The Managerial Coup D’Etat

Anticipating the oligarchy

At a time when the American business corporation is exploring and exploiting its new Supreme-Court-bestowed role in the management of American election results, an earlier transformation in the composition and political role of American business leadership should be recalled. This was the replacement of the Gilded Age capitalist—audacious, rapacious, and innovative, who created the post-Civil War American industrial economy—with the twentieth-century professional manager—technocratic, efficient, and controlling, who helped create today’s version of global finance.

James Burnham (1905-1987), before becoming the godfather of neoconservatism (as he is best known today to those who recall him), foresaw this transformation. Son of an English immigrant father and Catholic mother, Burnham was an eminent American Trotskyist at a time when Trotskyism was a serious matter among American intellectuals. He was a founder of the American Worker’s Party, which in 1934 merged with another dissident Marxist group to create the Trotskyist Workers Party of the United States. (His brother Philip, meanwhile, remained a Catholic and helped re-found Commonweal.)

But Burnham broke ranks in 1940, declaring that Marxism was merely a form of imperialistic class politics; the new force in the struggle was the managerial class, as it seized privilege and control over society. Capitalism as a form of social organization, he said, was finished. His new managerial class was taking over in Germany (Nazism), the Soviet Union (Stalinism), and the United States (the New Deal). Other Trotskyists, according to sociologist Daniel Bell, had as much as eight years earlier identified the emergence of capitalist management. But it was Burnham who caused an international stir with the 1941 publication of his book The Managerial Revolution, the only important American contribution to the Marxist debates surrounding the Crash and Great Depression.

George Orwell found Burnham more Machiavellian thinker than Marxist, as well as inordinately fascinated with power. Believing that society was generally on the path to oligarchy, Burnham took it for granted that “managerial” Germany was in all respects more efficient than a capitalist democracy like France or the United States. He expected Hitler to attack and defeat the Russia of Stalin (whom he had once called a “great man”). He predicted that Germany and Japan would not only win the Second World War but also remain the centers of world power afterward.

Still, Burnham’s theory on the rise of a technocratic, managerial class found a complement in the wartime and postwar adoption of and strategic management practices by intellectually moribund business schools. Developed by the military and such institutions as the Rand Corporation, these made use of mathematical models, behavioral theory, and operations research (usually a glamorized and heavily numerate version of empirical or common-sense analysis) and gave business executives an aura of scientific professionalism.

The combination proved damaging, spawning the system of global finance and industry that has led us to world crisis. It generally is run by managers who, without necessarily investing a penny of their own money, control the American (and increasingly European) economies, enriching themselves by assigning to one another titanic emoluments as rewards for having been hired; for carrying out executive duties that earlier professional managers performed for unexceptional compensation; and eventually for leaving their jobs.

These individuals usually are not founders or creators, but hired hands, graduates of American business colleges. They form today’s American plutocracy, and the Supreme Court has authorized them to make use of the resources (technically stockholder-owned) of the enterprises they control to direct unlimited and unregulated wealth toward promoting the election of political figures sharing their views on policy. It would seem this plutocratic power is permanently installed in the U.S. government, since nearly all of the economic, political, and communication groups in a position to change the situation in fact now richly profit from it.

By the end of World War II, Burnham had become an anti-Soviet rightist. In coming decades he would inveigh against the malign influence of American liberals in such works as 1964’s Suicide of the West. He was to influence William F. Buckley and the practitioners of the reactionary, xenophobic, and anti-intellectual “conservatism” that developed in the post-war United States, and that has reached bizarre culmination in the Tea Party of today.

Orwell did not live to see Burnham’s conversion to this aggressive American nationalism. In 1946 he aptly summarized the early theorist in writing that democracy never existed “and, so far as we can see, never will.” Burnham may have later changed his mind, but the apparently imminent succession of a constitutional democracy in the United States by an irreversible oligarchy, characterized by a morbid concentration of money and power, validates what he anticipated in The Managerial Revolution and 1942’s The Machiavellians. The prescience of these books, which claim that oligarchy is the natural form of society, its power resting force and fraud, must be saluted.

William Pfaff, a former editor of Commonweal, is political columnist for the International Herald Tribune in Paris. His most recent book is The Irony of Manifest Destiny: The Tragedy of America's Foreign Policy (Walker & Company).

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