The Post-Capitalist Economy

Defining Corporatism, and Why the Right Should Reject It

There exists a tension on the Right when it comes to economic policy, which I believe stems from a misunderstanding of the current economic system. Traditionally, the Right has represented “Capitalism”, and the Left has represented “Socialism”. Due to their ideological commitment to Capitalist “free-markets”, many on the Right have a knee-jerk reaction to support corporations, which they see as part of the “private sector” and therefore their political allies, even when this is clearly not the case. BoomerCons are particularly guilty of this, just as they are guilty of every conceivable error in judgement and tactics. This is what leads to “conservatives” pushing back against Ron DeSantis for raising taxes on Disney, after its executive team tried to strong-arm the Florida school system into grooming children. It’s what causes “Republicans” to sit back and do nothing while social media companies actively manipulate election results with psychological operation campaigns.

It seems to me that, even when someone on the Right proposes not letting corporations that hate us do whatever they want with impunity, it’s always couched as a temporary concession on the ideological front in the interest of political expediency. Yes, we believe in free markets but, in this particular case, when it comes to this particular company and this particular issue, we should set that aside. But I’m here to tell you that this is not an abandonment of your principles, that akshully, no, we do not live in a Capitalist economy, but a Corporatist one, and that Corporatism is much more akin to Socialism than it is to Capitalism.

Be ye not afraid to destroy the corporations

To understand the difference between Capitalism and Corporatism, we first need to define Capitalism. Capitalist society grew out of a rising “middle class” in Europe, who were neither peasant laborers, nor aristocratic nobles. These were the businessmen, the burghers, the “bourgeoisie” to use the French. Our friend Karl Marx, in his original critique of the Capitalist system, was critiquing this system, not the one we have today. During this period, all businesses were essentially small businesses. The individual owner-proprietor ran the day-to-day operations of their textile mill, their shipping business, their factory. Marx thought it would be better if the workers at the factories ran them, and cut the owners out. The original debate between the Capitalists and the Marxists was whether the workers or the owners should control the means of production. Today, neither do.

This is the premise of James Burnham's 1941 work, The Managerial Revolution, in which he posited that a new ideological revolution, similar in scope to the Democratic Revolution that transformed Western Europe, and subsequently the world, was already taking place. This was an economic revolution of “size and scale”, in which organizational complexity grew, and it became less and less feasible for the owners to run their businesses themselves. Business owners were forced to hire a layer of “managers” to assist in day-to-day operations. These Managers would eventually come to dominate the economic sphere and form a new social class, which was neither the “ownership” class, nor the “working” class.

Before we go further, I want to try to clear up some confusion around the term “Manager” here. I have heard Curtis Yarvin object to using the term "manager" to describe this new class of elites, but it seems like he is narrowly defining the term “manager” to mean an executive at a tech start-up. To my mind, a start-up CEO is more like a traditional bourgeoisie owner/operator in that they usually are also the founder or co-founder, and do actually have a controlling interest in the company (at least until the time they hit Series B, at which point the company has become a bureaucratized shitshow). But it does raise a larger point, that most people don’t necessarily associate the term “manager” with the group of people Burnham means when he uses it. I would agree that Yarvin’s recommendation of the term “bureaucrat” is probably better, but for the sake of consistency lets continue to use the term “manager”, but in the sense that Burnham means when he uses it:

Certain individuals - the operating executives, production managers, plant superintendents, and their associates - have charge of the actual technical process of producing. It is their job to organize the materials, tools, machines, plant facilities, equipment, and labor in such a way as to turn out the automobiles [or whatever]. These are the individuals whom I call “the managers”.

In a certain sense, Burnham’s definition is almost tautological, as he is essentially saying that the people whose job it is to control the means of production, control the means of production. But, the point is that, as the complexity and scale of the enterprise grows, the technical specialization required to successfully perform these various functions increases, until those who are even capable of performing them constitute their own class. Today, this class controls the large corporations which make up the overwhelming majority of the economy. The “owners” technically still exist in the form of “shareholders”, but they exert no control over the organization. As Samuel Francis describes in Leviathan and Its Enemies:

The characteristic that ordinarily distinguishes the mass corporation from the entrepreneurial firm that predominated in the bourgeois economic order of the 19th century is the dispersion of ownership of the corporation into the hands of the mass of stockholders, whose purchase of stock provides the capital for the corporation. The dispersion of ownership among a mass of investors makes possible the mobilization of a scale of capital and a growth of production far beyond what can normally be achieved by the entrepreneurial firm. Moreover, dispersion of ownership means that the owners themselves cannot operate the corporate enterprise. For most of the stockholders, their investment in the stock of any corporation is a small part of their normal business life, and most of them lack the time, opportunity, and special knowledge required to participate intelligently in the operation of the corporate firm. Hence, the owners must hire or appoint professional managers, whose training or experience enables them to conduct corporate business at all levels.

