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Marc Andreessen explains why AI might be the end of James Burnham's "managerial society" In his book The Managerial Revolution, Burnham divided capitalism into two phases. The first phase was what he called "bourgeois capitalism" "Think of this as name on the door -- it's Ford Motor Company because Henry Ford runs the company. It's a dictatorial model and Henry Ford just tells everyone what to do. He said the problem with bourgeois capitalism is it doesn't scale because Henry Ford can only tell so many people to do so many things." The second phase was what Burnham called "managerial capitalism", which was Marc describes as, "the creation of a professional class of managers that are trained -- not to be car experts or experts in any particular field but to be experts in management. And then that led to business schools and management consultant firms and all these things." Marc continues: "You look at every big company today and most executives at most of the Fortune 500 companies are not domain experts in whatever the company does. And they're certainly not the founders of those companies. They're professional managers. And in fact, over the course of their careers, they'll probably manage many different kinds of businesses. They might work in healthcare for a while and then work in financial services and then go work in something else." "What Burnham said was that transition was absolutely required because the problem with bourgeois capitalism is it doesn't scale... So if you're going to run capitalist enterprises that are going to have millions to billions of customers, they're going to be operating at a level of scale and complexity that will require this professional management class." Burnham acknowledged that this professional management class has its downsides -- they're not as inventive and not going to come up with the next breakthrough. But whether you think that's good or bad, that's what's going to be required. And basically that's what happened. Marc continues: "Managerialism basically took over everything. What I'm describing is basically how all big companies run and how all governments run and how our large-scale non-profits run." Marc believes venture capital is a protest movement to that -- backing founders under the Henry Ford model, and trying to find the next Elon Musk or Steve Jobs who can out-innovate the incumbents. "I've always viewed my entire life as: we're raging against the dying of the light. We're constantly trying to fight off managerialism from swamping everything and everything getting boring, gray, dumb, and old." But AI may now offer a third model. Marc explains: "Maybe the new Henry Ford, Elon Musk, or Steve Jobs + AI is the best of both because it's the spark of genius of the name on the door model but gives that person AI superpowers to do all the managerial stuff... What's the thing these bots are really good at? They're really good at doing paperwork, writing reports, and doing all the managerial work." "The challenge is going to be for the innovators to figure out how to leverage AI to actually do this." "The other challenge is going to be for the incumbents that are managerial to figure out: what does that mean? Because now they're going to be facing a different kind of insurgent competitor that has a different set of capabilities than they're used to." "I think this is going to force a lot of big companies to figure out innovation - figure out innovation or die trying." Ben Horowitz elaborates on this point further in his article Databricks & the Future Firm below. Video: @latentspacepod (Apr 2026)