The World Bank and Global Managerialism

Jonathan Murphy

• Publisher: Routledge
• Year: 2007
• ISBN:
  9781134125685
• Edition: 1
• Topic: Business
• Subtopic: Business generale
• Index: Business

In recent years, a great deal of scholarly and popular ink has been spilled on the subject of globalization. Relatively few scholars have addressed the political sociology of globalization, and specifically, the emergence of global class formations and a nascent global governance framework. This book is a contribution towards redressing this imbalance.

The book traces the emergence of the World Bank as a key driver of globalization, and as a central source of an evolving form of elite-driven transnational governance which the author describes as 'global managerialism'. The book argues that the Bank has expanded its sphere of activity far beyond provision of low-cost capital for development projects, and plays a central role in pursuing global economic and social policy homogenization. The World Bank and Global Managerialism features a new theoretical approach to globalization, developed through an analytical exposition of the key stages in the institution's growth since its creation at the Bretton Woods conference of 1944. The author details the contemporary Bank's central policy framework, which includes the intertwining of public and private initiatives and the extension of global governance into ever-wider policy and geographic spheres. He also argues that contemporary globalization marks the emergence of a transnational elite, straddling the corporate, government, and civil society sectors. The book provides two detailed case studies that demonstrate the practical analytical utility of the theory of global managerialism.

The theoretical approach provides a robust but flexible framework for understanding contemporary global development. It is essential reading for courses in areas such as International Organizations, Global Political Economy, and Globalization and its Discontents, and is also relevant to students of development policy and international economic architecture, among others.

1
Towards a theory of global managerialism Introduction

Global managerialism describes an ambitious elite project – both orchestrated and spontaneous – to construct a durable human management system on a global scale. The theory of global managerialism that I present here argues that managerialism is the driving force underpinning the colonisation of ever greater swathes of the ideal and physical worlds. Global managerialism is both more and less than an economic or political system; it is a modus operandi, an infinitely reconfigurable worldview, justifying continuing elite domination and inegalitarian resource distribution.

Global managerialism revolves around three core propositions:

• A globally organised managerial elite dominates contemporary society.

• The elite straddles economic and geographical boundaries.

• The elite is institutionalised through global institutions such as the World Bank, that play a key role in promoting and enforcing the new global order.

This book explores the theory of global managerialism from within a critical management studies (CMS) perspective. This represents something of a departure from the typical application of CMS approaches. CMS is best known for exploring the micro-processes of power within organisations. It has identified the burgeoning of managerial practices that seek to colonise organisations through an increasingly comprehensive set of practices extending far beyond twentieth-century Taylorist industrial management techniques. The new practices, propagated formally (e.g. business school education) and informally (e.g. popular management manuals), disavow mechanical management methods such as production lines, quotas and time-clocks, preferring to secure consent through enlisting the worker as a willing and enthusiastic partner in corporate success (Willmott, 1993). This approach has been generalised beyond the corporate environment and become managerialism, an all-purpose organisational solution (Parker, 2002). Despite the common CMS claim that managerialism represents a widespread and generally undesirable feature of contemporary society, little attention has been paid to the sociological meaning of this development. Does managerialism represent the emergence of managers as a distinct social grouping?

Critical management theorists are divided about the appropriateness of tying the concept of managerialism to a class of managers. For Grey (1999), managerialism is totemic of contemporary life, and thus managers cannot be neatly distinguished from managed. However, it is argued here that management is still an activity that belongs predominantly to certain social roles: within the organisation, to managers over workers, and in broader society to politicians, senior bureaucrats, opinion-leaders and corporate lobbies. Governing has become a matter of managing systems and people. Increasingly, management’s focus extends beyond national boundaries, through the activities of transnational corporations, the emergence of transnational systems of economic and social regulation, and the management of popular consent to this transnationalisation of social norms.

Global managerialism theory’s most celebrated ancestor is James Burnham’s (1941) managerial revolution hypothesis. Burnham argued that a managerial class had come to dominate political and economic life in New Deal America, Communist Russia and Fascist Germany, which he claimed were about to eclipse the old empires. Despite apparent ideological differences, Burnham believed that the Soviet, German and Russian elites shared a corporatist, scientific and totalising perspective to which traditional democracies had no answer. In retrospect, it is evident that Burnham greatly exaggerated the potential of statist planning while underestimating the resilience – and managerial tendencies – of liberal democracy. New Dealism in America had only superficial similarities with the authoritarian European movements, neither of which could escape from their own ideological and organisational rigidities. Burnham mistook Fascist and Communist states’ aggressiveness for durable strength and fatally minimised the importance of consent in the managerial project. Burnham’s inaccurate predictions somewhat discredited his theory and, more generally, managerial class theories. Managerialism was not dead, however, and in recent years has assumed a more flexible guise, adapting to ideological fashions while continuing to extend the domain of the manageable.

