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From The New International, Vol. VII No. 7 (Whole No. 56), August 1941, pp. 175–9.
Transcribed & marked up by Einde O’Callaghan for ETOL.
I BEGAN MY REVIEW of The Managerial Revolution by declaring that the Burnham theory is composed of half-truths assembled to fit a fantastic pattern unrelated to current social life. It is built upon a structure of assertions unfortified by empirical evidence and posited in such a way as requires the blind acceptance of his assertions in order to endorse his conclusions. It is my intention in this second review to evaluate the managerial society and discuss the future of socialism. There will be, naturally, a number of gaps in this criticism, but that is unavoidable. If we successfully answer the main theses, we shall, in fact, have replied to the hundreds of minor problems raised in the book.
Behind the facade of a strange combination of words, Burnham has woven a simple theory. If capitalism is doomed, and socialism is precluded as a theoretical and realistic social alternative, some new social order must take the place of the present profit economy. Burnham’s alternative social order, erected on the ruins of capitalism, and his belief in the impossibility of socialism, is the managerial society, in which the managers, through state control, become the inevitable owners of the instruments of production.
The proofs cited by Burnham to show that this revolution is in fact taking place, that it is world-wide and has been irrevocably achieved in Germany, Russia and Italy, and begun in the United States, we rejected as arising from a misconception of monopoly capitalism and a general failure on his part to appreciate economic theory and history. An intimate knowledge of the nature of monopoly capitalism might easily have demonstrated to Burnham that actually he did not prove much by his examples. We ate certain, however, that objective “scientific” proof is not precisely what Burnham sought. But let us see how it improves the position of the new society.
Consciously or not, Burnham’s description of capitalist property relations contains a key to his reasoning. Whenever he refers to bourgeois society he speaks of “control” of the instruments of production, and “control” of distribution. Why control and not ownership? Because it is an important link of Burnham’s theory that in present-day capitalism, recognizing the economic phenomenon of separation of ownership and control, he establishes a complete and universal separation of ownership and control, viz., a condition which automatically (at least on paper) insures the replacement of capitalism by managerial society. The state becomes the owner of the major instruments of production in order to avert perdition created by the chaos of bourgeois society. The managers, who have already become the dominant group in the state, in turn are now the dominant economic class. Thus are facts squeezed into a preconceived shape to fill the Burnham mold. On page 72 he writes:
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 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 the ruling class.
It is important to bear in mind while on this trip through fairyland, that the bourgeoisie does not merely “control” the instruments of production and “control” distribution, but that it owns the instruments of production and its owns and controls the means of distribution. This fact of ownership is decisive. Moreover, it has a decided bearing upon the problem of the way in which managerial society will come into being. Is the managerial revolution truly a social revolution? Is it an evolutionary change? Is it a social transformation directed by a state in the absence of cataclysmic social struggles? Burnham cannot clarify us because he does not himself know. Hiding behind repeated declarations that it is impossible to answer every question related to the managerial revolution, he evades the crucial problem of how this revolution occurs.
Several propositions are “established” by Burnham: 1. The bourgeoisie merely controls the instruments of production and the means of distribution. 2. The managers are already in control of the governmental bureaus which have become the new instruments of state rule. 3. The state owns the instruments of production and therefore owns and controls the means of distribution. 4. The managers through their established preeminence in the new state have “enough to place them in position of ruling class.” 5. There will be “no direct property rights in the major instruments of production vested in individuals as individuals.” Property becomes collectivized state property controlled by the managers.
What, in the meantime, has become of the bourgeoisie and the proletariat? The bourgeoisie, we are informed, has been decisively defeated. Where it hasn’t already been defeated, it will inevitably suffer such a fate. The proletariat remains an exploited class in the new society. In so far as the social status of the proletariat is concerned, it has not been fundamentally altered. We are indebted to Burnham for at least this admission, since the continued existence of the proletariat created, in turn, a class relationship in the new society of the highest social significance. (Does it remain, in a managerial society, a proletariat in the accepted scientific meaning of the term? Burnham so implies, but gives no good economic reasons why.) For, even on the basis of the Burnham theory, whatever transpires, nothing really changes so far as the international working class is concerned.
