Endgame for the Managerial State

Dymphna subscribes to a libertarian magazine called The Freeman, which is published by the Foundation for Economic Education. I have been reading through the back issues recently, and have found much worth looking at.

FEE concentrates on the Austrian School of Economics, and the magazine often refers to the works of Ludwig von Mises and Friedrich Hayek. But The Freeman covers many other topics of interest, from hard-core libertarian issues (for example, the privatization of the highway system) to American military adventures overseas.

The September 2011 issue featured an article by Kevin A. Carson entitled “Taylorism, Progressivism, and Rule by Experts”. In it Mr. Carson discusses an issue that has often surfaced here at Gates of Vienna: the superiority of distributed knowledge and decentralized social organizations, as compared with top-down centrally directed hierarchies.

The 20th century was characterized by the ascendance of the “managerial” mindset, which conceives of large, hierarchically arranged, centrally managed structures as the best and most efficient way of organizing society. The managerial state — as manifested under Mussolini, Hitler, Stalin, and FDR — was the most obvious product of this ideology. But all large organizations, private and public, business and charitable, have been infected with the same managerial virus.

The three great forms of Socialism — Nazism, Fascism, and Communism — perfected the model of the coercive centralized state, an all-powerful totalitarian government that directed every aspect of citizens’ lives, from cradle to grave. The fullest expression of the managerial ideal was realized in Soviet Communism, in which the state took over absolute control of everything.

The Nazis and the Fascists, who were also totalitarians, controlled their nations through syndicalism, also known as the corporate state. Government and large business enterprises combined forces to plan investment, industrial production, distribution, and social welfare. The state directed the general operations of the large corporations, but the titans of industry were allowed to function semi-autonomously, and collect profits within limits set by the state.

The syndicalist variety of the managerial state also emerged within the Western democracies, although in a less complete and less obvious fashion. The democracies were compelled to disguise this authoritarian trend as a necessary process set into motion for the public interest and to promote the general welfare — as defined and enforced by the state. Franklin Delano Roosevelt entrenched the Progressive version of the managerial state in the USA during the 1930s, and it has remained in place ever since, with only minor and limited rearguard actions being mounted against it by occasional bursts of conservative political intervention.

Mr. Carson discusses the ideological framework for the management of society as devised by intellectuals, who adapted the model of scientific engineering in industrial production to engineer the social and political activities of citizens:

And according to Yehouda Shenhav (Manufacturing Rationality: The Engineering Foundations of the Managerial Revolution), Progressivism was the ideology of the managers and engineers who administered the large organizations; political action was a matter of applying the same principles they used to rationalize their organizations to society as a whole. Shenhav writes (quoting Robert Wiebe):

Since the difference between the physical, social, and human realms was blurred by acts of translation, society itself was conceptualized and treated as a technical system. As such, society and organizations could, and should, be engineered as machines that are constantly being perfected. Hence, the management of organizations (and society at large) was seen to fall within the province of engineers. Social, cultural, and political issues… could be framed and analyzed as “systems” and “subsystems” to be solved by technical means…

During this period, “only the professional administrator, the doctor, the social worker, the architect, the economist, could show the way.” In turn, professional control became more elaborate. It involved measurement and prediction and the development of professional techniques for guiding events to predictable outcomes. The experts “devised rudimentary government budgets; introduced central, audited purchasing; and rationalized the structure of offices.” This type of control was not only characteristic of professionals in large corporate systems. It characterized social movements, the management of schools, roads, towns, and political systems.

The managerialist ethos reflected in Progressivism emphasized transcending class and ideological divisions through the application of disinterested expertise. Christopher Lasch (The New Radicalism in America) wrote:

For the new radicals, conflict itself, rather than injustice or inequality, was the evil to be eradicated. Accordingly, they proposed to reform society… by means of social engineering on the part of disinterested experts who could see the problem whole and who could see it essentially as a problem of resources… the proper application and conservation of which were the work of enlightened administration.

