The Managerial Revolution: What is Happening in the World

Assuming you even know who James Burnham is at all, he probably occupies a footnote at best in your mind. A notable political theorist and activist during the mid-20th century, he began his public life as a Marxist and Trotskyist but later transitioned to conservatism, spending the latter decades of his life as a columnist for National Review. Shortly after the fall of France in World War II, he wrote The Managerial Revolution, a radical tract that deserves to be more widely read. Burnham's claim was that capitalism was dead, but that it was being replaced not by socialism, but a new economic system he called "managerialism"; rule by managers.

I can't understand how this book is so ignored. Getting a hold of a copy was a real annoyance for me; it's been out of print for decades, there's no Kindle version, and used copies go for around $40 on Amazon. Most of the top Google searches for the Managerial Revolution refer not to the book itself but George Orwell's moronic response essay, published eight years later. I lucked out and managed to find a cheap copy of the book on Ebay... from a seller in the U.K.

Burnham's central argument will repulse both leftists--who think that the modern world is suffering an excess of free market capitalism--and conservatives/libertarians, who think that America is one more Obamaphone away from communism. It certainly ticked off his old Marxist buddies, drunk as they were in the 1930′s on their unbelievably arrogant belief in the "historical inevitability of socialism." Burnham's view was that the dictatorship of the proletariat would never happen because the pincer of technological advances and increasingly complex societies meant that ruling a nation required a skill set that the proles simply did not possess.

Burnham observed that Soviet Russia, Nazi Germany and the U.S. under Franklin Roosevelt were developing along parallel paths, creating an economic system in which power rested not with capitalists or workers, but managers; administrators, HR ditzes, engineers, bureaucrats, civil servants, CEOs and other figures who exist outside of the capitalist class yet are not of the proletariat. Stalin's nomenklatura, Hitler's vast patronage network, and the myriad agencies created by the New Deal represented this shift in power, as they were controlled neither by capitalists or by workers. The trigger for this transition was the mass unemployment sparked by the Great Depression and capitalism's complete inability to solve it, but the foundations had been laid beforehand in the increasing scale of society and scientific advances that made large-scale organization easier.

Additionally, Burnham observes that capitalism arose in a similar fashion; a new class (in this case, the merchants) seizing power from the ruling class (the aristocracy) beginning in the 14th century, when feudalism began to wane. This transition took different forms in different countries: it was gradual in England, where the monarchy slowly lost power to Parliament and became a largely ceremonial position, or violent in the case of France, where the aristocracy was viciously overthrown. In the same way, Burnham predicted that as part of the managerial revolution, the structures of capitalist government would either be eliminated entirely--as they were in the case of the Soviet Union and Nazi Germany--or reduced to figureheads.

Can anyone seriously argue that that hasn't happened in the U.S. and other "democratic" nations?

Power in America no longer rests with the elected government, but with the acronym agencies that exist beyond the voter's control: the FBI, NSA, CIA, FEMA, the Fed, the Department of Education and so on. Despite the grandstanding of Tea Party Republicans, these agencies run themselves with minimal oversight or input from Congress, who is almost entirely powerless to control them. In fact, whenever elected officials try to exercise even the slightest amount of control over bureaucracies--as Scott Walker tried to do in Wisconsin two years ago--they always find themselves rebuffed with overwhelming force.

Burnham also predicted that the public and private sectors would effectively cease to exist as separate entities in a managerial economy. Again, looking at the comfy relationship between Washington and Wall Street, can you really argue against this? The actual capitalists on Wall Street--the shareholders--have lost big in the bank bailouts, with the stock prices of Citi and other banks cratering and shops like Bear Stearns being driven out of business entirely. It's the managers--your Lloyd Blankfeins and Jon Corzines and Hank Paulsons--who've made out like bandits, giving themselves golden parachutes, stealing money from their customers and flitting back between government and the private sector as it suits them.

