The New Class War: Saving Democracy from the Managerial Elite

by Michael Lind

In the America of Truman and Eisenhower, the Germany of Adenauer, the Britain of Churchill, and other Western democracies, power brokers who answered to working-class and rural constituencies—grassroots party politicians, trade union and farm association leaders, and church leaders—bargained with national elites in the three realms of government, the economy, and the culture, respectively. In the era of democratic pluralism, the societies of the North Atlantic enjoyed mass prosperity and reduced inequality.

In the realm of the economy, populists favor national restrictions on trade and immigration to shield workers from competing with imports and immigrants. In the realm of politics, populists denounce neoliberal parties and factions as corrupt and elitist. And in the realm of culture, populists denounce elite-promulgated multiculturalism and globalism, while deliberately flouting the norms of the “politically correct” etiquette that marks membership in the university-educated managerial elite.

While demagogic populists can win occasional isolated victories for their voters, history suggests that populist movements are likely to fail when confronting well-entrenched ruling classes whose members enjoy near monopolies of expertise, wealth, and cultural influence.

Demagogic populism is a symptom. Technocratic neoliberalism is the disease. Democratic pluralism is the cure.

A body of thought does exist that can explain the current upheavals in the West and the world. It is James Burnham’s theory of the managerial revolution, supplemented by the economic sociology of John Kenneth Galbraith.

In his worldwide bestseller The Managerial Revolution (1941), Burnham argued that in the era of large-scale capitalism and the bureaucratic state, the older bourgeoisie was being replaced by a new managerial class: What is occurring in this transition is a drive for social domination, for power and privilege, for the position of ruling class, by the social group or class of the managers. . . . At the conclusion of the transition period the managers will, in fact, have achieved social dominance, will be the ruling class in society. This drive, moreover, is world-wide in extent, already well advanced in all nations, though at different levels of development in different nations.

In his essay “Second Thoughts on James Burnham” (1946), George Orwell provided a succinct summary of Burnham’s thesis: Capitalism is disappearing, but Socialism is not replacing it. What is now arising is a new kind of planned, centralized society which will be neither capitalist nor, in any accepted sense of the word, democratic. The rulers of this new society will be the people who effectively control the means of production: that is, business executives, technicians, bureaucrats and soldiers, lumped together by Burnham, under the name of “managers.” These people will eliminate the old capitalist class, crush the working class, and so organize society that all power and economic privilege remain in their own hands. Private property rights will be abolished, but common ownership will not be established. The new “managerial” societies will not consist of a patchwork of small, independent states, but of great super-states grouped round the main industrial centres in Europe, Asia, and America. These super-states will fight among themselves for possession of the remaining uncaptured portions of the earth, but will probably be unable to conquer one another completely. Internally, each society will be hierarchical, with an aristocracy of talent at the top and a mass of semi-slaves at the bottom.

In his memoir A Life in Our Times (1981), Galbraith wrote: “James Burnham, partly because he was a stalwart right-winger well out of the political mainstream and partly because he was not a certified academician, never got full credit for his contribution. In early editions of The New Industrial State I was among those in default.”

Most of today’s billionaires were born into this university-educated, credentialed, bureaucratic upper middle class, and their heirs tend to disappear back into it in a generation or two. Premodern titled aristocrats who survive in the contemporary West are anachronisms who, for the most part, avoid ridicule by disguising themselves as hardworking professionals and managers.

How big is the overclass? It’s difficult to measure, but operating on Mark Bovens and Anchrit Wille’s theory that Western democracies are “diploma democracies”—“ruled by the citizens with the highest degrees”—we can count higher education as a market of membership in the overclass.

Gregory Clark and Neil Cummins have demonstrated that Britons with Norman French surnames like Darcy, Mandeville, Percy, and Montgomery have been at the top of the British social order for twenty-seven generations since the Norman conquest in 1066, while families with Anglo-Saxon names like Sidwell, Tonbridge, and Goodhill still tend to be poorer and less educated.

In the United States, students with math scores in the bottom half who come from families with the highest socioeconomic status are more likely to finish a college degree than students from families with the lowest socioeconomic status who have math scores in the top half of the range.

