Thursday, January 22, 2009

Managerial versus Statist Ideology

In Work and Authority in Industry the sociologist Reinhard Bendix traces the evolution of managerial ideology in England, the US, Russia and East Germany (the book was published in 1956). Bendix dissects the ideologies of managerial power in each nation. In the case of the nations that turned out to be economically successful, the United States and the UK, there was an evolution of ideology. Bendix traces the pattern whereby Calvinism gave way to an emphasis on virtue, as in the case of Benjamin Franklin's writings on success. In turn, the virtue ethic morphed into social Darwinism and social Darwinism into the New Thought ideas that positive thinking leads to success. In turn, the success-conscious ideology was replaced by scientific management. Bendix implies that the scientific management and human relations school ideas that were prevalent in the 1950s were themselves ideological rather than empirically based. That was not the case. Scientific management had an efficiency rationalization that 19th century managerial ideologies, based on justification to aristocrats in England and to the public, lacked. However, scientific management in fact increased productivity. To the extent that the human relations school tempered scientific management and reduced labor problems while maintaining constant or increasing levels of productivity, it too could be validated. However, the chief advances in the second half of the twentieth century in management, lean manufacturing, computer integrated manufacturing and total quality management, had even greater effects on productivity.

Political ideologies have not advanced in the same manner as managerial ideologies. THe ideology of the 19th century, laissez faire, was associated with rapid industrial advance. Its competitor, mercantilism, had been associated with economic progress in the 17th and 18th centuries, but paled in comparison to the progress that laissez faire generated in the 19th. This was true in Britain and the US. Marxism, various strands of socialism and in the late 19th century progressivism evolved as critiques of some of the social ramifications of laissez faire. These ideologies, though, once implemented, were unable to evolve, unlike the managerial ideologies. Marxism today does not posit an economic model much different from Marxism in the 19th century. Oskar Lange was unable to overcome the arguments of Ludwig von Mises, and in any case socialism in practice was unable to efficiently implement Lange's idea. Similarly, the ideas of Progressivism intensified into the New Deal, but have not evolved since the early twentieth century. Progressives today still rely on scale economies rather than innovative management practice as a source of value. But scale is no longer a critical source of economic value. Correspondence of output to customer needs, reduction of loss through stabilization of the production funciton and taut management of production processes (along with evolution of organization structure to flatten hierarchy and increase employee responsiveness) have not been viewed as possible within the public sector. Much as processes have failed to improve, so program conceptualization, strategy and flexibility in the public sector remain rooted in early twentieth century bureaucratic forms. The evolution of centralizing tendencies in public sector management goes back to the 17th century and reflects the ideas of Lord Shaftesbury and other mercantilists. The debate between Federalists and anti-Federalists, Whigs and Jacksonian Democrats and Progressives and advocates of laissez faire revolved around the question of the relative merits of centralization and decentralization, of price versus central plan, of economies of scale versus dynamism of innovation. However, unlike the ideology of decentralization and laissez faire, which considerably evolved in the twentieth century, the ideology of Progressivism and planning stagnated.

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