This essay serves as the Introduction to a book which has just appeared, entitled Reinventing Aristocracy in the Age of Woke Capital (London: Arktos, 2022); it is available at Arktos and Amazon.
The proudest boast of the transnational corporate welfare state is that it has rendered obsolete the political hegemony of traditional ruling classes. Achievement, not ascribed or hereditary status, is said to be the key to material success and political influence. The open society promoted by transnational corporate capitalism has become the template of social progress. Accordingly, in the USA, only a few decades ago, a complacent WASP establishment was sidelined by a new class of brash outsiders. At the highest levels of American society, WASPs simply ceased to dominate.[i] In the media and entertainment industries, in banking, the law and academia, they were replaced, most visibly and dramatically, by Jewish parvenus.
Harvard University, America’s oldest university and long-time gateway to the ruling class, is emblematic of that transformation. Founded as ‘a schoale or colledge’ in 1636 by the first wave of Puritan settlers in New England, Harvard received its corporate charter from the Massachusetts General Court in 1650. By the nineteenth century, the college had become the intellectual bastion of an increasingly secularized, or, perhaps more precisely, deracinated, WASP Ascendancy.[ii] To all appearances, it remained a predominantly WASP institution until the mid-twentieth century.
Since then, however, Harvard has been almost completely detached from its ancestral ethno-religious identity. The once Anglocentric college was rebranded by cosmopolitan managers and well-connected overseers as a globalist multiversity. As a consequence, American ‘whites’ (a statistical category which includes Jews and non-WASP, European-descended, ethnicities) presently account for only about 42% of the entering class each year. In a striking sign of the times, there are now more Jews than WASPs among Harvard undergraduates.[iii]
In the received narrative of capitalist modernization, the rags-to-riches story of American Jewry is not about ethnic rivalry. Rather, the astonishing upward social mobility enjoyed, inter alia, by American Jews is typically attributed to the economic dynamism, technological prowess, and managerial and professional opportunities created by the modern American business corporation. In industry, education, the law and government, the rise of the managerial class was grounded in the progressive principle of careers open to the talents.
Orthodox Marxist historians emphasized the revolutionary role played by the bourgeoisie in undercutting the authority of established aristocracies.[iv] But the social character of the bourgeoisie was very different from the professional and managerial class spawned by the expansion of corporate capitalism. The eighteenth and nineteenth century bourgeoisie was, formally or informally, an estate of the realm. Unlike the relentlessly materialistic, performance-driven, goal-oriented managerial class, the bourgeoisie remained grounded in the status hierarchy of traditionally, and still predominantly Christian societies. In late nineteenth century, England, its Empire, and Europe, generally, authority could be justified credibly, if not exclusively, by reference to its origins. The genetic legitimacy of traditional ruling classes was based upon custom and social convention or in a presumptive divine right. Apart from any other justification, the right of conquest could be invoked. Like slaves captured in war, conquered peoples were fortunate to be allowed to live under the thumb of a victorious ruler.
The old, landed nobilities of Europe did not simply fade into the background amidst the satanic mills of bourgeois capitalist society. They continued to play a prominent role in social and political life until the Great War of the early twentieth century. In fact, ‘it was the rising national bourgeoisies that were obliged to adapt themselves to the nobilities.’ Even the most successful bourgeois merchants, bankers, and industrialists aspired to positions on ‘the high social, cultural, and political terrain’ occupied and controlled by the nobility.[v]
Even so, Anglo-American society provided fertile soil for the growth of a free market society. The English jurisprudence of liberty had deep roots. Britons had long vowed that they never, never, would be slaves. The ancient British constitution married the authority of both the king and patrician parliamentarians to primordial notions of popular consent. The Protestant Reformation rocked the foundations of ecclesiastical authority by licensing the freedom of every individual conscience. Then, in the mid-seventeenth century, the simmering resentment of English commoners towards their aristocratic and ecclesiastical rulers boiled over as Puritan revolutionaries executed the king in the name of parliament and the people. The Puritan struggle for religious liberty not only produced a civil war which upset the traditional balance of the ancient constitution; it also gave great impetus to the rise of capitalism in both England and colonial America.[vi]
By the 19th century, Anglo-American political authority was no longer justified primarily by reference to its origins. Leading legal thinkers came to scorn the Lockean obsession with social contract no less than the common lawyer’s veneration of musty precedents. A new ruling class appeared, basing its title to political power on its ability to achieve results. From then on, the source of constitutional legitimacy ceased to be genetic; it became goal-oriented or telic instead. Utilitarianism became the political leitmotif of an erstwhile bourgeois, now professionally managed corporate capitalist regime promising to promote the greatest good for the greatest number.
