In this, my second Yuri Bezmonov tribute piece, I want to make clear that I see the incorporation of KGB subversion efforts into my larger theory of the rise of the managerial class are supplementary to my prior analysis. What I mean by this is that whereas I have previously argued that Wokeness/Identitarianism arose from the synergistic interactions of Blairite austerity and the postmodern critique, I am now arguing that KGB subversion efforts were nothing more or less than a third force in this synergistic relationship.
But even without active subversion efforts, the mere removal of the USSR and its vassals as a global political force would naturally have empowered and unshackled the managerial class to carry out the efforts at seizing power in which it has been engaged since the 1990s.
My comrade D’Arcy began to refer to the labour aristocrats, professionalized government courtiers, executive directors, management consultants and public/government relations consultants as “the commissar class” not because he believed in the Bezmenov theory (in fact, he was unaware of Bezmenov’s subversion theory) but because the class solidarity, shared agenda and paternalistic elitism of those known as the “professional managerial class” was so similar to the behaviour and consciousness of those who hijacked Eastern Europe’s communist revolutions 1917-49.
Thomas Piketty makes an important contribution to our understanding of this class when he writes of the rise of the “super-manager,” that portion of the super-rich who understand their status as arising from their expertise in revolutionizing production rather than their ownership of the means of production, even though, in many cases, they are also owners. Finally, we must tip our hats to John Ralston Saul and his work in Voltaire’s Bastards, in which he tracked the origins of the super-manager and the vacuity of the class’s moral theory.
Robert McNamara and the Early Commissars
A key early exemplar of this class, for Saul, was Robert McNamara, the US military’s efficiency guru who reorganized the country’s prosecution of the Second World War’s Pacific Theatre. By his own account, McNamara’s greatest contribution to the war was not his reorganization of bomber fueling that enabled the more efficient fire-bombing of Japan’s major cities but instead his use of statistical psychological data to reduce the rate at which bomber pilots aborted their missions.
It was on this basis that the Ford family, which had been struggling in its management of Ford Motors hired him as the first CEO unrelated to the Ford lineage that owned the company and compensated him with a significant portion of the company’s shares. As Ford’s CEO, his primary contributions, by his own account, were based on his ability to statistically aggregate psychological data in order to better modify the behaviours of both workers and potential purchasers of Ford vehicles.
McNamara became famous for this skill and it was on that basis that, in 1961, he was appointed Secretary of Defense by John F Kennedy and placed in charge of 40% of the American federal government’s budget. Many of the innovations in war that we associate with Vietnam can be traced directly to McNamara, such as the employment of Napalm, Agent Orange and other defoliants, all pitched to Kennedy’s and later Lyndon Johnston’s cabinets as measures to make the prosecution of the war more efficient.
It is also under McNamara that we see the US initiating a policy, amplified under the Nixon Administration and reaching a crescendo under Reagan of covert bombing in neutral countries adjacent to US imperial projects and the sale of arms to states at which the US and/or its vassals were at war to finance the very war in which the weapons were used, to defray the financial costs of continuing to prosecute those wars.
McNamara then went on to chair the World Bank, where he helped to develop, not just neoliberalism and its austerity policies but “structural adjustment,” the process by which the World Bank or its agent, the International Monetary Fund, would seize control of the budgetary and fiscal policies of debtor nations and supersede democratic decisions voters made at the polls. The policies that rolled out in the Southern Cone in the 1980s, following McNamara’s tenure were effectively the first instances of what we might call “technocratic dictatorship” outside of the Soviet Bloc.
Much ink has been spilled on how Argentina was ground zero for a new kind of politics, a politics under which most of us now live: political parties could campaign on whatever budgetary and monetary policies they wished but, once they achieved office, they discovered that the World Bank would determine those areas of public policy. Consequently, as we have seen unfold over the past forty years, democratic politics increasingly became about cultural, non-material issues because those were the only things people’s votes could actually affect.
Countries that pushed back did not just suffer at the hands of the World Bank, which effectively controlled the value of these states’ currencies, but at GATT (the General Agreement on Tariffs and Trade), which later became the WTO (World Trade Organization). Being locked outside the world’s monetary system, based on the US dollar since 1943, and the world’s trading systems brought governments to heel within months as people’s money became worthless and whatever they might wish to buy disappeared from store shelves anyway.
The Mutual Fund, the Business School and the Postmodern Turn
In this way, the commissar class increasingly saw itself as naturally adversarial to those who gained democratic power and saw democratic power as a threat to its own. After all, it was the commissars, not the owners, who carried out the neoliberal reforms. Meanwhile, as shareholders ceased to participate democratically in corporate governance but instead handed their proxies in corporate votes to a new kind of business, Mutual Funds, corporations increasingly followed the agenda of mutual fund managers, drawn overwhelmingly from the commissar class.
