Published May 3, 2021
Welcome to managerial oligarchy, where those who steward the gold make the rules.
The corporate backlash to Georgia’s anodyne voting reforms has clarified the nature of the emerging American regime. The upper class means to impose its agenda on the nation by using economic power to threaten and punish states that deviate from the new corporate line, whether on election law, abortion, or transgender ideology. The nature of the new regime is encapsulated by a Wall Street Journal piece concluding that “American business is sparking a fifth spiritual awakening.” Those who control the nation’s wealth have decided that they should run everything else, too.
But control is not the same as ownership. This is the crucial difference between our new regime and a simple oligarchy. In the latter, the rich use their wealth and influence to rule; in America today, the stewards of wealth rule. And in many cases, these managers are supposedly working on behalf of the rest of us. The new regime is not governed by captains of industry, but by Harvard MBAs and Yale JDs and whatever degrees the people in HR get, and they have commandeered our resources to aid them in ruling over us.
Corporate leaders are well-off, but they rarely own the companies they direct. Even Jeff Bezos only owns around 10 percent of Amazon—enough to make him the richest man in the world, but not even close to majority ownership. Who owns Amazon? A great many of us, mostly through investment groups managing mutual funds, pension plans, and suchlike. This broad ownership tends to be ever more pronounced in older companies, in which the founders who built the company are long gone. For example, the leading executives of Delta Airlines, which led the opposition to the Georgia voter law, own miniscule portions of the company. They are well-paid managers for an actual ownership that is widely distributed, often through various investment vehicles.
The ownership of major corporations is frequently diluted and opaque to the point that genuine shareholder control is impossible. This is to say nothing of corporate structures that exclude many shareholders from ever having a voice. Many companies, such as Alphabet (the parent company of Google) issue non-voting class-C shares that offer ownership for investment purposes only.
Instead of the ownership society that Bush-era conservatives imagined, with widespread investment and savings plans expanding both responsibility and freedom, we have a managerial society. Ownership divests itself of responsibility, as capital is handed over to the money managers, who then invest it in companies run by business managers. Many of us do not even know what is in our investment portfolios. This has provided easy financial rewards, but we have ceded control over our resources to those who are using them to control us.
We expect businesses to take an interest in politics to protect their, well, business interests. But now, instead of focusing on taxes, regulations, and subsidies, even the Chamber of Commerce is charging into the culture wars, with local chapters declaring that killing socially conservative legislation is a top priority. Yet, as these American-based multinational corporations bully American state legislatures, they profit from, and even defend, the genocidal Chinese Communist Party.
Enlisting in the domestic culture war gives the managerial class moral and political cover to ruthlessly pursue its economic self-interest. Democrats are happy to coordinate with the them to fight the culture war, while Republicans seem stupefied by the revelation that corporations are as happy to wave the rainbow flag or a Black Lives Matter banner as they are the Stars and Stripes.
This corporate leftism goes beyond cynical economic self-interest, for not even managerial oligarchy lives on money alone. The materially comfortable still crave social prestige and recognition, which they may earn by performing well for the cause, often with someone else’s money. Many wealthy liberals and leftists put their own money where their mouth is, and many more put corporate cash and influence where the PR team tells them to. Even those who begin as cynics may become true believers under the accolades. Conversely, resistance brings scorn. Put simply, no one wants to be called a bigot.
This anxiety is heightened because executives are expendable. The fabulously rich, such as Harry Potter authoress J. K. Rowling, can afford to be heterodox if they are willing to risk social opprobrium. In contrast, though the managerial class is largely well-off, even wealthy, its members are rarely immune to financial blowback, especially if they have been living up to their income. This combination of social and financial insecurity makes them particularly subject to pressure by adjacent and adjutant classes, from the radicals running HR to journalists. Internal and external pressure campaigns can immediately be coordinated against dissidents, or even just the reluctant. The New York Times, for example, ran a piece listing the names of business leaders who hadn’t joined the campaign against the Georgia voting law.
Such mob tactics are essential to keep the managerial class in line. A climate of fear, intimidation, and punishment rather than persuasion has descended on Big Business. No one wants to stand up to ideological radicals who are eager to make an example of someone. There are corporate executives who would rather not dictate social policy and election law to the country, or turn their HR departments into race and gender studies programs. But few of them are willing to stick their necks out to try to stop it, and so managerial oligarchy is especially vulnerable to ideological fads. As a class, the managers are powerful, but individually they are often vulnerable to those who are more committed to the latest fashionable pieties. Colleagues are often eager to throw each other under the bus, whether from ideological zeal, personal animosity, or just to get an edge in a competitive workplace.
Elements of managerial oligarchy are not new, but the current combination is distinct. In a financial and corporate system that is unaccountable, the managerial class uses the wealth it supposedly oversees to impose its political and cultural vision on us. James Burnham (The Managerial Revolution) and Christopher Lasch (The Revolt of the Elites) were among the prophetic voices that saw this developing over the decades. Now it is upon us.
The conservative response has been hamstrung by the Right’s reflexive respect for free market economics. But free market dogmas are inapplicable to the managerial oligarchy. A politically coordinated cabal of opaquely owned companies under the control of the managerial elite is not private property in the way a local coffeeshop is. This is perhaps most evident with regard to the internet, where a handful of tech companies control access to the infrastructure undergirding both the economy and culture. If the law cannot make meaningful distinctions between a locally owned independent bookstore and Amazon, the law is an ass. If a political philosophy insists that the law not see the difference, then its advocates are fools.
Politics is therefore an appropriate vehicle by which we can actually reveal our preferences against the power of managerial oligarchy. Some initial steps are clear, which is why rising conservative and Republican leaders such as J. D. Vance are calling for an end to the subsidies and tax loopholes that line the pockets of the managerial oligarchy. We should also rein in business ties with China. There is nothing free about trade with a totalitarian communist regime, and these relations have turned American corporations, from Disney to the NBA, into apologists and enforcers for the Chinese Communist Party. Other responses are not yet so obvious, though excellent work is being done at places such as American Compass, as seen in a recent Oren Cass piece on the rise of financial speculation and the decline of genuine investment.
As conservatives contemplate how to respond to the threat of managerial oligarchy, we should, of course, be humble—aware of human fallibility and finitude, and cognizant of the dangers of unintended consequences, or of establishing dangerous precedents and perverse incentives. But we must not be so afraid of our own imperfections that we are paralyzed into acquiescence under an evil system. To do nothing while a managerial mob uses the wealth we have entrusted to them to seize power over us is a betrayal of ourselves, our nation, and our posterity.
Nathanael Blake is a postdoctoral fellow at the Ethics and Public Policy Center.
