Drawing on powerful arguments and demonstrating extraordinary insights, in The Managerial Revolution (1941) James Burnham investigates the rise of a new ruling class – the managers – who promised to unseat wealthy capitalists from their prime position in the mid-twentieth-century economy. Although written over seven decades ago, the themes and arguments from this book still resonate in today’s society.
At the time when the author was writing, the dawn of a new era seemed inevitable. Society seemed to be transitioning from one type to another – from a capitalist society to a managerial one. But before we can understand what this new world would look like, we must take a close look at capitalism.
Since the end of the Middle Ages, capitalism has been the dominant political and economic structure in both the United States and much of Europe.
But what are the defining features of a capitalist society?
The first important characteristic of capitalism relates to production. In a capitalist society, each of the produced goods, whether their purpose is to feed or entertain us, is viewed as a commodity. This means that everything has a monetary value or price. From houses to gold to a person’s labor – everything in a capitalist society is looked at from the point of view of its monetary exchange value rather than its ability to satisfy any actual need.
Secondly, under capitalism, money plays a crucial second function in the economy, separate from its role as a medium of exchange. Namely, money is used as capital. In a capitalist society, money can be transformed into machines, raw materials and labor, which can make products. These products are then sold, thereby retranslating the initial capital into money again. In other words, under capitalism, money makes money.
Another defining feature of capitalist society is that the production of goods is carried out for profit. For example, what determines whether a shoe factory can continue to produce shoes is not whether local children are going barefoot, but whether the shoes can be sold at a profit on the market.
Finally, under capitalism, people can be broadly separated into two social classes. One class is composed of the individuals who own the instruments of production, such as factories, machines and railroads, and who hire others to operate these means of production. These individuals are known as capitalists and their ownership of the instruments of production, as well as their ability to give themselves a bigger share of the resulting products, makes them the ruling class.
The second class of citizens in a capitalist society are usually referred to as the proletariat or the workers. These are the people who sell their labor to the owners, do not own any of the instruments of production themselves, and who typically receive a smaller, unequal share of the products.
You probably see all these aspects of capitalism in society today, but will they still be around tomorrow?