The Ungovernable Society. Grégoire Chamayou

In short, it was now certain: ‘Capital – and thereby capitalism – has dissolved’.²⁸

      As Daniel Bell concluded, there had once been ‘a society “designed” by John Locke and Adam Smith and it rested on the premises of individualism and market rationality […] We now move to a communal ethic, without that community being, as yet, wholly defined. In a sense, the movement away from governance by political economy to governance by political philosophy – for that is the meaning of the shift – is a return to pre-capitalist modes of social thought’.²⁹

      Here, I would make one remark. This idea of governance, the idea that prevailed before the great neoliberal shift, is what I propose to call, both as an echo of and in contrast with the notion of governmentality, ‘manageriality’. Michel Foucault conceived ‘liberal governmentality’ as an answer to the cardinal problem of the arts of governing: how can the economy be brought within the remit of the state? How is power to be exercised ‘in the form of the economy’?³⁰ As an extension of this project, neoliberalism sought to analyse ‘non-economic behavior’ (etc.) through ‘a grid of economic intelligibility’, leading to ‘the criticism and appraisal of the action of public authorities in market terms’.³¹ But its predecessor, the managerialism of the 1950s and 1960s, did the complete opposite, in both those aspects (practical and theoretical). Its problem was not that of introducing the economy into the state, but on the contrary of introducing an analogon of political government into the private management of economic affairs. It was not conceived as an art of exercising political power in the form of the economy, but on the contrary as an art of exercising economic power in the form of a certain politics, of a private politics. Manageriality does not have the economy as its ‘major form of knowledge’; rather, its fundamental epistemic predilection gazes beyond ethics into politics and, as we shall soon see, strategy.

In 1954, in The 20th Century Capitalist Revolution, Berle depicts the magical image of a prince-manager administering business as an ‘oracle of the public interest’. We can read this text as an anachronistic iteration, right in the middle of the American twentieth century, of the old genre of the mirror for princes.³² Berle refers to Augustine and his City of God, where ‘a moral and philosophical organization […] ultimately directed power’.³³ He also mentions the Plantagenet court, where a man, often a priest, called the ‘chancellor’, played the role of ‘keeper of the conscience of the king’.³⁴ The manager, the new prince, will likewise exercise his benevolent power with business ethics as a safety rail. The only limit placed on the power of the manager is his conscience, hemmed in by the informal sanctions of public opinion.³⁵ A few lines further on, without seeing any particular contradiction in this, Berle can argue that managers constitute ‘tiny self-perpetuating oligarchies’ and that the ‘tacit philosophy of the men who control them’ guarantees a ‘real control’ against the excesses of such power.³⁶

      But many, including those who followed the managerialist mindset, were sceptical: ‘how could managers be trusted to advance social welfare when they could not be trusted with their own shareholders?’³⁷

      Rather than relying on the self-proclaimed virtue of the managers, some people proposed regulating the exercise of business power by a kind of internal constitution – a charter stating the rights and duties of management. This meant applying to managerial power ‘the concepts of limited government which are the essence of Western constitutionalism’.³⁸

      In 1962, Richard Sedric Fox Eells, a General Electric executive, noted that wondering whether business possesses a ‘constitutional structure’ is tantamount to asking the ‘question of business governance’³⁹ – note that Eells is one of the first to use this term, outmoded at the time, in this new sense. A company is admittedly ‘a producer and a distributor, a supplier and a buyer of economic goods’, but it is also something different, a ‘decision-making centre’, ‘an instrument of power and authority’.⁴⁰ As such, one can ask it other questions than those raised by economists, questions of governance. ‘Who really controls a company? What power does it exercise? To whom should the power-wielders be accountable, and how? Is the company a “self-perpetuating oligarchy,” as some have charged, or is it a type of republic?’⁴¹

The difficulty, Eells pointed out, is that the private government of business ‘is decidedly not a democracy, and yet, it is no longer possible for a really big business to be an autocracy’.⁴² The path of corporate constitutionalism is narrow: what political space does it still have, on the basis of this dual diagnosis, between an autocracy that it considers untenable on the one hand and, on the other, a democracy it rejects? Actually, not much.

      But we need to be careful, warned a 1958 report from the Rockefeller Foundation, for if we accept this, ‘the same sort of question that can be asked of other governments can also be asked of these private governments’, and if ‘the democratic ideals by which the state is properly judged may also be applied to the ways in which the lives of men are governed in the private sector’,⁴³ then we will soon face a major problem: ‘Very simply, the corporation is an authoritarian form of industrial government in a purportedly democratic society’.⁴⁴ Or, if you apply the standards of political legitimacy to it, there will necessarily be a contradiction ‘between the democratic tradition of government by consent and the inevitably hierarchical and authoritarian procedures of business’.⁴⁵

      There was even, some thought, a great danger in this. If you shout from the rooftops that ‘management has the worker’s best interests at heart’, warned Peter Drucker in 1950, then ‘management can be legitimate if only it tries’. But how far can it go? It is very unwise to make this kind of promise, as is ‘proven by the one experience that is strictly comparable to modern industrial paternalism: modern colonial paternalism’.⁴⁶ By mistakenly adopting a rhetoric of ‘government for the people’, the colonialist discourse has placed itself at odds with its ‘obligation to manage the colony in the economic, political or strategic interest of the home country’.⁴⁷ This kind of language was catastrophic because rather than achieving ‘the one thing that mattered: acceptance by the natives as a legitimate government […] it made the colonial peoples conscious of the split between the ideals of colonial government and its responsibility toward the economic interests of the home country’.⁴⁸ And this, says Drucker, is a constant in history: ‘All Enlightened Despotisms have ended in revolution’.⁴⁹ And if people persist, ‘Enlightened Managerial Despotism’ will be no exception to the rule.

This was also what the neoliberals of the time feared. Milton Friedman pulled the emergency cord very early on. In March 1958, at a seminar held under the gilded mouldings with their griffon decorations in San Francisco’s Drake Hotel, the Chicago economist adopted a solemn tone: ‘If anything is certain to destroy our free society, to undermine its very foundations, it would be a wide-spread acceptance by management of social responsibilities in some sense other than to make as much money as possible. This is a fundamentally subversive doctrine’.⁵⁰ By dint of repeating everywhere that managers are ‘civil servants rather than the employees of their stockholders then in a democracy they will, sooner or later, be chosen by the public techniques of election and appointment’.⁵¹

      In the name of what, after all, are business leaders appointed by shareholders via the board of directors? There is, he replies, no justification for this state of affairs, except that the former are agents in the service of the latter, and if this postulate falls, everything collapses with it. If you accept that the business leader is a kind of private agent of the public, you will inevitably conclude that ‘it is inadmissible that such public officials […] be named as they are now. If they really serve the public, they must be elected via a political process’.⁵² By admitting that they exercise governmental functions, managers are unwittingly exposed to criticism, and soon to much worse. For, under the deceptive charms of ethics, Friedman senses the tracks of a Soviet tank: ‘the doctrine of “social responsibility” involves the acceptance of the socialist view that political mechanisms, not market mechanisms, are the appropriate way to determine the allocation of scarce resources