Corporations in the Early American Republic
Just as the rise of the bourgeoisie did not entirely eliminate aristocratic élites, the mental shift toward a goal-oriented view of politics overshadowed but did not entirely eviscerate traditional forms of genetic legitimacy. Indeed, in England, the aristocracy and landed gentry actually performed the economic role of the bourgeoisie as they pioneered new forms of agrarian capitalism. By the early nineteenth century, the result was ‘an open aristocracy based on property and patronage.’[vii] While the aristocracy and gentry classes were open to new forms of enterprise and political organization, the English bourgeoisie tempered its progressive ethos with a respect for traditional social, political, and legal institutions. The culmination of every truly successful business career was the acquisition of a substantial landed estate and, ideally, a hereditary title of nobility, both of which were then passed on to heirs expected to carry on the erstwhile bourgeois, family’s newly-invented traditions.
In both England and the American republic of the early national period, a patrician ruling class emerged which owed its wealth and social standing to the productive use of property. English common law had developed uniquely extensive and concentrated forms of individual proprietorship over land, which facilitated private, purely economic, ‘capitalist’ modes of appropriation. Elsewhere, in France for example, the state was much more important as a means of appropriating surplus labour from direct producers, as were other forms of politically constituted property, such as corporate privileges. Agrarian capitalism on the Anglo-American model helped to consolidate the distinctively bourgeois hegemony of civil society over the state. It came as no surprise, therefore, when foreign observers characterized the early American republic—sometimes even England—as ‘stateless societies.’[viii]
As a matter of constitutional form, early nineteenth century England was a monarchy. In reality, however, like the newly independent USA, it was a patrician republic in which a rising bourgeoisie made up of merchants, professionals and manufacturers constituted a natural aristocracy. By comparison with the continental regimes familiar to Alexis de Tocqueville, the patrician élites in Anglo-American societies favoured a minimalist state, confident that they could deliver the greatest good for the greatest number through the productive use of their private property. This view presumed that the people-at-large would continue to defer to their betters among a natural aristocracy, respecting the constitutional liberty of the latter to do as they chose with their property.
Tocqueville was among the first to warn that radical democratic disdain for aristocratic privilege was bound to give greater weight to popular demands for equality than to inherited traditions of constitutional liberty, much less the political prerogatives of property ownership.[ix] It was not long before the rising tide of democratic politics in America displaced the patrician Standing Order that had ruled colonial New England. In Britain and the American South, where the aristocratic ethos of the gentry was more solidly rooted than in New England, the process took longer, but there, too, the writing was on the wall.
The democratic radicalism spawned by the American Revolution trans- formed American society and politics, extending the principle of equality into every aspect of public, and eventually even into private life. Every branch of government now owed its existence to ‘the people.’[x] As they began to lose control over the newly constituted state and federal governments, patrician élites, especially in New England, began to experiment with new forms of politically constituted property intended to restore their traditional hegemony. They sought and obtained a massive expansion in the number of special corporate charters granted by state legislatures, not just to business enterprises, but to schools, colleges, hospitals, and churches.
For a time, the creative deployment of chartered corporations helped to shore up the sagging social prestige of the old patriciate. But that defensive strategy could be sustained only so long as corporations retained their traditional legal identity as ‘civil bodies politic.’ This concept seems altogether alien to the modern mind, accustomed as it is to think of the corporation as little more than a legal and organizational form designed to facilitate the pursuit of private profit. We take for granted the separation of ownership and control. But, for a patrician élite, the classical republican concept of property was understood as the material foundation of civic virtue. It applied not just to landed property but was embodied as well in the personal rights and responsibilities of the corporate shareholder.
