Our Managerial Class

In 1941, New York University philosopher James Burnham published a prophetic book, The Managerial Revolution: What Is Happening in the World, to critical acclaim. Fortune called it the most debated book of the year. Time had it on its annual most notable list. And it made The New York Times best sellers. It was translated into a dozen languages.

Burnham (1905-1987), an ex-Trotsykyite who became a founding editor of National Review and was accepted into the Church on his deathbed, held that self-destructing capitalism would not be replaced by socialism, which he thought “a mythical dream,” but by a managerial class that administers corporate policy.

In times of economic crisis, Burnham argued, the capitalist class – bankers, industrialists, merchants – will gradually be replaced by a new class of self-confident government managers. These administrative experts, directing engineers, and technocrats, will control ever-expanding government bureaus, agencies, and commissions that dictate how resources will be distributed. They will stress the state over individuals, will talk about planning more than free initiative, `jobs over opportunity, and as “economic conditions progressively decay, the reward allocated to the finance-capitalists [will] seem inordinate and unjustified.…” (Sound familiar?)

The managerial society will be promoted as the salvation of mankind ushering “in an age of plenty, sweetness, and light such that no man in his senses could do anything but welcome with rapture the prospect of the future.” This is now a familiar note in both domestic and international politics, but somehow the illusion raises few eyebrows.

Reflecting on the Depression era, Burnham concluded that the psychological effect of the New Deal had been “to undermine public confidence in capitalist ideas and rights and institutions” and “to prepare the minds of the masses for the acceptance of the managerial social structure.”

The Roosevelt administration created scores of federal agencies that governed by fiat. The National Recovery Administration (NRA), for instance, determined prices and wages throughout America until it was declared unconstitutional by the U.S. Supreme Court. Subscribing to a “high wage” theory that assumed efficient cost-cutting measures were bad, NRA managers created volumes of price codes; every business, big or small, had to comply. Policing the nation for violators, NRA agents actually jailed a Cleveland couple who owned a dry cleaner “because they cleaned suits for five cents less than the NRA codes provides.” Reviewing this managerial nightmare, the world’s leading liberal economist at the time, John Maynard Keynes, dryly conceded that the NRA “probably impedes recovery.”

Franklin Roosevelt’s rhetoric reflected managerial ideology. During the 1940 presidential campaign, Burnham found that FDR’s speeches “called for the support of all classes, including ‘production men’, ‘technicians in industry’ and ‘managers’ with one most notable exception: never by any of the usual American terms of ‘businessmen’, or ‘owners’ or ‘bankers’ or even ‘industry’, did he address himself to the capitalists.”

The emerging managerial class that Burnham described in the 1940s has continued to expand – even during Republican ascendency in the last third of the twentieth century. Today there are more than 400 Federal agencies, programs and activities that include the Administration for Children, Youth and Families (ACYF), Animal and Plant Health Inspection Service (APHIS), Community Relations Service (CRS), Economic Regulatory Administration (ERA), Office of Human Development Services (HDS), Labor-Management Services Administration (LMSA), New Community Development Corporation (NCDC), Office of Community Services (OCS), Public Health Service (PHS), Rehabilitation Services Administration (RSA), Senior Community Service Employment Program (SCSEP), Urban Development Action Grant (UDAG), Volunteer Management Support Program (VMSP), Work Incentive Program (WIN), and Young Volunteers in Action (YUA). If you think that’s a mouthful, wait until you see the coming growth of these alphabet agencies.

The present economic crisis opens whole new vistas to managerial types. New York Times columnist David Brooks claims the new standards will be dictated by what he calls “Ward Three morality.”

Ward Three is a neighborhood in northwest Washington, D.C., populated by regulators, staffers, lawyers and senior civil servants – the new managerial class, who belong to both political parties. According to Brooks, this crowd, even though they are powerful and feared at their workplaces, are resentful because their incomes do not match their sense of their own importance and cannot finance the lifestyle they believe they deserve. As a result, writes Brooks, “People in Ward Three have nationalized extravagance and privatized Puritanism.”

Don’t expect the agenda of this professional governing class to be limited to economics. They will reach into every home and church. Catholics should be especially wary of them. Their significance in the world hinges on the transformation of America into a Ward Three nation. For them, liberty means obedience to the enlightened values of a managerial elite, which is also becoming international in scope.

Some of them may still believe in God, but He lives in a different neighborhood, has odd views not shared by the very best people, and anyway there are multiple crises to deal with – and managerial opportunities.

