states in Central and Eastern Europe and elsewhere.

State socialism is a political and economic ideology within the socialist movement that advocates state ownership of the means of production. This is intended either as a temporary measure, or as a characteristic of socialism in the transition from the capitalist to the socialist mode of production or to a communist society. State socialism was first theorised by Ferdinand Lassalle. It advocates a planned economy controlled by the state in which all industries and natural resources are state-owned.

In Karl Marx's critique of political economy and subsequent Marxian analyses, the capitalist mode of production refers to the systems of organizing production and distribution within capitalist societies. Private money-making in various forms preceded the development of the capitalist mode of production as such. The capitalist mode of production proper, based on wage-labour and private ownership of the means of production and on industrial technology, began to grow rapidly in Western Europe from the Industrial Revolution, later extending to most of the world.

The socialist mode of production, also known as socialism or communism, is a specific historical phase of economic development and its corresponding set of social relations that emerge from capitalism in the schema of historical materialism within Marxist theory. The Marxist definition of socialism is that of production for use-value, therefore the law of value no longer directs economic activity. Marxist production for use is coordinated through conscious economic planning. According to Marx, distribution of products is based on the principle of "to each according to his needs"; Soviet models often distributed products based on the principle of "to each according to his contribution". The social relations of socialism are characterized by the proletariat effectively controlling the means of production, either through cooperative enterprises or by public ownership or private artisanal tools and self-management. Surplus value goes to the working class and hence society as a whole.

Social ownership is a type of property where an asset is recognized to be in the possession of society as a whole rather than individual members or groups within it. Social ownership of the means of production is the defining characteristic of a socialist economy, and can take the form of community ownership, state ownership, common ownership, employee ownership, cooperative ownership, and citizen ownership of equity. Within the context of socialist economics it refers particularly to the appropriation of the surplus product produced by the means of production to society at large or the workers themselves. Traditionally, social ownership implied that capital and factor markets would cease to exist under the assumption that market exchanges within the production process would be made redundant if capital goods were owned and integrated by a single entity or network of entities representing society. However, the articulation of models of market socialism where factor markets are utilized for allocating capital goods between socially owned enterprises broadened the definition to include autonomous entities within a market economy.

In Trotskyist political theory, a degenerated workers' state is a dictatorship of the proletariat in which the working class' democratic control over the state has given way to control by a bureaucratic clique. The term was developed by Leon Trotsky in The Revolution Betrayed and in other works.

The proletariat is the social class of wage-earners, those members of a society whose possession of significant economic value is their labour power. A member of such a class is a proletarian or a proletaire. Marxist philosophy regards the proletariat under conditions of capitalism as an exploited class⁠ forced to accept meager wages in return for operating the means of production, which belong to the class of business owners, the bourgeoisie.

References

  1. ↑ "Seen From the Right; Suicide of the West. By James Burnham. 312 pp. New York: The John Day Company. $5.95". The New York Times. 1964-10-04. ISSN   0362-4331 . Retrieved 2024-06-24.
  2. ↑ "Second Thoughts on James Burnham | The Orwell Foundation". www.orwellfoundation.com. 2010-11-30. Archived from the original on 2024-06-15. Retrieved 2024-06-24.
  3. ↑ Burnham, James (1941), The Managerial Revolution: What is Happening in the World, New York: John Day Co., p. 29.
  4. 1 2 3 4 5 Beauchamp, Zack (2022-12-14). "The 80-year-old book that explains Elon Musk and tech's new right-wing tilt". Vox. Retrieved 2023-08-17.
  5. ↑ Burnham 1941, p. 30.
  6. 1 2 Burnham 1941, p. 31.
  7. ↑ Burnham 1941, p. 71.
  8. ↑ Burnham 1941, p. 88.
  9. ↑ Burnham 1941, pp. 201–2.
  10. ↑ "James Burnham's managerialism eighty years later". Global Policy Journal. Retrieved 2024-06-24.
  11. ↑ Purser, Ronald (2024-02-12). "Against Managerialism". Current Affairs. ISSN   2471-2647 . Retrieved 2024-06-24.
  12. ↑ Beauchamp, Zack (2022-12-14). "The 80-year-old book that explains Elon Musk and tech's new right-wing tilt". Vox. Archived from the original on 2023-12-10. Retrieved 2024-06-24.
  13. ↑ "The moral hazard of Managerialism". The Spectator Australia. 2024-02-29. Retrieved 2024-06-24.
  14. ↑ Joseph Hansen, "Burnham's 'Managerial Revolution,'" The Fourth International, v. 2, no. 5 (June 1941), p. 157.
  15. ↑ Rizzi, Bruno; Adam Westoby (1985). The Bureaucratization of the World: The USSR: Bureaucratic Collectivism. Tavistock. ISBN   978-0-42278600-3 . Retrieved 2012-11-25– via Google Books.
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