Today’s globalised order is a seamless web of public and private networks extending over the human terrain. While the networks are not strictly hierarchical in the manner of the authoritarian movements of the first half of the twentieth century, power is distributed unequally within the networks, and institutionalised nodal points exist from where the discourse and practice of globalisation are developed and propagated; Czarniawska (2004:780) uses the term “action net” to describe such an institutional order.

The World Bank is one of these crucial nodal points, and the following chapters will trace its development into a pre-eminent globalising institution. It is not argued that the World Bank is the only, or even necessarily the pre-eminent, institution in this process. In particular, it is affirmed that private multinational corporations play a crucial role in pursuing elite-led globalisation, and that their executives are also part of the global managerial elite (Sklair, 2001). However, most previous critical research on globalisation has focused much too narrowly on its private capitalist content and insufficiently on the process of institutionalisation of globalisation. This book aims to help redress that imbalance.

The theoretical framework

The New World Order is one in which the fundamental cleavages of interest cut across national lines, as well as traditional economic categories. It is an order structured around the construction of governmentality, even while it lacks the nation state’s explicit authority superstructure. This order is the product of three dynamics: the seepage of managerial approaches into all facets of life; the gradual, worldwide homogenisation of human organisation; and the emergence of a global managerial elite straddling the public and private sectors.

Elite theory and existing critical theories

I begin by comparing the underlying assumptions of the global managerial elite theory with those of other critical perspectives of globalisation. While there are a variety of iterations of critical globalisation theories, which are discussed in some detail below, these fall essentially into two families: those that explain globalisation in terms of the unfolding of objectively existent economic factors; and those that are based on organic, culturalist explanations. By and large, the economistic critical accounts have roots in Marxism, while the culturalist accounts are based on a poststructuralist approach. Neither approach is satisfactory. Purely economic accounts can only offer a partial explanation because economic power is only one manifestation of power, while poststructuralist approaches are oblivious to the unequal distribution and reproduction of power. I will take some pains to underline the importance of a more nuanced analytical approach than either of these theoretical starting points can provide.

The ramifications of economistic approaches to understanding social dynamics are wide ranging and restrictive. These accounts grossly oversimplify the operation of power, tending to create a morality play in which agency is attributed only to holders of economic capital and the proletariat, their historically blessed “gravediggers”. Those who hold critical economistic views are unable to account for power in the state and civil society sectors except as derivative of one or other of the two power groups, leading to a repeatedly tragic “tourism of the revolution” in which demagogic populist movements are held up as harbingers of universal freedom.

The popularity of poststructuralism is in large measure a reaction to this authoritarian problem in economism (Derrida, 1994:13–15). However, the poststructuralist approach eviscerates the potential for authentic critique in asserting that “real” structure does not exist outside discourse. This argument tends to be constructed in the process of a logical leap: economic determinism cannot be sustained, thus power is not structured (Laclau and Mouffe, 1985). Whatever the political position arrived at by poststructuralists, it cannot by definition be derived from an analysis of existent social structure and reproduction, and thus tends to be random, declamatory and irrelevant in exposing the reproduction of deep social inequalities such as exist between the managers and the managed in an emerging global order.

Elite theorists Mosca and Pareto (see Bobbio, 1972) provide a more inclusive starting point for understanding social stratification than Marxism can provide. Marx began by assuming that a hidden explanatory engine must lie underneath social manifestations; his task was to uncover this essence and then refit presenting social phenomena into the defining dynamic. Because Marx selected the economic transaction as the fundamental social moment from which all other human phenomena are derived, social power must thus be traced back to the economic power holder. Mosca and Pareto’s method moves in the opposite direction; they base their theory of elite domination on the prima facie observation that dominant elites appear to exist in all different types of society. They assume that this is preordained, and focus their attention on the various mechanisms whereby elite domination is assured, threatened and renewed. In the democratic age, the assertion that elites dominate all societies is an impolitic one, but borne out by all presenting evidence. Ironically, in comparison to the putatively progressive theories of Marxism and poststructuralism that seek respectively to exclude the possibility of some, or all, forms of social domination, the “reactionary” elite theory acknowledges this reality without shame. From a critical perspective, acknowledging structured inequalities in human organisation does not assume that this is either a desirable or immutable feature of life: “the ubiquity of domination does not exclude the possibility of relative democratisation” (Wacquant, 1992:52).¹ From an analytical perspective, the elite approach draws attention to this unequal structuring of power while leaving open the forms in which this structuring takes place. Elite theory provides a basic starting point of the global managerial elite theory presented in this book.

