MIA: History: ETOL: Document: Workers Party/Independent Socialist League: Neither Capitalism nor Socialism

Workers Party/Independent Socialist League

E. Haberkern & Arthur Lipow (eds.)

Neither Capitalism nor Socialism


James Burnham

The Theory of the Managerial Revolutions


Neither Capitalism nor Socialism, pp. 42–60.
Partisan Review, Vol. 8 No. 3, 1941.


It is remarkable that the catastrophic events of the past decade have not stimulated a positive and systematic revision of our general ideas about what is happening in the world. Surely no previous decade has ever crowded within its brief limits developments of such magnitude as the consolidation of Stalinism, the rise of Nazism, the New Deal, the invasion of China, and the second world war. If we are honest, we must recognize that no one anticipated, with any plausible concreteness, these events. In any field of scientific inquiry other than history, such a lack of correspondence between expectation and fact would have led to the conclusion that the theories upon which the expectations had been founded were false or at least inadequate. But, apparently, we are not very anxious to be scientific about history. We seek from history salvation rather than knowledge, forgetting that genuine salvation can be based only on knowledge.

Orthodox bourgeois and orthodox Marxist thinkers alike take note of events – after they have happened – and are content to “reaffirm” principles which have failed to meet the test of actual experience. We ought to begin to suspect that orthodox bourgeois and Marxist thinkers have been driven together into a corner their only remaining effort is to escape from reality.

It is true that during recent years a number of ex-Marxists – Eastman, Hook, Corey, Utley are examples – have been trying to break new ground. Their negative critique of Marxist theory has been astute and, much of it, convincing. Nevertheless, in their work so far – and this is perhaps not unnatural – there have been two deficiencies. None of them has yet tried, in any but the sketchiest way, to present a substitute for, or reformulation of, Marxist theory. And, second, they have failed to separate, with the clarity plainly required, the moral problem of desirable political program from the descriptive problem of what actually seems to be happening in the world. It is this later problem which alone concerns me here; and with respect to it, new ideas seem to be emerging at the present time neither from Marxist nor bourgeois thought, but, so far as they are present at all, from a quite different source: from the anarchist tradition, and from the tradition – by no means unrelated to anarchism – of such writers as Pareto whose historical origins are perhaps to be found in Machiavelli.

I believe that we now have at our disposal enough evidence to answer, at least roughly and with a fair probability, this question of what is happening in the world, the question of the character of the present period of major social transition and its probable outcome. To give such an answer in detail cannot be the work of single individuals; it requires a cooperative effort. It may, however, be possible to reach some measure of agreement about the general direction in which the answer is to be sought.

During the past several generations, most of the writers in the fields of sociology, politics and economics who have abandoned the exceedingly naive assumption that the capitalist organization of society is eternal have accepted, implicitly or explicitly, a second assumption that is often expressed as follows: capitalism and socialism are “the only alternatives” for modern society; either capitalism will continue or socialism will replace it. It should be remarked that the two terms in this presumed alternative have an unlike status. What “capitalism” means we are able to know from experience, by generalizing the chief characteristics of post-Renaissance society, which we are all agreed in calling capitalism. What “socialism” means, on the other hand, we know only from definition, since there has never been a socialist society. Nevertheless, almost everyone agrees on the definition: socialist society is economically classless, politically democratic, and international (or at the least internationalist).

The assumption that capitalism and socialism are the sole alternatives is by no means confined to Marxists and others who favor socialism from a programmatic and moral standpoint. It is shared by many who oppose socialism and who fight against it. The most ardent defender of capitalism will usually agree with the firmest revolutionary that if capitalism goes it will be socialism that takes its place.

The acceptance of this assumption dictates the broad lines of the interpretation of contemporary events, and the expectations of the future. The significance of events is found in their relation to one or another of the alternatives. What happens is understood as of capitalism or from capitalism, as toward or away from socialism, as strengthening or weakening capitalism, bringing socialism nearer or pushing it farther off.

