In 2020, the ruling managerial elite achieved a major victory in affirming the managerial state as the sole paradigm by which the entire world is to be ruled during their reign.
The managerial state and corollary managerial economy is nothing new, but it is increasingly being noticed for the first time by many people, as it is now comfortable with very overt intrusions upon the rights many people believed they had. Many people mistakenly regard their discovery of the managerial economy as its genesis and the loss of these rights as something new; but it is not new – the fact is, their perception of having these rights was merely a convenient illusion that was upheld until this point – and the managerial economy has been running along smoothly for decades.
Unequipped with the framework and corresponding language to understand and describe this apparently new phenomenon, many people continue resorting to the age-old dichotomy of capitalism and socialism; but this is not a true dichotomy – indeed, these system are opposed to one another, but they do not represent the only possible alternatives to one another. The notion that they do is extremely useful to any third way that wishes to camouflage itself under this cover.
The managerial elite win both coming and going – among the voices contributing critiques the managerial regime, most either diagnose capitalism or socialism as the problem. Both are wrong.
James Burnham describes capitalist economy and private property rights thus:
capitalist economy is the field of “private enterprise,” based upon private property rights vested in individuals as individuals; an invasion by the state beyond a certain point into the economic process could only mean the destruction of those individual property rights—in fact even if not in legal theory—and therefore the end of capitalist economic relationships.
80 years later, the state has invaded much further, almost indescribably further, into the economics process. We are in the era not of the capitalist economy, but the managerial economy. Capitalism is long gone, its light already fading in the early 20th century. In the managed economy, there are only managed property rights. Individual or private property rights may apparently emerge through the delegation of the disposition of property by the managers to individuals, but these “rights” are contingent and are subject to revocation at any time. They are not fundamentally recognized by the managers; indeed, they are not recognized by many of the masses who live under this system, either.
Burnham describes the managerial economy thus:
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.
its structure is based upon the state ownership and control of the major instruments of production, with the state in turn controlled by, and acting in the primary interests of, the managers. This in turn means the disappearance of capitalist private property rights vested in individuals.
Whilst many will read the above and simply declare this to be socialism or a type of socialism, such a categorization and the subsequent associated terminology is not suited to the actual facts of the manner in which the managerial economy operates, as compared to the capitalist or Marxist socialist economy.
Marxist socialists are correct in their understanding that managerial society is not the same as the socialist ideal. Burnham describes the socialist ideal as “classless, fully democratic, and international.” He elaborates on these thus:
By “classless” is meant that in socialist society no person or group of persons has, directly or indirectly, any property rights in the instruments of production different from those possessed by every other person and group; it amounts to the same thing to say that in socialist society there are no property rights in the instruments of production, since a property right has meaning only if it differentiates the status of those who have it from that of those who do not. The democracy of the hypothetical socialist society is to extend, and completely, to all social spheres—political, economic, and social. And socialist society is to be organized on an international scale; if this cannot be done completely in the first stages, at least this is to be the tendency of socialism. If not at once international, it is to be always internationalist—as indeed it would have to be if it is ever to become actually international.
Given that managerial society reserves special property rights for the managers, allowing the managers to function as the class of ruling elite, managerial society is not classless, and therefore not socialist. We can even say that it is not directionally socialist. The society is certainly not becoming more classless – going beyond the typical left-wing complaints regarding the one percent, right-wing complaints about the persecution of MAGA people, and complaints from both wings regarding big business of any variety, there is now a formal first and second class person distinction created by vaccine culture. Regardless of what one thinks about the virus and vaccines, it is an indisputable fact that this class distinction exists. Secondarily, while managerial society is becoming more international, it is certainly not becoming more democratic. Political democracy has expanded, but the general democratization of society has not occurred.
The logical framework of Marxist socialism regards socialism as being the only alternative to capitalism; therefore, if the society is not socialist, as we have shown, socialists deduce, correctly within their framework, that society must be capitalist. Marxist socialist intellectuals may be wrong, but they are not stupid, and any attempt to dismiss their misunderstanding as mere stupidity is surely too dull an explanation to be sound.
While it may not be socialism, what was described above is certainly not capitalism, either. The trick in disambiguating exactly what managerial society is from both socialism and capitalism is examining the relationship between ownership and control, and the indirect means by why the mangers have come into ownership of the means of production via having control over them, outside of the typical capitalist means of assuming control (trade) and the socialist means (confiscation).
Ownership and control are, in actuality, the same thing. To control something is to own it. One cannot be the owner of something without being able to exact control over it. A salient example of this is cryptocurrency stored in an exchange versus cryptocurrency stored on a private wallet. In the strict, libertarian sense, the right of ownership over cryptocurrency purchased and stored on an exchange ought to be absolute – but, when conducting political science, we are interested in the empirical facts and not ideological conceptions. In this sense, the ownership would be contingent. Burnham defines ownership more precisely as:
control over access to the object in question and preferential treatment in the distribution of its products.
This definition is essentially the same as the Misesian definition:
Ownership means full control of the services that can be derived from a good.
In the age prior to that of the managerial elite, finance capitalists compromised the ruling elite. In their era, a capitalist could purchase some good or service, and direct that good or service to be disposed of as they saw fit.
In the age of the managerial elite, control over the means of production has shifted away from the finance capitalists and into the hands of the managers. Finance capitalists still have a role to play, much as aristocrats and monarchs still played a role in the regimes of the capitalists. Under the managers, the capitalists provide capital for various enterprises, and the managers direct that capital through their systems to achieve certain ends. The finance capitalists’ ends of profits must still be met – much as the monarchs still required certain dignities under the capitalists to cooperate – and thus, profit is generated for the capitalists. Profit is generated for the managers as well – but as the ruling elite, their interest is not merely profit, but in fortifying their own position as ruling elite, much as the feudal lords profited as a ruling elite, without profit being their sole or highest end.
So it is no surprise that capitalists exist and that capitalists can make profit – but we should not mistake their existence as confirmation that they remain a ruling class, any more than we should have made the mistake of believing that monarchies were the ruling class of the late 19th century.
We can end with one final, concrete example. Jeff Bezos purchased the Washington Post. He finances, sponsors, or patronizes it. He does not actually own it under our definitions, because he cannot direct it, so he does not control it. Jeff Bezos is part of the ruling elite to the extent that he is a manager. He is much more a manager of Amazon than he is a manager of the Post. He is a capitalist in relation to the Post. Ownership within a managerial state requires being a manager. One can only be a manager by integrating oneself into the society and systems of managers. Such a position cannot be purchased through capital alone. Much like the capitalists of old, who had their control subverted by managers, we should not be surprised if Bezos’s relation to Amazon itself is now more capitalist than manager. To the extent that he is a capitalist rather than manager, we ought to be less concerned with him, as he is thus less a ruling elite and more of a capitalist elite. Still an elite, still very capable, but not the core of the regime.
The example of Bezos being unable to control the Post despite being legally the controller of it is actually precisely the same problem one President Trump had, but this is a tangent for another time….