The Managerial Revolution: What is Happening in the World

by James Burnham

Certain individuals (among whom in the United States at present would be many of the directors of the company and more particularly the bankers and big financiers who actually appoint the directors) have problems different from either of the first types. Their direct concern is not, or need not be, either the technical process of production or even the profit of the particular company. Through holding companies, interlocking directorates, banks, and other devices, they are interested in the financial aspects not merely of this automobile company but of many other companies and many market operations. They may wish to unite this company with others, in order perhaps to sell a stock or bond issue to the public, independently of the effect of the merger on the technical process of production or on the profits of our original company. They may want, for tax or speculative or other reasons, to lower the profit of this company, and could do so by, for example, raising prices charged by supply companies which they also were interested in. They may want to put some competitors out of business or influence politics or inflate prices; and any of such aims might be altogether independent of the requirements of production or profit in the particular automobile company. Any number of variants is possible. I shall call this third group the “finance-capitalists.”