THE PROBLEM
It is by no means obvious what we mean when we speak of a “social revolution,” especially when we try to distinguish a social revolution from a merely “military” or “political” revolution. Several conflicting definitions have been attempted, as a rule accompanying special and conflicting theories of history, of which the definitions are a part. It seems, however, possible to describe the chief constituents of what can intelligibly be meant by a “social revolution” without committing ourselves in advance to any special theory. These chief constituents seem to be three:
There takes place a drastic change in the most important social (economic and political) institutions. The system of property relations, the forms under which economic production is carried on, the legal structure, the type of political organization and regime, are all so sharply altered that we feel compelled to call them different in kind, not merely modified in degree. Medieval (feudal) property relations, modes of economic production, law, political organization are all replaced by modern (bourgeois or capitalist) property relations, modes of production, law, and political organization. During the course of the revolution it often happens that the old institutions are quite literally smashed to pieces, with new institutions developing to perform analogous functions in the new society.
Along with the changes in social institutions there go more or less parallel changes in cultural institutions and in the dominant beliefs which men hold about man’s place in the world and the universe. This cultural shift is plainly seen in the transition from feudal to modern capitalist society, both in the reorganization of the form and place of such institutions as the Church and the schools, and in the complete alteration of the general view of the world, of life, and of man which took place during the Renaissance.
Finally, we observe a change in the group of men which holds the top positions, which controls the greater part of power and privilege in society. To the social dominance of feudal lords, with their vassals and fiefs, succeeds the social dominance of industrialists and bankers, with their monetary wealth, their factories and wage-workers.
In this conception there is a certain arbitrariness. The fact is that social and cultural institutions, beliefs, and relationships of social power always change, are subject to a continuous modification. It is impossible to draw an exact temporal line dividing one type of society from another. What is important is not so much the fact of change, which is always present in history, as the rate of change. In some periods the rate of social change is far more rapid than in others. To say that a social revolution is occurring at the present time is, then, equivalent to saying that the present is a period characterized by a very rapid rate of social change, that it is a period of transition from one type of society—that type which has prevailed from, roughly, the fifteenth century to the early part of the twentieth—to a new and different type of society.
The problem of this book is as follows: I am going to assume the general conception of a social revolution which I have just briefly stated. I am going to assume further (though not without evidence to back up this assumption) that the present is in fact a period of social revolution, of transition from one type of society to another. With the help of these assumptions, I shall present a theory—which I call “the theory of the managerial revolution”—which is able to explain this transition and to predict the type of society in which the transition will eventuate.
THE WORLD WE LIVED IN
We cannot really understand where we are going unless we have at least some notion of where we start from. What were the chief characteristics of the “modern world,” the type of society usually referred to as “capitalist” or “bourgeois,” which was dominant from the end of the Middle Ages until, let us say in order to fix a date, 1914, the beginning of the first world war?
Modern capitalist society has been characterized by a typical mode of economy. The mode of economy has gone through a number of major phases and transformations, has been more fluid and changing than any other economy known to history; but throughout these transformations certain decisive features have persisted. All of these features are sharply different from the outstanding features of feudal economy, which preceded capitalist economy and out of which capitalist economy evolved. Among the most important and typical of them may be listed the following:
Production in capitalist economy is commodity production. Thousands of diverse goods are turned out by the processes of production, diverse in their nature and suited to the fulfillment of thousands of different human needs. Some can warm us, some decorate us, some feed us, some amuse us, and so on. But in capitalist economy all of these diverse goods can be directly compared with each other in terms of an abstract property—sometimes called their “exchange value”—represented either exactly or approximately (depending upon the economic theory which analyzes the phenomenon) by their monetary price. Products looked at from the point of view, not of those qualities whereby they can satisfy specific needs, but of exchange value, in which respect all products are the same in kind and differ only in quantity, are what is meant by “commodities.” All things appear on the capitalist market as commodities; everything, thus, shoes and statues and labor and houses and brains and gold, there receives a monetary value and can, through monetary symbols, go through the multitudinous operations of which money is capable.
The all-important, all-pervasive role of money is an equally obvious feature of capitalist economy, is indeed a necessary consequence of commodity production. Money is not an invention of capitalism; it has been present in most other societies, but in none has it played a part in any way comparable to what capitalism assigns it.
In capitalist society, money has not one but two entirely different major economic functions. In the mighty development of the second of these lies another of the distinguishing features of capitalist economy. On the one hand, money is used as a medium of exchange; this is the use which is found in other types of society, and with respect to this use capitalism differs from them only, as we have seen, in the far greater extent, coming close to totality in developed capitalism, to which exchange is carried out through the intermediary of money. On the other hand, money is used as capital; “money makes money”; and this function was developed little, often not at all, in other types of society. Under capitalism, money can be transformed into raw materials, machines, and labor; products turned out and retranslated into money; and the resultant amount of money can exceed the initial amount—a profit, that is to say, can be made. This process can be carried out, moreover, without cheating anyone, without violating any accepted legal or moral law; but, quite the contrary, fully in accordance with accepted rules of justice and morality.
Under capitalism, production is carried on for profit. Some writers, more interested in apologizing for capitalism than in understanding it, seem to resent this commonplace observation as a slur. This is perhaps because they understand it in the psychological sense that is often attributed to it—namely, that individual capitalists are psychologically always motivated by a personal desire for profit, which is sometimes, though certainly not invariably, the case. The observation is not, however, psychological, but economic. Normal capitalist production is carried on for profit in the sense that a capitalist enterprise must operate, over a period, at a profit or else close down. What decides whether a shoe factory can keep going is not whether the owner likes to make shoes or whether people are going barefoot or badly shod or whether workers need wages but whether the product can be sold on the market at a profit, however modest. If, over a period of time, there continues to be a loss instead of a profit, then the business folds up. Everybody knows that this is the case. Moreover, this was not the case in medieval economy. In agriculture, by far the chief industry, production was carried on not for a profit but to feed the growers and to allow for the exactions (in kind, for the most part) of feudal suzerains and the Church. In other industries (amounting in all to only a minute percentage of the economy) the medieval artisan usually made goods (clothes, say, or furniture or cloth or shoes) only on order from a specific person because that person wanted them; and he usually made the goods out of raw materials supplied by the customer.
Capitalist economy is strikingly characterized by a special kind of periodic economic crisis, not met with or occurring only very rarely and on limited scales in other types of society. These capitalist crises of production have no relation either to “natural catastrophes” (drought, famine, plague, etc.) or to people’s biological and psychological needs for the goods that might be turned out, one or the other of which determined most crises in other types of society. The capitalist crises are determined by economic relations and forces. It is not necessary for our purpose to enter into the disputed question of the exact causes of the crises; whatever account is given, no one denies their reality, their periodic occurrence, and their basic difference from dislocations of production and consumption in other types of society.