Elite theory was further developed into an authentically critical approach by the post-war radical American sociologist C. Wright Mills. Mills sketched a contemporary picture of who, specifically, was running things, and how their domination was operationalised. He described a power elite of real people: people who went to school together, married each other, and helped each other out. From his angle, it wasn’t evident that the ones who ran companies were necessarily more important than the ones who ran countries or the ones who planned nuclear war. Beyond petty squabbles between different elite segments, they tended to see things the same way, and they often changed hats. In the half century since C. Wright Mills wrote The Power Elite (1957), the lifestyle details and the personal ambitions of elites have changed, but the basic characteristics of elite reproduction and control have not:

If social origin and formal education in common tend to make the members of the power elite more readily understood and trusted by one another, their continued association further cements what they feel they have in common. Members of several higher circles know one another as personal friends and even as neighbours; they mingle with one another on the golf course, in the gentlemen’s clubs, at resorts, on transcontinental airplanes, and on ocean liners. They meet at the estates of mutual friends, face each other in front of the TV cameras, or serve on the same philanthrophic committee; and many are sure to cross one another’s path in the columns of newspapers, if not in the exact cafes from which many of these columns originate.

(Wright Mills, 1957:281)

Wright Mills’s definition of the power elite carefully avoided exclusive membership criteria; he envisaged elite membership as gradated or tiered, in the manner we see today in frequent flyer programmes that have both basic and various “elite” tiers. For Wright Mills, elite membership, although correlated with wealth, was more directly related to location in an intertwined social order. Thus the senior government official is as legitimately an elite member as the corporate executive. There were three main circles of institutional power: business, government and military, although he emphasised their overlapping and the tendency of elite members to move between the circles.

The French social anthropologist Pierre Bourdieu (1994) provides a dynamic structural explanation that grounds Wright Mills’s sketch of a cross-sectoral elite. Bourdieu expands the notion of capital to include social and human as well as economic capital, like Wright Mills, justifying the extension of the ruling class to incorporate those who possess abundant non-economic but little economic capital. For Bourdieu, the various capitals cannot be simply translated into each other, but they can in principle be combined together in varying quantities to create what he calls “symbolic capital”, an aggregate capital that approximates an overall class position and social power. Bourdieu’s multiple capital theory is complemented by John Higley’s notion of elite “settlements”, which asserts that a stable hegemonic order is based upon the concurrence of major elite groups in a particular formula for the exercise of elite power (Higley and Burton, 2006). I will argue in this book that such an elite settlement, or compact, now exists on a global level.

Bourdieu’s other key contribution to post-determinist class analysis is the concept of “habitus”. Habitus, simply put, is the translucent web of social signals such as definitions of “taste” that semi-consciously structures social allegiances and permits coherent class positions to emerge in the absence of overt concertation. Bourdieu’s approach allows navigation of the waters between determinism and atomism, and is of fundamental importance in this book’s conceptualisation of the process of emergence of the global managerial elite.

Global managerial theory compared with other critical theories of globalisation

In this part of the chapter, I examine more closely some key alternative critical perspectives on the emergent global order. This discussion will permit an enriching of the bare bones of the theory of global managerialism described above, as well as clarification of the distinctions between this theory and other alternatives. By and large, the discussion will move chronologically, beginning with early theories of imperialism and leading to contemporary analyses of global class formation. Although some of the earlier perspectives outlined in the discussion might seem outdated, they continue to influence, both explicitly and implicitly, critical thinking on the global order, as I will discuss briefly at the end of the chapter. It is important, then, to understand the strengths and weaknesses of these positions.

Before venturing into a discussion of transnational theorising, it should be mentioned that there are some relatively well-known theorists who question the extent and the inevitability of globalisation. When globalisation discourse first became popular in the late 1980s, critical social science responses were often cautious and even disbelieving. Callinicos (1989) argued that the “postindustrial economy”, often represented as underpinning globalisation, is mythical, and that the shift between industrial and service employment is act...