The End of Economic Man, Chapter 2 (pt 2)

End of Week 2. So far, so good.

I haven’t gotten into the idea that Drucker is arguing that the world of the Economic Man has come to an end because communism – rather than capitalism - has failed. It’s a tricky argument that is based on the idea that the European tradition promises people freedom and equality. He starts by noting that capitalism can’t deliver equality, even equality of opportunity. Communism can’t deliver either, so, according to him, the goals of the entire civilization collapses.

I wonder if he would write it differently after 1989, after the end of the Cold War?

I don’t see anything in his oeuvre to suggest that he thought about rewriting it. Maybe I will find a revisionist essay somewhere. If he didn’t, he was either happy with this argument or felt that it referred to an era in the distant past that need not be revisited.

Did the fall of the Berlin Wall invalidate his argument? Probably not. He argues that 20th century communism was not especially true to Marx but was just a form of trade unionism within capitalism.

I once had a discussion about the transition from communism to capitalism with a computer engineer from Moscow. He had once designed clones of western machines for the Soviet Union. After the wall fell, he tried to start a technology company but quickly was overwhelm by competition from Silicon Valley. He is now a consultant of some sort. I asked him if it was difficult to switch from trusting economic plans to trusting the market.

He gave me a long, cynical stare, like I was a niave little waif, and shrugged his shoulders. “We want to feed our children,” he said. “We’ll believe whatever you want us to believe.”

The End of Economic Man: Chapter 2

What is Economic Man, you may ask? I certainly asked that question and expected Drucker to answer it in the first chapter of the book. If anything, I assumed that it was a typical small, businessman. Something like my uncle in Ann Arbor. Close to the actual goods and services of business. Conservative. Risk averse. If that were the case, this would be a much less engaging book.

“Economic Animal” is Drucker’s short definition. (p 43) A conception of men as women as only motivated by economic forces: the desire for economic satisfaction, economic position, economic goals.

If we live in a world of economic animals, then the field of economics has a special place in the pantheon of knowledge, as it would then describe the most fundamental actions of people.

Some time ago, 10 years I would guess, I sponsored a talk by a journalist who claimed to have special insight into the economics of East Asia. One of my economist colleagues attended the talk and left it quite angry. “Economics is a science and there is only one economics,” he hollered at me. “There is only one economics. It works everywhere. One size fits all.”

Maybe so, but Drucker argues that such a position uncovers the anxiety of economics about their field. Economics, after all, did not do a particularly good job of predicting the recent Great Unpleasantness, as we refer to the current times. Yet, no one in the field felt that Economics was at fault. They might have accepted the notion that some of their models were bad but they would not let that blame spread to the field.

So Drucker is claiming, in 1939, the end of a world populated by those who are motivated by economic satisfaction, position and goals.

I wonder where we are now?

The End of Economic Man: Review

I found a review of the The End of Economic Man in International Affairs, a British professional publication. 1939, the year of publication.

The review is generally quite positive though it suggests that Drucker is an idealist, a utopian or something like that. I always need to be reminded that Drucker is at the start of his career and is not yet Peter Drucker, management expert.

The reviewer claims that Drucker reaches a “rather obvious and rather vague” conclusion: the European social structures of of 1939 have reached the end of their useful life and that Europe needs to develop a “new, free and equal non-economic society.”

Perhaps it is obvious, though hindsight has clearly altered that view. Still, as Drucker moves towards that conclusion, he gives you the sense that you are exploring deep and profound ideas.

The End of Economic Man, Chapter 1 (pt 2)

If this guy is going to become an expert on organization, you’d think that he’d have at least a little sympathy for a movement that substituted organization for social goals, but he has none. You need to have a real goal. In the “European tradition, the justification of power must be the central issue.” (p 14)

I wonder how much Drucker followed the development of the social organizations on the Internet. He died in 2005, so he must have seem some of it. So many of these groups formed so naturally around an idea that the participants gave no thought to the justification of power. But I can remember when I was interviewing early network organizers, I found that they had a tremendous difficulty justifying power.