But what of the bourgeoisie? There is, in truth, no problem for the simple reason that Burnham has postulated a theorem which cannot be proved since there are no facts to prove it. For example, in what country does the state own the instruments of production? In what country have the managers (as described by Burnham) assumed control of the state bureaus or governmental institutions? In what country is property state owned, collectivist and, therefore, nationalized? The answer is clear. The Soviet Union is the only country in which the bourgeoisie has been expropriated. There, the state owns property which has been transformed into collective property and nationalized. Managers direct the daily affairs of industry and agriculture, but not alone and, significantly enough, without political, power, since it is vested in Stalin’s bureaucratic regime. Moreover, the Russian manager is a specie quite different from the manager Burnham thinks and writes about. Burnham’s theory presupposes the existence of independent political and economic control of society by the managers, and this phenomenon, so far as we are able to observe, exists only as an abstraction. It bears no resemblance to society as it really is.
Let us return to the German, Italian and American examples. Perhaps we shall be more fortunate in new geographic surroundings. But here, too, the governments do not own the instruments of production; property remains bourgeois in every sense of the term. The managers do not control “the bureaus of the state.” They do not, as a matter of fact, exist or function in the manner described in Burnham’s theory of the managerial state. Property rights are vested in individuals as individuals.
In Germany, Japan and Italy, where the state actively intervenes in the production process, and in the United States and Great Britain, where the prevalent tendency is in the same direction traveled by the totalitarian states, you have the sharpest expression of what is an unavoidable stage in the development of capitalism. But even if the state power in each of these countries were to assume complete control of the production process, the capital-labor relationship would suffer no basic change. The very development of monopoly capitalism is the living antithesis of bourgeois democracy and laissez-faire capitalism. Monopoly capitalism, especially in the period of world economic decay, is the most important propelling force toward statification of politics and economics.
Thus, twentieth century capitalism is in a death struggle to survive. As a profit economy, i.e., a world economy circumscribed by private ownership of the means of production organized in national states, where the production and reproduction of constant capital intensifies an already existent insoluble contradiction inherent in the very nature of bourgeois production, there remains, at least in the eyes of each national bourgeoisie, one hope: world domination for itself as a means of overcoming the falling rate of profit.
Modern capitalism means permanent war and war means the total mobilization of society. Such a gigantic venture implies a fusing process between the compact monopolistic national bourgeoisies and their respective states. What is significant in this development is that the democratic nations now arrayed in a war alliance against the Axis merely follow in one measure or another the patterns already established in the enemy countries; i.e., extensive and intensive state intervention in the economic process in accordance with war requirements.
Again, this process, necessitated by the stagnation of bourgeois economy, has no relation to, nor in any way proves anything about, managerial society and the fantastic “revolution” created out of Burnham’s imagination.
Yet it is not entirely true that the managerial revolution is merely a product of Burnham’s imagination. Burnham’s theory is an eclectic formation of ideas based on observing the variegated experiences of a proletarian revolution in Russia, fascist counter-revolutions in Germany and Italy, the insulated development of Japan, and current developments in England and the United States. Thus, from the Soviet Union, Burnham arrives at the property forms of the managerial society. The fascist states furnish the key to his description of political life in the new society, although in this respect he seems not altogether sure since he is strongly influenced by his bourgeois democratic environment as an inhabitant of the United States. But so far as the economic side of his theory is concerned, he borrows essentially from the Soviet Union.
