<nettime> Managerial capitalism?

[Brian Holmes <bhcontinentaldrift@gmail.com>]

On 09/17/2017 05:28 PM, Örsan Şenalp wrote:

> The agency of managerial class, which is preparing to claim full economic
> and political power, unified, absolute is Musk, and Schmidt.
> The way Trump translates such thrust, and by reversing towards national
> capitalists, sounds and looks like fascism
> Which was a form of managerial class power-claim; though was not aiming
> absolute power.

Orsan, just in the spirit of good debate, I'd like to say that I see 
only one country in the world right now where "managerial capitalism" is 
in the ascendant, that's China. Everywhere else the state-corporate 
connection has eroded and private ownership has come back seriously to 
the fore.

Probably most nettimers never heard of James Burnham's 1941 book, "The 
Managerial Revolution." In it, Burnham described the eclipse of the 
nineteenth-century owner-entrepreneur and the rise of corporate 
bureaucratic structures working in close cooperation with the state. The 
idea had already been formulated as early as 1932 by A.A. Berle and 
Gardiner Means in their book "The Modern Corporation and Private 
Property." They found that the rise of shareholding "has destroyed the 
unity that we commonly call property," transferring control from de jure 
owners to de facto managers. The notion that modern corporations 
represented a form of social property was used in turn by the Roosevelt 
administration to justify vast new regulatory powers of the state, which 
were legitimated by the rather obvious need for an adequate steering 
mechanism to get through the Great Depression. Burnham, even though he 
was in the process of becoming a reactionary, asserted in substance that 
the New Deal was now the universal form of the mid-twentieth-century 
state, visible also in the total mobilization of the Nazis and in the 
Soviet five year plans. During the war (1942-45 for the Yanks) the 
American state took direct control of corporate activity, to the point 
where the new look of capitalism became a lot harder to ignore. In the 
decades that followed, liberal commentators such as Galbraith or Raymond 
Aron agreed in substance with Burnham, as did the British Trotskyist 
Tony Cliff, in his 1955 book "State Capitalism in Russia."

OK, end of history lesson. Let's talk about the present.

In the Brexit and Trump campaigns, massive nostalgia was expressed for 
the prosperity of the 1950s, with flag-waving nationalism standing in 
for the unutterable reality of state capitalism. In the US, Steve Bannon 
represented the demand for "economic nationalism." That demand remains 
the centerpiece of Trump's rhetoric, but otherwise it's going nowhere. 
The news is full of owner-entrepreneurs: Zuckerberg, Musk, Bezos, Brin, 
Page, Koch (times 3), Buffet, etc. Their rise is the culmination of a 
deliberate plan to reverse the New Deal, carried out by the libertarian 
capitalists of the 1960s and 70s whose names we all now know (if you 
don't, just check out Jane Meyer's "Dark Money," in that book the US 
libertarian contingent is characterized in all its gory details). 
Shareholder activism and the imperative of return on investment has put 
an end to the comfortable distance between managers and owners. 
Government Sachs (I mean, the preponderance of major bankers in US and 
European administrations) appears much more as a hostile takeover than 
as a merger of equals. What's missing in this equation is just Hillary: 
the chance for the oligarchs to make an enduring political deal.  But 
it's not there, the instrumental rationalism that characterized Cold War 
varieties of state capitalism is nowhere to be found. What you have 
instead is the classic plague that Marx denounced: uncoordinated market 
chaos.

Today in his speech at the United Nations, Trump declared unlimited 
national sovereignty - to the point of nuking North Korea if necessary. 
Is it managerial capitalism? Hardly. For that you need good old 
bureaucratic deliberation, which is what put the chill in the Cold War. 
Instead, hot Trump at the UN is just the rantings of a psycopathic 
narcissist appealing to all the Americans who have been left in the 
lurch by the arbitrary market-based evolution of chaotic neoliberal 
capitalism, where rationality is a quaint relic of how your grandfather 
did things.

The hallmarks of contemporary society are the daily quest for maximum 
profit, plus blind navigation with no care for the future. The 
mid-twentieth century attempt to create a steering mechanism has been 
entirely abandoned. Obviously populations (including myself by the way) 
are absolutely terrified about what might happen next. Many are even 
stupid enough to vote for fools who promise whatever, a return to the 
good old days. However, only one country continues to deploy the steady 
deliberate power that everyone else rejected sometime in the late 1960s.

Alone among governing elites, the Chinese Communist Party continues to 
apply reason to reality. The problems with its ratio are obvious: it was 
"glorious" (ie rational) to get rich in the 1980s and 90s, according to 
the famous axiom of Deng Xioaping. Except unfortunately that meant that 
China became the low-wage, high-pollution manufacturing platform for 
Western corporations, or the "imperial handmaid" of the US, as one New 
Left Review article put it. In 2008 the Chinese elites realized their 
folly and set about correcting their course, so as to develop their own 
middle-class consumer base and start moving their industries up the 
value chain. Now, with the "One Belt, One Road" policy, they want to 
extend their brand of industrial civilization along a Central Asian 
transportation corridor stretching all the way to the biggest consumer 
market in the world, namely the European Union. The point of their new 
plan is to do like the US managerial capitalists did in the 1950s: use 
geopolitical domination to ensure vast corporate markets, not only for 
light consumer goods but also for heavy producer goods. This is what an 
integrated state-corporate complex does. It's the time-honored, 
twentieth-century way of resolving a major crisis.

I don't believe in the Chinese Communist Party any more than I believed 
in Jimmy Carter or Ronald Reagan. However I do see the CCP practicing a 
form of managerial capitalism, and I think that if they were able to 
bring ecological imperatives into their state-led pattern of development 
(as they seem to be trying to do) that might have real benefits for 
humanity and maybe even other species. As for the rest, I think that the 
gap between the rhetoric of economic nationalism and the reality of 
owner-entrepreneurialism is simply the proof that in the so-called West, 
the crisis that emerged in 2008 continues on unabated. How could it not? 
No Western polity has invented any new power of collective governance on 
the scale of the nation, let alone on the global scale. The postwar 
liberal world-order is broken and nothing has replaced it. China may 
well invent something new, beyond managerial capitalism. It's normal, 
they're the new hegemon. Meanwhile the so-called West has regressed to a 
chaotic owner-entrepreneurialism, and if no new steering mechanism is 
found we will all sink into an ersatz fascism without a plan, which is 
just the panic response to market chaos.

Is panic a synonym of managerial capitalism? I don't think so. But maybe 
I have misunderstood you, Orsan. The point of all good debate is to 
thrash out understandings, misunderstandings and counter-understandings, 
until some sharable form of clarity emerges. I aim at nothing else.

all the best, Brian
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