In Shenhav’s account this apolitical ethos grew out of engineers’ self-perception: “American management theory was presented as a scientific technique administered for the good of society as a whole without relation to politics.” Frederick Taylor, whose managerial approach was a microcosm of Progressivism, saw bureaucracy as “a solution to ideological cleavages, as an engineering remedy to the war between the classes.” Both Progressives and industrial engineers “were horrified at the possibility of ‘class warfare’” and saw “efficiency” as a means to “social harmony, making each workman’s interest the same as that of his employers.”

Thus began the longstanding tradition of a government that knows better than its “clients” how to manage their lives and order their affairs:

The implications, as James Scott put it in Seeing Like a State (about which much more below), were quite authoritarian. Only a select class of technocrats with “the scientific knowledge to discern and create this superior social order” were qualified to make decisions. In all aspects of life, policy was to be a matter of expertise, with the goal of removing as many questions as possible from the realm of public political debate to that of administration by properly qualified authorities. Politics, Scott writes, “can only frustrate the social solutions devised with scientific tools adequate to their analysis.” As a New Republic editorial put it, “the business of politics has become too complex to be left to the pretentious misunderstandings of the benevolent amateur.”

It’s true that Progressivism shaded into the anti-capitalist left and included some genuinely anti-business rhetoric on its left-wing fringe. But the mainstream of Progressivism saw the triumph of the great trusts over competitive enterprise as a victory for economic rationalization and efficiency—and the guarantee of stable, reasonable profits to the trusts through the use of political power as a good thing.

The author points out that the triumph of the managerial state in the USA was not a Socialist victory, but rather a successful effort by large corporations to manage the whole of society to ensure the continued stability, growth, and profitability of their operations. The Soviet Union had demonstrated that full Socialism destroys the wealth of society, but Progressives intended to preserve and expand that wealth — as managed by themselves, of course, for the good of everyone:

In the end the more utopian or socialistic Progressives found they’d become “useful idiots.” Their desire to regiment and manage was given free rein mainly when it coincided with the needs of the corporatist economy created by Rockefeller and Morgan. These needs were for what Gabriel Kolko (The Triumph of Conservatism) called “political capitalism,” the guiding theme of Progressive-era legislation. Political capitalism aimed to give corporate leadership “the ability, on the basis of politically stabilized and secured means, to plan future economic action on the basis of fairly calculable expectations” and to obtain “the organization of the economy and the larger political and social spheres in a manner that will allow corporations to function in a predictable and secure environment permitting reasonable profits over the long run.”

Mainstream Progressivism, far from embracing a left-wing vision of class struggle, saw class conflict as a form of irrationality that could be transcended by expertise. To quote Shenhav again:

Labor unrest and other political disagreements of the period were treated by mechanical engineers as simply a particular case of machine uncertainty to be dealt with in much the same manner as they had so successfully dealt with technical uncertainty. Whatever disrupted the smooth running of the organizational machine was viewed and constructed as a problem of uncertainty.

As Hilaire Belloc said (The Servile State) of its Fabian counterparts in Britain, the mainline of the Progressive movement quickly accommodated itself to the impossibility of expropriating big business or the plutocratic fortunes and found that it could be quite comfortable as a junior partner to the plutocracy, directing its lust for regimentation against the working class:

Let laws exist which make the proper housing, feeding, clothing, and recreation of the proletarian mass be incumbent upon the possessing class, and the observance of such rules be imposed, by inspection and punishment, upon those whom he [the Fabian] pretends to benefit, and all that he really cares for will be achieved.

As Scott put it, the managerial classes’ virtually unbounded planning instincts were directed mostly downward:

Every nook and cranny of the social order might be improved upon: personal hygiene, diet, child rearing, housing, posture, recreation, family structure, and, most infamously, the genetic inheritance of the population. The working poor were often the first subjects of scientific social planning… . Subpopulations found wanting in ways that were potentially threatening—such as indigents, vagabonds, the mentally ill, and criminals—might be made the objects of the most intensive social engineering.