At common law, property, especially landed property, had been conceived as ‘that sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual.’[xi] Possession of a landed estate ensured not only the economic autonomy of the household but its political independence as well. With the property owner as its head, every household became a little school of self-government. Property was thus directly linked to the responsibilities of rulership. Something like the same result was achieved by the special charter regime that effectively constituted the corporation as a ‘little republic.’
Corporate charters were granted by state legislatures, on a case-by-case basis, to achieve both public and private purposes. The constitutional principle of ultra vires operated to prevent any corporate enterprise from acting to achieve objects not authorized by its charter. Moreover, shareholders were responsible for the uses to which their common property was put. Consequently, limited liability was not an automatic and universal corporate privilege. Shares in a joint-stock enterprise therefore carried an associational element along with a proprietary interest. Shareowners were members of the corporate body politic; in effect, they were citizens of their own little republic. If the corporate charter did not specify the voting rights attached to share ownership, judges sometimes held that, prima facie, the rule should be: ‘one voice, one vote’ (i.e., not ‘one share, one vote’). Such civic concern for the integrity of the corporate body politic also led many to take a dim view of proxy voting. The practice was widely condemned as an abdication of shareholders’ political responsibilities.
It was not long, however, before the corporation as a civil body politic came under sustained attack as a bastion of ‘aristocratic privilege.’ A radical anti-charter movement arose, most notably in New York and Pennsylvania, to demand general incorporation laws and the extension of limited liability to all shareholders. The ‘democratization’ of the corporation did widen investment opportunities for small shareholders, encouraging widespread use of the corporate device as a means of securing firm central direction over the enterprising use of assets.
But precisely because small investors were least likely to value the associational element of share ownership, corporations ceased to be conceived as bodies politic. Soon the law began to treat corporations as private, economic instruments of capital accumulation. Republican resistance to the ‘one share, one vote’ rule became pointless. For the same reason, from being a sign of civic corruption within the corporate body politic, proxy voting became a simple convenience. Both developments may have owed their origins to the democratic rhetoric of the anti-charter movement, but their most important consequence was to entrench the plutocratic principle in corporate governance.
The Managerial Revolution and Corporate Plutocracy
Ironically but logically, the rise of corporate plutocracy signalled the imminent decline of the bourgeoisie. By the end of the American Civil War, the collapse of the corporation as a civil body politic was pretty much complete. Consequently, the patrician bourgeoisie could no longer function as an informal third estate within the civil constitution of Anglo-American society; it was displaced by an increasingly impersonal system of corporate capitalism. Membership in the body corporate became little more than a legal fossil, altogether divorced from patrician norms of honour and responsibility.
Such a change implied a fundamental transformation in property ownership. Marx was among the first to realize that the joint-stock company effectively abolished private property. Share ownership created a novel form of collective or social capital. From being a form of absolute dominion exercised over an autonomous landed household, proprietary interests were disaggregated into a variable bundle of claims to a share of the wealth or income generated within a complex, interdependent process of production, distribution, and exchange. Property ownership lost its civic significance; it no longer served as a school of self-government. Stripped of its patrician role within the body politic, the civic role of the corporate bourgeoisie was replaced by the self-interested avarice of fickle investors, ever on the lookout for the chance to buy on the dip and sell at the peak.
The moral decline and civic irrelevance of corporate shareholders as a class was a consequence of both the democratic and the managerial revolutions. Even a putatively natural aristocracy was ill-placed to compete with organized political machines employing the rhetoric of egalitarian democracy to license the growth of an impersonal public administration. Nor could wealth alone provide its owners with the managerial skills necessary to run a complex, multi-unit, modern business enterprise.
But the haute bourgeoisie in America and elsewhere in the Western world was not forcibly deprived of decision-making authority in the corporate realm. Rather, given the opportunity, moneyed interests were more than willing to abandon the notion that property ownership should carry with it the sort of public responsibility and civic obligation associated with the aristocratic ideal of noblesse oblige. By and large, the bourgeoisie simply abdicated the responsibilities of rulership.
