July 21, 2003


I can't get enough of Peter Drucker's writings, especially on society and politics. If there's ever been a writer that is in tune with the way the world works, it's Drucker. I'm going to talk about Drucker a lot in this blog. Think of this as my introduction of him to you, if you're not familiar with him.

Drucker is one of the best examples of the benefits of keeping an active mind: some of his best work was written in his 80s, and he still continues to write articles such as this Economist survey on the global economy and the "next society" in late 2001. So many of his ideas have pervaded our society's inner workings, it really will be a difficult thing when he passes on (he's going on 94). He was friends with Marshall McLuhan, Karl Polanyi, and Alfred Sloan (he wrote the introduction to the latest edition of Sloan's famous management book). Winston Churchill even gave a glowing review of Drucker's debut book, The End of Economic Man: The Origins of Totalitarianism. He's probably one of the only living people to have attended seminars from both John Maynard Keynes and Joseph Schumpeter.

I first started reading Drucker in college, back around 1997. I mainly focused on his management writings, but the university library had a number of first editions of his earlier works, that left quite an impression on me, though I don't think I was quite prepared to parse out the implications of those books. Lately (for the past 6 months) I've returned to his earlier writings on society: The Future of Industrial Man, Concept of the Corporation, and The New Society. In these three books, written between 1941 and 1950, he outlines his theory of society, examines the new reality of the society of organizations, and of the new social institution that defines all organizations, whether government, for-profit, not-for-profit: management.

He maintains a strong dislike for totalitarian approaches to society (including socialism), but has a strong skepticism of capitalism, particularily the way it has progressed since the 1980's. Drucker's words are no longer as hallowed as they once were in the executive suites of the Fortune 500 - he's considered somewhat cantankerous because of his constant criticism of both executive pay and the short-term gain aims of shareholder capitalism.

It strikes me that a lot of the ground he covers in these books is still ripe for analysis and discussion to this day. Drucker always was a bit of a contrarian and wild card, he's not quite an academic, but way more literary than most consultants. He's not an economist, but writes about economics. He's not a sociologist, but writes about society. He's not a historian, but knows a lot about history. I believe he once deemed himself a "social ecologist" - interested in the big picture of the interactions between people, society, and organizations.

I think a lot of his teachings and writings have been lost on this generation, even though they're extremely relevant to modern political discourse. His view of society and economics, in particular, is one of the only ones I've seen that transcends both classical and Keynesian economics. He thinks that businesses aren't an end to themselves, but are an organ of society. Consequently he thinks that "profit motive" is bunk, even though profitability is essential.

He's pro-market, but not "lassez faire". He (paradoxically, some might say) believes in strong government, but also in privitization (he arguably coined the term!) and in strong property-rights limitations to governmental power. He is a conservative in the Edmund Burke and Alexander Hamilton sense, but is certainly not a neo-conservative (of the current Washington-consensus variety).

He also thinks that corporate management represents illegitimate power and the crucial task for our society is to find a socially accepted principle for its legitimacy, lest it crumble under societal revolt (the Enron and Worldcom debacles show this quest is still not over).

And finally, he believes that we now are moving into a "post-capitalist" society, where capital (money allocated towards productive resources) is no longer the key factor of production: knowledge is. And management really is the application of knowledge to work - it's about increasing productivity and innovation. And knowledge workers (his term) will be the representative leaders of society for the coming century. The shift to knowledge as the key resource has tremendous implications for economics, politics, and education, none of which have really been tackled by developed nations seriously.

All of these ideas I probably will talk about in the coming weeks.

Posted by stu at July 21, 2003 03:21 PM