During the past generation, and especially during the past decade, this mode of interpretation, based upon and required by this assumption, has become more and more inadequate, less and less able to answer plausibly the problems raised by what is happening. To an ever increasing extent it becomes confusing, distorting, and sterile. It demanded that we regard the Russian Revolution of 1917 as a socialist revolution, and predict that it would move further toward socialism or back toward the restoration of capitalism. In fact, the post-1917 Russian social organization has done neither; but we are compelled by our assumption to say that it has done one or the other, and to waste time in such altogether fruitless disputes as that over whether Russia is today a “workers’ (socialist) state” or a “capitalist state” – since these are the only terms admitted by our assumption. Germany did not become socialist through Nazism, and we are therefore compelled to distort terminology, sense and facts into caricatures in order to “explain” that Nazism is a “new form” of capitalism. In our interpretation of the New Deal in this country, we have at our disposal only the same narrow alternative. We can say, as many say, that the New Deal is “disguised socialism” – and no one should doubt the impenetrability of the disguise; or we can argue that it is merely a special form of “finance-capitalism,” in which case we lapse into mysticism when asked why nine-tenths of the capitalists of the nation oppose it. Above all does the second world war leave us floundering. From its beginning, from the day of the Nazi-Soviet Pact, in the military, diplomatic, political, social-economic developments, our assumption makes the second world war unintelligible, and makes impossible an even roughly accurate anticipation of future events.

When an assumption is made explicit, it becomes possible to examine it critically, and, if this seems advisable, to reject it. If the assumption of “either capitalism or socialism” is merely verbal – that is, if it means only that we are resolved to call any possible change in social organization either “socialism” or “capitalism” – then of course the assumption cannot be disproved. we can at most suggest this verbal restriction is likely to be confusing.

But this particular assumption may easily be re-interpreted. We can understand its content not as an assumption, but as two different descriptive theories or hypotheses about what is probably going to happen, to be judged by the available evidence. Thus translated, the assumption divides into: the theory that capitalism will continue for the next historical period (let us say, at least several generations); the theory that capitalism will be replaced by socialism in the near future (let us say in the next decade or so).

These theories are not contradictories but contraries. That is, though one of them must be false, both of them may be false. It is logically possible that neither of them is true, and that a third hypothesis may be formulated which, on the basis of the evidence, is more probable than either of them.

What is at issue here is not, we should note, a question of program. Neither of these hypotheses – nor any additional alternative hypotheses – raises any problem of what “ought to be,” of whether the continuance of capitalism would be “good” or “bad,” whether we “ought” to fight for socialism, or what program “ought” to be adopted by men of good will. The problem is simply one of fact, of what, on the basis of the evidence now at our disposal, is most likely to happen

By now, the theory that capitalism is going to continue much longer is, from the scientific point of view, hardly worth the bother of refuting. Capitalism, considered on a world scale, is already half gone, and completing its disappearance before our eyes. In Russia, with a sixth of the earth’s surface and about a twelfth of its population, nearly everyone grants that capitalism is already pretty well eliminated. And in all other nations, even those which we can still justifiably call capitalist, new institutional structures are well on their way toward the replacement of the institutions of capitalism. Mass unemployment, an impasse in agriculture, idle capital funds, the inability to exploit subject territories profitably, the inability to use the productive plant and new inventions and technological improvements, the disorganization of the financial system, the loss of confidence by the capitalists themselves, and the loss of mass appeal by the capitalist ideologies, all signalize the end of the capitalist organization of society in a manner similar to that in which analogous symptoms have signalized the end of other social orders in other times.

The theory that socialism is going to replace capitalism, in spite of its being widely believed, has seldom had much evidence presented in its favor. Belief in the theory has been based ordinarily on the following syllogism: Capitalism is going to end soon (which we may grant); capitalism and socialism are “the sole alternatives”; therefore socialism is going to come. Formally, this syllogism is valid. The trouble with it is the second premise, which is once more our assumption. Rejecting the assumption, as assumption, the syllogism has no relevance to the actual problem: whether, on the evidence, it is probable that socialism is coming.

Most of those who believe that socialism is coming, including most Marxists with the exception, perhaps, of Marx, have tended to accept another assumption, with the help of which their case has been given a coating of strength. This is the assumption that the elimination of private property rights in the instruments of production is a guarantee, a sufficient condition, of socialism. Since it is manifest that private property rights in the instruments of production are being rapidly eliminated, and since there is no reason to expect any reversal of this world trend, these facts, together with the new assumption, are enough to prove that socialism is coming.

