The Managerial Revolution: What is Happening in the World

by James Burnham

In capitalist society, the role of government in the economy is always secondary. The government acts in the economy chiefly to preserve the integrity of the market and of capitalist property relations, and to give aid and comfort, as in wars or international competition or internal disturbances, where these are needed.

Capitalist economy is a system of private ownership, of ownership of a certain type vested in private individuals, of private enterprise. The capitalist state is therefore, and necessarily, a limited state.

Under present conditions in the United States it is true that the governmental managers do not have altogether free rein; but the process of the extension of governmental ownership and control nevertheless means a continuous increase of managerial dominance in the economy as a whole.

We have seen that the inability of the proletariat and the propertyless masses generally to build up in an analogous manner social dominion “within the womb” of capitalist society is one of the crucial reasons why socialism will not succeed capitalism.

The direct economic incursions of the government do, precisely, abridge or even eliminate those rights with reference to the section of the economy in question; they are therefore intolerable, so far as they go, incompatible with capitalism. The capitalists oppose the economic incursions at the outset.

The past, after all, is the only source of knowledge about the future.

In those nations—Russia and Germany—which have advanced furthest toward the new economy, “socialism” or “national socialism” is the term ordinarily used. The motivation for this terminology is not, naturally, the wish for scientific clarity but just the opposite. The word “socialism” is used for ideological purposes in order to manipulate the favorable mass emotions attached to the historic socialist ideal of a free, classless, and international society and to hide the fact that the managerial economy is in actuality the basis for a new kind of exploiting, class society.

In fact, as the example of Germany (and of the New Deal, for that matter) is proving, more orthodox taxation methods are capable of very flexible use in redirecting income toward new channels, in violation of capitalist “laws” of profits and wages, even while capitalist relations remain nominally intact.

An economic structure based upon state ownership of the major instruments of production provides the framework for the social domination of the managers. It must also be noticed that this apparently is the only economic structure through which the social domination of the managers can be consolidated.

Fusion of the economy with the state, expansion of the state functions to comprise also control of the economy, offers, whether or not the managers individually recognize it, the only available means, on the one hand for making the economic structure workable again after its capitalist breakdown, on the other for putting the managers in the position of ruling class.

In the sixteenth century, many persons consciously wanted to get rid of the feudal lords and feudal exactions, to build strong national states, and so on. They wanted these things from diverse motives: a love of freedom, a wish for more material comforts, often from religious motives—a hatred and rejection of the Catholic Church. On the other hand, many of the capitalists of the time did not want these things. Their highest ambition was often to become feudal lords. They often were afraid that strong national states would interfere too much with the independent cities where their economic base had previously been. The majority of the great sixteenth-century financiers and merchants of south Germany were good Catholics, and supported the Catholic emperor and thus, indirectly, Rome in the religious wars. Nevertheless, the results, when won, in spite of motives, benefited primarily the capitalists—if not the individual capitalists who had taken part in the struggles, then other capitalists. Just so do the results of doing away with the capitalists, of establishing state ownership of the instruments of production, from whatever motives the aims are pursued, act to the primary benefit of the managers and toward the consolidation of a social structure in which the managers will be the ruling class.

Moreover, even the apparently more modest question of whether managerial society will be “more beneficial to men” than capitalist society is in reality incapable of being answered. More beneficial in terms of what, to what men?

Managerial society is a class society, a society in which there are the powerful and the weak, the privileged and the oppressed, the rulers and the ruled. If we base ourselves upon what we know from the past and not on dreams of other worlds, there is no reason to think that the law which decrees that all social groups of any size try to increase their relative power and privilege will be suspended in managerial society.

Historically there is no doubt about the status of parliaments as the typical political institution of the capitalists. In spite of changes and of the extension of the vote to sections of the population other than the capitalists, parliaments have retained the social marks of their origin.

When there is more than one party, even if one of the parties is an overwhelming majority, parliament has always at least a minimum real function, since it provides a forum where the majority defends its policy against minority criticism. But where there is only one party, there is really nothing much left for parliament to do, and its political significance cannot be more than propagandistic.

In the case of Russia, as of Germany and Italy, the rules, regulations, laws, decrees, have more and more issued from an interconnected group of administrative boards, commissions, bureaus—or whatever other name may be used for comparable agencies. Sovereignty becomes, de facto and then de jure also, localized in these boards and bureaus. They become the publicly recognized and accepted lawmaking bodies of the new society.