It is with the Soviet Union in mind that Burnham writes on page 182 that “The managerial state does not have to make a capitalist profit.” Naturally, if the new society is not capitalist, it would not “have” to make a capitalist profit. But it would have to make a profit, whatever its description, since it rests upon the exploitation of the proletariat, as does capitalism. In the Soviet Union, the proletariat produces surplus products which are appropriated by the bureaucracy. The bureaucracy is an élite class in Russian society and enjoys the fruits of Russian labor. It is true that the Russian state does not have to make a capitalist profit, but it indeed does make a profit and must necessarily make one, otherwise its existence as a bureaucracy under Soviet production relations would be farcical. But Burnham’s example was intended not solely for Russia, not primarily for Russia, but for Germany. And there too, he stands on quicksand. For Russian economy bears not the slightest resemblance to German economy where the basic institutions of capitalism remain intact. Burnham’s point, in any case, is without significance. Profit or the lack of it does not itself alter the economy.
As further evidence of Burnham’s essential confusion, we quote from page 156:
In managerial society, however, politics and economics are directly interfused; the state does not recognize its capitalist limits; the economic arena is also the arena of the state. Consequently, there is no sharp separation between political officials and “captains of industry.”
If this is a description of managerial society, it is also an accurate picture of present-day capitalist society. Perhaps it will be said that, in any case, in managerial society, “the state does not recognize its capitalist limits.” I confess that I do not know what is meant by this statement. What is a capitalist limit and what capitalist nation is impeded in its actions by this limit? That the Soviet Union does not recognize “its capitalist limits” is clear, since it is not a capitalist nation. But, for example, what capitalist limits has Germany exceeded, and what are the limits respected by Great Britain? This essential characteristic of managerial society is hardly impressive or elucidating as a description of the new social order.
The managers differ from the capitalists on how to run economy? In what way? It is not clearly or satisfactorily explained. Yet this is a crucial point. Will there be planned production? Or, more accurately, is there genuine planned production in the existent managerial states? Hardly! Again, is it the innate desire of managers to keep production on a high level and to seek to constantly raise that level? For what purpose? Obviously, it is not to raise the level of existence of the proletariat. Burnham acknowledges that. Is it to increase the wealth and riches of the state or to increase the wealth and riches of the managers? A very important question! Burnham refrains from an explanation, or what explanation he does make is based entirely on metaphysical considerations.
On page 150, the professor says:
The social position of the managers is buttressed in the bureaus both against the claims of the capitalists and also against the pressure of the masses, neither of which groups can function effectively through the bureaus.
We have already pointed out how the state acts in the interests of the total national capital irrespective of how its acts may interfere with or affect the position of the individual capitalist and especially the middle class. This is so patently borne out in the present efforts of the United States to erect its powerful war machine. At the same time we acknowledge that the masses cannot “function effectively through the bureaus,” precisely because the bureaus are instruments of the bourgeois state, functioning in the total interests of the bourgeoisie. The bureaus, a plethora of which exist under the Roosevelt government, are obviously a means through which the bourgeoisie functions. One who cannot see this simple truth can hardly represent himself as an authority on the progression of social orders, new or old. In this instance, Burn-ham repeatedly alludes to the “bureau” development in American government as the concrete expression of the inexorable victory of managerial society. We do not recognize any theoretical or practical reason why this development is contradictory to bourgeois society, nor do we observe how the existence of this “phenomenon” is contradictory to the existence of the bourgeoisie as the dominant class in society. The assertion that it is proves nothing. In this instance, again, the facts contradict the theory.
In consideration of all the foregoing, why do not the fascist regimes in Germany and Italy once and for all rid themselves of the bourgeoisie? Why do they tolerate this expensive parasitic class which only interferes with their plans and is in truth a nuisance? Why, indeed!
