Say what you will about Stalin … he was no Babbitt.

> The rulers of this new society will be the people
> who effectively control the means of production:
> that is, business executives, technicians,
> bureaucrats and soldiers, lumped together by
> Burnham under the name of ‘managers’. These people
> will eliminate the old capitalist class, crush
> the working class, and so organize society that
> all power and economic privilege remain in their
> own hands.

The only thing this seems to have missed is that the ruling class might share a modest percentage of the swag with the non-members of the ruling class (all levels) to avoid any violent confrontation, which was done in the 1940-1970 period (and is now being reversed). Other than that this seems like an exact description of the current situation in the US to me.

Cranky

I would like to know: to what extent was it ‘common wisdom’ that capitalism and, by extension, liberal democracy, was doomed in the 30’s and 40’s. To what degree did this suspicion survive U.S. victory in WW II?

I think it actually was Orwell who used the Soviet (not US) victory in the Second World War to back up this belief. His argument was that, after their initial defeat, the liberal capitalist countries had had to become more centrally planned in order to fight the centrally planned Axis powers – and that the greatest part of the victory had been won by the centrally plannedest of all the anti-Axis powers, i.e. the Soviet Union. This, for him, proved the superiority (in economic, not moral terms) of centrally planned economies.

There is a lot of sf in the magazines in the 1930s which assumes that Capitalism is doomed. The Prosperity Fund was my favourite: everyone is encouraged to invest with the investments ripening in the millenium. The sudden spending splurge causes massive hyper inflation and the system collapses.

He predicts corporate capitalism without the capitalism, which is certainly worth half a point credit. But what he really gets wrong is the idea that rational planning will control everything.

Doesn’t it? What are we defining “rational planning” as? Something that begins and ends with centralized bureaucratic efficiency? Clearly we don’t have that. But I seriously doubt the real controllers of international capital in this world–the folks at Davos, the people setting the agenda at the WTO, the number crunchers who determine what the IMF will demand of client countries, etc.–think that what they’re doing lacks a rational basis, or that they are dubious of any effort to plan out years and decades in advance, which they clearly, in fact, do.

I write a lot about Burnham and Orwell and their American receptions in my book Dictators, Democracy and American Public Culture (a shameless plug, yes, but I have so few opportunities to shamelessly plug the thing).

A few points…

1. Burnham was not at all alone in the view that capitalism was doomed. Schumpeter’s Capitalism, Socialism, and Democracy, which appeared the following year, is another good example of the genre. And there were many who made less apocalyptic predictions about capitalism and communism growing together into some sort of mixed economic system (e.g. Pitirim Sorokin and VP Henry Wallace).

2. Both Burnham and Schumpeter became more influential in the U.S. after the war than during it. For a variety of reasons both built larger audiences in the late 1940s for their wartime books.

3. Orwell’s Nineteen Eighty-Four is, in certain ways, a “what if Burnham is right” thought experiment, though I think a good case can be made that Orwell thinks that Burnham (and O’Brien and Winston Smith) underestimate the Proles.

For all that Burnham got wrong, that is an impressively accurate prediction, wouldn’t you say? ;)

What I don’t understand is why he thought those people would somehow not be the same as the “capitalist class”.

Heinlein’s Beyond This Horizon and Asimov’s stories in I, Robot, envisage a world where the economy is run by robots or computers.

Not really communist worlds, but not capitalist ones.

I agree with Ben and Jacob. The debate in that period seems to be over what was killing capitalism and what would replace it, not about its demise as such. You can go back to Keynes’ studied ironies in the 1925 “Short View of Russia” — he could assert even then that capitalism had played itself out, and contrast it with the religious fervor of Russian communism.

There’s a link here to your epic H.G. Wells post, no? Folks were really impressed with the rise of management, experts, technicians.

…capitalism and, by extension, liberal democracy…

What is exactly is this ‘liberal democracy’, and why is it an extension of capitalism? My understanding is that there was a very strong social-democratic movement in Europe in the 1930s. It was weakened and in some cases (Germany) simply destroyed by Stalin&Co. via Comintern. The rest is history.

Folks were really impressed with the rise of management, experts, technicians.

Which reminds me that Walter Lippman should be added to our growing list of pessimists . . .

The Managerial Revolution sounds like a book that I will love. It seems like it takes a lot of ideas I already think and expands upon them greatly. I am definitely going to read it soon. Thanks!

It’s an older book, though. Are there any newer books that make the same argument in a newer context, which I could read after?

What is exactly is this ‘liberal democracy’, and why is it an extension of capitalism?

A liberal democracy is a democracy that is also liberal, in the sense of guaranteeing individual rights.

If those rights include arbitrarily-large abstract property rights, as they usually do, then the corresponding proportion of the economy owned by people who play by those financial rules is going to be describable as capitalist.

My understanding is that there was a very strong social-democratic movement in Europe in the 1930s.