In the United States, sovereignty may still be chiefly located in Congress (together with the Supreme Court), it may still be the principal “lawmaking” body; but no one with eyes open during the past generation and especially the past decade will believe that its claims are today undisputed. “Laws” today in the United States, in fact most laws, are not being made any longer by Congress, but by the NLRB, SEC, ICC, AAA, TVA, FTC, FCC, the Office of Production Management (what a revealing title!), and the other leading “executive agencies.”

How plainly it is reflected in the enormous growth of the “executive branch” of the government—which is no longer simply executive but legislative and judicial as well—in comparison with that of the other two branches. Indeed, most of the important laws passed by Congress in recent years have been laws to give up some more of its sovereign powers to one or another agency largely outside of its control.

The shift in the locus of sovereignty is only a symbol of the shift in basic social relations, the shift from the rule of the capitalists to the rule of the managers. As has happened in the other comparable historical transitions, managerial society does away with the representative political institution of the old society, not merely because a new type of institution is technically better for the new society, but precisely because the old institution represents the old society; it becomes despised and hated, and the resentment of the masses is turned against it (look at France in the early summer of 1940); psychologically, ideologically, it is not suited for the new rule.

Equally important, the administrative bureaus have the same kind of general appropriateness for localizing managerial rule as the parliaments had for localizing capitalist rule.

No matter how important totalitarianism may be, it is still necessary to separate from the problem of totalitarianism the question of what kind of society is being totalitarianized: for whose benefit and against whom, with what economic and political institutions, with what ideologies and beliefs? When we hear, merely, that Russia or Germany is “totalitarian,” there is not much that we have learned about them.

In the preceding chapter we have seen one decisive feature of the political organization of managerial society which there is good reason to regard as permanent: namely, the localization of sovereignty in administrative boards or bureaus. This, however, is not necessarily identical with totalitarianism, certainly not with an extreme type of totalitarianism.

We have defined “ruling class” as consisting of the group of persons which has (as a matter of fact, not necessarily of law or words or theory), as against the rest of the population, a special degree of control over access to the instruments of production and preferential treatment in the distribution of the products of those instruments. In many societies, the members of the ruling class in question have also, in their own persons, administered the state: that is, have been the governing officials in the state apparatus.

In managerial society, however, politics and economics are directly interfused; the state does not recognize its capitalist limits; the economic arena is also the arena of the state. Consequently, there is no sharp separation between political officials and “captains of industry.” The captain of industry is, by virtue of his function, at the same time a state official. The “supreme planning commission” is indistinguishably a political and an economic institution.

It is physically and logically impossible for any person or group to be free from everything; to be so would mean not to exist.

The key characteristic of “democracy” as we use the word (whatever it may have meant to the Greeks who invented it) is the granting of the right of political expression to minorities. More fully: democracy is a political system where policy is decided, directly or indirectly, by a majority, and where minorities, differing in their opinion from the majority, have the right of political expression and the opportunity, thereby, of becoming a majority.

It can be seen at once that there has never been—and in practice will never be—a 100% democracy. Democracy is a matter of degree, of more or less; and it varies in several dimensions.

The capitalists of the sixteenth century were, we might say, carrying on a triple battle: against the feudal lords, whose interests were bound up with the decaying social order; against the masses, who, though obscurely, were a social force working against oppression and class rule of any kind; and against each other for first prizes in the new world.

Historical analogy, then, suggests that with the consolidation of the structure of managerial society, its dictatorial phase (totalitarianism) will change into a democratic phase.

We might put it, over-simplifying but not distorting, in this way: The war of 1914 was the last great war of capitalist society; the war of 1939 is the first great war of managerial society. Thus both wars are transitional in character, are wars of the transition period between capitalist and managerial society. In both wars we find both capitalist and managerial elements, with the former predominant in the war of 1914, the latter immensely increased in the war of 1939.

In particular, the major ideologies of a class society must be able to perform two tasks: (1) They must actually express, at least roughly, the social interests of the ruling class in question, and must aid in creating a pattern of thought and feeling favorable to the maintenance of the key institutions and relations of the given social structure. (2) They must at the same time be so expressed as to be capable of appealing to the sentiments of the masses.

The major ideologies of capitalist society, as we noted briefly in an earlier chapter, were variants on the themes of: individualism; opportunity; “natural rights,” especially the rights of property; freedom, especially “freedom of contract”; private enterprise; private initiative; and so on.

Terrorism and skilled technique cannot by themselves put across an ideology that has no roots in mass appeal.