The answer is not hard to find. The fascist regimes are bourgeois regimes, formed in the period of the deepest world capitalist crisis whose historic aim is the maintenance of bourgeois society through the only means possible and arising on the basis of concrete national conditions. The fascist movements are not social revolutionary movements. They do not think or act in a social revolutionary way. They do not have a great theory, a world social aim. Difficulties which beset them are solved empirically and from day to day. In other words, they are never truly solved. They do not know anything else but capitalism; their thoughts and their aims are bourgeois. The great striving of this “wave of the future” is to build a strong nation based upon arms, to vanquish the enemy so that the fatherland may be strong and prosper on the ruins of the defeated. Thus, no great social plan emanates from this movement. What we do observe is the fruition of an inherent tendency of monopoly capitalism which is by its very nature totalitarian and anti-democratic. Thus the real victors under fascism are big business, the heavy industries, the fascist elite, which enrich themselves by means of thievery. This is especially so in Germany, where the fascist pinnacle is notoriously ignorant of economics and history. They cannot conceive of a world without the bourgeoisie and without the proletariat, production without profit, an enslaved peasantry, a militarized youth, and war as a means of enriching the fatherland. They are incapable of envisaging an enormous historical role such as is ascribed to them by Burnham.
We have reserved a discussion of Burnham’s views on socialism for the end of this review because it leads to a fulsome summary of his managerial ideology and explains many things about the manner in which he developed the whole theory of the new revolution.
The basic premise for Burnham’s exclusion of socialism as the next possible alternative to capitalism is the failure of socialism to succeed, the uninterrupted defeats it has suffered. It would be futile, of course, either to deny these defeats or to brush them aside as insignificant lapses in the onward march of the proletariat to power. The salient fact remains: reaction is in the ascendancy. There are, indeed, many ways of interpreting this truth, depending, naturally, upon one’s class point of view. The revolutionary socialist, as a social scientist, strives to examine the reasons for the protracted defeats suffered by the world proletariat, in order that the mistakes committed by its movement may be averted and victory achieved. Burnham, the anti-Marxist, proceeds with another measuring rod: success.
In speaking of the failures of the socialist movement, reformist and revolutionary, he writes, on page 55:
This fact [the defeats] does not, as some think, prove anything about the moral quality [sic] of the socialist ideal. But it does constitute unblinkable evidence that whatever its moral quality, socialism is not going to come.
This is proved by the fact that it has been defeated in all tests engaged in with the bourgeoisie, except one, and there the revolution degenerated (or developed?) into managerial society.
This observation is accompanied by the statement that:
Socialism is not possible of achievement or even approximation in the present period of history (p. 48).
The proof? Again the USSR, which is not socialist but is the most advanced managerial state. If managerial society has succeeded best in the country believed to be laying the basis for socialism, then you have the most conclusive evidence of the future of this new social order. If socialism were really to replace capitalism, why hasn’t it already done so? It hasn’t because socialism is impossible – at least for many, many decades. Or, it is an impossible social alternative because it has not won any victories.
Burnham, however, must be aware that this kind of thinking and reasoning is not very profound, enlightening or “scientific.” Following a series of statements anent the “grander scientific pretensions of Marxism” which “have been exploded by this century’s increases in historical and anthropological knowledge and ... scientific method,” Burnham proceeds to “prove” why socialism is impossible.
At the outset of his discussion of this question, Burnham writes (page 58):
(a) The rate of increase in the member of workers – especially the decisive industrial workers – compared to the total population, has slowed down and in the last decade, in many nations, has changed to a decrease.
The statement is made to buttress the argument that socialism is impossible. One of the reasons why it is impossible is that, contrary to the opinions of the Marxists, the proletariat, that class which is to overthrow capitalism and establish socialism, is declining absolutely and relatively. This, if a fact, would have profound effects upon the movement for socialism. Yet, upon what facts does Burnham sustain this conclusion. If he means that in the midst of the world crisis of capitalism the number of proletarians, measured by those employed, declined, this cannot be gainsaid. But that is hardly the way to determine the extent of the proletariat as a class.