Crucially, the key movement in both Germany and Spain was democratic-socialist not social-democratic. They, at least nominally, wanted to get a 51% majority then pass a law abolishing capitalism, not gradually progress towards a future in which the capitalist part of the economy was a small, specialist sector.

In general, I’m not quite clear on what the overall balance was in that time of people believing capitalism simply couldn’t carry on working on it’s own terms, versus those who thought something better was relatively easily attainable.

Stuff about how France fell so quickly not just because of German military superiority but because “they had no heart for war because the bourgeois ideologies by which they they were appealed to no longer had power to move their hearts.”

Note btw how this kind of “analysis,” properly satirized at 15 above, is the secular version of the old “our military victories show that God is with us” fallacy, which had great rhetorical force at least up through the 17th century.

The notion that France fell in 1940 simply because the French army had a bad plan and bad generals is just too simple, like Oswald’s having been the lone gunman. It fails to engage superior minds.

So, crudely, is it classical bourgeois capitalism –> Monopoly/Finanzkapital –> post-war mixed economy? Surely Burnham and Orwell didn’t neglect the first rupture, circa the 1870s.

I’ll state my question first: to what extent did people believe, in the 30’s and early 40’s, that capitalism was doomed?

Isn’t this why Hayek wrote “The Road to Serfdom” — that is, because such an understanding was so common?

He was sort of the MC5 of neocons.

He was a working model of the new paleo-cybernetic culture in action? Details please.

“So, crudely, is it classical bourgeois capitalism—Monopoly/Finanzkapital—> post-war mixed economy? Surely Burnham and Orwell didn’t neglect the first rupture, circa the 1870s.”

To some extent, that’s what they’re arguing – that the classical bourgeois capitalism is the real capitalism, while managerial capitalism is something radically different. The problem is the weight that they give to that change – is managerial capitalism a big enough difference from the earlier capitalism to support a massive over-arching theory like Burnham/Orwell’s?

There’s no doubt that managerial capitalism is very different from classical capitalism. But I would argue that the bad effects of both capitalisms are pretty much similar, and stem from the still large similarities between the two capitalisms. If anything, I would argue that managerial capitalism actually slightly alleviates some (though certainly not all) of the downsides of classical capitalism.

Going even further, I might argue an even bolder thesis: that American capitalism to some moderate extent regressed from full-fledge managerial capitalism back to classical capitalism over the period 1975 to the present, partially due to neoclassical economics (which takes as a model classical capitalism and ignores managerial capitalism) taking over as the dominant economic ideology. And some of American economic problems would actually be moderated by a return to a more full-fledged understanding of managerial capitalism rather than fantasies about the long-departed classic capitalism.

“Milosz wrote with the benefit of hindsight.”

How much hindsight did he have in 1953? Maybe some, but not much. The “capitalism is doomed, socialism is more efficient” was still a pretty pervasive mindset at this point (SU was still growing at impressive rates) and Stalin was still kicking.

John,

I don’t know what the Gallup polls said, but books like John Strachey’s The Coming Struggle for Power (1933; Modern Library [!] 1935) and George Soule’s The Coming American Revolution (1934) were best-sellers. So: I think the short answer is that the common American wisdom was that free-market capitalism was doomed.

Of course, that didn’t mean that the “Man on the Street” was necessarily predisposed to communism, either, which is why the whole literature and discussion during that period is so interesting.

Plus: what Ben, et. al., said about FDR…

Soru,
If those rights include arbitrarily-large abstract property rights, as they usually do, then the corresponding proportion of the economy owned by people who play by those financial rules is going to be describable as capitalist.

The way I see it, capitalism is certainly a possibility under a liberal democracy, but not a requirement. Suppose we were talking about the (hypothetical) demise of the organized religions. Would it, then, make sense to say “organized religion and, by extension, liberal democracy, was doomed“, because ‘liberal democracy’ presupposes freedom of religion? I don’t think so.

Why, any liberal-democratic form of collective ownership of the means of production, I suppose. Syndicalism is probably the most popular idea, but maybe some sort of communitarianism as well or a combination of both. I realize that I don’t have any empirical claims to make here, but as long as we’re talking about intellectual prophecies – is there an obvious contradiction? I don’t see it.

We’re basically talking about J.K. Galbraith’s technostructure here; the management, and specifically the engineering bureaucracy, of big organisations is in charge, not the largely theoretical owners (or the largely irrelevant CEO). So much capital comes from retained profit or government that the banks and shareholders’ influence is negligible.

Which sounds fair enough up until the 1980s, when we saw a ferocious reassertion of shareholder power, C-level authority, and supposed entrepreneurship.

Beyond This Horizon is a terrifying sympathetic portrayal of libertarianism.

I don’t think of Beyond This Horizon as particularly libertarian. There is a computer, or set of computers, that manages the economy, there appears to be some sort of universal basic income, including special payments to people who are control naturals (not sure if that was the exact phrase, but people who are not genetically-engineered), the population is being purposefully managed for genetic fitness – eg there is technology that could avoid women having to go through pregnancy but it’s not used due to fears that humanity could become dependent on it and then go extinct if something goes wrong and the technology is not available in the future, and there is substantial government spending on issues of no economic value.