Fascism-Nazism and Leninism-Stalinism (communism or Bolshevism) are types of early managerial ideologies which have been given organized expression and have already had great success. In this country, Technocracy and the much more important New Dealism are embryonic and less-developed types of primitive, native-American managerial ideologies.

That an ideology should be a managerial ideology, it is not necessary that managers should be its inventors or the first to adopt it. Capitalists did not invent capitalist ideologies; and intellectuals were elaborating them when the ambition of nearly every capitalist was still to be a feudal lord.

The Marxist movement separated along the lines of the great division of our time, capitalist society and managerial society. Both wings of Marxism retained, as often happens, the language of Marx, though more and more modifying it under new pressures. In practice, the reformist wing lined up with the capitalists and capitalist society, and demonstrated this in all social crises. The Leninist wing became one of the organized movements toward, and expressed one of the ideologies of, managerial society.

So far as historical development goes, there really cannot be much question; Stalinism is what Leninism developed into—and, moreover, without any sharp break in the process of development. Stalinism is different from Leninism, and so is a youth from a child; the difference is to be accounted for by the change in the background against which development took place.

Once we get even a short way beneath the surface, it is easy to recognize in both Stalinism and fascism the same set of assumptions and key concepts—the concepts out of which we have noticed that managerial ideologies develop. The critiques of capitalist society made by communist and fascist theoreticians are, for practical purposes, identical.

Fascist and communist ideologies denounce in the same words the “chaos” and “anarchy” of capitalism. They conceive of the organization of the state of the future, their state, exactly along the lines on which a manager, an engineer, organizes a factory; that is, their conception of the state is a social extension generalized from managerial experience.

Both communism and fascism claim, as do all great social ideologies, to speak for “the people” as a whole, for the future of all mankind. However, it is interesting to notice that both provide, even in their public words, for the existence of an “élite” or “vanguard.” The élite is, of course, the managers and their political associates, the rulers of the new society. Naturally the ideologies do not put it in this way. As they say it, the élite represents, stands for, the people as a whole and their interests.

If we try to understand ideologies by merely taking their words at face value, as if they were scientific statements of fact, we can never comprehend history and politics. Nor can we do any better by explaining great events as “inconsistencies” and hypocrisies.

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.

What I am maintaining is simply this: Communism (Leninism-Stalinism), fascism-Nazism, and to a more-partial and less-developed extent, New Dealism and Technocracy, are all managerial ideologies. That is, in short: as ideologies they contribute through their propagation to the development of attitudes and patterns of response which are adverse to the continuance of capitalism and favorable to the development of managerial society, which are adverse to the continued social acceptance of the rule of the capitalists, and favorable to the social acceptance of the rule of the managers.

The workers, or some of them, sensed its meaning: that the freedom and end of privilege, which they had thought the revolution was to bring, were giving way to a new form of class rule. They tried to prevent power from getting out of the hands of their Committees. They refused to accept the managers, sometimes drove them out or even killed them. But at each decisive step, the state (the “workers’ socialist state”), whether under Lenin or Stalin, backed not the workers but the managers.

By a “decadent” society, I shall mean no more than a type of society which is nearing its end in time and history.

There is no historical law that polite manners and “justice” shall conquer. In history there is always the question of whose manners and whose justice.

The Nazi Fifth Column is made up of persons within other nations who are more loyal to Nazi Germany, or to the general conception of life of which Nazism is one embodiment, than they are to the nation of which they are residents and perhaps citizens, and to its conception of life. This is why genuine Fifth Columns (whether Nazi or Stalinist) cannot be wiped out.

In the second place, it is not true that all “war economies” are alike. Calling a given economy a “war economy” tells us nothing. Societies prepare for and make war after the manner of such societies as they are.

The basic German pattern reverses the first two stages, which yields: (1) the fairly rapid curbing of the masses, in order to prevent a repetition of the Russian pattern and to forestall a break-through toward a free, classless society; together with the alignment of the masses under a managerial ideology and to an increasing extent under managerial institutions; (2) the more gradual reduction of the home capitalists to impotence, combined with direct onslaught against the capitalists abroad and the institutional bulwarks of world capitalism; (3) the contests to come with rival sectors of the managers.

The firmest representatives of the New Deal are not Roosevelt or the other conspicuous “New Deal politicians,” but the younger group of administrators, experts, technicians, bureaucrats who have been finding places throughout the state apparatus: not merely those who specialize in political technique, in writing up laws with concealed “jokers,” in handing Roosevelt a dramatic new idea, but also those who are doing the actual running of the extending government enterprises: in short, managers.