Flaming. I think that the term is still current. It was a phenomena on the early email based groups. Individuals who had some emotional response to a network discussion would express their opinions in long, invective-filled, emails. Many, many of the early group leaders were reluctant to discipline people who disrupted group discussion. They had to justify their power and didn’t want to do it. They thought that the organization would run itself.

Well we know better now, at least a little better. We know that organizations don’t run themselves, that leaders have to justify their power and that organizations have to have a purpose. Nothing is emptier than a discussion group with no purpose.

The End of Economic Man, Chapter 1

Well, I'm into the first chapter and I can only ask if this is written by the same guy who made is reputation as a management expert? This chapter contains few clues to Drucker’s eventual career and place in the management world. The prose is compelling, tightly reasoned and intellectual to be sure, but it is a political argument against Fascism.

I understand the crisis of the moment. Fascism was horribly frightening at the time. Drucker didn't like it but many people didn't like it. Only at the end of the chapter, the last paragraph to be exact, Drucker can I find any sign of the future management expert.

After arguing and re-arguing with the conventional ideas about Fascism, Drucker reveals that he will handle the subject from the point of view of an expert on business structures. Organization is the problem, he says. The “abracadabra of fascism is the substitution of organization for creed and order,” are his exact words. (p 21) You need a purpose for any organization, and Fascism has none except that of building an organizational structure.

Probably a sound point, but we will see where he takes it.

The End of Economic Man, Forward (pt 2)

I am not moving very quickly through the book. I had planned to do a chapter a day or at least five chapters a week. However, this work has to fit into a daily life that includes the usual household duties, teaching, and a writing schedule. I write a 2,500 essay each month for Computer and currently am writing an encyclopedia entry on software engineering. Though I have put management aside, at least temporarily, I am the Vice President of Publications for the Computer Society and that has demanded my attention this week. If I can at least move forward every day, that will have to be enough.

Also, as I am writing from the point of view of digital computing and communications technology, I wanted to make the connection between that those technologies and Drucker. Drucker wrote The End of Economic Man almost a decade before the electronic computer. At the time, the most common form of computing technology was the punched card machinery of IBM.

Punched card machinery dates to the 1890 Census of the United States but that technology acquired new sophistication in the 1920s and 1930s. IBM expanded the size of the card in 1928 and developed a new line of products to punch, read, sort, tabulate, and handle accounting problems. These machines encouraged the industrial production of information during the 1930s. They facilitated the rapid expansion of US Government agencies and programs during the New Deal. Some writers have even argued that the Nazis used punched cards to facilitate the Holocaust. If you are going to move against 6 million members of your own population, you probably need industrial tools to identify and track those individuals.

You will need to forgive these little essays, these little bursts of excessive fact. I would like to think that it is an endearing aspect to my personality but I suspect that it can be more than a little irritating. I mentioned punched cards because, like Drucker, I am dubious that there can be sudden, instantaneous changes. In this forward he writes that there are neither “’accidents’ nor ‘miracles’ in political and social life.” (p xv).

As I look ahead, I anticipate that Drucker will be writing about several technical changes that many have identified as revolutionary. The computer (1946-ish). The software industry (about 1968) and the more or less unrelated social upheaval. The personal computer (let’s call it 1980). The Internet (1992 for all tends and purposes.) All of these things are important. All of them changed the way that we look at our selves and manage our organizations. But in line with Drucker, I suspect that they had an impact not because of a radical change of technology but because they caused us to get a new concept of our own function and our own place in society. (p xvi)

That is it for this week. I am planning that this will be a workday blog. See you Monday with Chapter I. Let's see if we can get 5 chapters next week. Take care.

The End of Economic Man, Forward - Drucker's words at last

Well, I have dawdled long enough. I am now in to Drucker’s actual words. The first phrase that stands out from the rest is “Surface phenomena.” (p xv) Drucker begins the book with an attack on those who “appear to me to content themselves with surface phenomena.”

That phrase is so familiar that I wonder if I grew up in a community that quoted Drucker without identifying or even knowing the source. I even recall a high school teacher to liked to employ that phrase. He was an odd bear. A bit gruff and completely impenetrable. With the experience of 20 years of teaching, I now suspect that he assumed a gruff character in order to get his points across to group of naive teenagers.

