The Managerial Revolution: What is Happening in the World

by James Burnham

With the help of centralized state direction, managed currency, state foreign-trade monopoly, compulsory labor, and prices and wages controlled independently of any free market competition, branches of the economy or the whole economy can be directed toward aims other than profit. The managerial economy is no longer “the profit system.”

Compulsion Has proven noncompetitve

money will become increasingly and perhaps altogether divorced from any metallic base. The Fort Knox gold pile may well be turned into a monument for posterity, like the Egyptian pyramids.

There seems no reason to believe that managerial economy will be subject to the capitalist type of economic crisis, since the factors involved in this type of crisis, which are all related to the profit requirement of capitalist economy, will be done away with. However, it is most probable that managerial economy will have its own form of crisis. Managerial crises will, it would seem, be technical and political in character: they will result from breakdowns in bureaucratized administration when faced with, say, the complicated problems of sudden shifts to war or peace or abrupt technological changes; or from mass movements of dissatisfaction and revolt

As we saw, the necessarily decentralized economy of private enterprise makes impossible such deliberate regulation of production as a whole. Under the centralized economic structure of managerial society, regulation (planning) is a matter of course.

We know, without waiting for the future, that managerial economy can do away with mass unemployment or reduce it to a negligible minimum. This was done, by managerial methods, in Russia and Germany at the same time that England, France, and the United States proved incapable of doing it by capitalist methods.

We may think that unemployment is preferable to, for example, conscript labor battalions. Nevertheless, mass unemployment is the most intolerable of all the difficulties that any economy can face, sufficient, by itself, to guarantee the collapse of an economic system; and we are concerned with the fact, already sufficiently proved, that managerial methods and managerial economic relations can get rid of unemployment, whereas capitalist methods no longer can do so.

the degree to which nations have been able to build up a general production advance is closely correlated with the degree to which they have been transformed along managerial lines: Russia and Germany head the list of the great nations; the United States and France end it.

Similarly, managerial economy is in a better position than capitalist economy to make use of new inventions and technological devices.

Bureaucracy LOVES change!

The managerial state will either confiscate them, at once or gradually, or it will, for an interim period, compel their use on its own terms and for its own purposes.

Finally, as I have already mentioned, managerial economy, by virtue of centralized control of the economy as a whole, is able to plan for and with the economy as a whole in a way that is not possible for capitalist economy,

Consider who are the members of parliaments. From the beginning probably a majority of them have been lawyers—that is, persons trained in the economic and juridical relations of capitalist society. They have been the kind of person you meet in businessmen’s clubs—not clubs of the first rank, perhaps, but whose members are all the sounder and surer capitalist loyalists for the very reason of their second-rateness.

It is no news to anyone to point out that during the generation since the first world war, sovereignty has been slipping away from parliaments.

Parliamentary sovereignty proved inappropriate for a nation that rapidly developed in the direction of managerial society.

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. The politically significant body will be the controlling institution of the one political party, whatever that institution may be. The decisions of the party institution, when the one party monopolizes political life, complete the political job.

Sovereignty has shifted from parliament to the administrative bureaus.

“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 well lawyers know this to be the case! To keep up with contemporary law, it is the rulings and records of these agencies that they have chiefly to study. 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.

In the new form of society, sovereignty is localized in administrative bureaus. They proclaim the rules, make the laws, issue the decrees. The shift from parliament to the bureaus occurs on a world scale. Viewed on a world scale, the battle is already over.

It was. Brexit and Trump?

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.

The active heads of the bureaus are the managers-in-government, the same, or nearly the same, in training, functions, skills, habits of thought as the managers-in-industry. Indeed, there is less and less distinction between the two: in Russia, managers-in-industry and managers-in-government are one and the same, since there is no (important) industry apart from government.

For just as the capitalists cannot continue as the ruling class, cannot continue even to exist, under a system of state ownership and control of the economy, so they cannot rule through a structure where sovereignty is localized primarily in the bureaus.

In the first place, we may observe that it really doesn’t make very much difference which of the two groups is correctly to be regarded as the new ruling class; whether, as we might put it, the bureaucrats are to be the servants of the managers or the managers of the bureaucrats. In either case, the general structural and institutional organization will be the same.

Capitalist economy proper was the arena of private enterprise, and the capitalist state, we saw, was a limited state. The rulers of capitalist society, as in every society, were those who ruled the economy; and these were not the persons who held the offices of political administration. By the nature of the case, the latter, no matter how supreme they were in their own limited realm, were, in the entire social process, subordinate to the former.

To say that the ruling class is the managers is almost the same thing as to say that it is the state bureaucracy. The two have, by and large, coalesced.

