The Tyranny of Management

By Douglas Carswell
June 27, 2022

America is a democracy where voters get to decide public policy, right? This is a free-market country where those that own capital are able to invest in it, yes?

Alas, things no longer seem quite so simple. Proper democracy and capitalism seem to be dying in America. They are being replaced not with socialism, but with ‘managerialism’ – or rule by managers.

Voters still get to cast their ballots in elections, but the process of deciding public policy is in the hands of a class of public policy administrators. 

Think I exaggerate? Why, for example, does a state like Mississippi, where voters have voted conservative in state-wide elections for years, have a Department of Education that actively encourages the use of Critical Race theory in the classroom? Mississippi’s Department of Education website encourages teachers to use teaching resources offered by, for example, the Zinn Project

It is not what the voters want that determines public policy, but what the management – or bureaucrats – want that counts. 

Were you surprised like I was when Disney went ‘woke’? 

Disney seemed to almost revel in taking positions that might offend some of their customers, including families from places like Mississippi, many of who will have saved hard to be able to afford to go to Disney World.

The kind of people that manage Disney seems to me to have been more concerned about what other members of the corporate management class think. Among America’s corporate management class, ‘woke’ ideology is often seen as a badge of sophistication, up there with an Ivy League degree as a way of differentiating oneself from anything a little too ‘country’.

Big businesses have become ‘woke’ because it is increasingly the ideology and belief system of the management class. 

In a properly functioning capitalist system, when management makes bad decisions, you would expect to see the shareholders to intervene, but some of Disney’s biggest shareholders are firms like BlackRock, State Street and Vanguard.

These three fund managers oversee a combined $22 trillion of assets, giving them enormous clout over corporate America. Of course, these fund managers don’t actually own the money that they manage either.

This helps explain why in recent years many fund managers have started to apply non-financial factors as part of their analysis process when allocating capital. For example, some have used ESG – or Environmental, Social and Governance – criteria to decide where to put the money that they manage. The trouble is that these criteria are often so subjective that it leaves the fund managers in effect investing other people’s assets on the basis of their own political preferences. The notion that the managerialist elite makes purely empirical decisions based on reason is a myth. 

The rule of administrators in both business and government has had lots of negative consequences. It has fueled an intense antipathy toward ‘the swamp’.  It has seen bureaucrats making all kinds of policy errors on everything from the setting of interest rates to the public education system. It has driven bad investment decisions – with the oil and gas sector, for example, starved of investment.

Rule by management is not only undemocratic. It does not work very well. America’s next generation of conservative leaders needs to offer an alternative that will pass power away from the administrative elite back to the people.

Douglas Carswell is the President & CEO of the Mississippi Center for Public Policy. 


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