In capitalist economy, production as a whole is regulated, so far as it is regulated, primarily by “the market,” both the internal and the international market. There is no person or group of persons who consciously and deliberately regulates production as a whole. The market decides, independently of the wills of human beings.
The institutional relations peculiar to capitalist economy serve, finally, to stratify large sections of the population roughly into two special classes. One of these classes is comprised of those who as individuals own, or have an ownership interest in, the instruments of production (factories, mines, land, railroads, machines, whatever they may be); and who hire the labor of others to operate these instruments, retaining the ownership rights in the products of that labor. This class is usually called the bourgeoisie or the capitalists. The second class, usually called the proletariat or the workers, consists of those who are, in a technical sense, “free” laborers. They are the ones who work for the owners. They are “free” in that they are “freed from,” that is, have no ownership interest in, the instruments of production; and in the further sense that they are free to sell their labor to those who do hold such ownership, renouncing, however, ownership rights in the product of their labor. They are, in short, wage-workers.
It is not easy to generalize about the chief characteristics of the political institutions of capitalist society. They show a greater diversity, both at different periods of time and in different nations, than the economic institutions. We can, however, select out some, which are either common to capitalist society throughout its history or typical of the chief capitalist powers.
The political division of capitalist society has been into a comparatively large number of comparatively large national states. These states have no necessary correspondence with biological groupings or with any personal relations among the citizens of the states. They are fixed by definite though changing geographical boundaries, and claim political jurisdiction over human beings within those boundaries
Capitalist society was the first which had, in some measure, a world extent. From one point of view, the world ramifications were a result of economic developments: the search for markets, sources of raw materials, and investment outlets was extended everywhere. But along with this most of the earth was brought in one way or another within the orbit of capitalist political institutions. The great powers, including within their own immediate borders only a small fraction of the territory and population of the world, reduced most of the rest of the world to either colonies or dominions or spheres of influence or, in many cases, to weak nations dependent for their continued existence upon the sufferance of the powers.
By the term, “the state,” we are referring to the actual central political institutions of society—to the governmental administration, the civil bureaucracy, the army, courts, police, prisons, and so on. The role of the state in capitalist society has varied greatly from time to time and nation to nation, but some traits have remained fairly constant. As compared, for example, with the central political institutions of feudalism, the capitalist state has been very firm and well organized in asserting its authority over certain fields of human activity which have been generally recognized as falling within the state’s peculiar jurisdiction. Within its national boundaries, for instance, it has enforced a uniform set of laws, exacted general taxation, controlled the major armed forces, kept lines of communication open, and so on. But, though the state’s authority was so firm in some fields, there have been others where it did not penetrate, or penetrated only very lightly. The scope of the activities of the state, that is to say, has been limited. This limitation of the range of the state’s activities was a cardinal point in the most famous of all capitalist theories of the state, the liberal theory. The prime interest of liberalism was the promotion of the capitalist economic process. According to the liberal theory of the state, the business of the state was to guarantee civil peace (“domestic tranquillity”), handle foreign wars and relations, and with that to stand aside and let the economic process take care of itself, intervening in the economic process only in a negative way to correct injustices or obstacles and to keep the market “free.”
Political authority, sovereignty, cannot remain up in the clouds. It has to be concretized in some man or group of men. We say that the “state” or “nation” makes the laws that have to be obeyed; but actually, of course, the laws have to be drawn up and proclaimed by some man or group of men. This task is carried out by different persons and different sorts of institutions in different types of society. The shift in what might be called the institutional “locus” of sovereignty is always an extremely significant aspect of a general change in the character of society. From this point of view, the history of the political development of capitalism is the history of the shift in the locus of sovereignty to parliament (using the word in its general sense) and more particularly to the lower house of parliament.
The restriction of range of the state’s activities, noted in 3 above, must not be thought to have any necessary connection with political democracy; nor, in general, is there any necessary connection between democracy and capitalism. The “limited state” of capitalism may—and there have been many examples in modern history—be an extreme dictatorship in its own political sphere: consider the absolute monarchies of the sixteenth and seventeenth centuries, the theocratic state of Oliver Cromwell, the Napoleonic state. Even the supremacy of parliament need not imply any considerable democracy.
The legal system of capitalist society, enforced by the state, was, of course, such as to uphold the general structure of capitalist society and to set up and enforce rules for acting within that structure.
It is even harder than in the case of political institutions to generalize about the belief patterns of capitalist society. For our purpose, however, it is not necessary to be at all complete. The beliefs with which we are concerned are often called “ideologies,” and we should be clear what we mean by “ideology.” An “ideology” is similar in the social sphere to what is sometimes called “rationalization” in the sphere of individual psychology. An ideology is not a scientific theory, but is nonscientific and often antiscientific. It is the expression of hopes, wishes, fears, ideals, not a hypothesis about events—though ideologies are often thought by those who hold them to be scientific theories.
Among the elements entering into the ideologies typical of capitalist society, there must be prominently included, though it is not so easy to define what we mean by it, individualism. Capitalist thought, whether reflected in theology or art or legal, economic, and political theory, or philosophy or morality, has exhibited a steady concentration on the idea of the “individual.”
In keeping with the general ideology of individualism was the stress placed by capitalist society on the notion of “private initiative.” Private initiative, supposed, in the chief instance, to provide the mainspring of the economic process, was discovered also at the root of psychological motivation and moral activity.
The status of the capitalist individual was further defined with the help of doctrines of “natural rights” (“free contract,” the standard civil rights, “life, liberty, and the pursuit of happiness,” etc.) which are held to belong in some necessary and eternal sense to each individual.
Finally, in capitalist society, the theological and supernatural interpretation of the meaning of world history was replaced by the idea of progress, first appearing in the writers of the Renaissance and being given definite formulation during the eighteenth century. There were two factors in the idea of progress: first, that mankind was advancing steadily and inevitably to better and better things; and, second, the definition of the goal toward which the advance is taking place in naturalistic terms, in terms we might say of an earthly instead of a heavenly paradise.
THE THEORY OF THE PERMANENCE OF CAPITALISM
During the past century, dozens, perhaps even hundreds, of “theories of history” have been elaborated. These differ endlessly among themselves in the words they use, the causal explanations they offer for the historical process, the alleged “laws” of history which they seem to discover. But most of these differences are irrelevant to the central problem with which this book is concerned. That problem is to discover, if possible, what type (if indeed it is to be a different type) of social organization is on the immediate historical horizon. With reference to this specific problem, all of the theories, with the exception of those few which approximate to the theory of the managerial revolution, boil down to two and only two. The first of these predicts that capitalism will continue for an indefinite, but long, time, if not forever: that is, that the major institutions of capitalist society, or at least most of them, will not be radically changed. The second predicts that capitalist society will be replaced by socialist society. The theory of the managerial revolution predicts that capitalist society will be replaced by “managerial society” (the nature of which will be later explained), that, in fact, the transition from capitalist society to managerial society is already well under way. It is clear that, although all three of these theories might be false, only one of them can be true; the answer that each of them gives to the question of what will actually happen in the future plainly denies the answers given by the other two. I propose, therefore, in this and the following chapter to review briefly the evidence for rejecting the theory of the permanence of capitalism and the theory of the socialist revolution.