The public burdens of property ownership came to count for much less than its private benefits, nowhere more obviously than in the sphere of corporate governance. Once the ‘one voice, one vote’ principle was replaced by the ‘one share, one vote’ rule, share ownership became a means of systematically negating the civic significance of property ownership. All shares, not all persons, were created equal. Not surprisingly, wealthy investors soon became quite comfortable with that interpretation of democratic equality. The voice of a shareholder with one hundred or one million shares now carried one hundred or one million times the weight of a member holding but one share in a common corporate enterprise. Votes came to be valued, not as an incident of membership in a corporate body politic, but rather for their tactical importance in securing effective control over a valuable bundle of economic and financial assets.
So long as their business was organized as a family firm, a partnership or a close corporation, an entrepreneurial capitalist could remain in control of his own enterprise. But, having chosen homo economicus as their role model, capitalist entrepreneurs became hostages to fortune in the public realm, where a new class of professional politicians and bureaucrats was expanding the state’s administrative capacities. Indeed, even in the economic sphere, the spectacular success of entrepreneurial capitalism spawned a vast network of hugely complex business enterprises organized and run by professional managers with highly specialized technical and administrative skills. More often than not, the most successful enterprises became public corporations whose shares and bonds were traded in national financial markets. Before long, entrepreneurial capitalists lost control over the corporate sector to a rising class of professional managers. By the early twentieth century, the separation of ownership and control had become the default position in the modern business corporation.
Managerial élites are now in the driver’s seat, not just the corporate sector, but in the state as well. Democracy no longer implies that the government will be ‘owned,’ much less ‘controlled,’ by the people of any given nation. The only legitimate form of democracy, according to the multiculturalist mullahs of the managerial state, is cosmopolitan democracy. The state may still claim to act in the name of the people, but the demos has expanded to include the whole of humanity. By virtue of their presumptive enlightenment, the managerial and professional classes now present themselves, or, rather, the global system which they administer, as the virtual representatives of humanity at large.
Corporate capitalism has expanded to become a global system of organized irresponsibility. Precisely because it is a system, it has become a form of no-man rule. No-one can be held responsible for the operation of the system; it has a life and logic of its own. At most, individuals can be held accountable for a failure to behave in accordance with the norms governing the effective management and orderly administration of sub-systems. Entrepreneurial activity, capital investment and managerial oversight have all become specialized functions, no longer united in a single figure responsible for the uses to which property is put. Those who variously own, manage, or regulate the corporate economy generally escape political responsibility for its social costs, much less for the moral hazards and spiritual emptiness that are among its most obvious by-products. Within a global economy detached from and destructive of local communities, the ruling class has disappeared behind the corporate veil.
In these circumstances, the restoration of a ruling class prepared to accept responsibility for the fate of the common world would be a welcome relief. Unfortunately, political, economic, and cultural élites throughout the Anglosphere are steeped in dishonour; they have privatised the privileges of high social status while socialising the public burdens of responsible rulership. The ideology of ‘democratic capitalism’ allows them to dissimulate their actual role as a ruling class, thereby evading personal liability for the adverse consequences (described antiseptically as ‘negative externalities’) of their corporate decisions. Political imagination is surplus to requirements in a bureaucratic corporate hierarchy. Behind the corporate veil, the civic virtues of honourable conduct and personal responsibility have been translated into impersonal standards of accountability for results achieved. The managerial overclass presents, successfully so far, its globalist program of perpetual economic growth as humanity’s highest achievement. In the absence of a noble ruling class, old-fashioned notions of noblesse oblige lose their functional significance.
Resurrecting the Corporation as a Civil Body Politic
Denunciation of the managerial regime serves no useful purpose unless it arises out of a movement aiming to create a new ruling class. This is not an impossible dream. Indeed, given the accelerating crisis of confidence in the corporate sector, it is becoming an urgent practical necessity. In principle, the goal of such a movement is clear: those who nominally own the corporate sector must recover a measure of control over the uses to which their property is put. To make that possible, the public corporation must be reconstituted as a civil body politic. The best citizens among substantial shareholders in public corporations must be allowed, indeed encouraged to become a civic élite within those corporate bodies politic. Reinventing the aristocratic principle of rule by the best and applying it to the governance of the public corporation could help to cope with the multiplying risks generated by a global society of perpetual growth.