In the 2016 US presidential election, among counties with a population of fifty thousand or more, Hillary Clinton won forty-eight of the fifty counties that had the highest percentage of voters with at least a four-year bachelor’s degree. Support for her presidential bid “collapsed” (to use the pollster Nate Silver’s term) in the fifty counties with the lowest educational levels.

The most important cleavage dividing the working classes in today’s North Atlantic democracies is rivalry for jobs, public services, and status among old-stock natives and recent immigrants and their descendants. To understand this rift within the working class, we must add to James Burnham’s analysis of managerial rule the split labor market theory first proposed by sociologist Edna Bonacich in 1972.18 According to Bonacich, a split labor market occurs when there are “at least two groups of workers whose price of labor differs for the same work, or would differ if they did the same work.” In the case of some regional or ethnic groups: “Crushing poverty may drive them to sell their labor relatively cheaply.”

Bonacich complained that “both Marxist and non-Marxist writers assume that racial and cultural differences in themselves prompt the development of ethnic competition. This theory challenges that assumption, suggesting that economic processes are more fundamental.”

the pattern of politics in today’s Western democracies is best described as a struggle with three sides—the overclass and two segments of a divided working class. Working-class immigrants and some native minority group members whose personal conditions are improving compete with many members of the native working class, mostly but not exclusively white, who find their economic status, political power, and cultural dignity under threat from below as well as from above. The only winners are a third group: the mostly native, mostly white overclass elites who benefit from the division of the working class.

In Europe and North America, these amenities are provided by the sectors that the economist David Autor calls “wealth work,” a category with formal job titles that include Gift Wrapper, Fingernail Former, Mystery Shopper, and Barista.3 The combination of low wages and high living costs for many workers in hubs like New York, London, and Paris make these occupations unattractive to many native workers of all races, as well as more prosperous immigrants, who often move to suburbs or exurbs as soon as they can afford to escape. Urban service jobs are filled disproportionately by recent immigrants, for whom miserable pay and crowded living conditions in the hubs are preferable to the limited opportunities in the countries they left behind.

Meanwhile, in the vast areas of low-density, low-rise residential and commercial zones around and among the hierarchical hubs, a radically different society has evolved. In the national heartlands, apart from expensive rural resort areas, there are fewer rich households and therefore fewer working poor employed by the rich as servants and luxury service providers.

In addition to being the realm of goods production, the heartland is the land of mass services. In the somewhat idealized era of mid-twentieth-century industrial Fordism, the workers in mass-production industries earned enough to buy the products they made, such as cars, radios, and television sets. In the twenty-first century, the workers in mass-provision service industries—waiters at inexpensive chain restaurants with working-class clienteles at exurban highway intersections, for example, unlike waiters at prestigious downtown restaurants—often can afford to purchase the services they provide, in a kind of service-sector Fordism.

Absent perpetual repopulation from abroad, cities like New York, San Francisco, London, and Paris might go into demographic and economic death spirals.

Under the double standard of what the political scientist Eric Kaufmann calls “asymmetrical multiculturalism,” political and media establishments in Europe and the US, atoning for the white supremacist attitudes of earlier generations, praise immigrants and native minorities and celebrate their cultural traditions. In itself, this is commendable progress. Unfortunately, under the logic of asymmetrical multiculturalism, appreciation of minority and immigrant traditions is often coupled with elite contempt for the ancestral traditions of white native and white immigrant subcultures, which are alleged by overclass intellectuals to be hopelessly tainted by white supremacy or colonialism.

The British thinker David Goodhart has contrasted the communitarian localism of less-educated “Somewheres” with the individualistic careerism of educated “Anywheres.”17 For many working-class Somewheres, personal identities as members of particular local communities or extended families are more important than their low-status jobs. In contrast, Goodhart’s Anywheres, educated and mobile members of the managerial overclass, often think of themselves as “citizens of the world”; derive their personal status from their prestigious occupations, not their local or national communities; abandon their low-status class or ethnic or regional accents in order to succeed in metropolitan careers; and jettison ancestral traditions in favor of ever-changing transnational elite fashions.

the average American lives within eighteen miles of her mother. Fifty-seven percent of Americans have never lived outside of their home states and 37 percent have spent their entire lives in their hometowns, with the exception of periods of military service or college education.

