Wednesday, October 12, 2011

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.”


Dymphna said...

This is a very hard lesson to learn. And for those states protected for the moment by their petro-wealth, it doesn't have to be learned. Yet.

In his newsletter essay today, Robert Tracinski, who writes and publishes The Intellectual Activist must've been reading your mind. He shows how Russia, China, the EU, and the USA have failed to find a way around the reality:

Russia is becoming a harder and harder place to do business. Endemic corruption has soured the investment climate. Private capital is fleeing the country...

Even senior policymakers within the Kremlin are doubting the future of Russia's state capitalist model...


...It turns out that this was the real legacy of the fall of the Berlin Wall. Back in 1989, it seemed that capitalism had indisputably triumphed over socialism. But the elites in government, academia, and the media could not accept that conclusion. Instead, they responded by trying to find a Third Way between capitalism and socialism. This was the legacy of Bill Clinton in America and Tony Blair in Britain, and it was the pattern for the policies of the European Union. The idea was to accept many aspects of capitalism, such as financial markets and the relatively free flow of capital, but to try to harness these capitalist institutions to pay for a bloated middle-class welfare state.

That was the dominant response in the West. Elsewhere, first in China and then in Russia, the response was "state capitalism," a Frankenstein-monster hybrid that allowed a large measure of freedom for the economy, except where an authoritarian regime decides to exert control over key companies and industries and to favor the interests of its cronies.

I'm beginning to suspect that the credit "bubble" is the hallmark of such a system. It reflects the hybrid nature of the system. It is a system that still has property rights, private savings, financial markets, and ambitious individuals exuberantly reacting to price signals in a frenzy of activity. But behind that is the "management" of government, which serves to distort those price signals and misdirect trillions of dollars' worth in private economic activity. The government decides that housing, for example, or "green energy" is an industry to be supported with cheap credit, loan guarantees, and subsidies, making it seem artificially profitable and leading investors to pour more money into these activities than the economy can actually support over the long run...

...we have to learn the lessons of the collapse of the Third Way, and we have to be willing to follow the process of elimination to its logical conclusion. If socialism has failed, and so has the Third Way between capitalism and socialism, that leaves us with only one system left: capitalism

So, for Americans, we need to elect a capitalist to office next presidential turn. Boy, that'll rattle the theorists all to pieces.

EscapeVelocity said...

Great article.

This flows out of Rationalism and Scientism....which are all the rage today.

The attempt to banish not acknowledging it, but rather giving it all sorts of psuedo scientific labels.

All this does is allow evil to flourish by tolerating it, not acknowledging it, but rather giving it some esoteric nomenclature and attempting to work on correcting the flaw.

Thus Islam is not evil, but rather, just misunderstood. Criminals are not punished but rather rehabilitated, not via Christian rebirth, but via psychotheropy and expert rehabilitation classes.

All it has done is cycled criminals back out to the streets to prey on decent folks.

The folly of the perfection of man.

1389 said...

Why Modern Liberals are 100% Wrong About Everything

Abuelo Tortuga said...

Why always this focussing on the elites and their grab for power.
Why is so little thought given to what makes the power of the elites
possible? In a word, human helplessness. Those who control the masses could not do it without castrating them, making them helpless. Capable people, self actualizing people, would never put up with elites running their lives for them.
Abuelo Tortuga

Takuan Seiyo said...

Paul Gottfried, one of the very few public conservatives in whom derision quote marks are not required around "conservative" wrote a good book, "After Liberalism: Mass Democracy in the Managerial State."

Sagunto said...

Baron -

Great article, thank you. And I agree with your conclusion that "our awakening will be harsh and unpleasant". One possible silver lining: less social engineering, which might result in the collapse of many a state-sponsored program currently leading to the forced islamization of our societies.

I'd also like to second TS's tip about the Paul Gottfried book and add one (ok, two) more: "Multiculturalism and the Politics of Guilt: Toward a Secular Theocracy" (2004).

Another very informative read by Gottfried is, "The Strange Death of Marxism: The European Left in the New Millennium" (2005).

From the editor's review:

"Three distinctive features of the book are the attempts to dissociate the present European Left from Marxism, [..] and the emphasis on the specifically American roots of the European Left.
Gottfried examines the multicultural orientation of this Left and concludes that it has little or nothing to do with Marxism as an economic-historical theory. It does, however, owe a great deal to American social engineering and pluralist ideology and to the spread of American thought and political culture to Europe.
Contrary to the impression that the United States has taken antibourgeois attitudes from Europeans, the author argues exactly the opposite. Since the end of World War II, Europe has lived in the shadow of an American empire that has affected the Old World, including its self-described anti-Americans."