I don’t know the extent to which Drucker is assuming a character but he is projecting a confident and knowledgeable persona. His thesis for the book seems to be rooted in the statement that there “can be no compromise between the basic principles of the European tradition and those of the totalitarian revolution” (p xv). If he is going to make good on this claim, he is going to have to defend his ideas on a broad front. Brailsford, in the preface, suggested that Drucker was capable of such a performance. We will see how he performs in this book.

The End of Economic Man, Introduction (pt 2)

I don’t know who H. N. Brailsford might be and I really don’t care, even though he wrote the introduction to Drucker’s first book in English, The End of Economic Man. He is an English political figure of some import, a liberal that is “advocating a broad union between all schools of liberals and socialists.” (p x)

Just as he identifies himself with liberal ideas, Brailsford shows that he also embraces certain conservative ideas in that combination that is a hallmark of Drucker. He, Brailsford, suggests that European liberals are actually conservatives of a sort, as they are placed in the position of preserving “for Europe, the liberties our fathers won.”

We think of business people as being a relatively conservative group. They support unfettered markets and defend private property. Yet, they can also embrace certain aspects of liberalism, certainly when liberalism is defined as equality before social and civic institutions.

In his day, my businessman father combined that free-market conservatism with social equality. On several occasions, he found himself defending the rights of African Americans. I believe that held his convictions on moral principles but made his arguments in terms of equal treatment in business. Everyone is the same in the market. All customers get equal treatment. In one case, he made a public argument when a club said that they would not serve two of his African American customers in their public dinning room. (I describe it in Too Soon to Tell, Wiley 2009) The club manager eventually retreated, though he made my father pay a price – a bowl of soup dumped in the laps of a colleague.

The incident at the club was a small event, a minor event when compared to the stand against Nazi Germany that Brailsford and Drucker are advocating. Still, it illustrates the fact that business people make decisions with a fairly sophisticated set of criteria, ideas that may not be easily categorized as liberal or conservative.

The End of Economic Man, Introduction

Well, if you expected this book to be about management, you are going to be surprised. It’s a critique of Nazism. The Nazi government of Germany was apparently of interest to the economists and business people of 1939. It would be easy to skip this book and jump to the Idea of the Corporation, which clearly starts his career in the study of management but we need to begin here. Perhaps by looking at a subject that seems remote from the topics of management we can get a clearer sense not only of Drucker’s priorities but also see a little more clearly the foundation on which modern management was built.

When this book was published, the most active manager in my family was my grandfather, the minority partner in a lumberyard. He held, I have been told, a job of some respect and authority, though I doubt that he had a dozen people working for him. I don't think that he would have connected management and Nazi Germany. Still, the second world war gave him the greatest management education that he would receive. In the fall of 1939, he was called into the army and would spend the bulk of the war commanding a prisoner of war camp in Alabama for captured German soldiers. It taught him more advanced management than he had ever experienced. I suspect that many of Drucker's early readers had similar experiences, as they saw the scale of industry change in less than three years. So we might as well begin with Drucker's view of the Nazi's and the growing threat of war.

Reading Peter Drucker: A Prospectus

In this project, I am going to read and organize the complete works of the management pioneer Peter Drucker, beginning with The End of Economic Man (1939) and ending with Managing in the Next Society (2002). I undertake this project not because I have any thought of improving my managerial skills, as I have just completed twenty years of academic management and believe that I am honestly looking forward to the independence that I have acquired. I am reading Drucker because I believe that he will help me understand that he will help me (and helps us all) understand the growth of technology that dominates our society. In particular, I am interested in the technology of software, which appeared in the last half of the twentieth century. Drucker, afterall, coined the term “Knowledge Worker” and, as I can see it, Knowledge workers would have little scope were not their activities supported by software.

So I begin. My list has 30 books and a much longer list of articles. I will probably focus only the books, as I believe they include the most complete statement of Drucker’s ideas. I’ll include the articles only as they add new material or bring new insight to his ideas. So tomorrow, I begin with Drucker’s first book in English, The End of Economic Man.