But the new assumption is not in the least more justified than the other. We have in history numerous examples of exploiting or class societies, and non-democratic societies, where there have not been private property rights in the instruments of production. Control over (that is, property rights in) the instruments of production has been vested in a corporate body (for example, the body of priests or ancients), not in individuals as such. Nor are the examples confined to ancient or primitive history. Present day Russia shows plainly, to anyone who wants to see, that there is no necessary connection between private property rights and exploitation or class divisions.

The Russian events prove that the elimination of private property rights in the instruments of production is not a guarantee, a sufficient condition, of socialism, since in Russia these rights are eliminated and there is not socialism – that is, a society which is economically classless and politically democratic.

With these two question-begging assumptions dropped, the case for the hypothesis that socialism is coming is extremely weak, almost non-existent. The fact that many of us would like it to come, think it the best possible form of society, consider it the only “rational solution” to the major social problems and conflicts, does not, as we know from historical experience, have any particular weight as evidence that it will come. It is not at all true that socialism and socialists have “never had a chance.” On the contrary, socialism, and all branches of the movements professing socialist society as an ideal and aim have had many chances. And all of these chances have resulted in either betrayal or failure, usually both. Each branch will admit this of all the other branches; together their admissions cover the lot.

The Leninist wing has taken state power by revolutionary means and held it (Russia), but has not built socialism or toward socialism; and it has taken state power and lost it (Hungary), not to speak of failing to take it when it might have done so (Germany, China, Spain). The reformist wing has often been in charge of the government (Germany, Denmark, Sweden, Norway, Austria, France, England, New Zealand) but socialism has not appeared or even been approached. The anarchists have had their chance in Spain.

During the past generation, the working class, which must be presumed to be the main social force active in any possible transition to socialism, has had its social position progressively undermined. This has resulted from a falling off of its relative numbers, the presence of large-scale unemployment, and technological changes which reduce the relative importance of the working class in production. In addition, the development of new techniques of production, of propaganda and political rule, of military technique and strategy, all decrease the elements of potential power available to the working class.

During the past decade, a large part of the Marxist and other socialist-inspired movements has been wiped out. The only important section remaining is the Stalinist, which experience has proved to be an influence in no way moving toward socialism.

At the same time, the socialist ideologies have lost their power to move the masses, as is proved by their inability to make headway against rival ideologies – Stalinist and especially fascist.

There does not, in general, seem to be any positive evidence worth mentioning in the events of the past generation that substantiates the hypothesis that socialism is coming.

Both the theory that capitalism will continue and the theory that socialism will come are, on the basis of the available evidence, in extremely poor shape. However convincing they may once have been as speculation, historical developments since 1914 simply do not bear either of them out; on the contrary, actual historical developments have run counter to both of them. This by itself, would not be enough to prove both of them false. If there were no alternative theory, more probable on the evidence than either of them, then we should still have to accept the more probable of the two. But there is a third alternative (or rather a third group of alternative theories), Which needs little more than to be formulated to be recognized as far more probable than either, much more plausible in the interpretation it permits of the data of the past, and more convincing in its predictions of the future.

This third alternative I call “the theory of the managerial revolution,” though naturally the name is of no importance. My own formulation must be understood as only one among several possible variants of a more general type of hypothesis that might be more exactly presented in somewhat different terms. This theory, or type of theory, is not at all an arbitrary speculation. It is based upon what has actually been happening in the world, especially since the beginning of the first world war. It explains, with reasonable and reasonably systematic plausibility, what has been happening; and through this explanation predicts, roughly, what is going to happen.

The theory may be summarized briefly as follows: We are now in the midst of a major social transformation (revolution), during which, as in other major transitions, the chief economic and political institutions in society, the dominant ideologies, and the class relations, are being sharply and rapidly altered. This transition is from the structure of society which we call capitalist – that is, a structure characterized economically by “private enterprise,” the owner-“wage worker” relation, production for individual profit, regulation of production as a whole by “the market” rather than by deliberate human control, and soon; characterized politically by the existence of numerous sovereign national states, strong in their own political sphere but limited as to their intervention into other spheres of life, especially the economic sphere, and by typical parliamentary institutions; characterized in terms of class relations through the position of private capitalists as the ruling class; and characterized ideologically by the prominence of individualist and “natural rights” notions in widespread social beliefs.

