Avoiding Bureaucracy, Managerialism and Technocracy

The basis of any society is the way its members reorganised for the production of wealth. Where a section only of society controls the means of production then we can speak of a class society.

The class that controls the means of production can be said to constitute a stable ruling and privileged class when it:
1. controls the use of the means of production (possession);
2. controls the state (rule);
3. has preferential treatment in the allocation of goods for consumption (privilege).

These three features — possession, rule and privilege— don’t always necessarily or automatically go together. It is possible for a possessing class to be neither the ruling class nor a privileged class. For instance, it might not actually control the state but just have its protection against the excluded majority. Another minority class might control the state and use it to allocate itself, at the expense of the possessing class, a privileged consumption. In this case, there is a socially and politically unstable situation in which the possessing class, starting from the finally decisive fact of controlling the means whereby society lives, will strive to capture state power for itself—strive to become the ruling class as well the possessing class. This done, it can easily end the privileged consumption of the previous ruling class.

 Marx quotes Dr. Ure as saying in 1840, that not the industrial capitalists but the industrial managers “are the soul of our industrial system.” (Capital, vol. 3). It is of course true as the managerial theorists say that the unity between owners of capital and the actual direction of production has been ruptured.

Joint-stock companies (corporations) operate not merely with their own capital but other people. Of them, Marx says, “Capital … is here directly endowed with the form of social capital…as distinguished from private capital and assumes the form of social enterprise as distinguished from private enterprise. It is the abolition of capital as private property within the boundaries of capitalist production itself.” Marx adds, that it leads to the “transformation of the actually functioning capitalist into a mere manager, and administrator of other peoples capital and the owners of capital…into mere money capitalists.” (Capital, Vol. 3)

 Marx did not believe the development of the corporation to be a step towards socialism. Collective capital, he said, although it gave impetus to the social character of wealth production could never overcome, but only intensify the antagonism of socially produced wealth and private appropriation. He also added that the development of the corporation and “the credit system, brings a new set of parasites…promoters, speculators…a whole system of swindling by means of corporation juggling, stock jobbing and stock speculation. It is private production without the control of private property.” (Capital, Vol. 3)

Marx dealt with the replacement of the capitalists as industrial entrepreneurs by managers. The early capitalists, while not producing surplus value, supervised the activities of those who did. This appropriation of unpaid labour was called the profits of an enterprise. The economic apologists of the day also called it the wages of superintendence. With the vast growth of capitalism, the function of the capitalist as a representative of capital became delegated to managers, whose wages of superintendence was fixed at the market price and was but a mere fraction of what the capitalist had appropriated for such work. Managers are then agents for the capitalists and hence agents for capital. Managers constitute the elite of the amorphous mass called by some people the new “middle class.” It includes civil servants, professional workers, office staff, salesmen, etc. The requirement of large scale capitalism has brought about a considerable increase of these types of employees.

The Marxist model gives primacy to the concept of the “mode of production”. It is the mode of production that essentially defines the kind of society we live in and by this is meant the combination of relations and forces of production. Technological determinists, on the other hand, tend to focus on the “forces of production”.

Marxists point out that the world was not divided into two opposing social systems each rooted in a distinctive mode of production. There was instead a single world system based on a capitalist mode of production with so-called communist countries representing a variant of this mode of production—namely, capitalism run by the state, or “state capitalism”.

 A few months before the outbreak of the Second World War there was published in Paris “La bureaucratisation du monde” by Bruno Rizzi. The book’s main theme was that capitalism was being replaced throughout the world by a new social system called “bureaucratic collectivism”. This was, like capitalism, a class-divided society based on the exploitation of the producers but one in which the capitalists had been replaced as the exploiting class by a bureaucracy that collectively owned the means of production through the State. The transition to Bureaucratic Collectivism, said Rizzi, had been completed in Russia, was well on the way to completion in Nazi Germany and Fascist Italy and had also begun in the old capitalist democracies with measures such as the New Deal in America.

The idea that Russia under Stalin was pro-working class was so patently absurd that, towards the end of the Thirties, it began to be challenged even within the Trotskyist movement.

In America, James Burnham argued that, although Russia was not capitalist, it could not be described as a “Workers’ State” either.  Burnham called this new society “managerial society” and not “bureaucratic collectivism”.

This is significant and a reason for concluding that Burnham did not simply plagiarise Rizzi. For Burnham rejected the term “bureaucratic collectivism” precisely because he held that the new ruling class would not be the political bureaucrats but rather the industrial managers, who were directly involved in production. In the final chapter of his book, he distinguished his theory from what he called “the similar theory of the bureaucratic revolution”, a reference to theories such as Rizzi’s. Further, Burnham had suggested that Russia might be some sort of “non- bourgeois, non-proletarian State” before Rizzi wrote his book. Rizzi continued to regard the Russian revolution as a proletarian one. Burnham, on the other hand, had no hesitation in declaring: “The Russian revolution was not a socialist revolution . . . but a managerial revolution.” 

