Management theories

Truthdig has posted this interesting essay by the ever-interesting William Pfaff about the ideas of management theorist James Burnham. Burnham was a Trotskyist--"during the period when Trotskyism was a serious matter among American intellectuals," Pfaff says--before evolving into the loopy sort of extreme right-winger who worships Ayn Rand.

Pfaff analyzes Burnham's 1941 book, The Managerial Revolution, and concludes that it accurately predicted an undemocratic U.S. society run by the managers--not the owners--of large corporations:

Burnham’s Trotskyist period ended with a declaration in 1940 that he had decided that Marxism was merely a form of imperialistic class politics, and he proposed a new theory which said that the managerial class was the new force in the class struggle, seizing privilege and control over society. Capitalism, he said, as a form of social organization, was finished. His new managerial class was taking over in German Nazism, Soviet Stalinism and in F.D.R.’s New Deal.

Pfaff goes on to say:

Burnham’s theory that a new class of professional and technocratic managers were taking control of modern economies accompanied another phenomenon of the wartime and postwar years in the U.S. Intellectually moribund university business schools were reawakened by the influence of “scientific” and strategic management theories and practices developed by military staffs and at such institutions as the RAND Corporation. These made use of mathematical models, behavioral theory and operations research (usually a glamorized and heavily numerate version of empirical or common-sense analysis) and gave business executives an aura of scientific professionalism.

This combination eventually gave us the version of global finance and industry that has given us world crisis. It generally is run by managers who, without necessarily investing a farthing of their own money, control the American (and increasingly European) economies, enriching themselves by assigning to one another titanic emoluments as rewards for having been hired, for carrying out executive duties that earlier professional managers performed for unexceptional rewards and eventually rewarding themselves for leaving their jobs.

This reminded me, actually, of the annoying management guru Peter Drucker, whose worship of the managerial class was accompanied by a subtle contempt for democracy and ordinary working people. A quick Google search turned up a review of Burnham's book by Drucker. Drucker loved it--except for this:

(I)f society is to continue free, it must be asserted that ideas are not economically determined, that they are not "myths" invented to cover economic power; and above all, it must be re-asserted that power must be legitimate and that legitimacy is not a function of economic reality but one of the basic beliefs of society. If Mr. Burnham thinks that the totalitarian power wielded by the managers will be "legitimate" simply because it mirrors the existing structure of industrial production, he denies all possibility
of right or wrong in politics.

Drucker was an interesting and complicated guy, actually, who came by his distrust of government power as a Jew who fled the Nazis. He really wanted to believe in the benevolence of the managerial class.

William Pfaff seems to believe that Burnham--though he later abandoned these ideas--was able to accurately predict the fate of the world in The Managerial Revolution. I think he's wrong. There is nothing so difficult to predict as the future, as George Orwell argues in the passage below. Pfaff refers several times to Orwell's analysis of Burnham's ideas, and I think this is the essay that Pfaff mentions:

Power worship blurs political judgement because it leads, almost unavoidably, to the belief that present trends will continue. Whoever is winning at the moment will always seem to be invincible. If the Japanese have conquered south Asia, then they will keep south Asia for ever, if the Germans have captured Tobruk, they will infallibly capture Cairo; if the Russians are in Berlin, it will not be long before they are in London: and so on. This habit of mind leads also to the belief that things will happen more quickly, completely, and catastrophically than they ever do in practice. The rise and fall of empires, the disappearance of cultures and religions, are expected to happen with earthquake suddenness, and processes which have barely started are talked about as though they were already at an end. Burnham's writings are full of apocalyptic visions. Nations, governments, classes and social systems are constantly described as expanding, contracting, decaying, dissolving, toppling, crashing, crumbling, crystallising, and, in general, behaving in an unstable and melodramatic way. The slowness of historical change, the fact that any epoch always contains a great deal of the last epoch, is never sufficiently allowed for. Such a manner of thinking is bound to lead to mistaken prophecies, because, even when it gauges the direction of events rightly, it will miscalculate their tempo. Within the space of five years Burnham foretold the domination of Russia by Germany and of Germany by Russia. In each case he was obeying the same instinct: the instinct to bow down before the conqueror of the moment, to accept the existing trend as irreversible. With this in mind one can criticise his theory in a broader way.

In other words, Burnham did identify a powerful trend in society, but there is no reason to insist that this is how everything will end up.