When examined, this belief is seen to be based not on any evidence in its favor but primarily on two assumptions. Both of these assumptions are flatly and entirely false. The first is the assumption that society has always been capitalist in structure—and, therefore, presumably always will be. In actual fact, society has been capitalist for a minute fragment of total human history.
The second assumption is that capitalism has some necessary kind of correlation with “human nature.” This, as a matter of fact, is the same assumption as the first but expressed differently. To see that it is false, it is not required to be sure just what “human nature” may be. It is enough to observe that human nature has been able to adapt itself to dozens of types of society, many of which have been studied by anthropologists and historians and a number of which have lasted far longer than capitalism.
The first, and perhaps crucial, evidence for the view that capitalism is not going to continue much longer is the continuous presence within the capitalist nations of mass unemployment and the failure of all means tried for getting rid of mass unemployment. The unemployed, it is especially significant to note, include large percentages of the youth just entering working age. Continuous mass unemployment is not new in history. It is in fact, a symptom that a given type of social organization is just about finished.
Capitalism has always been characterized by recurring economic crises, by periods of boom followed by periods of depression. Until a dozen years ago, however, the curve of total production always went higher in one major boom period than in the boom preceding.
The volume of public and private debt has reached a point where it cannot be managed much longer. The debt, like the unemployed, sucks away the diminishing blood stream of capitalism. And it cannot be shaken off. Bankruptcies, which formerly readjusted the debt position of capitalism, hardly make a dent in it. The scale of bankruptcy or inflation which could reduce the debt to manageable size would at the same time—as all economists recognize—utterly dislocate all capitalist institutions.
The maintenance of the capitalist market depended on at least comparatively free monetary exchange transactions. The area of these, especially on a world scale, is diminishing toward a vanishing point.
Since shortly after the first world war, there has been in all major capitalist nations a permanent agricultural depression. Agriculture is obviously an indispensable part of the total economy, and the breakdown in this essential sector is another mark of the incurable disease afflicting capitalism.
Capitalism is no longer able to find uses for the available investment funds, which waste in idleness in the account books of the banks.
The continuance of capitalism was, we saw, dependent upon a certain relationship between the great powers and the backward sections and peoples of the earth. One of the most striking developments of the past fifteen years, which has been little noticed, is the inability of the great capitalist nations any longer to manage the exploitation and development of these backward sections.
Capitalism is no longer able to use its own technological possibilities.
As symptomatic and decisive as these economic and technical developments is the fact that the ideologies of capitalism, the bourgeois ideologies, have become impotent.
THE THEORY OF THE PROLETARIAN SOCIALIST REVOLUTION
First, we must be clear about what is meant by “socialist society.” It is worth emphasizing that with respect to the central and only problem of this book—the problem of what type of society is to prevail in the immediate future and for the next period of human history—the theories of anarchists, socialists, communists, and their subvarieties are the same. They all agree, in general, as to what they mean by “socialist society” (even though they may call it something else—“communism” or “anarchist society”), and they all agree that it is going to come. Their differences are on how it is going to come and on what ought to be done to help it along, not on the prediction that it will come. The determining characteristics of what they mean by socialist society are that it is classless, fully democratic, and international.
The assumption that the abolition of capitalist private property guarantees socialism must be entirely rejected. It has simply no justification on the facts. It is a hope, that is all; and, like so many hopes, one scheduled for disappointment.
The Russian events, since 1917, will occupy us in other connections. Here I wish to observe that, taken at their face value, they are powerful evidence against the theory that socialism is coming. Far from showing tendencies toward socialism, far from taking steps in the direction of socialism, the Russian revolutionary society developed in a plainly contrary direction. With respect to the three decisive characteristics of socialist society—classlessness, freedom, and internationalism—Russia is immeasurably further away today than during the first years of the revolution; nor has this direction been episodic but rather a continuous development since those early years.
The second set of facts, constituting evidence that socialism is not coming, has already been mentioned: the expected socialist revolution, even the nominally socialist revolution such as took place in Russia, did not take place elsewhere, or, if attempted as in Germany, several Balkan nations, and in China, did not succeed. Yet socialist theory gave every reason to expect that it would come and would succeed, and socialist theoreticians did expect it.
One point of great importance has been proved conclusively by the Russian events: namely, that the second assumption we have discussed—the assumption that the abolition of capitalist private property rights in the instruments of production is a sufficient condition, a sufficient guarantee, of the establishment of socialism—is false.
If socialism is to come, the working class, as we have seen, has always, and rightly, been held to be the primary social group which will have a hand in its coming. According to Marx himself, the inherent development of capitalist society as it tended toward centralization and monopoly was such that there would take place the “proletarianization” of the overwhelming bulk of the population; that is, almost everyone would become workers. This made socialism easy, because the workers would have almost no one except a handful of finance-capitalists to oppose their course. As is well known, this development did not take place as predicted by Marx. Sectors of the economy even of advanced nations, in particular agriculture, resisted the process of reduction to full capitalist social relations; most persons engaging in agriculture are neither capitalists nor workers (in the technical sense) but small independent producers. Small independent proprietors remain in many lines of endeavor; and the last seventy-five years have seen the growth of the so-called “new middle class,” the salaried executives and engineers and managers and accountants and bureaucrats and the rest, who do not fit without distortion into either the “capitalist” or “worker” category.
The important social groups having as their professed aim the transition to socialism are the various Marxist political parties. Practical success for such parties does not at all guarantee the victory of socialism as the Russian experience shows: in general, there is no necessary correspondence between the professed aims of a political party and what happens when it takes power. But practical failure of these parties is additional, and strong, evidence against the prediction that socialism will come, since it removes one of the chief social forces which have been pointed to as motivation for the prediction. And the fact is that during the past two decades Marxist parties have collapsed on a world scale. Their fate can be pretty well summed up as follows: they have all either failed socialism or abandoned it, in most cases both.
The practical collapse of the Marxist parties has paralleled the collapse of the Marxist ideology.
THE STRUGGLE FOR POWER
The general field of the science of politics is the struggle for social power among organized groups of men.
In most types of society that we know about, and in all complex societies so far, there is a particular, and relatively small, group of men that controls the chief instruments of production (a control which is summed up legally in the concept of “property right,” though it is not the legal concept but the fact of control which concerns us).
