Managerial Revolution

* Book: The Managerial Revolution: What is Happening in the World (James Burnham)

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Context

Brad LeLong:

"The Burnham of The Managerial Revolution was a post-Marxist but just barely ( think he wrote the book only a year of two after he left the Trotskyist movement. So it is still a theory of class and of modes of production.

The new managerial class took its position because private family capitalism was no longer up to the technical demands of the modern world and the emerging super-states. While the Machiavellians might seem like a reversion to pre-class thinking -- and certainly has a flavor of cyclical history, Burnham really continued to maintain all his life that the managerial class was a real distinct class, with its own class consciousness & interests, and the only possible class for a modern industrial nation. Burnham himself was in some ways a product of that class, a child of the high bourgeois who became a technician of power (as consultant to OSS and CIA). Burnham never thought he could or should overthrow the managerial class. The only option was to try to sway it (in a Machiavellian circulation of elite fashion) by creating counterpoints of power."

(https://substack.com/@delongonsubstack?)

Review

by Charles Haywood

"Who rules? That’s what we all want to know. The Managerial Revolution, James Burnham’s still-influential 1941 book (the subject, for example, of recent pieces by Aaron Renn and Julius Krein), gave that eternal question a fresh answer. Broadly speaking his was, we can see eighty years later, indisputably the correct analysis. Burnham agreed that capitalism, private enterprise as the engine of the ruling class, was dying, the usual opinion in that tumultuous time, but made the entirely new claim that what would replace it was not, as most assumed, socialism, but a new thing. Namely, the ascent of managers, a new ruling class, who would hugely expand government and use it to mold society into new forms for their own benefit.

The Managerial Revolution is a cousin to Burnham’s 1942 The Machiavellians, in which Burnham more completely laid out his theory of the ruling class, through a Gnostic examination of history. In The Managerial Revolution, he treats as axiomatic that every society must have a ruling class, but this book looks not backward, rather forward, to what our specific new ruling class will be, and how it will rule. Both books suffer somewhat from a belief that human social and political relations can be reduced to an objective science; in 1941, unlike today, an author could still believe the precision of his predictions was only limited because of the “relatively undeveloped stage at which sociological science today rests.” Burnham always aspired to be a pure rationalist, but that made him unable to appreciate that human beings are not machines, and therefore their actions cannot be reduced to the same analysis as physical processes (to be fair, a common error also made by some on today’s postliberal Right). Hence, his claims about the future were wrong in many details, but that does not really detract much from the value of his book."

(https://theworthyhouse.com/2022/05/01/the-managerial-revolution-what-is-happening-in-the-world-james-burnham/)

Discussion

The 'Managerial Revolution' was overblown, instead <this> happened:

Branko Milanovic:

"That capitalism changed in the twentieth century with the advent of what many called a new “managerial” class. The rise of managers –-people who neither own the means of production not are simple laborers, but manage the means of production for capitalists lazily playing golf in Florida—was announced by James Burnham classic in 1941, and then further developed by Joseph Schumpeter, Raymond Aron, John Kenneth Galbraith and Daniel Bell, among others, in the 1960s and 1970s; continuing in the same vein, there is also a recent book Managerial Capitalism: Ownership, Management and the Coming New Mode of Production, by Gérard Duménil and Dominique Lévy. For its critical discussion see, Nicole Aschoff in Jacobin.

The perception of capitalism as a three-class society, with managers rising to be the new ruling class, drew on the contrast that Marx saw, but never fully resolved, between two functions played by the capitalist: the provider of the means of production and the organizer of their use (or put differently in Walrasian language, capitalist and entrepreneur). Logically, the two functions could be separated, and in fact they did become separate. That separation—it was argued by the authors I mentioned—created a new, third, class: that of managers. A very nice recent paper by Alexandre Chirat discusses the phenomenon from the Marxist point of view.

But the managerial revolution was overblown. It never happened and it is not happening. Managers as such never succeeded in creating a third class. What happened instead, as I argued in my 2019 book and several new papers confirm, is the rise of a homoploutic elite in the United States, in particular, and also in other rich capitalist economies. What is homoploutia? As often when faced with a new phenomenon, we resort to coining a new term by using Greek words: “same wealth”, or wealthy both in terms of the so-called “human capital” and thus labor income, and in terms of productive and financial capital and thus income from ownership. Homoploutic elite is composed of people who are simultaneously among the richest capitalists and richest (best paid) workers. They may be financial sector CEOs, engineers, doctors, software developers (and hence receiving high salaries) and at the same time having large financial wealth that generates sufficiently high capital income to place them at the top of capital income distribution. They might have inherited that money, or they might have saved over their lifetime out of their high salaries enough to transform themselves into the richest capitalists. We do not know the relative importance of the two channels, because the area of research is new, and nobody has yet used longitudinal data that should, in principle, allow us to answer that question."

(https://branko2f7.substack.com/p/new-capitalism-in-america)

More information

• Homoploutia