New Deal — were permanent, and when the Germans lostnthe war and several New Deal agencies were abolished afternRoosevelt’s death, Burnham’s critics seized upon thesendevelopments to argue that his prophecies and analysis hadnbeen discredited. Finally, Burnham wrote in an aggressive,nnot to say brutal, style that was often too dismissive of criticsnand alternative social theories, and he expressed his ownnthesis in schematic and sometimes poorly defined language.nTo a large extent, these flaws also derived from several yearsnof immersion in Marxist polemics, the literature of which isnpermeated by the same vices.nNevertheless, for all its errors. The Managerial Revolutionnuncovered what is one of the central truths of the 20thncentury and elaborated it into an interpretation of thenpresent age, and despite the criticisms leveled at it for the lastnhalf century, it has exerted a profound influence onnsubsequent social and political thought. Not only do thenworks of Galbraith, Mills, Daniel Bell, Robert Nisbet, andnPeter Drucker owe a large debt to Burnham, but also KadnWittfogel wrote in Oriental Despotism that “social sciencenis indebted to James Burnham for pointing to the powernpotential inherent in managerial control” and expressed hisnown “appreciation of the contribution made by Burnhamnthrough his concept of managerial leadership.” JacquesnEllul also acknowledged Burnham’s influence on his ownnthought in The Technological Society, and David Riesmannin The Lonely Crowd could write of “Marx, Mosca,nMichels, Pareto, Weber, Veblen, or Burnham,” placing himnand his work in the same category as the major socialnthinkers of the last hundred years. It is now well establishednthat George Orwell, who wrote two long essays on Burnhamnin the 1940’s, based Nineteen Eighty-Four on thenprophecies of The Managerial Revolution, and in one formnor another Burnham’s ideas have been recapitulated byndozens of writers, thinkers, and scholars in several differentnfields.nThe theory of the managerial revolution as Burnhamnformulated it in 1941 holds that Marxism is correct thatncapitalism, in the sense of privately owned and operatednbusiness enterprises seeking profit, is historically in decline.nIt disagrees with Marxism that what is replacing capitalismnand the society capitalism created is a socialist order in whichnthe proletariat will rule. Instead of socialist revolution,nBurnham argued that the managers of large corporate firmsnwere beginning to form a new ruling class and that theynwould merge with similar groups in the modern bureaucraticnstate. The result would be an order in which the state andnthe economy would be “fused.” Formal nationalization ofnthe means of production might or might not occur, but thenreality, apart from the formal and legal arrangements, wouldnbe a monolithic concentration of power in the hands of thendominant managerial class in state, union, and corporation.nOne of the foundations of this theory was the 1933 worknof Adolf A. Berle and Gardiner G. Means entitlednThe Modern Corporation and Private Property. Berie andnMeans had argued that modern corporate businesses werenno longer controlled or operated by their owners (stockhold- •ners), partly because the stockholders were too dispersed tonexercise direct control and parfly because they lacked thennecessary technical expertise to direct the corporationnintelligently. Those who actually did direct the corporationnwere the managers, and they gradually assumed de factoncontrol from the stockholders by virtue of their superiornexpertise and through their manipulation of modern corporationnlaw.nBurnham believed that Berie and Means’ work confirmednhis own theory, though they had discussed “management”nonly in the formal, legalistic sense of those who sit on thencorporate boards of directors. It was Burnham’s innovationnto extend the concept of “manager” beyond this narrow,nlegalistic meaning to refer to anyone who possessed technicalnskills that are applicable to social, economic, and politicalnfunctions. The “managers” in Burnham’s sense thus includedn”administrators, experts, directing engineers, productionnexecutives, propaganda specialists, technocrats,”nand such managers had little incentive to preserve privatenproperty because they held their position not throughnownership (as had the old capitalist entrepreneurs or thencorporate stockholders) but by virtue of their technicalnexpertise. Hence there was at least a latent conflict ofninterest between the stockholders (and any other socialngroup with interests in private property) and the managers.nThe perception of this conflict was not original withnBurnham. Berle and Means had also emphasized it, and itnwas noted by John Maynard Keynes and indeed by bothnAdam Smith and Karl Marx in discussions of the joint stockncompanies of early capitalism.nBurnham also argued, again parallel with Marxism, thatnthe displacement of one ruling class based on privatenproperty by a new class based on technical skills would havenprofound social and political implications, and it was preciselynthose implications that were the most controversial andnthe most disturbing parts of The Managerial Revolution.nGapitalist society had developed a limited state, parliamentaryngovernment, organization in the form of sovereignnnation-states, and a dominant “belief-pattern” of individualismnin the economy, art, morality, religion, and socialnmanners. These institutions reflected the interests andnbeliefs of the dominant capitalist ruling class, which neededna limited government that its representatives could controlnand found an ethic of individualism useful as a rationale fornits own economic interests.nOnce the capitalist class had been overthrown, Burnhamnargued, there would be no further need for these institutionsnand beliefs. The new managerial class would demand ancollectivist economy, an unlimited state, a governmentncontrolled by bureaucratic administrators justifying itselfnthrough formulas of scientific and rationalistic efficiencynrather than government by parliamentarians operating onnthe basis of legal and constitutionalist codes, a transnationalnor global organization in place of national sovereignty, andnan ethic of collectivism that would emphasize the duty ofnthe individual to conform and subordinate his interests andnidentity to those of some larger collective category — thenparty, the race, the people, the class — which in reality wasnsimply an abstraction that disguised the interests of thenruling managerial elite. The phrase “managerial revolution”nhas survived in economic textbooks mainly to refer to then”separation of ownership and control” that both Burnhamnand Berle and Means noted, but in Burnham’s usage itnrefers not only to this process by which managers come tonnnJANUARY 1992/15n