The crucial phases of this control seem to be two: first, the ability, either through personal strength, or, as in complex societies, with the backing—threatened or actual—of the state power acting through the police, courts, and armed forces to prevent access by others to the object controlled (owned); and, second, a preferential treatment in the distribution of the products of the objects controlled (owned). Where there is such a controlling group in society, a group which, as against the rest of society, has a greater measure of control over the access to the instruments of production and a preferential treatment in the distribution of the products of those instruments, we may speak of this group as the socially dominant or ruling class in that society.
The easiest way to discover what the ruling group is in any society is usually to see what group gets the biggest incomes. Everyone knows this, but it is still necessary to make the analysis because of the fact that control of access is not the same thing as preferential treatment in income distribution. The group that has one also, normally, has the other: that is the general historical law. But for brief periods this need not invariably be the case, and we shall see later how significant the distinction is at the present time.
To an ever-increasing extent in post-medieval society, the decisive sectors of economy are not agricultural but mercantile, industrial, and financial. In modern society, the persons who control access to, and receive preferential treatment in, the distribution of the products of the instruments of production in these fields—and to a varying extent in the land also—are those whom we call “capitalists”; they constitute the class of the “bourgeoisie.” Their control is exercised in terms of the typical property rights recognized by modern society, with which we are all familiar. By our definition, the bourgeoisie or capitalists are the ruling class in modern society. Since the society recognizes these rights, we may properly speak of it as bourgeois or capitalist society. Since these rights have been enforced by the political institutions of modern society, by the state, we may speak similarly of the bourgeois or capitalist state.
From the time of the Renaissance a number of more or less related new ideologies—religions, philosophies, moralities, theories of law and politics and society—were developed, and some of them became widely believed. None of these ideologies spoke openly in the name of the bourgeoisie; none of them said that the best kind of society and politics and morality and religion and universe was one in which the capitalists were the ruling class; they spoke, as all important ideologies do, in the name of “truth” and for the ostensible welfare of all mankind.
Two facts are of special significance for us. First, that the net result of the widespread acceptance of some of these new ideologies was to promote patterns of attitude and feeling in society which benefited, above all, the social position of the bourgeoisie and the institutions favorable to the bourgeoisie. Second, belief in, and advocacy of, these ideologies were not at all confined to the bourgeoisie but spread to all sections of the population. Presumably, the non-bourgeois sections of the population believed because they thought that these ideologies expressed their interests and hopes and ideals. Judged in terms of economic and social results, this was either not the case at all or true for the non-bourgeois groups only to a very minor degree as compared with the capitalists.
THE THEORY OF THE MANAGERIAL REVOLUTION
What is occurring in this transition is a drive for social dominance, for power and privilege, for the position of ruling class, by the social group or class of the managers (as I shall call them, reserving for the moment an explanation of whom this class includes). This drive will be successful. 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. The economic framework in which this social dominance of the managers will be assured is based upon the state ownership of the major instruments of production. Within this framework there will be no direct property rights in the major instruments of production vested in individuals as individuals.
The managers will exercise their control over the instruments of production and gain preference in the distribution of the products, not directly, through property rights vested in them as individuals, but indirectly, through their control of the state which in turn will own and control the instruments of production. The state—that is, the institutions which comprise the state—will, if we wish to put it that way, be the “property” of the managers. And that will be quite enough to place them in the position of ruling class. The control of the state by the managers will be suitably guaranteed by appropriate political institutions, analogous to the guarantee of bourgeois dominance under capitalism by the bourgeois political institutions.
The ideologies expressing the social role and interests and aspirations of the managers (like the great ideologies of the past an indispensable part of the struggle for power) have not yet been fully worked out, any more than were the bourgeois ideologies in the period of transition to capitalism. They are already approximated, however, from several different but similar directions, by, for example: Leninism-Stalinism; fascism-nazism; and, at a more primitive level, by New Dealism and such less influential American ideologies as “technocracy.”
Ee must remember that the language of the struggle for power in metaphorical. No more than in the case of the capitalists, have the “managers” or their representatives ever got together to decide, deliberately and explicitly, that they were going to make a bid for world power. Nor will the bulk of those who have done, and will do, the fighting in the struggle be recruited from the ranks of the managers themselves; most of the fighters will be workers and youths who will doubtless, many of them, believe that they are fighting for ends of their own. Nor have the managers themselves been constructing and propagating their own ideologies; this has been, and is being, done for the most part by intellectuals, writers, philosophers. Most of these intellectuals are not in the least aware that the net social effect of the ideologies which they elaborate contributes to the power and privilege of the managers and to the building of a new structure of class rule in society. As in the past, the intellectuals believe that they are speaking in the name of truth and for the interests of all humanity.
WHO ARE THE MANAGERS?
During the past several decades the de facto management of the instruments of production has to a constantly increasing extent got out of the hands of the capitalists that so plainly proves society to be shifting away from capitalism and the capitalists losing their status as the ruling class. In ever-widening sectors of world economy, the actual managers are not the capitalists, the bourgeoisie; or, at the very least, the managerial prerogatives of the capitalists are being progressively whittled down. The completion of this process means the elimination of the capitalists from control over the economy; that is, their disappearance as a ruling class.
I mean by managers, in short, those who already for the most part in contemporary society are actually managing, on its technical side, the actual process of production, no matter what the legal and financial form—individual, corporate, governmental—of the process. There are, to be sure, gradations among the managers. Under the chief operating executives of a corporation like General Motors or U. S. Steel or a state enterprise like the TVA there are dozens and hundreds of lesser managers, a whole hierarchy of them. In its broader sense the class of managers includes them all; within the class there are the lesser and the greater.
In the earlier days of capitalism, the typical capitalist, the ideal of the ideologists before and after Adam Smith, was himself his own manager so far as there were managerial functions other than those assigned to some reliable skilled worker in the shop. He was the individual entrepreneur, who owned the whole or the greater share of a factory or mine or shop or steamship company or whatever it might be, and actively managed his own enterprise; perhaps to retire in old age in favor of management by his heirs. But, as is well known, the growth of large-scale public corporations along with the technological development of modern industry have virtually wiped such types of enterprise out of the important sections of the economy; with a few exceptions, they remain only among the “small businesses” which are trivial in their historical influence. These changes have meant that to an ever-growing extent the managers are no longer, either as individuals or legally or historically, the same as the capitalists. There is a combined shift: through changes in the technique of production, the functions of management become more distinctive, more complex, more specialized, and more crucial to the whole process of production, thus serving to set off those who perform these functions as a separate group or class in society; and at the same time those who formerly carried out what functions there were of management, the bourgeoisie, themselves withdraw from management, so that the difference in function becomes also a difference in the individuals who carry out the function.