George Marlin is the author of The American Catholic Voter: Two Hundred Years of Political Impact.

[Too many Americans[ are resentful because their incomes do not match their sense of their own importance and cannot finance the lifestyle they believe they deserve.
*****

This is what I have seen for years as the root cause of our economic implosion.

CEOs of large corporations watched movie stars and athletes earn 10 to 100 times the CEOs annual earnings, so gradually compensation packages began to be ratcheted up to a more “acceptable” range.

University presidents watched football coaches earn 5 times as much, so university presidents’ compensation packages went up. So heads of departments went up.

And so on and so on.

Politicians told themselves that their salary was below their value so accepted huge amounts of ‘gifts’ from lobbyists.

Much of this new money had to be invested, (parked somewhere), and was sent on to lovely folks running “high prestige” funds, etc.

We have been living in a land of greed and resentment, instead of true worth.

"These administrative experts, directing engineers, and technocrats, will control ever-expanding government bureaus, agencies, and commissions that dictate how resources will be distributed. They will stress the state over individuals, will talk about planning more than free initiative...The managerial society will be promoted as the salvation of mankind ushering “in an age of plenty, sweetness, and light such that no man in his senses could do anything but welcome with rapture the prospect of the future.” "

They have created something even more demonic.
The Managerial Messiah.

Like HAL in 2001: A Space Odyssey

"Big Brother" in Orwell's Nineteen Eighty-Four.

But it's not "only a movie."

HMBA©

Now you know why Timothy Guithner was a chisler. Didn’t make enough money in relation to his own self-importance

CEOs of large corporations watched movie stars and athletes earn 10 to 100 times the CEOs annual earnings, so gradually compensation packages began to be ratcheted up to a more “acceptable” range.

University presidents watched football coaches earn 5 times as much, so university presidents’ compensation packages went up.

And so on and so on. We have been living in a land of greed and resentment, instead of true worth.

What you said reminds me of all the 22 year old kids graduating from college the past 15 years and immediately making $80K + per year.

I think that for the past 15 or so years, the entire American economy was a "bubble", not just the real estate and credit markets.

University presidents watched football coaches earn 5 times as much, so university presidents’ compensation packages went up.

And so on and so on. We have been living in a land of greed and resentment, instead of true worth.

What you said reminds me of all the 22 year old kids graduating from college the past 15 years and immediately making $80K + per year.

I think that for the past 15 or so years, the entire American economy was a "bubble", not just the real estate and credit markets.

I agree.

During the Clinton years, we really had the Gay Nineties (in the traditional sense of the word) with the end of the Cold War Peace dividend, the beginnings of internet technology, and the end of large welfare populations (thsnks to a Republican Congress). All of these events combined to increase real take home pay for everyone and increase tax revenue to all stages of government.

Unfortunately, now we are reliving the parallel of the first decade of the Twentieth Century, where class envy was used to stir up the proletariat/underclass in many countries - leading to WWI in the next decade.

I believe we are reliving history. And the future is not pretty.

In Yugoslavia, Milorad Djilas wrote a critique of ‘the New Class’—in the Communist East, the commisars—as replacing the bourgoisie.

It is the same class—managers who cease to be stewards for the capitalists (shareholders) in the case of corporate management, for the intended beneficiaries in the case of non-profit management, or the citizens in the case of managers of government bureacracies, and look out for their own interests and the interests of their fellow-managers.

Notice that both Obama and Bush are members of the class: Bush with his MBA and business experience and Obama whose only substantive job before entering politics was managing a grant-funded foundation project. Jamie Gorelick, Franklin Raines, Ken Lay, and the CEOs and CFOs who have driven banks and car companies into the ground while other managers who sit on boards of directors payed them fat bonuses not tied to actually delivering value to their shareholders, are all members of the Western “New Class”.

They gained power as all of us became capitalists through pension-fund holdings and mutual funds in IRA’s. Managers voted our (often fractional) shares for us at corporate shareholder meetings and always (surprise) voted for the interests of management, even when they conflicted with the interests of capital.

I think the only real way out of the problem is to have laws that forbid moving easily between corporate boards and goverment, and to require that all pension funds and mutual funds have annual votes of the beneficiaries and shareholders to issue binding instructions on how to vote corporate shares on governance issues including executive compensation.

Of course, that’s not what we’ll get under the current administration—instead the New Class will consolidate power within the government, and through the government over commerce—at least unless the “Tea Party” movement puts a stop to it.

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