In ensuing discussions, all sorts of ideas were put forward even if only to be rejected by those who brought them up: that the bureaucracy was a class; that Russia was state capitalist; that a class could own without legal property titles; that Stalinist Russia and Nazi Germany had the same social system.

 Since both Rizzi’s and Burnham’s books were written, the capitalist class in the West are as firmly established as ever and show no signs of being ousted by industrial managers or a political bureaucracy.

It is true that in Russia the exploiting class collectively own the means of production and do not have legal property titles to it, and in this respect, they do differ from the capitalist class of the West. But, to use a phrase of Marx’s which comes up in Rizzi’s book, this does not necessarily mean that “the specific economic form in which unpaid surplus-labour is pumped out of the direct producers” is different. In fact, it is basically the same: the producers are separated from the means of production and, in order to live, are forced to sell their labour-power for a wage. In the course of their work, they create, over and above the value of their labour-power, a surplus-value which is realised when the commodities in which it is embodied are sold. Thus in Russia, as in the West, the working class are exploited through the wages system. All the other features and categories of capitalism also exist in Russia: commodity production, value, profits, capital accumulation, and so on. The difference – in the form of ownership but not of exploitation – between Russia and capitalism in the West is best indicated by referring to Russia as State capitalism.

Supporters and opponents alike often mistakenly analyse this tendency towards state capitalism as socialist, early references are made to “state-socialism”. Indeed, as a result of years of misuse, the word “socialism” has now virtually come to mean “state capitalism” for most people. But socialism must be clearly distinguished from state capitalism otherwise the working class will be intervening on the political scene only to support state capital against private capital, just as in the last century they intervened to support the industrial capitalists against the landed aristocracy.

Rizzi and Burnham rejected the view that Russia could be described as state capitalism. Both of them regarded Russia as a new class society: “bureaucratic collectivism” for Rizzi and “managerial society” for Burnham. Later, Solidarity and “Paul Cardan” made a contribution. Then more recently the Parecon model creator, Michael Albert, talked similarly of a co-ordinator class that existed in Russia.

This rejection of a state capitalist analysis was an inheritance from their Trotskyist past where they had learned to identify capitalism with private capitalism. For Trotsky, capitalism could not exist without private property titles vested in individuals; for him “state capitalism” was state control of private capitalist industry.

There is a variation of the managerial theme which holds that the complex character of automation will produce a race of technicians upon whom the capitalists will be so utterly dependent that they and the managers will be able to hold the big capital owners to ransom and impose their own terms upon the system. In substance, these arguments were put forward by technocrats thirty years ago. They argued that the ever-growing complex technical evolution of the system would result in the power of control passing to technicians and administrators, who would be small and compact enough to hold the capitalists to ransom. Experience shows, however, that the technical requirements of capitalism have never failed in the long run to bring about a generous, sometimes over-generous supply of necessary technicians, and there is no reason to suppose that automation technicians either now or in the future will not be as liberally forthcoming as they have been in the past.

To the structure of this alleged new ruling class, there has been added another component, the bureaucrats. Although what role they are supposed to play in the economy and in what manner they fuse with the managers, is never made concretely clear.

Claims that the Bureaucratic State is not capitalism at all, but a new kind of social arrangement in which the power of the capitalist class has been broken and the control of society passed into the hands of “the managerial class,” managers, supervisors, highly paid technicians, etc. This view owes its origin to an American doctrine known as “Technocracy.” The fundamental error common to both these schools of thought was to assume that capitalism in every country must have identical features, political and economic, forgetting that in each case exists a different historical background which is bound to give varying trends and twists to each country’s evolution.

Both Russian and Western commentators have called Bogdanov an advocate of “technocracy” and the promoter of a “cult of the engineer.” Bogdanov’s fiction and his political writings suggest that he expected the coming revolution against capitalism to lead to a technocratic society. This was because the workers lacked the knowledge and initiative to seize control of social affairs for themselves. One reason for this situation was the hierarchical and authoritarian nature of the capitalist production process. Another was the hierarchical and authoritarian mode of organisation of the Bolshevik party, although Bogdanov considered such organisation necessary and inevitable—he was a Bolshevik, after all. This, however, was not a prospect that Bogdanov welcomed or idealised. He knew that real socialism (or communism) could only be a fully democratic society. And he knew that only a highly cultured Metropolis – another 1920’s dystopic vision and knowledgeable working class could achieve real socialism

Parecon’s Coordinators

The thesis of coordinatorism asserts, namely, that the USSR was a new mode of production based on a new ruling class dominating and exploiting the immediate producers.