THE MANAGERS MOVE TOWARD SOCIAL DOMINANCE
We have seen that of the two decisive elements in actual ownership, control over preferential treatment in distribution is subordinate to control over access. With respect to the latter, though it is by no means yet out of the hands of the big bourgeoisie, though it can still be exercised by them on crucial occasions, it has on the whole been diminishing during the past generation.
The traditional and necessary capitalist role of government is, as everyone knows, now being quickly abandoned in all nations, has been altogether abandoned in at least one (Russia), and close to abandoned in several others. Government is moving always more widely into the economy. No matter who runs the government or for what, every new incursion of government into the economy means that one more section of the economy is wholly or partially removed from the reign of capitalist economic relations. That this is the meaning of the governmental extensions into the economy can be seen from one very simple and obvious fact alone: All capitalist enterprises are run for profit; if, over a period, they do not make a profit, they have to stop running. But governments not only do not have to make a profit but on the contrary normally and properly run in the contemporary world at what is from the capitalist point of view a loss. When governments confined themselves to the narrower political sphere—army, police, courts, diplomacy—this might not have seemed so out of line (though in those days governments ran continuously at a loss only at the cost of going bankrupt, like any other capitalist institution): it could be thought that the government was a special expense chargeable to business like the private police force of a steel mill or the public-relations department of a utilities firm. But when we remember that government is now the biggest business of all, in the strictly economic as well as in other spheres, the demonstrated ability of government to keep running at a loss is intolerable from the standpoint of capitalism, and shows that the government functioning in the economy is implicitly a noncapitalist institution.
The actual, day-by-day direction of the processes owned and operated by the government or controlled, without full ownership, by the government is in the hands of individuals strictly comparable to those whom we have called “managers” in the case of private industry: the men of the innumerable bureaus and commissions and agencies, not often the publicly known figures, who may be decorative politicians, but the ones who actually do the directing work.
THE ECONOMY OF MANAGERIAL SOCIETY
The capitalists, as a class, base their power and privilege, their social dominion, on their control (ownership) of “private enterprise,” which alone is capitalist enterprise proper, since in it alone do we find the characteristic capitalist social and economic relations. So long as government enters, either not at all or comparatively little, into the economy, and at the same time is either tolerant toward or the active defender of capitalist relations, the social rule of the capitalists and the continuance of capitalist society is assured and often immensely aided by government. Even when government takes over substantial but still minor percentages of the economy (either through outright ownership or growing but not complete control), the social rule of the capitalists can be continued, and government can still act primarily to their benefit. The capitalists will not benefit directly from governmental enterprise. But, having private enterprise as a base for leverage, governmental enterprise can be indirectly manipulated to benefit private enterprise and thus the capitalists. This is simple enough when the relative percentage of governmental enterprise is low and that of private enterprise correspondingly high: private enterprise then easily outweighs governmental. But, especially since the first world war, the universal tendency, in the world economy as a whole and in that of each separate nation, is toward the relative extension of governmental enterprise at the expense, necessarily, of private. (Once again I must stress that such an extension is marked as much or even more by an increase in governmental control as by formal government “ownership”: since control is the decisive factor in ownership.)
When, finally, the major part of the instruments of production come under governmental ownership and control, the transition is, in its fundamentals, completed. The “limited state” of capitalism is replaced by the “unlimited” managerial state. Capitalist society exists no longer or lingers only as a temporary remnant. Managerial society has taken its place.
The term “state capitalism” seems to be due to a misunderstanding which we have already analyzed. When the state owns only a part, and a minor part, of the economy, with the rest of the economy remaining capitalist private enterprise, we might correctly speak of “state capitalism” in connection with that minor state-owned part: since, as we have seen, the economy remains in its balance capitalist and even the state-owned part may be directed primarily to the benefit of the capitalist part. But the “capitalism” in “state capitalism” is derived not from the state-controlled part of the economy but from the capitalist-controlled part. When the latter disappears, or becomes negligible, then the capitalism has disappeared. There is no paradox in saying that 10 times 10% state capitalism, far from equaling 100% capitalism, equals 0% capitalism. The multiplication is of state, not of capitalism.
There is not a trace of a magic in the structure of state ownership which could in some mysterious and necessary way eliminate class rule and domination. On the contrary (and this is not a question of speculation but already shown by historical experience), an economy of state ownership can (though it need not) provide the basis for domination and exploitation by a ruling class of an extremity and absoluteness never before known. Those who control the state, those whose interests are primarily served by the state, are the ruling class under the structure of state-owned economy. Through the state, they will control access to the instruments of production. Through the state, they will control the distribution of the products of those instruments so that they themselves receive the privileged share. This ruling class, as what has happened in the past few decades already makes clear, will be, or at any rate its decisive section will be, those whom I have called the managers. The managerial economy will be, thus, an exploiting economy.
As the word is used in this book, there is no moral or psychological reference of any kind. By an “exploiting” economy is meant simply an economy wherein one group receives a relatively larger share of the products of the economy than another. By “exploitation” is meant the processes, whatever they may be, whereby such an unequal distribution comes about, independently of any moral judgment or of the psychological motives of the individuals concerned. According to this definition, all class economies are exploiting; feudal and capitalist economies are exploiting; and the managerial economy will be exploiting.
There is nothing in the nature of factories, mines, railroads, airplanes, radio transmitters that compels their operation to be dependent upon monetary profit. This dependence results merely from the specific economic relations of private enterprise, of capitalism. When these relations are gone, the need for profit is gone also. With the help of centralized state direction, managed currency, state foreign-trade monopoly, compulsory labor, and prices and wages controlled independently of any free market competition, branches of the economy or the whole economy can be directed toward aims other than profit. The managerial economy is no longer “the profit system.”
In managerial economy, the regulation of production will not be left to the “automatic” functioning of the market but will be carried out deliberately and consciously by groups of men, by the appropriate institutions of the unlimited managerial state. As we saw, the necessarily decentralized economy of private enterprise makes impossible such deliberate regulation of production as a whole. Under the centralized economic structure of managerial society, regulation (planning) is a matter of course.
Put in the crudest way, there will continue to be, as there has always been in human history, fighting over the spoils. The fight may translate, and thereby partly hide, itself into political and juridical, as well as physical, forms that we do not as yet suspect, but it will go on. And this is sufficient reason, if there were no others, why we should have as little faith in the promises of the ideologies of the managers—fascist or Leninist or Stalinist or New Dealer or technocratic—as we ought to have learned to have in those of the capitalists, when they tell us that following their pipe will guarantee a world of plenty and peace and freedom.