Reflecting the sacrifice of family commitments to career ambitions that is characteristic of many highly educated and ambitious overclass professionals, a survey of twenty-four advanced industrial democracies showed that, compared to the non-college-educated, university-educated individuals are more likely to describe children as a “burden” rather than as a “joy.”19 Working-class households are far more likely than overclass households to rely on a stay-at-home parent or relatives to care for children. In the United States, 66 percent of those whose education ended with high school say that children are better off when one parent stays at home to raise them; the number plunges to 51 percent for those with a bachelor’s degree or more.20 Urban hubs increasingly are populated by individuals without any children at all. According to the American Community Survey, in 2016 there were more dogs than children in San Francisco.21 Writing in The Atlantic in 2019, Derek Thompson concluded: “The Future of the City Is Childless.”

In the US, attitudes toward immigration are chiefly determined by class; less-skilled workers are more likely to favor immigration restriction than more-educated workers.23 At the same time, there is broad cross-class support in the US and other Western countries in favor of skilled rather than unskilled immigration.24 In the US there has been no significant backlash against East Asian and South Asian immigrants, who tend to be college-educated professionals, comparable to the backlash against less-skilled and disproportionately poor Latin American immigrants, even though Asian immigrants are nonwhite as well. In Britain, working-class populists have complained about “Polish plumbers” and other lower-income immigrants from Central and Eastern Europe who are white. As split labor market theory would predict, the native working-class backlash has been greatest against particular groups of immigrants, nonwhite or white, who are viewed as competitors for jobs or welfare and public services.

Producerism is the belief that the economy should be structured by the state to maximize the numbers of self-employed family farmers, artisans, and small shopkeepers in society. The moral ideal of this school is the self-sufficient citizen of a republic with a small-producer majority whose economic independence means that they cannot be intimidated or blackmailed by wealthy elites. In the form of Jeffersonian agrarianism, producerism has a rich history in the United States. The rise of mass production in the economy, and the shift from a majority made up of farm owners and farm workers to urban wage earners, rendered the producerist ideal irrelevant in the modern industrialized West.

In 1935 the NRA was abolished when the Supreme Court struck down its enabling legislation, on the technical grounds that Congress had delegated too much authority to the president. But the wreckage of the NRA was plundered to construct a system that structured the US economy from the 1930s to the 1970s. NRA industry codes were reborn as regulations in commission-governed industries like aviation, trucking, and coal, which were treated as public utilities. Instead of the sectoral minimum wages and working hours and pensions that were to have been agreed on in each industry by business and labor and ratified by the NRA, the federal government directly imposed a one-size-fits-all national minimum wage and eight-hour day in 1938, in addition to the federal Social Security program that was enacted earlier in 1935. The Wagner Act of 1935 turned section 7(a) of the National Industrial Recovery Act into the statute that, as amended, governs collective bargaining in the United States to this day.

Dwight Eisenhower told his brother Edgar: “Should any political party attempt to abolish Social Security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history.”

Despite the beginnings of suburbanization, national politicians were still connected with local voters by several layers of regional, urban, and neighborhood party officials—urban “bosses” and rural “courthouse gangs” in the United States. Intellectuals tended to sneer at these provincial power brokers, some of whom were indeed ignorant or corrupt or racist. But the existence of this layer of petty tribunes ensured that politicians would not ignore the interests and values of local working-class constituencies in local, state, and national politics.

Whether they were supporters or opponents of New Deal liberal policies, southern Democrats and northern Catholics in the dominant New Deal Democratic coalition refused to increase the discretionary power of elite federal bureaucrats who would probably be recruited disproportionately from the educated Protestant upper middle class of the North and Midwest and educated at a handful of Ivy League universities. Successive plans for executive reorganization, which would have put the president in charge of a rationalized continental European–style administrative state, never made it through Congress.