However, by no matter what measuring rod the professor employs, he cannot prove this assertion. Here as elsewhere, no facts are cited. What has happened in the present era of the war is that the ranks of the proletariat are increasing. The longer the war lasts – and war has become a permanent feature of bourgeois economy, as Burnham himself admits – the greater will be the demands put on industry and the greater will be the need for industrial workers, i.e., proletarians. This is borne out by events in Germany, Great Britain and above all in the United States. In each of these examples, the problem has been one of obtaining sufficient labor supply. In all the warring countries, and in the United States, great projects for the training of workers have been organized to maintain a continuous influx of trained proletarians into industry. The growth of the proletariat in the leading bourgeois nations is a fact of utmost significance and importance.
Following this misrepresentation, Burnham adds another. On page 51, he writes as follows about the prospect of the socialist revolution:
There has been a corresponding change in the technique of making war, which, since social relations are ultimately a question of power, is equally decisive as a mark of deterioration in the social position of the working class.
On page 53, he adds:
Just as the new techniques of industry weaken the general position of the workers in the productive process as a whole, so do the new techniques of warfare weaken the potential position of the workers in a revolutionary crisis. Street barricades and pikestaffs, even plus muskets, are not enough against tanks and bombers.”
We do not propose to spend a great deal of time in answering this obviously conscious and malicious attack on the Marxist concept of the socialist struggle for power. Suffice it to say that the assault has no merit.
No Marxist living in the 20th century has ever declared it was possible to seize power by the pikestaff or the musket. Burnham knows that the Marxist concept of power was never so simple and narrow. Moreover, the conditions of world imperialist war solves this problem far more simply than Burnham can possibly imagine. (I refer our readers to the articles by C.D.E. in the May and June issues of The New International for a discussion of this question.)
As an additional reason why socialism is impossible, the professor writes on page 51:
The workers, the proletarians, could not, by themselves, run the productive machinery of contemporary society.
Here again, we do not feel required to enter into a lengthy discussion of what the proletariat is or is not capable of achieving by itself. It is only necessary to add that the proletariat (the socialist revolution) has never conceived of the productive process, upon the victory of the revolution, as being run by the “proletariat itself.” Two questions are thrown together here – one the struggle for power, the other, the organization of production on a socialist basis. The proletarian power envisages a joint effort on the part of all groupings, a fusing of their collective talents for socialist purposes.
What Burnham really means by the above is this: the productive process is an intricate one. Only the managers by their technical and scientific training are capable of directing production – thus, the future really lies in their hands. Only they can achieve the miracle by reducing the proletariat to veritable slavery.
What should one do or say about this new managerial society, since it is an exploitative society, a war society, subjecting other nations and classes to a new form of exploitation? According to Burnham, nothing! It is coming, no matter what is done. On page 153 he says:
Our business is not to judge it good or bad, not to express likes or dislikes, but to analyze it in its relation to the problem of what is happening to society.
Is it a progressive social development? Burnham will not answer this, although he implies both, that it is and is not! Shall anything be done about it? Nothing can be done about it since it is ... inevitable!
Thus are new societies born in the minds of men.
The realities of social development in the present epoch, however, do not sustain Burnham’s theory. That is one good reason why he avoids facts as a foundation, or as a proof of his numerous fantastic declarations.
The one salient fact of the present era of capitalism, no matter what country one may turn to, is the existence of the proletariat. It is the existence of the proletariat as a living class, that is the nub of the entire situation. All bourgeois states fear it – despite its many defeats. Roosevelt and Churchill, Hitler and Mussolini, never cease their appeal to the workers of their respective countries. Each is lavish in his promises of the great future that is theirs if only they slavishly carry on production to make possible victory in the war.
Above all, they each promise a new social order after the war. And the social order which they each promise is either “socialism,” a more equitable society, a happy life, or democratic equality. Why this constant deference paid the proletariat? Because each of these rulers, the democratic as well as the fascist, realizes that in the larger sense, their future is dependent upon what this class does. If Burnham does not understand this, at least the real rulers of capitalism do and they understand far more and far better than the cloistered professor.
As long as the proletariat remains the future is not hopeless. Socialism and freedom are truly ahead.
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