THE MANAGERS SHIFT THE LOCUS OF SOVEREIGNTY
Any organised society patterns its life according to certain rules—customs, laws, decrees. These rules may not be written down, may not be explicitly formulated even in verbal terms, but they must exist or there would be no sense in calling the society organized. The origin of many of the rules, at any given moment, is lost in a remote past; but there must be within the society some mechanism for enforcing those taken over from the past, and, since the rules are always changing and being added to or dropped, for stating and enforcing new or changed rules. A social group which makes and enforces its own rules for itself, and does not recognize rules made for it by an agency outside the group, is called “autonomous” or “sovereign”—such as the capitalist nations all claimed to be and the chief of them in fact were. The “sovereignty” of the group, by virtue of which rules are made, cannot, however, simply float in the group air. It must be localized, concretized, in some human institution which is accepted as the institution from which rules (in complex society called “laws”) come.
A new type of society will almost certainly have a different type of sovereign institution from that in which sovereignty was localized in the preceding society. This follows because the old institution becomes, over a long period, hardened in the ways of the old society, not sufficiently flexible to readapt itself to the new; and because mass hatred is directed against the old institution as representative of the old order. Though this is the case, the institution where sovereignty is shifted will usually have existed in the old society, though not as the sovereign institution. What will be new will be its possession of sovereignty, not its existence. This tends to be the case because social institutions in actuality change slowly, cannot be built up artificially overnight; and because the institution to which sovereignty shifts really represents in the old society those forces tending toward the new.
Whoever may run things ultimately, some given institution or group of institutions is commonly recognized and accepted as the public lawmaker, the proclaimer of the rules for society. A political party or parties must work through this institution or group of institutions, at the least. In capitalist society the typical institution of this sort is the parliament. We are asking what institution or group of institutions replaces parliament in this matter of the localization of sovereignty. We are not concerned here with where “real” power may be. History has shown the enormous symptomatic importance of shifts in the localization of sovereignty, and that is all that is necessary for our present purposes.
In the new form of society, sovereignty is localized in administrative bureaus. They proclaim the rules, make the laws, issue the decrees. There is no mystery in this shift. It can be correlated easily enough with the change in the character of the state’s activities. Parliament was the sovereign body of the limited state of capitalism. The bureaus are the sovereign bodies of the unlimited state of managerial society. A state which is building roads and steel mills and houses and electric plants and shipyards, which is the biggest of all bankers and farmers and movie producers, which in the end is the corporate manager of all the major instruments of economic production, can hardly be run like the state which collected a few taxes, handled a leisurely diplomacy, and prosecuted offenders against the law. Nor can the same kind of men run it. The new agencies and new kinds of agency are formed to handle the new activities and extensions of activity. As these activities overbalance the old, sovereignty swings, also, over to the new agencies.
The old-line parliamentarians do not do well in the bureaus. One or two of them may be present, as figureheads, for decorative purposes. But the actual directing and administrative work of the bureaus is carried on by new men, a new type of men. It is, specifically, the managerial type, the type we noticed also when considering the structural developments in “private enterprise.” The active heads of the bureaus are the managers-in-government, the same, or nearly the same, in training, functions, skills, habits of thought as the managers-in-industry.
TOTALITARIANISM AND MANAGERIAL SOCIETY
Those nations—Russia, Germany, and Italy—which have advanced furthest toward the managerial social structure are all of them, at present, totalitarian dictatorships.
Stalin, Hitler, Mussolini, and the Stalins and Hitlers of tomorrow, will go, some of them with violent political convulsions. The class of managers will remain. From the vantage point which their functional role in modern economy gives them, the managers will strengthen and consolidate their social position, and will establish society on a strong basis that will guarantee their rule, whoever may be the figures who stand in the political limelight.
Dictatorships have occurred under many historical circumstances. But there seems to be one type of situation out of which dictatorships very readily develop: namely, a period of social crisis and major transition. This seems rather natural, when we come to think about it. When established institutions and ideas are falling to pieces, are being sharply challenged by opposing institutions and ideas, society loses cohesiveness. Strong and ruthless hands reach in to pull it together again. The present is such a period of social crisis and major transition.
Historical analogy, then, suggests that with the consolidation of the structure of managerial society, its dictatorial phase (totalitarianism) will change into a democratic phase. This conclusion is reinforced by two additional considerations. In the first place, it would seem that the managers, the ruling class of the new society, will for their own purposes require at least a limited democracy. The managerial economy cannot operate without a considerable degree of centralized planning. But in planning and co-ordinating the economic process, one of the factors that must be taken into account is the state of mind of the people, including something of their wants and of their reactions to the work they are doing. Unless these are known, at least roughly, even reasonable efficiency in production is difficult. But totalitarian dictatorship makes it very hard—as Russia especially already proves—to get any information on the actual state of mind of the people: no one is free to give unbiased information, and the ruling group becomes more and more liable to miscalculate, with the risk of having the social machine break down. A certain measure of democracy makes it easier for the ruling class to get more, and more accurate, information. Secondly, experience shows that a certain measure of democracy is an excellent way to enable opponents and the masses to let off steam without endangering the foundations of the social fabric. Discontent and opposition, under an absolute dictatorship, having no mechanism for orderly expression, tend to take terroristic and, in times of crisis, revolutionary forms. The example of capitalist parliaments shows how well democratic possibilities are able to make discontent and opposition harmless by providing them with an outlet. Faced with the threat of trouble from the submerged and underprivileged groups, and with the need for mediating conflicts within its own ranks, the new ruling class will doubtless prefer a controlled democracy rather than the risk of social downfall.
THE WORLD POLICY OF THE MANAGERS
Experience has shown that the existence of a large number of sovereign nations, especially in Europe (and with somewhat less acuteness in Latin America), is incompatible with contemporary economic and social needs. The system simply does not work. In spite of the fact that the post-Versailles European arrangements were set up and guaranteed by the most powerful coalition in history, which had achieved victory in the greatest war of history, they could not last. The complex division of labor, the flow of trade and raw materials made possible and demanded by modern technology, were strangled in the network of diverse tariffs, laws, currencies, passports, boundary restrictions, bureaucracies, and independent armies.
If political problems were settled by scientific reasoning, we should, most probably, expect that the political system of managerial society would take the form of a single world-state. In this way the anarchy necessarily following from conflicting sovereignties would be wholly eliminated. World production could be organized on the most efficient plan with the maximum utilization of world resources and the most effective division of labor. Unnecessary duplications could be avoided, and land, climate, peoples, and resources could be exploited in the most fruitful way. Such a world-society is a goal which Marxists, pacifists, and many others before them have had. If we stick to formal and moral arguments, a powerful case can be made out for it. Even when we come down to cruder realms, it is not improbable that some of the managers and their political colleagues are also looking toward a world-state, if not as a triumph of justice and logic, then as an aim of power.
