Introduction
In "The Managerial Revolution," James Burnham presents a compelling analysis of the changing landscape of society and economics during World War II. Written in 1941, this book offers a prescient view of the future, arguing that the world is transitioning from a capitalist society to a managerial one. Burnham's insights into the mechanisms of social dominance and the shifting power structures remain relevant today, making this book a valuable read for anyone interested in understanding the forces shaping our world.
The Characteristics of Capitalist Society
To understand the managerial revolution, we must first examine the key features of capitalist society:
Commodification of goods: In a capitalist system, everything is viewed as a commodity with a monetary value. From basic necessities to luxury items, all goods and services are assigned a price tag.
Money as capital: Beyond its role as a medium of exchange, money in capitalism functions as capital. It can be transformed into means of production, which in turn generate more money.
Profit-driven production: The primary goal of production in capitalism is not to meet needs but to generate profit. Businesses continue to operate only if they can sell their products at a profit.
Class division: Capitalist society is divided into two main classes:
- Capitalists: Those who own the means of production and hire others to operate them.
- Proletariat: Workers who sell their labor to the owners and receive a smaller share of the resulting products.
The Uncertain Future of Capitalism
Despite the prevalence of capitalism in modern society, Burnham argues that its continuation is far from certain. He challenges two common assumptions:
The permanence of capitalism: Many believe that capitalism has always existed and will continue indefinitely. However, capitalism has only been the dominant economic system for a relatively short period in human history.
Capitalism as human nature: Some argue that capitalism aligns with innate human characteristics. Burnham counters this by pointing out that humans have adapted to various social structures throughout history.
Signs of Capitalism's Decline
Burnham identifies several indicators suggesting that capitalism may be nearing its end:
Mass unemployment: The author notes the rising unemployment rates in capitalist nations during his time. Historically, mass unemployment has often preceded the end of a particular social organization.
Social breakdown: High unemployment signals that a society can no longer provide useful roles for its citizens or support those without work.
Historical precedent: Similar patterns of unemployment and social strain have been observed at the end of other economic systems, such as Classical Athens and the Roman Empire.
The Failure of Communism as an Alternative
While some may view communism as the natural successor to capitalism, Burnham argues that this is unlikely based on the Soviet experiment:
Classless society myth: Despite abolishing private property rights, the Soviet Union failed to create a classless society. In fact, wealth disparity in the USSR was more extreme than in capitalist countries.
Lack of democracy: True communism requires full democracy and freedom for all citizens. However, the Soviet regime quickly suppressed political opposition and individual rights.
Practical challenges: The Russian example demonstrates the difficulty of implementing a truly communist society in practice.
The Rise of the Managerial Class
Burnham proposes that instead of communism, the world is transitioning to a managerial society. Key aspects of this new system include:
Managers as the new ruling class: Those who make decisions about the use of production means will gain the most power and influence.
State ownership of production: The major instruments of production, such as factories and infrastructure, will be owned by the state rather than private individuals.
Indirect control: Managers will exercise control over production and distribution through their positions within the state apparatus rather than through direct ownership.
Gradual transition: This shift to managerial dominance is not the result of a deliberate coup but a natural consequence of increasing state control over the economy.
The Emergence of Managers in Modern Society
Burnham explains how managers have become increasingly important in both private and public sectors:
Technological complexity: Advancements in technology and the growth of large-scale corporations have made management more complex, requiring specialized skills.
Decline of the capitalist-manager: The traditional model of the entrepreneur who both owns and manages their business has become less common.
Shareholder dilution: As companies grow larger, ownership is often spread among numerous shareholders, weakening their ability to control managers.
Government expansion: The increasing role of government in various sectors of the economy has led to a growing class of bureaucrats who effectively manage state-owned enterprises.
The Increasing Power of Government Managers
Burnham argues that the power of managers in government is becoming even more significant than in private industry:
Expansion of government services: Governments are taking control of vital sectors of the economy, from transportation to healthcare.
Growth of bureaucracy: The number of government employees has increased dramatically, with a significant portion of the population dependent on government for their livelihood.
Control without ownership: Government managers (bureaucrats) exercise de facto control over state-owned enterprises without needing direct ownership.
Potential for absolute power: As the state takes control of more aspects of the economy, the power of government managers is likely to become absolute.
Implications of the Managerial Revolution
Burnham's analysis of the managerial revolution has several important implications:
Shift in power dynamics: The transition from capitalist to managerial society represents a fundamental change in who holds power and how it is exercised.
Redefinition of property rights: The concept of private property, particularly concerning the means of production, is likely to change significantly.
Increased state control: The role of government in the economy and society at large is expected to expand dramatically.
New class structure: The traditional capitalist-worker divide will be replaced by a new hierarchy based on managerial control rather than ownership.
Global phenomenon: Burnham argues that this transition is occurring worldwide, albeit at different rates in different countries.
Challenges and Criticisms
While Burnham's analysis is thought-provoking, it's important to consider some potential challenges to his theory:
Oversimplification: The stark division between capitalists and managers may not fully capture the complexity of modern economic systems.
Technological changes: Advancements in technology and automation since Burnham's time may have altered the trajectory he predicted.
Globalization: The interconnectedness of the global economy may have influenced the development of managerial systems in ways Burnham couldn't have foreseen.
Resilience of capitalism: Despite challenges, capitalist systems have shown remarkable adaptability and persistence in many parts of the world.
Relevance to Modern Society
Despite being written in 1941, many of Burnham's observations remain relevant to contemporary society:
Corporate power: The influence of large corporations and their managers continues to be a significant factor in global economics and politics.
Government intervention: The role of government in the economy, particularly following economic crises, remains a contentious issue.
Wealth inequality: The concentration of wealth and power in the hands of a small group (whether capitalists or managers) continues to be a concern.
Technological disruption: The impact of technology on traditional business models and power structures echoes Burnham's observations about the changing nature of management.
Final Thoughts
"The Managerial Revolution" offers a unique perspective on the evolution of society and economic systems. While not all of Burnham's predictions have come to pass exactly as he envisioned, his analysis of the changing nature of power and control in modern society remains insightful.
The book challenges readers to think critically about the structures that govern our world and to consider how they might continue to evolve. Whether one agrees with Burnham's conclusions or not, his work provides a valuable framework for understanding the complex interplay between economics, politics, and social organization.
As we navigate an increasingly complex and interconnected world, the ideas presented in "The Managerial Revolution" can help us better understand the forces shaping our society and economy. By examining the rise of managers and the changing nature of control over the means of production, we can gain valuable insights into the challenges and opportunities that lie ahead.
In conclusion, James Burnham's "The Managerial Revolution" remains a thought-provoking and relevant work, offering readers a unique lens through which to view the ongoing transformations in our social and economic systems. As we continue to grapple with issues of inequality, technological disruption, and the proper role of government in the economy, Burnham's analysis provides a valuable historical perspective and a framework for considering the potential futures that lie ahead.