We see here also a similarity between the Corporate landscape and the State. In both cases, there is a theoretical control vested in a disparate group - the shareholders of the corporation, or the citizens of the country. This control is exercised in the form of periodic voting - but even if a majority of shareholders or constituents manage to remove a particularly bad executive or representative, they can only be replaced by a new executive or representative. Additionally, many of the decisions for running the organization (whether public or private) are made by faceless bureaucrats, completely unaccountable to the supposed “owners”. This is not an accident, as the same “class” of people form the managerial elite in both the public and private sector, and in fact often transition between them in what is known as the “revolving door”. In such a system, the distinction between public and private itself becomes almost irrelevant.

Who controls the corporations isn’t just a matter of intellectual curiosity either; there are fundamentally different incentives between an entrepreneurial owner, and a professional manager. As John Galbraith writes in The New Industrial State:

Expansion of output means expansion of the technostructure itself. Such expansion, in time, means more jobs with more responsibility and hence more compensation […] The paradox of modern economic motivation is that profit maximization as a goal requires that the individual member of the technostructure subordinate his personal pecuniary interest to that of the remote and unknown stockholders. By contrast, growth as a goal is wholly consistent with the personal and pecuniary interest of those who participate in decisions and direct the enterprise.

For an individual entrepreneur, the profits of the business represent his actual earned income, but for a manager, their primary income is represented by their salary, which is usually a function of the size and scope of their responsibilities. It’s in the interest of the managerial class, then, to reinvest company profits back into growing the corporation, rather than paying them out as dividends. It’s no wonder that only about half of US stocks even pay dividends anymore (and those that do are typically low). The sales pitch for purchasing these stocks is that they are growth stocks. If you buy them now, the company will grow, they will then be worth more later, and you can sell them to realize your profit. This is speculation, by the way, not investment.

Unless they don’t

Here again we can see the overlap between the bureaucratic State and the bureaucratic Corporation. There has been much wailing and gnashing of teeth on the Right over the rampant growth of the technocratic nanny-State, but this is a function of both the State and the Corporate economy being run by the same class of growth-focused managerial “experts”. You cannot combat one without combating the other.

And combat them you should, for in addition to creating a constant growth feedback loop (the larger the organization, the larger the requisite bureaucratic apparatus, the more incentive to increase growth), the modern Corporatist focus on growth also has ideological ramifications. Consider the ethics of “Classical Liberalism”, sometimes referred to as the “Puritan ethic”. Frugality, thrift, and delayed gratification are hallmarks of the old, bourgeoisie culture. But for a corporation hyper-focused on growth, a culture of mass consumption is required. There is nothing inherently “Capitalist” about gross over-consumption. Capitalism is production-focused. In contrast, consoomerism, instant gratification, constant stimulation - in short, hedonism - facilitates growth in the modern Corporatist structure. Similarly, in order to make more sales, the corporation’s product (whatever it may be), needs to appeal to as large a population as possible. Therefore the managerial elite will naturally favor ideological outlooks that focus on cultural homogenization, cosmopolitanism, and collectivism. The ideal “worker-consumer” is an interchangeable cog, with no roots in its community, that can be indiscriminately relocated in service to efficiency, and continue to buy the same clothes, eat the same food (preferably bugs), and enjoy the same entertainment, wherever it is located.

In other words, its not some accident that all these “woke” corporations hate you. Hedonistic cosmopolitanism fuels corporate growth. Values that conflict with this outlook are a threat to the system. Its not a betrayal of your bourgeois values to oppose these forces. I don’t know what the future of Right-wing economic policy looks like, I don’t know that we can put the genie back in the bottle, so to speak, after the rise of the megacorp. But we certainly shouldn’t be distracted by cries of “Muh Sacred Capitalism” anymore than “Muh Sacred Democracy” - because, at this point, both are fake and gay.