Marc Andreessen: evaluation

Transcript context

…Why Burnham? Burnham is not famous, but he should be famous. Burnham has a fascinating story. He’s a thinker in the 20th century who talked a lot about these issues. He started out life, as a lot of people do in the 1920s and ’30s, as a dedicated Trotskyite, full-on communist. He’s a very special guy. Burnham was a very brilliant guy. He was such a dedicated communist that he was close personal friends with Leon Trotsky, which is how you really know how you’ve made it when you’re a communist. He would have these huge arguments with Trotsky, which is not the safest thing in the world to do. Apparently, he got away with it. Very enthusiastic communist revolutionary through the ’30s. Then in the ’40s, he’s a very smart guy and he started to figure out that was a bad path. He went through this process of rethinking everything. By the 1950s, he was so far to the right that he was actually a co-founder of National Review magazine with William Buckley, who always said he was the intellectual leading light at National Review. He’s got works that he wrote that will accommodate the full spectrum of politics. In his middle period where he was trying to figure out — this is like in the 1940s — he was trying to figure out where things are going. There were enormous questions in the 1940s because it was viewed as a three-way war for the future between communism on the far left, fascism on the far right, and then liberal democracy floating around there somewhere. His best, most well-known book is called The Managerial Revolution, which talks a lot about the issues we’ve been discussing, and it was written in 1941. It’s fascinating for many reasons, part of which is, he was still mad about communism. He debunks communism in it. Also, they didn’t know who was going to win World War II. It talks about this battle of ideologies as if it were still an open topic, which is super interesting. He did this very Marxian analysis of capitalism. He made the observation that I see every day, which is there are fundamentally two types of capitalism. There’s the original model of capitalism, which he calls bourgeois capitalism, which you could think like Henry Ford is the archetype of that. A capitalist starts a company, runs the company, name on the door, ownership of the company, control the company, dictator of the company, complete alignment of a company with an individual. Then he talks about this other emerging form of capitalism at that time called managerial capitalism. In managerial capitalism, you think about today’s modern public companies. Think about Walmart or whatever, any public company where, in theory, there are shareholders. Really, what there are is, there are millions and millions of shareholders that are incredibly dispersed. Everybody in this room owns some three shares of Walmart stock in a mutual fund somewhere. You don’t wake up in the morning wondering what’s happening to Walmart. It doesn’t even occur to you to think about yourself as an owner. some three shares of Walmart stock in a mutual fund somewhere. You don’t wake up in the morning wondering what’s happening to Walmart. It doesn’t even occur to you to think about yourself as an owner. What you get instead is this managerial class of actually both investors like fund managers and then also executives and CEOs who actually run these companies. They have control, but without ultimate responsibility, without ultimate ownership. The interesting thing he said about that is, he said, “Look, managerialism is, basically, it’s not that it’s good or bad. It just is necessary because companies and institutions and governments and all the rest of it get to the point where they’re just too big and too complicated for one person to run everything. You’re going to have the emergence of this managerial class who’s going to run things.” There’s a flip side of it, which is, the people who are qualified to be managers of large organizations are not themselves the kind of people who become bourgeois capitalists. They’re the other kind of person. They’re often good at running things, but they generally don’t do new things. They generally don’t seek to disrupt or seek to create or seek to invent. One way of thinking about what’s happened in our system is, capitalism used to be bourgeois capitalism. It got replaced by managerial capitalism without actually changing the name. That will necessarily lead to stagnation. By the way, that may be necessary that that happens because the systems are too complicated, but that will necessarily lead to stagnation. Then what you need is, basically, the resumption of bourgeois capitalism to come back in and, at the very least, poke and prod everybody into action. That, aspirationally, is what we do and what our startups do. Marc Andreessen, thank you very much.…

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