Naturally, mutual fund managers trusted members of their class as the most competent corporate leaders and used their consolidated voting power to elect fellow members of the class to positions like CEO, CAO and CFO.
Whereas, in previous models of corporate governance, large shareholders (often from founding families like Ford) appointed fellow members of the owner class, the old school bourgeoisie/owner class, to high internal office within these companies. In other words, one amassed stock (by inheritance or profit in another company) and then ascended to leadership. But the commissar class offered a competing model whereby one was appointed to leadership by other members of this class who managed funds and held voting proxies and, from that position, compensated oneself with shares and stock options.
This ascendant class based these appointments on an expanding academic discipline, “business administration,” which purported to confer skill at and understanding of the management of people based on the ability to analyze and manipulate mass psychology through statistical analysis. Whether this actually made any company more efficient is entirely debatable. The point is that the commissar class could justify its amplification of its own power by using a meritocratic discourse of expertise, not in what the company made or did but in psychological manipulation. People who ran companies, according to the logic of the commissars, didn’t run them because they were rich, or because they understood the specific industry in which the company was involved, and had risen through its ranks, but because they were masters of an arcane science McNamara and his ilk had helped to create.
It was therefore perfectly logical that the commissars would endow business schools with funds to make more commissars. And as the austerity programs the commissars championed went into effect, these schools came to exercise an outsize influence on university cultures as they expanded financially while the rest of the universities saw their budgets contract. Logically, of course, the way to save other parts of the universities was to make them more closely resemble the business schools that produced the commissars or, conversely, to reassure the commissars by withdrawing into various forms of immaterialism so as not to produce graduates who might make competing meritocratic claims on the basis of specific, disciplinary knowledge as opposed to the meta-science of management. Humanities, social science and STEM programs that were losing state funding were encouraged to engage in internal austerity and/or “entrepreneurial” activities (e.g. recruiting foreign students and charging them higher fees), activities that were expected to be planned and carried-out by academic administrators, trained in management theory.
In other words, the postmodern turn and the rise of the business school were of a piece with one another, both driven by austerity, the ascendance of the commissars, Soviet subversion and immaterialism. By immaterialism, I mean that management was increasingly a science of psychological analysis and manipulation while humanities and social science scholarship relocated from describing the physical world to describing people’s thoughts about that world. The idea that reality is a social construction is one equally championed by the business schools and postmodernists who seized control of humanities and social science scholarship.
These processes were already underway when the Eastern European dictatorships that had helped create them collapsed one after another. But without the worry of the Soviet Bloc as competition and with the removal of any serious political alternative, commissar-driven austerity could accelerate, as it rapidly did in the 1990s, raising tuition fees, ensuring that those working class people who did rise through the university system would be heavily indebted and thereby more controllable should they attempt to join this ascendant class. And, with an increasing dependence on and enrollment of international students, the commissar class globalized, incorporating more of the emerging middle classes of the Global South.
Thatcherite vs. Blairite Austerity
Austerity is best understood as a two-phase process. Thatcherite/Reaganite austerity was a political force that was, in the Global North, a largely democratic one, in contradistinction to its highly authoritarian character in the Global South. This first type of austerity was driven the working class’s hatred of the ascendant commissar class. As management became increasingly manipulative and psychologically invasive, workers’ anger towards the bosses turned from the owner class to the junior members of the commissar class. And as the commissar class came to recognize labour aristocrats, often from family groups that had monopolized trade union power for multiple generations, as part of their crew, that anger also turned against a corrupt and out-of-touch union leadership class that was clearly culturally disconnected from all but the most white-collar union members. And labour aristocrats increasingly culturally identified not with the workers they represented but with the managerial class with whom they negotiated.
Politicians like Ronald Reagan and Margaret Thatcher were able to gain public support for austerity programs on the basis growing working class hatred towards union leadership, their managers and members of the white-collar caring professions who increasingly intermediated their access to government services due to increasing means-testing for government aid, as part of neoliberal austerity programs. Meanwhile, as elected officials were pushed away from the role of intermediating and distributing government largesse out of concerns over “corruption” i.e. a material quid pro quo between voter and representative.
