Man & Managers

THE MANAGERIAL REVOLUTION --James Burnham--John Day ($2.50).

ADVENTURES OF A WHITE-COLLAR MAN --Alfred P. Sloan Jr.--Doubleday, Doran ($2).

Seldom do Americans eagerly read such a book as this--a modest, 285-page exposition of abstract political theory called The Managerial Revolution. But few books of political theory pack such a punch as this does. Even its slyly casual subtitle promises to tell them something they want desperately to know--What Is Happening in the World.

Its author is James Burnham, assistant professor of philosophy at New York University, onetime co-editor of The New International, theoretical magazine of U.S. Trotskyists. He writes deliberately unemotional English with primer simplicity. The tone of his book is amoral, nonpartisan, scientific. The theory he expounds makes The Managerial Revolution as morbidly fascinating as a text book vivisection, possibly the most sensational book of political theory since The Revolution of Nihilism.

Author Burnham's theory: World War II is a social revolution, but not the kind of social revolution almost everybody thinks it is. When World War II is finished, capitalism and socialism will both be finished. After some 50 years of ruthless struggle, there will emerge a "domination and exploitation by a ruling class of an extremity and absoluteness never before known." Author Burnham calls his new class "The Managers"--the one class in society which is indispensable in making modern industry productive. Moreover, in two decisive sectors (Germany with most of Europe; Russia with half of Asia) the managerial revolution has already won. What remains is mopping up, division of the British spoils.

First test of any new theory is that it must explain more simply and completely than the old theories the greatest number of things that need explaining. First test for Author Burnham was to explain the stupendous paradoxes that baffle and confuse the observers of World War II:

> How did the Nazis in eight years turn bankrupt, impoverished, faction-torn, truncated, disarmed Germany into the greatest military power in history?

> How could the Nazis destroy all freedom, brutally persecute intelligent minorities, regiment the individual, half-starve the whole population, and yet retain the support of an overwhelming majority of Germans?

> Why was France, hitherto Europe's No. 1 military power, smashed to pieces by the Nazis in 60 days?

>Why is Britain, the world's No. 1 empire, fighting for its life with every chance of losing if unaided?

> How are dictatorships like Germany and Russia able to win the loyalty of some citizens of democratic countries and turn them into fifth columnists?

> Why is Naziism, which seized power as the defender of capitalism, liquidating capitalism?

> What is the common basic factor which many people feel running through Bolshevism, Naziism, the New Deal?

> Why does the moral superiority which makes the people of the democracies think of themselves as the children of light, constantly result in doubt, skepticism, confusion, unsureness about objectives, diffusion of effort, widespread paralysis of the will to act, dread of defeat, while the children of totalitarian darkness constantly assert an immoral superiority which they translate into initiative, decision, unity of purpose, invincible organization, victory in diplomacy, espionage, war?

The answer, says Author Burnham softly, and the common factor in all these paradoxes, is to be found in the character of what he calls the managerial revolution. He says: "

We are now in a period of social transition ... a period characterized . . . by an unusually rapid rate of change of the most important economic, social, political and cultural institutions of society. . . What is occurring in this transition is a drive for social dominance, for power and privilege, for the position of ruling class, by the social group or class of the managers. ..."

Their immediate drive, says Burnham, is to control the instruments of production. They do not want to own them. The managers prefer to control them through their control of the state. "The state--that is, the institutions which comprise the state--will ... be the 'property' of the managers. And that will be quite enough to place them in the position of ruling class."

By managers, Author Burnham means the men who organize and coordinate the various elements of production "so that the different materials, tools, machines, plants, workers are all available at the proper place and moment and in the proper numbers." In business, managers are sometimes called " 'production managers,' operating executives, superintendents, administrative engineers, supervisory technicians." In government they are called administrators, commissioners, bureau heads. "I mean by managers, in short, those who . . . are actually managing, on its technical side, the actual process of production, no matter what the legal and financial form--individual, corporate, governmental. . . ."

The relative strength of the two groups in a period of social change, Burnham implies in two casually grim sentences: "The position, role and function of the managers are in no way dependent upon the maintenance of capitalist property and economic relations (even if many of the managers themselves think so); they depend upon the technical nature of ... modern production." "The position, role and function of the most privileged of all groups, the finance-capitalists, are, however, entirely bound up with capitalist property and economic relations. . . ."

There are excellent chapters in The Managerial Revolution on Russia (the most developed managerial society); on Germany (a somewhat less developed managerial society). But U.S. readers will easily understand what Burnham is driving at from his account of the New Deal.

Says Burnham: "We must be careful not to identify the New Deal and New Dealism with Franklin Roosevelt and his acts. Roosevelt is a brilliant and demagogic popular politician, who did not in the least create, but merely rides when it fits his purposes, the New Deal. The New Deal sprang from the inner structural drives of modern society, the forces that are operating to end capitalism and begin a new type of social organization, the same forces which at later stages and under different local circumstances produced the revolution in Russia and Germany.

"The firmest representatives of the New Deal are not Roosevelt or the other conspicuous 'New Deal politicians,' but the younger group of administrators, experts, technicians, bureaucrats, who have been finding places throughout the state apparatus: not merely those who specialize in political technique, in writing up laws with concealed 'jokers,' in handing Roosevelt a dramatic new idea, but also those who are doing the actual running of the extending government enterprises: in short, managers. These men include some of the clearest-headed of all managers to be found in any country. They are confident and aggressive. Though many of them have some background in Marxism, they have no faith in the masses of such a sort as to lead them to believe in the ideal of a free, classless society. At the same time, they are sometimes openly scornful of capitalists and capitalist ideas. They ... are not so squeamish as to insist that their words should coincide with their actions and aims."