Nevertheless, it is extremely doubtful that the world political system of managerial society will be organized, within the discernible future, as a single world-state. If we leave words and get closer to practical details, the organization of the entire world under a single sovereign-state power seems to present difficulties that are close to insuperable. These difficulties are of many kinds. First, there are technical and administrative difficulties. The centralized direction of the whole world and all its peoples would be a task beyond the technical ability of any human group so far as we can judge from the behavior of human groups in the past. The job is just too vast. Second, there is the military and police problem: There seems no reason to believe that any state can organize a military group sufficiently large and sufficiently cohesive to be able to patrol the whole world. Even if, by a lucky chance, some one power might win what would look like a world victory, it could prove only temporary. The disintegrative forces would be sufficient to pull it rapidly to pieces. Third, the ethnic, cultural, social, and climatic diversities of the world are so considerable as to preclude its reduction to a political unity; and these diversities, even if they are not permanent, will continue for as long as we can sensibly pretend to predict about. A world state would presuppose a large measure of general social unity among men: in interests, in culture, in education, in material standards of life. No such unity exists, nor, under the class structure of managerial society, can be expected to develop.
At the same time the capitalist system of a comparatively large number of sovereign states cannot continue, and is, in fact, collapsing right now. What is going to take its place? The answer, in general terms, is not obscure; and, as with so many other questions, does not have to be given by idle speculation about the dim future. The working out of the answer started some time ago and is now going on quickly before our eyes. The comparatively large number of sovereign nations under capitalism is being replaced by a comparatively small number of great nations, or “super-states,” which will divide the world among them. Some of the many nations which are eliminated in fact may be preserved in form; they may be kept as administrative subdivisions, but they will be stripped of sovereignty. Sovereignty will be restricted to the few super-states.
THE MANAGERIAL IDEOLOGIES
Though ideologies are not controlled by facts, they are nevertheless subject to controls. In particular, the major ideologies of a class society must be able to perform two tasks: (1) They must actually express, at least roughly, the social interests of the ruling class in question, and must aid in creating a pattern of thought and feeling favorable to the maintenance of the key institutions and relations of the given social structure. (2) They must at the same time be so expressed as to be capable of appealing to the sentiments of the masses. An ideology embodying the interests of a given ruling class would not be of the slightest use as social cement if it openly expressed its function of keeping the ruling class in power over the rest of society. The ideology must ostensibly speak in the name of “humanity,” “the people,” “the race,” “the future,” “God,” “destiny,” and so on. Furthermore, in spite of the opinion of many present-day cynics, not just any ideology is capable of appealing to the sentiments of the masses. It is more than a problem of skillful propaganda technique. A successful ideology has got to seem to the masses, in however confused a way, actually to express some of their own interests.
In a period of social transition, the ideologies of the old society are under attack by the rising ideologies of the society-to-be, just as the institutions of the old society and the economic and political power of the old ruling class are under attack. The rising ideologies naturally devote much of their attention to the negative task of undermining mass acceptance of the old ideologies. The major ideologies of capitalist society, as we noted briefly in an earlier chapter, were variants on the themes of: individualism; opportunity; “natural rights,” especially the rights of property; freedom, especially “freedom of contract”; private enterprise; private initiative; and so on. These ideologies conformed well to the two requirements stated above. Under the interpretations given them, they expressed and served the interests of the capitalists. They justified profit and interest. They showed why the owner of the instruments of production was entitled to the full product of those instruments and why the worker had no claim on the owner except for the contracted wages. They preserved the supremacy of the field of private enterprise. They kept the state to its limited role. They protected the employers’ rights of hiring and firing. They explained why an owner could work his factory full time or shut it down at his own discretion. They assured the right of owners to set up factories or to buy and sell wherever they might choose, to keep money in a bank or in cash or in bonds or in active capital as seemed most expedient. So long as ideologies developed from such conceptions as these were not seriously and widely questioned, the structure of capitalist society was reasonably secure. At the same time, these ideologies were able to gain the acceptance and often the enthusiasm of the masses. Men who were not capitalists were willing to swear and die by slogans issuing out of these ideologies. And, as a matter of fact, the way of life embodied in these ideologies was for some while beneficial to large sections of the masses, though never to the extent advertised or in any way comparable to what it was for the capitalists.
The general basis of the managerial ideologies is clear enough from an understanding of the general character of managerial society. In place of capitalist concepts, there are concepts suited to the structure of managerial society and the rule of the managers. In place of the “individual,” the stress turns to the “state,” the people, the folk, the race. In place of gold, labor and work. In place of private enterprise, “socialism” or “collectivism.” In place of “freedom” and “free initiative,” planning. Less talk about “rights” and “natural rights”; more about “duties” and “order” and “discipline.” Less about “opportunity” and more about “jobs.”
These concepts, and others like them, help break down what remains of capitalism and clear the road for the managers and managerial society. They prepare the psychic atmosphere for the demolition of capitalist property rights, the acceptance of state economy and the rule of a new kind of state, the rejection of the “natural rights” of capitalism (that is, the rights of the capitalists in the private market place), and the approval of managerial war. When enough people begin thinking through these instead of the capitalist categories, the consolidation of the managerial structure of society is assured.
The managers’ training as administrators of modern production naturally tends to make them think in terms of co-ordination, integration, efficiency, planning; and to extend such terms from the area of production under their immediate direction to the economic process as a whole. When the managers think about it, the old-line capitalists, sunning themselves in Miami and Hawaii or dabbling in finance, appear to them as parasites, having no justifiable function in society and at the same time preventing the managers from introducing the methods and efficiency which they would like.
The masses, also, are, through the trade-union and other devices introduced under capitalism, interfering with the managers’ control and plans. Besides, the masses seem to the managers stupid, incapable of running things, of real leadership. The managers know that with the technological means at their disposal it would be perfectly easy for them to put everyone to work; but the existing setup prevents them from acting. They naturally tend to identify the welfare of mankind as a whole with their own interests and the salvation of mankind with their assuming control of society. Society can be run, they think, in more or less the same way that they know they, when they are allowed, can run, efficiently and productively, a mass-production factory.
It is out of such a vision of life, which is that undoubtedly held by very many managers and would-be managers—above all, managers functioning in the governmental apparatus—that the managerial concepts and managerial ideologies arise. It is not the managers themselves who make the ideologies explicit, draw out their implications, systematize them. That is the task of intellectuals.