Despite the reference to "evident errors" on the back of my copy of The Managerial Revolution, most of Burnham's predictions have come true, even if he got specific details wrong. For example, he envisioned a future in which the U.S., Germany and Japan would rule much of the Earth as "super-states," with power gradually moving from sovereign states to supranational entities. Britain and France would wane and become satellite states because they clung to capitalism in the face of rising managerial empires. While Germany and Japan flamed out in World War II, the managerial state that Burnham dismissed in classic wannabe Tory fashion--Russia--became one of the world's preeminent superpowers, jockeying with the U.S. for proxy control over Europe and the third world. As for "supranational entities," how about the European Union, a gang of bureaucrats who have the reins on individual national governments? The U.N.? The WTO?

And this book is out of print?

The biggest flaw in Burnham's analysis is that he's still constrained to a certain extent by a Marxist frame, failing to take into account human motivations and stupidity. For example, he argues that Hitler's desire for an alliance with Britain was driven solely by rational motives, as allying with Britain would allow Germany to more easily take control of Britain's empire, which was being chipped away by America and other entities (Canada, by that point, was fully an American satrapy). He doesn't account for Hitler's retarded racial ideology that led him to believe he'd be leading a pan-Aryan brotherhood against those filthy evil Slavs.

But even with these mistakes, The Managerial Revolution is one of the most prescient and accurate portraits of the modern West. It's also useful for analyzing what will happen in the future. Burnham notes that entrenched mass unemployment is one of the signs of imminent social revolution, going back to ancient Greece. If that's the case, our managerial regime may well be in its death throes, with the massive unemployment rates in places like Spain and Greece, along with exploding underemployment in the U.S.

What will come next? I can't say, only to say that the current system can't last.

Burnham's Managerial Revolution was published in 1940, almost 20 years before J.K. Galbraith's more famous The New Industrial State (1958), but contains most of the important ideas concerning the rise of a managerial class with loyalties more to its own class than to the owners of the enterprise (capital, shareholders), which later made Galbraith famous. Other than the fact that Burnham (once a leftist philosophy professor who broke with the left over Stalin's crimes) was a conservative, there is no rational explanation why this is not the famous book and Galbraith an epigonal footnote. Dated of course, but Burham was insightful and prescient. Especially in view of recent evidence of members of the new managerial class looting their companies despite attempts to align their interests more closely with the owners (stockholders) through stock incentive schemes. Read Burnham!

The year is 1940. The USSR is under Stalin and a Third Reich seems to be absorbing Europe. China, rocked by inner conflict, looks like it may become just another enslaved region of the Empire of Japan. The New Deal in the USA is showing just how anti-business a government can be. Everywhere Burnham looks, even within the USA, Capitalism seems to be failing. But Socialism is NOT gaining any ground. It is not replacing Capitalism. Who is replacing the Capitalists? Bureaucrats and managers seem to be organizing, controlling, combining the factories, businesses, and nations into... what?
And that is what the book is about. Burnham was socialist who lost trust in his fellow Marxists but not in Marxism. He believed that Capitalism was on the way out but it seemed to him it was NOT going to be replaced by Socialism. As he watched and studied the very events happening in Europe, Asia, and within the USA, he came to the answer. Managers would become the next class. Neither owners nor producers, they would nevertheless, take reins in hand to control the nations, forming super-states and gaining power over the other classes.
He does a great job of tracing his logic, using history and current events (well, events that was current at the time), building up his predictions. In fact, some of the pages could be used, word for word, to describe events and movements happening now. For example, when talking about the youth of England, who no longer believe in the system they are living in and are showing a lack of willingness to support it, I could not help but think about the Occupy movement! On the other hand, he seems to have totally dismissed banks and other factors that we know would shape our future, for better or for worse.
Much of the events he talked about did not happen and may never happen, but his book did influence such authors as Orwell, who used Burnham's idea of three super-states always in conflict for the setting of Nineteen Eighty-Four. I plan to get The Machiavellians: Defenders of Freedom and read it to help understand more of his thoughts of political theory.