For some eight years these New Dealers have been trying to steer the U.S. from capitalism to a managerial society. Some of their methods: 1) doubling government expenditures in five years; 2) making agriculture wholly dependent on state subsidy and control; 3) moving toward state control of foreign trade; 4) shrinking private control over capital funds by acts governing the issuance of and trading in securities; 5) divorcing money from its metallic base, making it a currency managed by the state; 6) running up annual deficits of billions of dollars, while using the national debt as an instrument of managerial social policy; 7) imposing taxes to secure social and political ends rather than income; 8) weakening capital relative to themselves by curtailing pri vate property rights in measure after measure ; 9 ) the taking over by the executive bureaus of the attributes and func tions of sovereignty: "the bureaus become the de facto 'law makers.' " Burnham believes that the gradual reduction of parliaments (the congress of Soviets, the Reichstag) to a mere sounding board is an essential feature of the managerial revolution. "With occasional petty rebellions," Congress, he notes, has sunk "lower and lower as sovereignty shifted from the parliament toward the bureaus and agencies. ... By 1940, it was plain that Congress no longer possessed even the war-making power, the crux of sovereignty. The Constitutional provision could not stand against the structural changes in modern society and in the nature of modern war: the decisions about war and peace had left the control of the parliament."

As evidence of this shift he cites: 1) the Bremen affair; 2) freezing of foreign funds in line with policies never submitted to Congress; 3) sending abroad of confidential personal agents instead of regular diplomatic officials; 4) release of military supplies and secrets to warring powers; 5) the destroyer-base deal; 6) the lend-lease provisions. "The parliament has so far lost even its confidence that it did not dare protest."

But, cautions Author Burnham, "the New Deal is not Stalinism and not Naziism. It is . . . far more primitive with respect to managerial development, and capitalism is not yet over in the U.S. But no candid observer, friend or enemy of the New Deal, can deny that in terms of economic, social, political, ideological changes from traditional capitalism, the New Deal moves in the same direction as Stalinism and Naziism. The New Deal is a phase of the transition process from capitalism to managerial society." Readers of The Managerial Revolution may wonder whether Author Burnham does not carry neutrality too far--not once in his brilliant exposition does he make a slip, write the word fascist instead of manager.

If a strong antidote is wanted after reading The Managerial Revolution, the book to read is Adventures of a White-Collar Man, the autobiography that General Motors' Chairman of the Board Alfred Pritchard Sloan Jr. wrote in collaboration with Boyden Sparkes. The book, which ran serially in the Saturday Evening Post, is: 1) a lively account of the pioneering days of the U.S. automobile industry; 2) an intimate synoptic history of General Motors; 3) the success story of Alfred P. Sloan Jr., who started as a $12.50-a-week draftsman in the Hyatt Roller Bearing Co., about three years later was running the company.

But the book contains something more than a wealth of anecdotes about W. C. Durant, William Knudsen, Henry Ford, the Dodge Brothers, the Fisher Brothers, many another automotive bigshot--something not generally understood or valued in the U.S., something that must be read mostly between the lines: the story of what Grade A business management means and can achieve. It is the inadvertent self-revelation of a resourceful organizing genius who is a really great manager, but not in Mr. Burnham's sense. The greatness of Sloan's achievement is that he took the vast rambling collection of companies which Promoter Durant put together with all a promoter's nonchalance, and made it into a well-knit, well-run company.

If there are flaws in Mr. Burnham's theory that governmental managers will eventually take over the world's economy, the greatest one is that, so far, government managers have yet to prove--in Russia, Germany or the U.S.--that they can permanently run the economic machine with sufficiently satisfactory results to keep mankind in bondage to them, run it with an efficiency anywhere near equal to that with which Mr. Sloan runs General Motors.

The importance of the comparison is that Manager Sloan is a democrat. He is a democrat not only because he is a human, just and generous man, but because he could not operate in any other way. He did not learn democracy in books. His democracy is implicit in his life. It is realistic, practical, unsentimental. His success with General Motors was that he literally made his management a democracy of brains, for he knows that democracy is the vital fluid of great corporate organizations, holding their personnel from top to bottom in a creative balance to each other. When for any reason corporate democracy fails, so to that extent does the corporation.

"[My] conception of the management scheme of a great industrial organization," he says, ". . . is to divide it into as many parts as consistently can be done, place in charge of each part the most capable executive that can be found, develop a system of coordination . . . welding all parts together in the common interests of a joint enterprise . . . developing ability and initiative . . . developing men and giving them an opportunity to exercise their talents, both in their own interests as well as in that of the business." The managerial revolutionists cannot practice this kind of democracy which might save their great centralizations: they cannot understand it.

Only occasionally is Sloan baffled: "What the end is to be I do not know, but I do know that notwithstanding all the wonders we are accomplishing in technological progress, we just can't keep up with the politicians' ability to spend our money."

This mood does not make Manager Sloan call for a managerial revolution. He thinks he knows a better way. "A dynamic economy is essential to progress and the continuation of free enterprise. ... A static economy means decay and ultimate regimentation. . . . Some see danger in bigness. They fear the concentration of economic power. . . . That is in a degree true. It simply means, however, that industrial management must expand its horizon of responsibility. ... It must consider the impact of its operations on the economy as a whole in relation to the social and economic welfare of the entire community. . . . Those charged with great industrial responsibility must become industrial statesmen."

This file is automatically generated by a robot program, so reader's discretion is required.