Thatcherite populists enacted austerity policies that ended up magnifying the power of the commissars by focusing their government cutbacks on frontline workers, and hiring commissars to preside over austerity. Or, they privatized or contracted-out government services, creating new corporations with shares and shareholders in which mutual funds could invest and install commissars as people presiding over the process of spinning off and selling off government services. While their friends, among the owner class, often bought these entities, commissars ran them and increasingly controlled even those they did not own. And these processes made sense on balance sheet because massive layoffs and wage cuts produced “savings.”
But these austerity policies produced democratic push-back. At the very moment that socialism was discredited the world over, political movements arose to install social democratic governments to reverse austerity in the 1990s. But the problem was that even the most independent states of the Global North were part of an integrated system run by the World Bank and WTO. Consequently, these social democratic parties found that they could not meaningfully change the economic direction of the states they governed and retreated to focusing on issues like abortion and gay rights, as issues on which they were still allowed to govern. So, instead, these parties transformed into new political formations known as the Third Way, epitomized in the regimes of Tony Blair, Bill Clinton and Gerhard Schroeder. Their sales pitch was that they were offering austerity but with a human face. More on this here.
What they delivered was both a good deal worse and more insidious. The educated liberals and social democrats who ran these parties had been the primary targets of KGB subversion. By this I do not mean that they were in some way more inspired by Marxism-Leninism than others, as Bezmonov believed they would be. Rather, their consciousness was a purer version of the class consciousness of the commissar dictatorships of Eastern Europe, which held the proletariat in every bit the same degree of contempt as the owner class did, but in a more paternalistic fashion, more likely to see the free will, the free agency of the working class as something to be managed and chipped away at, lest the workers rise against them and reinstall the Thatcherites.
Whereas old school politicians and old school company orders operated within a transactional theory of their relationship with the working class, commissars believe in a technocratic theory of governance/management based on science and personal benevolence, in which ordinary workers and voters were not people with whom they made deals but people who benefit from their benevolence.
Naturally, it became vitally important that Third Way regimes demonstrate to the powerful commissars who increasingly controlled the corporations and the mutual funds that selected their leadership that they were more meritorious, that they were better experts who could more competently enact austerity. And so, they innovated, using psychometric data.
The most efficient forms of contracting-out and privatization, from a cost reduction perspective, magnify a sector of the economy unconsidered by Thatcherites: the non-profit/charitable sector. Until the 1990s, most charities and non-profit organizations were democratic, membership-based and rooted geographically. Most of their leadership and most of their decisions were made at members in general meeting or by boards elected by those members. But, in the 1990s, in places where Third Way governments held power, they were offered a Devil’s bargain.
The government would cut services in an area they were concerned about like environmental restoration, care for the elderly, care for the handicapped, hospice care, food banks etc. The state would then approach these organizations, which had previously been involved either in advocacy for greater state action in these areas or in supplementing core government services with a few services of their own and offered to hand them the job of providing those services themselves, for a fraction of the money the government had been spending on directly delivering said services through the state.
This was a more efficient form of austerity because:
- wages paid in the non-profit sector tended to be lower because workers choosing this career path feel guilt about taking money that might otherwise be spent on the cause they believed in;
- workers were less likely to unionize or otherwise feel adversarial towards management because of a belief that everyone involved was pursuing a shared altruistic project;
- there is much more abundant volunteer labour that could be used to supplement paid labour or, if necessary, replace it;
- non-profit and charitable organizations often waived educational requirements for paid positions that would be expected (or even required) were those positions in government or for-profit business;
- these organizations ceased to be sites of organizing against austerity or criticism of the state because they had become totally dependent on state funding, which, if disrupted, would compromise their charitable aims; and
- the democratic leadership class of these organizations yielded internal power to members of the commissar class they were forced to hire to manage their much-increased responsibilities, larger labour force and to ensure the continued flow of patronage from government; these folks were called “executive directors.”
In other words, Third Way austerity achieved three objectives: it reduced costs; it coopted organizations and people who had previously been watchdogs of the state into working as its apologists; and it created a whole new set of organizations the commissars could “manage.” This austerity program out-competed parts of civil society not conscripted by state patronage by using the resources and legitimacy of the state to capture an increasing proportion of charitable donations relative to those received by old school democratic non-profits.
When these entities were on the rise, they were referred to as QuaNGOs, i.e. quasi-non-governmental organizations as distinct from NGOs, non-governmental organizations. But, in the twenty-first century, our Newspeak has eliminated the term “QuaNGO” and now conflates these two radically different types of organization as “NGOs.”
It is only after the new dominance of the Mutual Fund, the QuaNGO and the Executive Director that the next phase of the commissar class’s seizure of power could proceed in the early twenty-first century, something I will cover in my next post.