Democratic pluralism in North America and Europe, an alternative to the extremes of free market liberalism, socialism, and state corporatism, compelled the representatives of national overclasses to share power and bargain with lesser elites who acted as power brokers for working-class communities in the three realms of the economy, government, and culture.

The results were unprecedented levels of working-class prosperity and economic growth during what in France was called les Trente Glorieuses, the “thirty glorious years” that followed 1945.

Neoliberalism is a synthesis of the free market economic liberalism of the libertarian right and the cultural liberalism of the bohemian/academic left. Its economic model, based on global tax, regulatory, and labor arbitrage, weakens both democratic nation-states and national working-class majorities. Its preferred model of government is apolitical, anti-majoritarian, elitist, and technocratic.

While the oil shocks of the 1970s contributed to the problem, in hindsight there were several structural causes: slower productivity growth as a result of the exhaustion of the technological possibilities of the earlier electromechanical revolution, before the benefits of the information technology (IT) revolution had become important; pressure on corporate profits from overproduction in manufacturing, caused by the postwar recovery of Germany and Japan and their export-oriented manufacturing strategies; and pressure on profits as well from trade unions enabled by tight, low-immigration labor markets to demand wage increases outstripping productivity growth, which fueled wage-push inflation.

Laws and regulations that corporate lobbyists are unable to persuade national democratic legislatures to enact can be repackaged and hidden in harmonization agreements masked as lengthy trade treaties, which are then ratified by legislatures without adequate scrutiny. Whatever its minor benefits, legislation by treaty represents a massive transfer of power from democratic legislatures to corporate managers and bankers. Jean-Claude Juncker, the prime minister of the tax haven Luxembourg who became the president of the European Commission from 2014 to 2019, described how the European Council systematically expanded its authority by stealth: “We decree something, then float it and wait some time to see what happens. If no clamor occurs . . . because most people do not grasp what had been decided, we continue—step by step, until the point of no return is reached.”

According to the Commerce Department, between 1999 and 2009 US multinational corporations cut 864,600 workers in the US while adding 2.9 million workers abroad. Fifty-seven percent of the foreign hiring by nonfinancial companies was in Asia, with multinationals adding 683,000 workers in China and 392,000 workers in India. In the same period, multinationals cut capital-investment spending in the US by 0.2 percent a year, while increasing it abroad by 4 percent a year.

According to Konstantin Kakaes in MIT Technology Review, producing every single component of the iPhone in the United States, in addition to assembling it in the United States, would at most add $100 to the cost of the device.18 But while domestic production would not seriously inconvenience American consumers, American labor costs might cut into Apple’s profit margin, which in 2010 was 59 percent of the final sales price of its iPhone 4, with labor costs in China accounting for only 1.8 percent.19 In 2017, Apple’s iPhone X, which cost $357.50 to make and sold for $999, gave Apple a gross profit margin of 64 percent.

In the United States, the McGovern-Fraser Commission reforms of 1971 sought to democratize the structure of the Democratic Party by replacing nominating conventions dominated by state and local power brokers with citizen primaries. These reforms shifted power from the old white working-class base of the New Deal Democrats to a new Democratic elite, which, while more racially diverse, for the most part was still largely white but far more affluent, educated, culturally liberal, and skeptical of government intervention in markets.

Hirschl argues that the major motivation for juristocracy is to shield elites from democratic majorities, by means of “a strategic tripartite pact between hegemonic, yet increasingly threatened, political elites seeking to insulate their policy preferences from the vicissitudes of democratic politics; economic elites who share a commitment to free markets and a concomitant antipathy to government; and supreme courts working to enhance their symbolic power and institutional position.”

In the words of Skocpol, Cobb, and Klofstad, “American elites . . . went from joining membership associations along with fellow citizens from many walks of life, toward joining boards and coordinating committees that left them in the position of doing public-spirited things for or to ordinary citizens (emphasis in the original).”

