The traditional Marxist view of the composition of capitalism as a socio-economic system sees it divided into two class components. There is a ruling class who assert that position due to their ownership of the means of production. And there is a working class who serve to create profit through the offer of their labour in return for a wage.
Philosophically, Marx and Engels – borrowing from the thinking of Hegel – advanced the following political view:
‘The advance of industry, whose involuntary promoter is the bourgeoisie, replaces the isolation of the labourers, due to competition, by their revolutionary combination, due to association. The development of Modern Industry, therefore, cuts from under its feet the very foundation on which the bourgeoisie produces and appropriates products. What the bourgeoisie, therefore, produces, above all, is its own gravediggers. Its fall and the victory of the proletariat are equally inevitable.’ (p6)
Such a perspective assumes a somewhat religious complexion, insofar as it suggests that the triumph of the working class is in some way unavoidable. Problematically for this school of thought, of course, is that the overthrow of capitalism has not occurred as Marx and Engels forecast in light of their faith in it. Despite workers being in close workplace proximity, the predicted usurpation of power had simply not occurred – and the capitalist class apparently remained firmly in control.
Many continue to unthinkingly adhere to the Marxist fantasy of the inevitability of capitalist collapse. Adherence to the traditional perspective remains a test of faith in the morass of unthinking Leftism. Elsewhere, however, more thoughtful theorists – like those in the Frankfurt School and individual neo-marxist thinkers who shifted their attention from economic mechanisms to socio-cultural constraints – have tried to make sense of the fact that capitalism prevails.
Owners and Managers
Critically, in 1941, an American Trotskyist called James Burnham offered a fascinating insight into what appeared to be going on in the world at that time. He refuted the notion that the Soviet Union remained a workers’ state and looked at how actually existing socialism, national socialism, and social democratic regimes shared a number of similarities. His analysis led him to declare that capitalism had not been replaced by socialism, as Marx had declared as unavoidable; instead, there had been a subtle revolution wherein managerialism had triumphed.
Burnham argued that managers had usurped the owners of capitalist property – and established themselves as a new ruling class that could be detected in all political regimes at that time, whether Stalinist, Nazi, or driven by Roosevelt’s New Deal. In practice, for Burnham, this meant that,
‘The managers will exercise their control over the instruments of production and gain preference in the distribution of 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.’ (p66)
These observations put Burnham firmly at odds with those who continued to subscribe to the political binary of the bourgeoisie-proletariat. Additionally, as with those assuming a more traditionalist view of capitalism, he failed to acknowledge the capacity for systems to adjust themselves in the course of their existence. Hence, whilst state intrusion into the mechanics of capitalist economies did prevail for a while – in terms of the Leninist revolutionary seizure of the means of production; the Nazi invasion of the German state and its active control of that nation’s industry, and the post-war nationalisation that was undertaken by the Labour government in the UK – ultimately private ownership of economic elements reasserted itself in the late 20th and early 21st Centuries through the triumph of neoliberalism in respect of governance.
That said, Burnham’s fundamental observations that firstly, to an extent, ownership of resources had dissipated in response to the expansion of commercial institutions and their embrace of the notion of public offerings in terms of shareholding – and that, secondly, as a result of this embrace of stocks and shares, senior managers found themselves in far greater overall economic control of capitalist societies remain insightful. This was the case regardless of whether these were free market societies like the United States or state capitalist polities, such as Russia and China.
Overall, then, Burnham’s observation that the growth of management in light of the expansion and increased complexity of the capitalist economy had engendered a major shift in power from individual ownership to positions of corporate control seems extremely accurate. The dominance of the bourgeoisie analysed by Marx and his followers has been drastically reduced by the growth in terms of both numbers and social power of the managerial class.
A detailed exposition of this position can be found in a detailed book from 2017 by Gérard Duménil and Dominique Lévy entitled Managerial Capitalism. These authors argue that,
‘Contemporary societies are hybrid social formations, combinations of capitalism and managerialism, and, as such, are denoted “managerial capitalism.” The hybrid character is manifested in all respects, regarding class patterns, the pervasiveness of market mechanisms, the formation of income, etc. And these traits are in constant evolution depending on the advance of socialization.’ (p57)
Importantly, their analysis focuses on the shifts that have occurred in terms of corporate structures and economic foundations that have led to shifts in ownership of companies. But it also acknowledges the way in which – alongside these adjustments – the state itself has expanded into the economy – thereby extending managerialism from the shopfloor into the capitalist marketplace.
In Chapter 2 of this four part article, I will explore contemporary managerialism and its relationship to feudal systems and practices.
Radical OD 