I found it an interesting view of a post-scarcity economy that avoided the cliche of the whole society being built on some deep dark secret (see Star Trek whenever they find a utopian planet). But nothing like as libertarian a society as The Moon Is A Harsh Mistress.

In the 1930s, Robert Heinlein was actually one of the fairly small number of US followers of the Social Credit movement, which was most successful in Canada and New Zealand. His first novel, For Us, the Living (written in the late ’30s) is an attempt to imagine a society organized by Socred principles.

Just a footnote to Jacob Levy’s last: as readers of the Berlin essay he mentions — ‘Historical Inevitability’ — may remember, the piece is directed partly against Berlin’s friend and polemical opponent E.H. Carr, who offers another data-point reflecting the widespread belief that liberal democracy was doomed — a point he made in a number of books and articles, before, during, and after WWII (though he did switch from being well-disposed toward Nazism/Fascism in the 1930s, to being a committed advocate for the Soviet Union during and after the War).
Also: Karl Mannheim’s writings from the late ’30s and early ’40s make a larger point about the disintegration and ‘sickness’ of society; liberal democracy’s doom is portrayed as but one part of this more general malaise. Indeed, I think one can locate this whole line of thought within the more general ‘crisis of the West’-type-thinking that goes back to the ’20s.

It would indeed be hyperbolic to characterise Carr as a ‘Nazi sympathizer’. Which is why I did not, in fact, do so. I merely noted that he was, at one point (and before the full extent of Nazi brutality became apparent) ‘well-disposed’ to Nazi and Fascist policies. This was not a matter of just thinking that Germany had gotten a ‘raw deal’ at Versailles; in addition(as documented in the highly sympathetic biography of Carr by his sometime student Jonathan Haslam) Carr believed that Nazi Germany and Fascist Italy were, through their embrace of collectivism. He did, in fact, write some pretty complimentary stuff about Nazi Germany in its early years — though he did also hedge these statements with (in retrospect, insufficient) qualifications.
As for Carr on the Soviet Union, I suspect that we simply disagree what an ‘objective’ view of the Russian Revolution and subsequent Leninist and Stalinist policy were. But Carr certainly did act as an advocate of the Soviet Union, defending it as democratic during some of the worst years of Stalinist repression, and trying to suppress more critical (perhaps too critical, though I tend to think not) studies of Soviet policy such as Leonard Schapiro’s (again, there is much detail in Haslam’s book).
I may, indeed, have been hyperbolic in using the term ‘doomed’ to describe Carr’s estimation of liberal democracy; I forget if he uses the word (I suspect that I was confusing passages from The New Society with some of Harold Laski’s writings — another figure who thought classical liberalism was, yes, doomed). But Carr does explicitly portray liberal democracy as socially out-dated, as resting on assumptions about human nature and society that were no longer sustainable (and in some cases never had been). The form of democracy that he believed was appropriate for modern society was mass democracy — or as Carr called it in earlier books (The Soviet Impact on the Western World and Democracy in International Affairs, from 1945 and 1946), ‘totalitarian democracy’ (a term which, so far as I can tell, Carr introduced into English — it appeared seemingly simultaneously in French). We can perhaps quibble over terminology, and debate the merits of this view; but it seems to me to be what John Holbo was initially talking about.
(Incidentally, and tying this back more closely to the initial post, Berlin explicitly associated Carr and Burnham as part of the same trend — a ‘realist’ celebration of brute strength — in a 1951 letter to George Kennan.)

Thanks, Louis, for the warning about relying on Haslam; that’s interesting, and I’ll have to give the book another look.
Also — and sorry to belabor this point — I didn’t claim that Carr was a Stalinist during the ’30s; as I said, he seemed to turn to championing Soviet Russia during WWII. In this, he was far from unique — once the USSR became Britain’s (and the U.S.’s) ally against Nazism, there was a widespread shift from criticism and condemnation to celebration of Soviet Russia. Carr was somewhat unusual in that he continued to defend the USSR against criticism after the Cold War had set in. I also do think that Carr was not only *explaining* the Soviet ‘critique’ of Western liberal democracy, but also endorsed it. And, in the debates of the time, this would have appeared not only as a criticism of Western societies, but a defense of Soviet policy.

Oh dear. I feel I’m being a terrible pedant here … but once more unto the breach …
I didn’t say Laski repudiated democracy. I said he believed that CLASSICAL LIBERALISM (and thus, a specifically capitalist, individualist form of democracy) was ‘doomed’ by the forces of history (or, if you prefer, historical development). That is what John Holbo’s original question was about — the view that capitalism was doomed — so Laski seemed appropriate to bring up. (Laski did also seem to sway — in his usual fashion — between favouring more reformist and more revolutionary means to instituting a new system, but that’s another matter.)