(Once again, we are not concerned with why those with arms in their hands do not take all privileges for themselves; the fact is that they do not.) It

From the point of view of the managers, for example, the political bureaucracy will often seem (already seems) too irresponsible, too much addicted to graft and waste, too unstable. Such conflicts presage changes within the structure of managerial society.

“Freedom” is by itself an incomplete term; there is no such thing as freedom pure and simple; it must always be freedom from something and for something. Freedom along certain lines always implies restrictions along other lines. If I want to be free from hangovers, I must restrict my freedom to drink large amounts of alcohol. If a worker wants to free himself from a job he doesn’t like, he will usually have to restrict his intake of food, since he will have nothing to get food with.

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

In any case, the notion of “freedom” does not help us understand what “democracy” is.

So far, the development toward managerial society has been everywhere accompanied by the tendency toward a one-party monopoly in the political arena, a tendency which has reached completion in most countries.

Sovereignty for a nation implies that the nation makes laws for itself and recognizes no superior lawmaker.

The war of 1914 was the last great war of capitalist society; the war of 1939 is the first great war of managerial society.

I have predicted the division of the new world among three super-states. The nuclei of these three super-states are, whatever may be their future names, the previously existing nations, Japan, Germany, and the United States.

The managerial state does not have to make a capitalist profit; and as the capitalist relations are liquidated the managerial state will move ahead to a new stage in world colonial and semicolonial development.

To prove that such trade cannot be carried on profitably is not to prove that it won’t be carried on but only that it will not be under capitalism.

Does any serious person seriously think that the European Continent is again going to be divided up into a score of sovereign nations, each with its independent border guards, tariffs, export restrictions, currencies, forts, armies, bureaucracies … ? I doubt that anyone really thinks so. If it didn’t work after Versailles, when conditions were a hundred times more favorable, when mounting mass unemployment and permanent economic depression were not yet inescapable features of capitalism, it is certainly not going to work today or tomorrow.

A society cannot hold together unless there is a fairly general acceptance on the part of most of its members, not necessarily of the same ideology, but, at any rate, of ideologies which develop out of similar root concepts as starting points.

The primary function of ideologies—whether moral or religious or metaphysical or social—is to express human interests, needs, desires, hopes, fears, not to cover the facts.

A successful ideology has got to seem to the masses, in however confused a way, actually to express some of their own interests.

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.

Perhaps the most striking proof of the falling off in mass appeal is provided by the complete failure of voluntary military recruiting in England (as well as the entire British Empire) and in the United States.

Does success now prove thesis wrong?

The armies must be gathered by compulsion. No one can challenge the fact; and no one who is honest about it can doubt the significance of the fact.

Hitler took power without a civil war. The capitalist ideologies did not provide a sufficient incentive for heroism.

The masses in France could not be stirred to enthusiasm for a war for “democracy” (that is, capitalism). They rejoiced at Munich. They

In place of the “individual,” the stress turns to the “state,” the people, the folk, the race. In place of gold, labor and work. In place of private enterprise, “socialism” or “collectivism.” In place of “freedom” and “free initiative,” planning. Less talk about “rights” and “natural rights”; more about “duties” and “order” and “discipline.” Less about “opportunity” and more about “jobs.”

They prepare the psychic atmosphere for the demolition of capitalist property rights, the acceptance of state economy and the rule of a new kind of state, the rejection of the “natural rights” of capitalism (that is, the rights of the capitalists in the private market place), and the approval of managerial war.

We already have examples. 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.

The managers’ training as administrators of modern production naturally tends to make them think in terms of co-ordination, integration, efficiency, planning; and to extend such terms from the area of production under their immediate direction to the economic process as a whole.

interfering with the managers’ control and plans. Besides, the masses seem to the managers stupid, incapable of running things, of real leadership. The managers know that with the technological means at their disposal it would be perfectly easy for them to put everyone to work; but the existing setup prevents them from acting. They naturally tend to identify the welfare of mankind as a whole with their own interests and the salvation of mankind with their assuming control of society. Society can be run, they think, in more or less the same way that they know they, when they are allowed, can run, efficiently and productively, a mass-production factory.

Certainly there can be no doubt that under Nazism, Stalinism, and New Dealism, the group in society which has done better (however well or badly) than any other group is the managers; above all, the managers who have had sense enough to become integrated in the state.

What the capitalists sense, and are in the best position to sense, is that the final implications in all these ideologies are anticapitalist, destructive of the ideologies which are the psychological cement of capitalist society. There is, in truth, not a formal identity, but a historical bond uniting Stalinism (communism), Nazism (fascism), and New Dealism.

Clear to any that have eyes to see