When the dust from the collapse cleared, the major institutions in which working-class people had found a voice on the basis of numbers—mass-membership parties, legislatures, trade unions, and grassroots religious and civic institutions—had been weakened or destroyed, leaving most of the nonelite population in Western countries with no voice in public affairs at all, except for shrieks of rage.

The antecedents of Trumpism can be traced to a series of independent presidential campaigns that drew many members of the white working class out of the midcentury New Deal coalition: George Wallace’s independent presidential campaign in 1968, which won Wallace 13.5 percent of the popular vote, and the 1992 campaign of Ross Perot, who captured 19 percent, the highest percentage for a third-party candidate since Theodore Roosevelt ran as the candidate of the Progressive Party in 1912. Although he was a Texan, Perot did poorly among white southerners and did best among high-school-educated whites in the industrial North. In 2000 Donald Trump considered running for president as the candidate of Perot’s short-lived Reform Party.

The only reason there was a British referendum on membership in the European Union at all was the desire of British conservatives to appease a growing number of populist voters. Before the British “Leave” vote won the Brexit referendum in 2016, Dutch and French voters in 2005 and Irish voters in 2008 had rejected measures promoting greater centralization of the European Union in referendums.

It is an ongoing counterrevolution from below against the half-century-long technocratic neoliberal revolution from above imposed by Western managerial elites. At every stage, populist movements of some sort have resisted technocratic neoliberalism. Again and again, because of their lack of wealth, power, and cultural influence, the populists have lost, becoming more alienated and more resentful. And so the dry wood accumulates to fuel the next conflagration.

on both sides of the Atlantic there are substantial numbers of voters—by no means only white or only working class—who have a coherent mix of public policy preferences that are ignored by national politicians and policy makers. These voters combine support for generous government entitlement like public pensions and health care spending with opposition to high levels of unskilled immigration and moderate cultural conservatism—what the British political scientist Matthew Goodwin calls a combination of economic and cultural protection.

Drutman calculated that in the United States, “populists”—defined as those who favored maintaining or increasing Social Security spending, while maintaining or decreasing immigration—made up 40.3 percent of the electorate, while “moderate leftists” (American “liberals” or “progressives”), who supported maintaining or increasing both Social Security and immigration, made up 32.9 percent, with “moderates” (who wanted no changes in either Social Security or immigration) at 20.5 percent. The two groups that wanted to cut Social Security and increase immigration, “business conservatives” (3.8 percent), who are better described as “neoliberals,” and “political conservatives” (2.4 percent), who might also be described as “libertarians,” made up only 6.2 percent of voters.

THE SINGLE MOST important factor explaining the rise of populism in the US and Western Europe is the changing class composition of center-left parties between the mid-twentieth century and the early twenty-first. What used to be parties of the native white working class and rural voters have become parties of upscale members of the native white managerial elite, allied with racial and ethnic minorities and immigrants. Following the 2018 midterm elections, forty-two of the wealthiest fifty congressional districts in the United States were represented by Democrats.3 Between 2010 and 2018, whites with a college degree went from 40 to 29 percent of the voters in the Republican Party, while white voters with less than a college education expanded from 50 to 59 percent of the Republican electorate,

The Democratic Party in the US is now a party of the affluent native white metropolitan elite, allied with immigrants and native minorities brought together by noneconomic identity politics rather than by class politics. In Britain, the social base of the Labour Party has undergone a similar shift. In Germany, the Green Party shares the best-educated and wealthiest voters of the managerial-professional overclass with the free market libertarian Free Democrats.5 The exclusion of the views of large numbers of voters from any representation in public policy or debate has created openings in politics that demagogic populists have sought to fill.

Where populists have succeeded in Western countries, they have done so because they have opportunistically championed legitimate positions that are shared by many voters but excluded from the narrow neoliberal overclass political spectrum.

As a result of the changing class composition of the two parties, the older dichotomy of Democratic protectionism and Republican support for free trade has been reversed. According to the Pew Research Center, by a margin of 56 percent to 38 percent, Democratic voters believe that free trade agreements have been good for the US. Among Republicans, those numbers are flipped: by a 53 percent to 38 percent margin, a majority of Republicans believe free trade has been a bad thing.