Both communism and fascism claim, as do all great social ideologies, to speak for “the people” as a whole, for the future of all mankind. However, it is interesting to notice that both provide, even in their public words, for the existence of an “élite” or “vanguard.” The élite is, of course, the managers and their political associates, the rulers of the new society. Naturally the ideologies do not put it in this way. As they say it, the élite represents, stands for, the people as a whole and their interests. Fascism is more blunt about the need for the élite, for “leadership.” Leninism worked out a more elaborate rationalization. The masses, according to Leninism, are unable to become sufficiently educated and trained under capitalism to carry in their own immediate persons the burdens of socialism. The masses are unable to understand in full what their own interests are. Consequently, the “transition to socialism” will have to be supervised by an enlightened “vanguard” which “understands the historic process as a whole” and can ably and correctly act for the interests of the masses as a whole: like, as Lenin puts it, the general staff of an army. Through this notion of an élite or vanguard, these ideologies thus serve at once the twofold need of justifying the existence of a ruling class and at the same time providing the masses with an attitude making easy the acceptance of its rule. This device is similar to that used by the capitalist ideologies when they argued that capitalists were necessary in order to carry on business and that profits for the capitalists were identical with prosperity for the people as a whole. So long as the masses believed this, they were ardent defenders, not only of capitalism in general, but even of bigger and better times (power and privilege) for the capitalist ruling class. The communist and fascist doctrine is a device, and an effective one, for enlisting the support of the masses for the interests of the new élite through an apparent identification of those interests with the interests of the masses themselves.
Technocracy is another example of an American variant of the managerial ideologies. As a matter of fact, Technocracy’s failure to gain a wide response can be attributed in part to the too-plain and open way in which it expresses the perspective of managerial society. In spite of its failure to distinguish between engineers and managers (not all engineers are managers—many are mere hired hands—and not all managers are engineers) yet the society about which the Technocrats write is quite obviously managerial society, and within it their “Technocrats” are quite obviously the managerial ruling class. The theory is not dressed up enough for major ideological purposes.
But what about the bitter disputes among the various types of what I have stated are all managerial ideologies? How can these be explained if the ideologies are all “the same”? Are the disputes, thought so notorious, “unreal”? I wish to guard against possible misunderstanding. These disputes are not “unreal” and the ideologies are not “the same.” Such a contention would be ridiculous and easily disproved. What I am maintaining is simply this: Communism (Leninism-Stalinism), fascism-Nazism, and to a more-partial and less-developed extent, New Dealism and Technocracy, are all managerial ideologies. That is, in short: as ideologies they contribute through their propagation to the development of attitudes and patterns of response which are adverse to the continuance of capitalism and favorable to the development of managerial society, which are adverse to the continued social acceptance of the rule of the capitalists, and favorable to the social acceptance of the rule of the managers. The fact is, moreover, that they and ideologies similar to them are securing wide public acceptance throughout the world while capitalist ideologies are losing support; and that this support is much more intense than that given to the capitalist ideologies, making believers willing to sacrifice and die for managerial slogans while fewer and fewer are willing to sacrifice and die for capitalist slogans. This shift in public attitude is itself a very important symptom of the general breakup of capitalist society and the advance of managerial society.
THE RUSSIAN WAY
The consequences of a mass revolution seldom coincide with the slogans and ideas under which it takes place. Capitalism was introduced or strengthened in many places in the world to the accompaniment of mass revolutions. I have never read or heard of such a revolution’s proclaiming in its slogans that its object was to introduce capitalism. There was, it is true, a certain relation between the slogans and what happened; they were, as we saw in the last chapter, slogans which tended to develop attitudes favorable to capitalist institutions and capitalist rule; but the relation is indirect. Similarly, an ostensibly socialist mass revolution does not at all have to lead to socialism.
The Russian way, the Russian pattern, may thus be summed up as follows: (1) Speedy reduction of the capitalist class at home to impotence (and, after a sharp struggle, an armed temporary truce with capitalists elsewhere); (2) the curbing of the masses in a more gradual and piecemeal manner, over a considerable number of years; (3) direct competition, in the days still to come (though the preparations started some while ago), with the other sections of the rising managerial world society.
It is the business of a correct theory to clear up mysteries. If once we get away from ungrounded assumptions, unjustified predictions, if we stop mistaking ideologies for scientific hypotheses and recognize them for the expressions of social interest that they are, then we can get rid of bewilderment over Russia. Russia is not a mystery from the point of view of the theory of the managerial revolution. The Russian development, in broad outline, is exactly what may be expected from that theory and is a powerful confirmation of the theory. The Russian Revolution was not a socialist revolution—which, from all the evidence, cannot take place in our time—but a managerial revolution.
THE GERMAN WAY
We find in Germany to an ever-increasing degree those structural changes which we have discovered to be characteristic of the shift from capitalism to managerial society. In the economic sphere, there is a steady reduction, in all senses, of the area of private enterprise, and a correlative increase of state intervention. This reduction toward impotence of the capitalists is accompanied by the rise of precisely the class which we found to be at the top in Russia: the managers, together with their bureaucratic and military colleagues. This is the class (in which some individual capitalists have found a place) that even today in Germany holds the largest share of control over the instruments of production, wields the effective power, and already is receiving the lion’s share of the privileges. In short, Germany is today a managerial state in an early stage. Structurally, it is less advanced along managerial lines than Russia; it retains as yet more capitalist elements.
THE FUTURE OF THE UNITED STATES
The New Deal sprang from the inner structural drives of modern society, the forces that are operating to end capitalism and begin a new type of social organization, the same forces which at later stages and under different local circumstances produced the revolutions in Russia and Germany. The firmest representatives of the New Deal are not Roosevelt or the other conspicuous “New Deal politicians,” but the younger group of administrators, experts, technicians, bureaucrats who have been finding places throughout the state apparatus: not merely those who specialize in political technique, in writing up laws with concealed “jokers,” in handing Roosevelt a dramatic new idea, but also those who are doing the actual running of the extending government enterprises: in short, managers.
With the advent of the New Deal, the rate of those changes, to which we have so often referred and some of which I have just listed, quickened. State intervention really got going. The percentage of the national income accounted for by direct governmental enterprises doubled in five years. A substantial percentage of the population became directly or indirectly dependent upon the state for livelihood. State controls of a hundred kinds extended throughout the economy.
The New Deal is a phase of the transition process from capitalism to managerial society. The further development of the war preparations, the economic world conflicts, and the wars, will prove in practice that success in none of them can be won along capitalist lines. When that proof is plain enough, the country will go over to definitive managerial structure.
OBJECTIONS
It is perhaps worth remarking that there is an interesting piece of psychological evidence for the assured social position of the managers. The managers—these administrators, experts, directing engineers, production executives, propaganda specialists, technocrats—are the only social group among almost all of whose members we find an attitude of self-confidence. Bankers, capitalist owners, liberal politicians, workers, farmers, shopkeepers—all these display, in public and private, doubts and fears and worries and gloom. But no one who comes into contact with managers will fail to have noticed a very considerable assurance in their whole bearing. They know they are indispensable in modern society. Whether or not they have thought it out, they grasp the fact that they have nothing to fear from the immense social changes speeding forward over the whole world. When they begin to think, they get ready to welcome those changes, and often to help them along.