When the major task of capitalist development was the conquest of scarcity, it made good sense to privilege the private benefits of corporate share ownership over the public burdens and civic challenges associated with membership in a corporate body politic. It is now high time to tilt the constitutional balance within the corporation away from civic privatism by creating a political role for the active investor. A new emphasis on the political character of membership in the corporate body politic would re-attach civic responsibilities to the proprietary rights of share ownership.
This would mean an end to the plutocratic principle of ‘one share, one vote,’ which did so much to hollow out the civic significance of corporate governance. Only under conditions of political equality can any significant number of share- holders hope to overcome the formidable collective action problems facing activists within the realm of corporate governance. For that reason, all shareholders who hold a substantial threshold stake in an enterprise should be entitled to participate in a process of deliberative decision-making based on one voice, one vote. Property ownership could, once again, serve as a school of self-government.
It may well be that only a relatively few individuals among millions of widely dispersed investors in thousands of firms are ever likely to enrol in such a course in practical civics. Not everyone is moved by the joys of public happiness. But all those who do take up that civic challenge should stand on an equal footing in the corporate body politic. Those who demonstrate by their actions that they value the privileges of membership should bear final responsibility for the good governance of their joint enterprise.
The problem with the governance of corporations as they are presently constituted is that only money talks. At a general meeting, those who hold a majority of the (voting or proxy) shares, even if they are only a small minority of those present, have no need to either to speak or to listen to their fellow members. Even the best corporate citizen is bound to be discouraged by a voting regime that systematically devalues the power of reasoned speech in favour of the sheer dumb weight of proprietary interest. This would not amount to a constitutional issue if corporate decision-making affected only private economic interests. But corporations now exercise powers that are governmental and political in nature.
The constitution of the public corporation must be reconceived as a novel sort of mixed polity in which private ownership interests are balanced against the public responsibilities of governing a body corporate that creates both economic wealth and political power. Corporate governance should be reconstituted to provide a political theatre in which bourgeois investors keeping a sharp eye on their financial interests can also take on the role of citizens striving to distinguish themselves in the service of the common good (and vice versa).
By treating a senatorial élite of shareholders as political equals in fundamental corporate decisions, a reformed constitutional law enables the bourgeois and the citizen to learn the art of corporate governance from each other. If the public corporation is to survive and prosper while doing business in an enlightened and responsible manner, a coalition of interests must learn to balance the economic imperatives which call the business corporation into being against the responsible exercise of its inherent governmental powers. The consequence would be the re-emergence of a patrician bourgeoisie, the very model of a modern natural aristocracy.
[i] See, e.g., E.Digby Baltzell, The Protestant Establishment: Aristocracy & Caste in America (New Haven, CN: Yale University Press, 1987); and Eric P. Kaufmann, The Rise and Fall of Anglo-America (Cambridge, MA: Harvard University Press, 2004).
[ii] Ronald Story, The Forging of an Aristocracy: Harvard & the Boston Upper Class (Middletown, CN: Wesleyan University Press, 1980)
[iii] https://datausa.io/profile/university/harvarduniversity/#enrollment_race; see also, Ron Unz, ‘The Myth of American Meritocracy,’ at: https://www.unz.com/runz/meritocracy-appendices/#3 .
[iv] Eric Hobsbawm, Age of Revolution:1789-1848 (London: Weidenfeld & Nicolson, 1962).
[v] Arno J. Mayer, The Persistence of the Old Regime: Europe to the Great War (New York: Pantheon, 1981), 80-81.
[vi] R.H. Tawney, Religion and the Rise of Capitalism: A Historical Study (New York: Mentor, 1946 [orig pub. 1926]), 164.
[vii] Harold Perkin, The Origins of Modern English Society, 1780-1880 (London: Routledge & Kegan Paul, 1969), 17.
[viii] See, especially, Stephen Skowronek, Building a New American State: The Expansion of National Administrative Capacities, 1877-1920 (New York: Cambridge University Press, 1981), 3-8.
[ix] Alexis de Tocqueville, Democracy in America 2 Vols [original edition, 1835 and 1840] (New York: Alfred A. Knopf, 1945).
[x] Gordon S. Wood, The Radicalism of the American Revolution (New York: Vintage, 1993).
[xi] William Blackstone, Commentaries on the Law of England, Vol II (Chicago: University of Chicago Press, 1979 [orig. pub. 1766]), 2.