To belong to the capitalist class by virtue of ownership of capital, one must simply possess adequate wealth; that is the only requirement for membership in that sense. To belong to the capitalist class in its aspect as the direct organizer and manager of a capitalist enterprise is another matter. Here, a process of selection goes on having to do with such qualities as aggressiveness and ruthlessness, organizational proficiency and drive, technical insight, and especially marketing talent. Thus while the managerial stratum continues to be drawn from among those endowed with capital, family, connections, and other ties within the network of the class as a whole, it is not closed to some who may rise from other social classes, not through the acquisition of wealth on their part but through the co-optation of their talent on the part of the capitalist organization which they serve. In this case the ownership of capital later follows from the managerial position, rather than the other way around. But this is exceptional, not just because top management is drawn as a rule from within the class, but also because the stratum as a whole is not a large one.
While the title of “manager" is bestowed in various statistical classifications upon a great variety of jobs, the possession of this title has, for most, nothing to do with the capitalist management of the substantial corporations of the country. For example, the Bureau of the Census classified almost six and one-half million persons, out of some 80 million, as “managers and administrators, except farm," in the census of 1970. But this included perhaps a million managers of retail and service outlets, and as much as another million self-employed petty proprietors in these same fields. It included buyers and purchasing agents, officials and administrators at the various levels of government, school administration, hospitals and other such institutions; postmasters and mail superintendents; ships' officers, pilots, and pursers; building managers and superintendents; railroad conductors; union officials; and funeral directors. Since such categories consume almost half of the entire classification, it is clear without further analysis of the rest that the managerial stratum of true operating executives of the corporate world is quite a small group.
But though proportionately small in the total population, this stratum has become very large in comparison with the pre-monopoly situation. Speaking of the early part of the nineteenth century, Pollard says: "The large-scale entrepreneur of the day began with very limited managerial, clerical or administrative staff: he wrote his own letters, visited his own customers, and belaboured his men with his own walking stick." The small number of clerks employed even in large establishments did not only bookkeeping but timekeeping, quality control, traveling, and draftsmanship. For years, says Pollard, Watt made all his drawings himself, and he gives this remarkable statistic: “The Arkwrights, in 1801-4, employed only three clerks to look after 1,063 workers, nearly all of whom, again, were paid by complicated piece rates."² In the United States, Alfred D. Chandler points out: “Before 1850 very few American businesses needed the services of a full-time administrator or required a clearly defined administrative structure. Industrial enterprises were very small, in comparison with those of today. And they were usually family affairs. The two or three men responsible for the destiny of a single enterprise handled all its basic activities—economic and administrative, operational and entrepreneurial."3
The institutionalization of capital and the vesting of control in a specialized stratum of the capitalist class corresponds chronologically to an immense growth in the scale of management operations. Not only is the size of enterprises growing at a great paceto the point where a few enterprises begin to dominate the productive activity of each major industry——but at the same time the functions undertaken by management are broadened very rapidly. We have already traced this development in the sphere of production. When fully reorganized in the modern corporation, the producing activities are subdivided among functional departments, each having a specific aspect of the process for its domain: design, styling, research and development; planning; production control; inspection or quality control; manufacturing cost accounting; work study, methods study, and industrial engineering; routing and traffic; materials purchasing and control; maintenance of plant and machinery, and power; personnel management and training; and so on.
But if the engineering organization was the first requirement, it was soon outstripped in functional importance by the marketing apparatus. The first great integrated corporations, which began to appear in the United States in the 1880s and 1890s, were constructed on the basis of a new approach to the marketing problem, and it is not too much to say that after the assurance of basic engineering requirements it was this revolutionary marketing approach that served as the basis for the monopolistic corporation. The earlier pattern had been one of buying and selling through commission agents, wholesalers, and the like. The growing scope of the market, based upon improvements in transport and communications as well as upon the rapid increase in the size of cities created by the growth of industry, showed itself not only through increases in volume but also in geographical dispersion. The fundamental corporate innovation in this area was the national marketing organizations they established as part of their own structures, organizations which were soon to become international.4
The transportation network was the first arena for the giant corporation. The railroads and shipping organizations, by virtue of their demand for steel rails, plate, and structural shapes, drew in their wake the steel industry which had just begun to become proficient in the manufacture of steel at a price and quantity that made these developments possible.
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Labor and Monopoly Capital
The Modern Corporation
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