The transition, which it is well to emphasize is already in mid-course, is to a type of society that I call “managerial.” The economic structure of managerial society is to be based upon state ownership of the chief means of production, in contrast to the predominantly private ownership of the means of production in capitalist society. The new economy will be an exploiting (class) economy; but, instead of exploitation’s taking place directly, as in capitalism, through owner ship vested in individuals, it takes place indirectly, through control of the state by the new ruling class, the state in turn owning and controlling the means of production.

Some of the possible mechanisms of this new mode of exploitation, as they have been developed in Russia, are clearly shown in Freda Utley’s very interesting recent book The Dream We Lost. Trotsky, committed to the view that Russia is a “workers’ state,” was forced to hold that Russia’s rulers got their heavy share of the national income through fraud and graft, that Russia has a “fraud economy” – since, by definition, there could not be “exploitation” in a workers’ (socialized) state. Miss Utley’s analysis shows how superficial was this opinion to which Trotsky was driven by his unshakable faith in the “either capitalism or socialism” assumption.}

Through the new economic structure, as we have already seen from the examples of Russia and Germany, mass unemployment can be done away with, capital funds released from idleness, foreign trade carried on (by, for example, barter methods) at what would be an intolerable loss for capitalism, exploitation of backward territories and peoples resumed and stepped up, and the capitalist type of economic crisis eliminated. What is in question here is not whether we approve of the means whereby these ends are achieved (we might, from a moral standpoint, prefer unemployment to state labor camps), but merely the observation that they are achieved. They are achieved, moreover, not through the cleverness of individual leaders, but through new institutional arrangements which remove the private profit requirements that have brought a dying capitalism to mass unemployment, idle funds and dried up trade. There is thus every reason to believe that the achievements are not episodic, but a consequence of the newly rising structure of society.

Within any society, primary social power is in general held by those persons who have the chief measure of control over the instruments of production. Nevertheless, in the political order, power or “sovereignty” cannot simply float in the air; it must be concretized or “localized” in some definite human institution which is recognized and accepted by the given society as the body from which laws, decrees, and rules properly issue. There is a natural enough tendency for each major structure of society to develop its own typical sort of institution to serve this function of the localization of sovereignty. All historians recognize the great symptomatic importance of what might be described as the “shift in the localization of sovereignty” which occurs as a phase of every social transition (revolution). As the old order decays, sovereignty departs from the institution where it has been localized, and comes to rest in a new type of institution which, though it exists as a rule within the old order, is there secondary in influence and in reality representative of the new order that is on its way up.

Under capitalism, political sovereignty has been most typically “localized” in parliaments (or some similar sort of institution, by whatever name it may have been called). Parliaments have been the “law-makers” of capitalism. During the generation since the first world war, sovereignty has been quickly shifting away from parliaments, and in most nations today parliamentary sovereignty has ended. In the new, managerial society, we can already see that sovereignty is to be localized where it has been in fact coming to rest, in the administrative commissions, boards, bureaus, of the new unlimited state.

In place of the dominant ideologies of capitalism, focusing around the concepts and slogans of “natural rights,” “free enterprise,” “private initiative,” “life, liberty and the pursuit of happiness,” and other offspring of “individualism,” the ideologies of managerial society will focus around such concepts and slogans as the collectivity (“state,” “race,” “proletariat,” “people”), “human rights v. property rights,” “discipline,” “order,” “sacrifice,” and so on. As examples of early of managerial ideologies may be cited Leninism-Stalinism (Bolshevism), fascism-Nazism, and, at a still more primitive level, New Dealism.

The managerial society will mean the reduction to impotence, and finally the disappearance, or virtual disappearance of the class of capitalists (to say that capitalist institutions will disappear is at the same time to say that capitalists will disappear). Within the new structure, the new ruling class – that is, those who have the principal control over the instruments of production and who get the principal differential rewards from the products of those instruments (for such persons are what we mean by the ruling class in any society) – will be the managers together with their bureaucratic colleagues in the strictly political movement. Under the institutions of managerial society, with the unlimited state at once the sovereign political and the controlling economic apparatus, these two latter groups (managers and bureaucrats) will be on the whole fused.