Abuelo Tortuga -

People you'd probably count among the capable and self-actualizing are just about the most enthusiastic supporters of the progressivist welfare state.
What happened, i.m.o., is that people (and politicians themselves) have been duped into playing the politicized, "democratic" game of "left" vs "right", with a false sense of voter-control, while leaving untouched (by thought, let alone action) the grand scheme of organized theft and aggression against us, the people, via the monetary system that feeds the whole bureaucratic apparatus of the state. The model of the Bismarckean "Versorgungsstaat" won out long ago, and the game was fixed when the whole system was financed through taxation and monetary inflation. After that, the public has participated in what has essentially been a game of false choices. This game will continue, until the system itself collapses and a movement comes along that is determined to challenge the most fundamental financial premises of the welfare state system.

Tea anyone? ;-)

Kind regs from Amsterdam,

Baron Bodissey said...

Sagunto --

I agree with everything you say.

We have been scammed since 1913, and we are still being scammed. The scam takes the form of a worldwide Ponzi scheme, the largest ever created. It must inevitably crash, as all Ponzi schemes do. There is no way around it; it will collapse.

I can't say when, nor how destructive the collapse will be. But I intuit that things will become very unpleasant for an extended period before a new, more sensible order emerges.

GeorgeOfTheJungle said...
This comment has been removed by a blog administrator.
Baron Bodissey said...

GeorgeOfTheJungle --

Your comment was worthwhile, but you neglected to observe our guidelines regarding appropriate language. I've redacted it and reposted it below.

Please read the guidelines here and follow them in future.


GeorgeOfTheJungle said…

John Ralston Saul, in his book "Voltaire's Bastards" (1992), discusses at length the failure of rationalsim because it has been twisted and deformed into "management and administration". He contends that Governments no longer govern because they are bereft of leaders, but consist solely of ill-educated managers who respond to "the experts" with no thought to the "masses" ro to the progress of real civilisation. John Ralston Saul is one of the great thinkers and eloquent writers of this century - he lives in Canada. Probably one of his most meaningful quotes from "Voltaire's Bastards" is -

"Rationalism has been reduced to management and administration. The power of reason has been used by the ruling elites to justify everything from War to the Holocaust. This was brought about by professionals and technocrats and the use of expertise which rewards the rational specialist while moving away from what Voltare proposed as the renaissance generalist. Society is fractured into insulated professional groups. There is a basic incompatibility between democracy and contemporary rational governments. The decision-making is “done for the people” by the ruling elites, and they appeal to the lowest common denominator of the citizenry. These elites generally have contempt for the citizens. Democratic decision making is very different from this type of administration."

it is also interesting (to me, anyway) that JRS points out the etymological origin of the word "manager" - it derives from Italian "maneggiare" (to handle a horse) > which in turn derives from the Latin word "manus" (hand" and the French "manège" (horsemanship). The earliest English sense was "managing and caring for horses" - literally a stable hand who shovelled the horse [dung] out of the stable. The earliest extension of this to other objects and business (a "Manager manages") dates from the 1570's. Thus a Manager is a lowly employment promoted through deformation into the supposed "leader of the system"... my, how folish we have become in our search for ourselves.

sulber nick said...

The welfare state is neither unaffordable nor inherently damaging provided it is directed towards that population that contributed to it in the first place. The problem arises when those that have made no contribution are able to benefit from it.


"So, for Americans, we need to elect a capitalist to office next presidential turn. Boy, that'll rattle the theorists all to pieces."

A free market president or PM is one thing but would the masses recognise the courtesy, self-discipline and trust that are the necessities of a free market.

In all probability the progressive ghost will be nigh on impossible to exercise from the masses and any attempt will bring collapse, economic dementia and political psychosis to the West.

We can already see the economic dementia and political psychosis of the West, in the servile display of exaggerated flattery given to third world economies in the mistaken belief that they are virtuous examples of free market economics when they are nothing more than the economics of progressive third worldism.

Anonymous said...

X said...

Sulber Nick, that being the case, does not the welfare state then become obviated? I see no purpose in taking money off people only to give it back to them later.

Jolie and others, it's been observed many times that people accommodate themselves to the prevailing social order quite effectively. Several eastern european countries went from socialist dictatorships to pluralist free-market economies virtually overnight, when given the chance to do so without interference from westerners trying to "fix" them, and their people prospered and became free.

Give people the chance, they do what needs to be done. Anything else is just an attempt to "manage" them with a different excuse.

GeorgeOfTheJungle said...

Baron Bodissey: I do not appreciate being patronized and lectured upon from a Blog that I used read regularly. I find it insulting and degrading, to say the least. Your blog, needlees to say, is no longer in my Firefox bookmarks.

Anonymous said...

Graham Dawson (Archonix): The purpose is complete state control of citizen subjects - with the people's leaders siphoning off greater and greater quantities of the people's money until the people are made slaves - and stay slaves.

It is a simple and effective formula recreated all throughout history by each monarchy empowered by an upper class.

Baron Bodissey said...

George --

You are, of course, free to take your custom elsewhere. I would be the last to try to hinder you.

As a matter of fact, I took the time and trouble to redact and repost your comment, removing the scatology so that it stayed within our rules.

I see that I was misguided in doing so, since my reward has been to be called "patronizing" and "insulting". I won't make the same mistake again.

Next time I will just delete it. That will be easier, simpler, and takes a lot less of my time.