Neoconservatism was born out of former Trotskyites that became anti-Communists at the end of the Second World War. After the campus protests and student movements of the late 1960s and early ‘70s, their repulsion to the waving of the Little Red Books and protests at Ivy League schools shifted these New Deal Truman Democrats into the hands of the Republican Party. There, early neoconservatives like Irving Kristol and Norman Podhoretz made the “neoliberals” into “neoconservatives.” But long before those who became the body of the neoconservatives was another Trotskyite-turned-anti-communist conservative: James Burnham. And, unlike the other neoconservatives, much of his writing may be of use today.
Most of Burnham’s popular writing in National Review was focused on rebuking liberalism and what he saw as its unwillingness to confront international communism. Burnham was a hawk—a former Trotskyite one at that—which is why he is often lumped together with Sidney Hook as one of the grandfathers of neoconservatism. But Burnham broke into the public sphere, not initially with his hawkish foreign policy, but with a systematic analysis of what was going on in the world: The Managerial Revolution. This text, especially in light of the work of Ludwig von Mises, can be a useful tool of analysis.
It is no surprise that this text has been revisited lately by many a conservative. That isn’t to say that Burnham’s analysis is airtight. You can detect heavy lingering of Burnham’s Marxist past in his discussion of the inevitably this “managerial revolution.” Burnham seems to articulate, at least in 1941, an idea not unsimilar from Marx’s himself of stages of history that are inevitably coming and cannot be reversed. He also seems to believe that “capitalism” as a system has not always been inherent in human nature. While the socio-political system of capitalism has not always existed as we know them, acting man, production, and exchange have always existed.
Setting aside these small areas, much of his theory is useful and insightful. Burnham’s theory holds that capitalism is being replaced slowly but surely by a managerial class that secures further control of the economy and the state. Burnham lays the blame of the transition at the failures of capitalism, criticisms not too unlike that of Marx himself. Burnham claims that the technological necessities of modern production requires managers to oversee production. Burnham claims that these managers gain increasing control over production much more than the capitalists.
Burnham’s more modern acolyte, Sam Francis, continued his analysis by expanding far more greatly on the role of the “administrative state” in this revolution. Burnham saw the fusion of state and managers as precisely the end state of the Managerial Revolution. Writing in 1941, the Soviet Union, in his eyes, was hardly communistic and far more managerial in nature. Lenin had not given the workers control over industry, but rather placed managers in charge of production. The National Socialists in Germany placed all industry under the command of the Reich, even if they preserved the illusion of private ownership. Each was a managerial state, run by managers, propelled by managerial ideologies.
We can strengthen Burnham’s narrative of the 20th century by more precisely identifying the entrance of the managerial class into free enterprise. This is where Ludwig von Mises’s 1944 book Bureaucracy can both strengthen and explain the origins of Burnham’s managerial revolution. The administrative class is not the same as management in general. Management has existed as long as modern capitalism has, and before as well. Mises lauds the ability of managers to search for profits at the direction of the owners of any given firm. The ability to choose managers and reap profit is evidence enough of control.
Increasingly, then and today, we see a management class that wrestles control away from making profits and into unprofitable activities. The managers and employees that do this are increasingly given further protections. This isn’t a purely technological phenomenon. What came about was bureaucracy. Bureaucracy in government seeps into free enterprise. Mises best clarifies this process.
Government bureaucracy fails precisely because it provides goods and services while straying from the profit-loss system. Allocation of resources, from labor to land, is done arbitrarily and no efficiency can be meaningfully discerned because there are no price signals. Bureaucracy is the modus operandi of any function of government, operating off of code and legislation rather than market prices. Inefficiency is not the issue Burnham is concerned with though. He is far more focused on the expansion of the managerial class and its wedding to the state apparatus.
What Mises describes is bureaucratic imposition on free enterprise. After describing several interventionist policies that intrude on private enterprise to punish the profit motive he writes:
What is common to all these instances is the fact that the enterprise is no longer interested in increasing its profits. It loses the incentive to lower costs and to do its job as efficiently and as cheaply as possible. . . . With the increasing government interference with business it became necessary to appoint executives whose main duty it was to smooth away difficulties with the authorities. First it was only one vice-president in charge of “affairs referring to government administration.” Later the requirement for the president and for all vice-president was to be in good standing with the government and the political parties.
Compliance, rather than profit, becomes necessary. Burnham’s “managers” are hired to help steer the firm in obedience of regulation and code. They are given control to steer away from profit. These new bureaucratic managers find their whole justification for employment—their entire role in society—in the arbitrary edict of government. They will continually seek, as a part of the state apparatus, to expand their share of any enterprise. Further codes and rules are advocated for under whichever ideology is popular at the time in order to expand the bureaucrat’s job. It is a self-perpetuating cycle. The government creates a parasite on free enterprise that quickly metastasizes and expands. Bureaucrats in government interfere with business and insert an unproductive role that only creates further opportunities for inefficiency.
Labor laws require inner enforcement and reporting to the government. This means new, unproductive managers. These managers soon become “Human Resources” whose role is to report and ensure compliance to state edict and, as we have seen in recent years, to create new justifications for their own existence and resources. These managers are backed by laws, so they cannot just be removed. They might be displaced but their roles need to be filled. They seize further control of everyday processes, so that the capitalist management can no longer seek profit, as is their proper role. Burnham failed to explain the entrance mechanism of the managerial elite, but Mises came to complete the analysis.
Mises further agreed with Burnham on his view of Nazism and Communism as both being managerial, or bureaucratic, management. Mises spends much time discussing what might be seen as Russian and German varieties that differ only in aesthetic, and expounds on the similarities in his books Omnipotent Government and Planned Chaos.
Mises presents us with a cold mechanical analysis, whilst Burnham applies the theory to the world. Every expansion of government interference in markets can be seen as a further expansion of the bureaucratic administrative class preying on capitalist production. The managerial revolution that Burnham describes is started by governments, and often with the aid of businessmen trying to get a leg up on one another, and grows quickly.
DEI initiatives, for one, are another means by which the managerial class justifies itself and expands further. Resources are dragged away from what is profitable, valuable, and popular and into whatever concocted ideology is made that gives them more power. There may be genuine believers in the ideology that has been created, but that is secondary to the power grab that was sought after by creating it.
Thus, the fusion of state and economy—as the state slowly saps away more and more resources from the productive economy and funnels it further to self-motivated bureaucrats. Nothing quite sufficiently describes much of our modern dilemma as the wed narratives of Burnham and Mises. Failures of efficiency, collecting of incompetent ideologues in businesses, expanding bureaucracy, all of it is entwined in self-interested spiraling interventionism.
Burnham may have been an architect for the Cold War, but The Managerial Revolution is worth a read. Much of his analysis is corroborated by his contemporary: our very own, Ludwig von Mises, who only strengthens the narrative that Burnham describes. In order to reverse this revolution, which Burnham perhaps did not foresee, one must have a proper vision of the enemy. That enemy is the administrative-bureaucratic managerial class. It must be overthrown to restore markets, and efficiency, to America.