So under the Soviet system, the immediate producers are dominated and exploited by a ruling class just like under capitalism. The fact that the soviet ruling class were fixated with converting the surplus-value of the exploited immediate producers into further expanding capital, the essence of the mode of capitalist production, is surely beyond contention. So why is it not capitalism?

The new coordinating class organised themselves collectively into the body of the state which was the instrument that confronted and exploited the working class. If the state in the USSR was not the collective of the coordinating class exploiting the workers what was it? We can split hairs over coordinating class capitalism, coordinatorism, bureaucratic collectivism, or state capitalism, the workers being exploited however would probably fail to see or be interested in any differences in the mode, if there is any. Proponents of Parecon, Leninists and Trotskyists share some basic common ideas.

The suggestion that the ideas presented by the Parecon people on the coordinator class are somehow new is nothing but a chimaera, it is nothing even upon a superficial analysis but a fusion of old Leninist and Trotskyist ideas rehashed and repackaged with a libertarian label.

The Parecon position is essentially that it is not the Soviet economic model itself that is or was the problem but how it was managed. The problem was that a coordinating managerial class, the Communist Party, had monopolised the decision-making process, economic planning, taking it away from the control of the working class. The new managerial class then proceeded to use that monopoly of power to serve their own interests at the expense of the non-coordinating class.

In fact, Albert’s ideas are related to those of Trotsky and the ex-Trotskyist James Burnham, all that has changed is the skin, from “degenerate workers state” to “Coordinatorist”. It is not particularly difficult to see parecon Coordinatorist ideas presented below. One would hope that for a so-called libertarian finding such antecedents to your new ideas might be somewhat embarrassing.

Cannon, backed by Leon Trotsky held that the USSR was a degenerated workers state while Shachtman and Burnham contended that the Soviet Union was bureaucratic collectivist and thus not worthy of being supported even critically. The party dispute led to Shachtman, Burnham and their supporters leaving the SWP in 1940 but soon after Burnham broke with Shachtman and left the communist movement altogether. For James Burnham:

 “A new managerial class, rather than the working class, was replacing the old capitalist class as the dominant power in society. The managerial class included business executives, technicians, bureaucrats and soldiers. He gave Nazi Germany and the Soviet Union as clear examples. Burnham’s theory is sometimes thought to have been influenced by Bruno Rizzi’s 1939 book La Bureaucratisation du Monde; but despite similarities, there is no evidence that Burnham knew of the obscure book outside of some brief references to it by Trotsky.” http://en.wikipedia.org/wiki/James_Burnham

Parecon responds “That is, Marxism obscures the existence of a class which not only contends with capitalists and workers within capitalism, but which can become ruler of a new economy, aptly called, I think, coordinatorism.” 


“Far more important than these failures, what I want to focus on is that in virtually every variant of Marxism, Marxist class theory literally denies the existence of what I call the coordinator (professional-managerial or technocratic) class and undercounts its antagonisms with the working class as well as with capital. This particular failing has long obstructed class analysis of the old Soviet, Eastern European.”

Trotsky has set out in his book “The Revolution Betrayed” first published in 1936 the origin of the Trotskyist dogma that Russia is a “degenerate Workers State” in which a bureaucracy had usurped political power from the working class but without changing the social basis (nationalisation and planning).

This view is so absurd as to be hardly worth considering seriously: how could the adjective “workers” be applied to a regime where workers could be sent to a labour camp for turning up late for work and shot for going on strike?

Trotsky was only able to sustain his point of view by making the completely non-Marxist assumption that capitalist distribution relations (the privileges of the Stalinist bureaucracy) could exist on the basis of socialist production relations.

Marx, by contrast, had concluded, from a study of past and present societies, that the mode of distribution was entirely determined by the mode of production. Thus the existence of privileged distribution relations in Russia should itself have been sufficient proof that Russia had nothing to do with socialism.

Trotsky rejected the view that Russia was state capitalist on the flimsiest of grounds: the absence of a private capitalist class, of private shareholders and bondholders who could inherit and bequeath their property. He failed to see that what made Russia capitalist was the existence there of wage labour and capital accumulation not the nature and mode of recruitment of its ruling class.

Trotsky’s view that Russia under Stalin was still some sort of “Workers State” soon brought criticism from within the ranks of the Trotskyist movement itself. Two alternative views emerged. One was that Russia was neither capitalist nor a Workers State but some new kind of exploiting class society. The other was that Russia was state-capitalist. The majority of Trotskyists, however, remain committed to the dogma that the USSR was a “degenerate Workers State”. “