The New Industrial State

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Galbraith, John Kenneth. The New Industrial State. 1967. Second edition, "Revised and Updated." New York City: Mentor-New American Library, 1971.

See Robert Michel's Political Parties (1915), James Burnham on The Managerial Revolution (1940/41), and Michael Lind's The New Class War (2017/2020).

Galbraith analyzes bureaucracy (1971: p. 76; VI.2) and "The Technostructure" (ch. VI).

In the past, leadership in business organization was identified with the entrepreneur — the individual who united ownership or control of capital with capacity for organizing the other factors or production and, in most context, with a further capacity for innovation. With the rise of the modern corporation, the emergence of the organization required by modern technology and planning and the divorce of the owner of the capital from control of the enterprise, the entrepreneur no longer exists as an individual person in the mature industrial enterprise. Everyday discourse, except in the economics textbooks, recognizes this change. It replaces the entrepreneur, as the directing force of the enterprise with management. This is a collective and imperfectly defined entity [... people listed from chairman of the board on down to staff]. It [the preceding list] includes, however, only a small portion of those who [...] contribute information to group decisions. This latter group is very large.; to extends from the most senior officials of the corporation to where it meets, at the outer perimeter, the white- and blue-collar workers whose functions conform more or less mechanically to instruction or routine. It embraces all who bring specialized knowledge, talent or experience to group decision-making. This, not the management, is the guiding intelligence — the brain — of the enterprise. There is no name for all who participate in group decision-making or the organization they form. I propose to call this organization the Technostructure. (pp. 83-84; VI.7)

For imaging of blue-collar workers themselves conforming "more or less mechanically," see Fritz Lang's METROPOLIS (1927).

Such points are in the background of a fair number of SF works using large mechanisms as a symbol or "objective correlative" — in an extension of T. S. Eliot's use of the term[1] — for bureaucracy or "the Technostructure," and these points have been raised both before and after Galbraith's discussion (see below). However this is (1) a book by the once-famous John Kenneth Galbraith and (2) a text on political economy that is understandable by laypeople and in large part a highly enjoyable reading experience: so it's a significant book.

Galbraith asserts that there's general agreement among those who discuss such matters, "that the modern large corporation is, quite typically controlled by its management. The managerial revolution, as distinct from that of the technostructure is accepted." And he adds a note at "managerial revolution."

The phrase brought into the language by James Burnham, The Managerial Revolution (New York: John Day, 1941). This was an important book which changed people's minds on the nature of the modern corporation. Partly, perhaps, because he was a strong and on occasion eccentric conservative, and change in economics is usually led by liberals, Burnham's contribution has not had the recognition it merited. (124 n. 5; X.3).

Combining an unfortunate 2011 formulation by Mitt Romney[2] with a famous line from the 1973 film SOYLENT GREEN[3] we can say Galbraith's Technostructure is people, as specified above, and, hence, can be talked about as having intentions and goals; and it is an abstraction in an economic analysis written in English, and so can figuratively employ such anthropomorphic terms, or personification. (Erlich's Introductory Chemistry instructor railed briefly against anthropomorphizing the objects of study of chemistry, such as saying an electron somehow "desires" to move into a less energetic orbit, and then pulled himself up short, noted that the language of instruction was English, added that English routinely used such figures of speech, and allowed he would, on occasion, talk that way — but we should recognize a figure of speech when we heard one.) Galbraith's language suggests an "objective correlative" as mentioned above, and having applied to it the common satiric move of literalization: taking a figure of speech and making it literal: Technostructure to a kind of apparat, to a literal apparatus, to a large — or giant and encompassing — machine, not made of people but enclosing them and manipulating them, classically in E. M. Forster's 1909 "The Machine Stops." Galbraith also relates figurative Technostructure — and corporations as imaginary individuals — to literal technology.

More even than machinery, massive and complex business organizations are the tangible manifestation of advanced technology. (p. 34; II.2, #5).
[Notes "The Regulation of Aggregate Demand" (ch. 20) added to control of prices] gives precision to planning [by the industrial system]. And it serves admirably the goals, those of security and growth in particular, of the technostructure. (XX.1, p. 219; for goals see also X.1, p. 121; p. 136, XI.1, & passim)
In the mature corporation, the technostructure sets prices not where they maximize profits but where they best contribute to the security of the technostructure and to the growth of the firm. (p. 246; XXII.2).
The first goal of the technostructure is its own security. Profits, provided that they are above the minimum necessary for security, are secondary to growth. Labor relations, naturally enough, are conducted in accordance with the goals of the technostructure. (p. 259; XXIII.2)

The corporation also accommodates itself admirably to the needs of the technostructure. This [...] is an apparatus for group decisions — for pooling and testing the information provided by numerous individuals to reach decisions that are beyond the knowledge of any one. It requires [...] a high measure of autonomy. (p. 89; VII.3)

For technology and the economy as such, see especially ch. XXI, "The Nature of Employment and Unemployment," with a headnote from Norbert Wiener's Cybernetics book (without quoting the word "Cybernetics"), Control and Communication in the Animal and the Machine (1948): "There is no rate of pay at which a United States pick-and-shovel laborer can live which is low enough to compete with the work of a steam shovel as an excavator" (p. 232).

RDE, Initial Compiler, 19May20 f.