Progressivism was a branch of what Scott called the “high modernist” ideology, which “envisioned a sweeping, rational engineering of all aspects of social life in order to improve the human condition.” High modernism carries with it an aesthetic sensibility in which the rationally organized community, farm, or factory was one that “looked regimented and orderly in a geometrical sense,” along with an affinity for gigantism and centralization reflected in “huge dams, centralized communication and transportation hubs, large factories and farms, and grid cities… .” If you’ve read H. G. Wells’s “Utopias” or looked at Albert Speer’s architecture, you get the idea.

High modernism was scientistic, not scientific, based on, writes Scott, a “muscle-bound… version of the beliefs in scientific and technological progress” of the Enlightenment, centering on “a supreme self-confidence about continued linear progress… , the expansion of knowledge, the expansion of production, the rational design of social order, the growing satisfaction of human needs, and, not least, an increasing control over nature (including human nature) commensurate with scientific understanding of natural laws.” The high priesthood of this ideology was precisely the same as Progressivism’s social base: “planners, engineers, architects, scientists, and technicians [high modernism] celebrated as the designers of the new order.”

The high priesthood of high modernism is still active, and is personified by the attitudes and actions of Barack Obama and his innumerable “czars”. They aim to regulate us, tax us, bully us, and “nudge” us into the behaviors that are good for us. Like the technocrats of the 1930s, they have nothing but contempt for the ideas, knowledge, experience, and preferences of the ordinary citizen.

One aspect of Scott’s analysis of high modernism, his use of the concept of metis, is especially relevant to us here. Scott’s book, more than any other I can think of, should be read as a companion to Hayek’s discussion of what’s variously called distributed, tacit, or idiosyncratic knowledge in “The Use of Knowledge in Society.” (As Hayek put it, this is the knowledge of circumstances necessary to make a decision that exists “solely as the dispersed bits of incomplete… knowledge which all the separate individuals possess.”)

Scott distinguished metis from techne, which is a body of universal knowledge deducible from first principles. metis, in contrast, is (largely irreducible) knowledge acquired from practical experience, concerning the particular, the variable, and the local, and involving a “feel” for the unique aspects of situations obtained over a prolonged period.

High modernism tended to see metis as an enemy and sought to supplant it by central schemes of planning and control, whether at the level of society as a whole through State social engineering or at the level of the firm by Taylorist managers.

High modernism, Scott writes, placed remarkably “little confidence… in the skills, intelligence, and experience of ordinary people.” The dispersed, local knowledge of the general population was, at best, to be patronized as prescientific and purified of its partial or local character by codifying it into a set of universal rules that could in turn be reduced to a verbal formula and transmitted as knowledge by the priesthood.

The priests of the elite managerial caste were installed in their theocratic offices eight decades ago. Their decaying order is now on the verge of dissolution.

The Western corporate state depends above all else on the fiat money system. Without the continuous creation of illusory wealth, of which they alone control the distribution, the managers cannot achieve the coercion necessary to preserve and enhance their own privileged status as the engineers of the creaky and clanking monstrosity that the modern welfare state has become.

Like the banks of the Eurozone, the entire edifice depends on a universal belief in the lie that there is real wealth in the bonds, debt instruments, derivatives, and all the other artifices that have replaced a real monetary system. The lie is now being exposed, and the credulity of the general population — and even many of the managers themselves — is being strained to the limit.

We are approaching endgame in the century-long experiment with imaginary money and the centralized direction of all human activity. The emperor is perceived to have shed a garment or two, and his nakedness will soon be revealed. The Progressive dream is all but over, and our awakening will be harsh and unpleasant.

As Lao Tzu said in Chapter 55 of Tao Te Ching:

“Whatever is contrary to Tao will not last long.”