By “managers” I mean those who for the most part are already actually managing production nowadays, whether within the narrowing sphere of private enterprise or the expanding arena of state enterprise: the production executives, administrative engineers, supervisory technicians, plant co-ordinators, government bureau heads and commissioners and administrators. Under modern technological conditions, these managers (or administrators) are seldom identical as persons (as they used to be) with the capitalists, are not themselves capitalists; and in any event there is no necessary connection of any kind between the managerial and the capitalist functions in the total economic process.

To employ for a moment the metaphorical language of the class struggle: Just as once the early capitalists built up their power “within the womb of feudal society,” but found that their power could not be consolidated and extended without smashing the foundations of feudalism; so the managers have built up their power within the womb of capitalism – more and more de facto power coming into their hands as the capitalists proper, pushed by technological, social and moral changes, withdraw from production to finance to economic idleness. For more than six hundred years, from the fourteenth century until the first world war, the curve of capitalist social domination rose without interruption. The end of every decade found a greater percentage of the total economy subject to capitalist rule and capitalist social relations than the beginning. During the course of the first world war, the curve turned catastrophically downward. The Russian Revolution snatched at one stroke a sixth of the world’s surface and a twelfth of its population away from the capitalists and capitalism. The Nazis, it turns out, though more slowly are bringing about the same result in an even more decisive section of world economy. And in all nations, rapid structural changes are reducing everywhere both the area of the economy subject to capitalist relations as well as the degree of control exercised by the capitalists. The continuous economic process is abruptly accentuated, but not altered in direction, by political explosions.

The managers cannot consolidate their power without smashing the foundations of capitalism. Whether the managers themselves realize it or not, their problem can be solved only by doing away with “private enterprise” and parliamentarism, and replacing them by state economy and government by boards and bureaus. In the process, the managers do not, of course, do the actual fighting or construct the appropriate ideologies, any more than did the early capitalists. The masses do the fighting and intellectuals construct the ideologies. The result is what counts, and the result is already apparent: a society in which the class of managers, together with a group of political allies with whom the managers largely fuse in the apparatus of the new unlimited state, are the ruling class.

I am unable, in this article, to discuss the difficult and humanly most important problem of the relations among the managerial institutional structure, democracy and totalitarianism. This much seems clear: Rapid advance toward the managerial structure has so far been accompanied by totalitarian politics. Nevertheless, totalitarianism is no more identical with the managerial structure than is democracy with the capitalist social structure. It is certainly at least possible that managerial society, when consolidated, will develop its own kind of democracy – though not, it would seem, a parliamentary democracy, and certainly not capitalist democracy; it is even possible that the transition to managerial society could be accomplished democratically.

The achievement and consolidation of the managerial revolution faces a triple problem: the reduction to impotence of capitalist institutions (and thus of the capitalists) at home, and in the end also abroad; the curbing of the masses in such a manner that the masses accept the new order of managerial society; competition among various sections of the managers for dominant positions in the world.

The second step, it should be remarked, though it requires at certain intervals the use of force, above all demands a change of ideological and institutional allegiance. The masses must be led to accept one or another variant of the managerial institutions and the ideologies built upon the basis of managerial concepts and slogans; they must, we might say, come to see the (social) world in managerial terms. When that happens, the general structure of managerial society is reasonably assured; conflicts remain possible and likely, but they take place within the framework of managerial society, do not endanger its foundations, do not threaten to move toward the restoration of the capitalist structure or toward the overthrow of all forms of class structure – that is, toward socialism.

There is no pre-arranged temporal order in which these three parts of the managerial problem must be solved. Many different patterns or combinations are possible, and several are already being witnessed. Local social, political, cultural circumstances and even the specific influence of local leaders and organized political groups may rightly be expected to affect the patter which we discover in any given instance. For example:

The Russian Revolution we must understand not as a socialist but as a managerial revolution. As soon as we make this shift, the general course of Russian events becomes intelligible. Instead of spending all our time “explaining “ why Russia has “deviated” from the socialist course, has failed to develop as expected, has constantly done the opposite of what theory demanded, we are able to show through the theory of the managerial revolution how Russia has developed consistently along the lines to be deduced from theory, granted the specific circumstances of the Russian position. The triple managerial problem in Russia was worked out as follows: First, in a rapid and drastic fashion, the capitalist institutions and the capitalists at home were reduced to impotence; and, after an armed defense, a temporary truce was reached with capitalist institutions and capitalists abroad. Then (though this second step began during the solution of the first step), more gradually, the masses were curbed in such a manner as to lead them to accept the new exploiting order. The curbing of the masses began long before the death of Lenin (Lenin’s and Trotsky’s leadership in the smashing of the power of the Factory Committees and of the autonomy and rights of the trade unions and local soviets were decisive early moves, for instance); Stalin’s definitive victory and the Moscow Trials merely symbolized the completion of the second part of the triple managerial problem. The Nazi-Soviet Pact and the inability of Britain to move against Russia during the Finnish war showed that capitalism from abroad was no longer capable of overturning the new order. The third part of the managerial problem remains: the competition with other sections of the managers for first fruits in the managerial world system. In this competition, the Russian weaknesses indicate that Russia will not be able to endure, that it will crack apart, and fall toward east and west.

Russia has today advanced furthest, from a structural or institutional point of view, toward the managerial goal. The rest of the world, however, plainly moves in the same general direction, though the specific route being followed need not be the same as the Russian. In Germany, for example, the pattern for the solution of the triple managerial problem is different, though the problem and the outcome are the same. The order of the first two stages in Germany is on the whole the reverse of what we found in the case of Russia. In Germany, the curbing of the masses, their redirection into managerial channels, by and large preceded the reduction of the home capitalists and capitalist institutions to impotence; and the undermining of the capitalists abroad proceeds along with the process of completing the reduction of the capitalists at home. This account is, however, too rigidly schematicized. In actual fact, the reduction of the home capitalists began, by a partial voluntary abdication, along with the curbing of the masses – the capitalists themselves seeing in this partial abdication their sole desperate chance of avoiding the more immediate and drastic Russian pattern (which it did, but as it turns out with no long term difference in the process as a whole, except for the better chance it gives individual capitalists to integrate themselves into the new order). The exile of Thyssen and the earlier retirement of Schacht signify the recognition by German capitalism of the error in the original hope that Nazism was the savior of German capitalism, the understanding that Nazism is merely a variant pattern in the liquidation of capitalism.

As in the case of Russia, so with Germany, the third part of the managerial problem – the contest for dominance with other sections of managerial society – remains for the future. First had to come the death blow that assured the toppling of the capitalist world order, which meant above all the destruction of the foundation of the British Empire (the keystone of the capitalist world order) both directly and through the smashing of the European political structure which was a necessary prop of the Empire. This is the basic explanation of the Nazi-Soviet Pact, which is not intelligible on other grounds. The future conflict between Germany and Russia will be a managerial conflict proper; prior to the great world-managerial battles, the end of the capitalist order must be assured. The belief that Nazism is “decadent capitalism” (which is besides prima facie implausible in that not Nazi Germany but France and England have displayed all the characteristics which have distinguished decadent cultures in past historical transitions) makes it impossible to explain reasonably the Nazi-Soviet Pact. From this belief followed the always-expected war between Germany and Russia, not the actual war to the death between Germany and the British Empire. The war between Germany and Russia is one of the managerial wars of the future, not of the anti-capitalist wars of yesterday and today. In the United States, by virtue of relative geographical isolation and enormous resources, the revolution lags somewhat behind, but it is already well enough advanced to indicate the same general direction and outcome. New Dealism, both in its practical measures and in its ideology, can now be seen to be a managerial movement and belief, at a more primitive level, with more capitalist hangovers, than Bolshevism or Nazism. This the “Tories” (that is, the capitalists) have, from shortly after the beginning, recognized and attested in 1940, by overwhelming and “principled” opposition to Roosevelt’s re-election. How ridiculous to attribute this opposition to failure on the part of the Tories to understand “their own true interests”! The Tories include many shrewd and intelligent men. They oppose New Dealism because they see that New Dealism in its consequences is directed against capitalism and thus against themselves. And already, plainly, the power is shifting from the capitalist hands into those of the managers and administrators, and their bureaucratic colleagues. The locus of sovereignty, already, has nearly completed its shift from parliament (Congress) to the administrative boards and bureaus. Private enterprise – necessarily the decisive basis of capitalism, for the capitalist is the private owner – gives way to the state. New Dealism is not Nazism, any more than Nazism is Bolshevism. There is not a formal identity among the three; but they are nonetheless linked historically. They are, all three, variant patterns of the way toward the same goal, differing in their stage of development as well as in their local background; they are three of the possible routes from capitalist society to managerial society. And in the war to come – which has, in reality, already started – the social transformation in the United States will leap forward.

We may, from the point of view of the managerial revolution, discover the historical significance of the first two world wars. In brief: the war of 1918 was the last great war of capitalism; the present war is the first great formative war of managerial society.

The first world war, we might say, was a final convulsive effort by capitalism to find a cure for the diseases which were already, below the skin, eating its substance away. Instead of a cure, as so often results from such desperate efforts, the disease was only spread and made mortal. The course of the war itself showed that capitalism was ending its days, by: the outright breaking off of an important section of the world (Russia) from the capitalist structure; the cumulative weakening of capitalist institutions in all nations together with the growth of new (managerial) institutions; the fact that, unlike the previous wars of capitalism, the war of 1914–18 was unprofitable for both victors and losers, whereas earlier wars were invariably profitable for the victors and often for the losers as well; the demonstrated inability to devise a workable peace.

From 1928 on, a renewed and far more devastating crisis set in, as shown not merely by the unparalleled economic depression but equally plainly by the consolidation of Stalinism and Nazism, the rupture of the state from its traditional capitalist limits in all other nations, and the beginning of the breakup of the political order (Manchuria, Ethiopia, Spain, the spread of Germany, and finally the new war).

The political division of the world into a comparatively large number of sovereign states, each with its armies and forts and currencies and tariffs and civil bureaucracies, is no longer workable for modern society with its complex division of labor and its needs for wider planning, control and trade exchanges. But in the Versailles peace, capitalism demonstrated that it was unable to smash the traditional political structure. The preservation of capitalism in the victorious powers (above all ion England, the heart of capitalist society) meant the continuation of capitalist-nationalist divisions, indeed their exaggeration; but such divisions, the last generation has proved, cannot any longer endure. The process of changing the world political structure involves also a change in the world social structure. The second world war comprises major initial steps in both these changes.

Already the world system of managerial society emerges: a comparatively small number of “super-states,” fighting for and dividing the world among themselves. An economic map suggests the probable outcome will be three great super-states, each based on one of the three main areas of advanced industry: north central Europe; the United States, especially the northeastern United States; Japan together with the east coast of China. In the future conflicts the managerial super-states of tomorrow cannot, in reality, hope to achieve a definitive military conquest of each other. The struggle will actually be, not for control over the central areas of advanced industry – the European area will already be ruled by Europeans, the East Asian by Asiatics, the United States area by Americans – but for prime shares in the rest of the world.

The world conflict, however, is not at all divorced from the internal social transformation. On the contrary, as so frequently in history, war speeds up and spreads the revolution. Those nations (Russia, Germany) which have gone furthest toward the managerial structure, carry their new institutions with their tanks and bombs. Their influence acts also by contagion in the nations which they have not conquered by direct military means. Within their own borders, they are forced to speed the rate of social change in order to keep going – a fact well symbolized by the increasing “radicalization” of Hitler’s speeches during the course of the war. And the opposing nations are compelled to adopt the managerial methods in order to meet the challenge.

The United States, for example, approaches the world conflict socially unprepared. Already it is discovering that the institutions of capitalism do not permit it to compete adequately with its great rivals on the economic, military and ideological fronts. The economic integration of Latin America, essential to the survival of the American super state, is blocked by the fact that from a capitalist point of view such integration is not profitable. The building of an adequate military machine is prevented by the same cause. And, ideologically, the concepts and slogans and beliefs of capitalism are unable to arouse the masses. Since it is unlikely that the United States will decline its potential place in the new world system, as the isolationists in effect advise, we may feel sure that at an ever-increasing rate the United States will take those means necessary for the fulfillment of its “destiny”: that is, will move evermore rapidly toward the managerial social structure. The managerial revolution is a world social revolution. Against a world revolution, even a six-ocean Navy would doubtless prove not enough.

Last updated on 8 November 2020