Friday, February 26, 2010

The Future of Industrial Man, 1: The War for Industrial Society - last day

Economic Man was the individual who responded to economic forces. Industrial man is the individual who works in an industrial context. Drucker sees only once question facing the leaders of the war “Can industrial society be built as a free society?” He has spent the last two years at Sarah Lawrence College, which is not really a place that one associates with industry. He has been teaching statistics, a field that has been rapidly growing in the prior 7 years. A series of conferences at Iowa State University begins to consolidate the methodology. The technology of the IBM tabulator makes the work doable. During the war, the financial companies of Manhattan pooled their tabulating machinery so that the military could do statistical tests on war plans: submarine kills, malaria incidence, enemy plant destroyed. This technology will be one of the tools that leaders of industrial society will use. Drucker will have to ask if such things will organize industrial in a free manner.

We will move ahead on Monday and, we hope, with more speed.

Thursday, February 25, 2010

The Future of Industrial Man 1: The War for Industrial Society (pt 3)

I’m moving slowly again through the first part of a book. It takes me a little time to get my notes in shape and get started. I want to return again to the idea that the organization structure of the war will be the one that controls the peace. In 1943, The various military units were truly starting to focus on the problem of Operations Research of using mathematics to manage the various elements of the war. The Applied Mathematics Panel, which I have studied in some depth, is less of a group of people studying mathematical methods as it was a committee for using abstract models to insure that bombs exploded where they were supposed to explode.
Thomas Hughes notes that these methods will “come into vogue” after the war, but they are being developed during this war by the need to direct machinery and production that needs more than human control. We shall see if this leads to Drucker’s free industrial society.

Wednesday, February 24, 2010

The Future of Industrial Man 1: The War for Industrial Society (pt 2)

Drucker calls this a civil war for western civilization. He sees the orgins in many places, including William James and August Comte. He is holding to the ideas that he identified in the last book. The economic sphere is primary. Freedom is the key value. The important features of society are the principles that people apply to physical reality to create social institutions. He repeats his critique of totalitarianism from the last book. Totalitarianism replaces a non-economic hierarchy for an open economic structure. “The violent repression of freedom by the totalitarians proves that they are trying to make society function by abandoning freedom.”

One of my favorite discussions of engineering society, Edwin Layton’s “Revolt of the Engineers” dwells on that economic fault line that runs between technical and financial people, whose with specialized knowledge about specific engineering processes and those with more general managerial skill. This is not smeothign that Durcker is going to address at the moment, though it will have to be something that recur in these writings.

Tuesday, February 23, 2010

The Future of Industrial Man 1: The War for Industrial Society

This chapter repeats much of what was said in the prior book about the Nazis and totalitarianism. It is written at a time when our scientific and engineering establishments are being established and are working to expand production. Both the NDRC – the National Defense Research Council – and the OSRD – Office for Scientific Research and Development – are fully formed and operating, Both of them tended to rely on young researchers – most barely out of grad school. Many had to get deferments from the draft.

This new group of researchers would set the stage for 50 years of research. When I started graduate school they were very much present, though clearly in the last years of their leadership role. The history of war-time research argues that these scientists had to be put into a stronger social structure because the United States did not have the time to waste. They had to develop new weapons, train the soldiers and deploy the new systems in the war.

Drucker doesn’t comment on this but it represents an early example of what he is discussing. A small group of scientists have a leadership role and work with a highly stratified support team. This will be the structure that wins the war and establishes the peace.

Monday, February 22, 2010

The Future of Industrial Man (1943)

We are starting a new book but it is a book that begins where the old book ended. It is 1943. The Second World War is at the peek that it will ride for another year. We have agreed that Europe is first, Japan is second. We have had the battles of North Africa and the German defeat at Stalingrad. We are starting to fight up the Italian peninsula.

Drucker argues that this war if the first industrial war, the first war in which industry is the prime weapon. He also notes that this war has a much more sophisticated division of labor than the first world war. Bombing crews, he notes, have very specialized duties. Twenty-five years before, the trenches were filled with masses of undifferentiated humanity.

The structure of the war will establish the structure of the piece. In particular, how we learn to manage the industry of conflict will set the stage for how we do it in peace and will help us to see if we can actually keep the peace.

Friday, February 19, 2010

The End of Economic Man, Summary

Five weeks over, one book down. The blizzards in DC delayed this project more than one might think. What is the argument that is relevant to us? Basically:

  • The economic state is primary.
  • The European tradition attempts to produce a society that is free and equal.
  • Capitalism in Europe has failed to produce a society that meets both goals
  • Socialism removed full freedom but didn’t achieve equality
  • Fascism replaces organization for economics and delivers neither freedom nor equality.
  • He predicts a new society will emerge from this process.

Given his final comments about mechanisms, he will likely be interested in the role of information flow in this new society.

Thursday, February 18, 2010

The End of Economic Man, END

We can be so smug some times. The New York Times reviewer was generally pleased with Drucker’s first book . He argues that Drucker has “succeeded in injecting in the much overworked and often tedious discussion of fascism remarkable vigor and freshness,” even though he offers opinions that may not be universally accepted.

One of those opinions is the potential alliance with the USSR. The review appeared about three months before the alliance between the two countries. The reviewer, Michael Florinsky, clearly doesn’t see it coming. Unless the democracy follows his advice, Florinsky writes, “Mr. Drucker threatens them with an alliance between Hitler and Stalin. To bring it about the Soviet Union will have to make some ‘minor’ (!) concessions…”

None of us can see perfectly in to the future. Not even a future that is only a few weeks away.

Wednesday, February 17, 2010

The End of Economic Man, Chapter 8 East Against West

So here we are at the last chapter. Like the whole book it is both of its time and something beyond it. It is about the German preparations for World War II and yet it has an attitude that looks beyond it. It postulates that Germany will have to side with Russia against the Western Democracies, more or less predicting the Molotov-Ribbentrop pact about two months before it became public.

On the other hand, it argues that recent German history, the history of the 1930s, points to a new kind of society, one quiet different from the Europe of the time. In these predictions, you see the themes that will become the hallmark of Drucker: freedom and equality, independence of operation and coordination of control.

In this work, Drucker makes no comment on information processing. Nothing about IBM. Only hints about the scale of the New Deal. At the same time, he seems to be ready for it, particularly as a way of structuring society. If economic production has failed as a means of achieving freedom and equality – or so he feels – the world is going to new a new form of organization. At some point, he is going to point to information as being at the center of that new form. He has prepared the ground work for that time, but he is not quite there yet. Although the Western Democracies “can produce a new order at will as little as they can restore the validity and rationality of capitalism and socialism, they can and should strengthen the dignity and security of the individual in economic society in such a way as to re-endow freedom with some meaning.”

Tuesday, February 16, 2010

The End of Economic Man, Chapter 7 (pt 2) Miracle or Mirage

In many ways, this book is filled with themes that cold be important to management even though Drucker is talking about politics at this point. Much of this chapter deals with personifying demons – the problems that bedevil and organization. He notes that people tend to fix blame to a hidden problem in their midst and identify that problem with certain kinds of people. It is clearly a problem in the body politic and it can easily be an issue in corporate life. Old boys. Conservatives. Liberals. Bean Counters. Engineers. Sales staff. Anyone group can be perceived as having too much power and be identified as bringing a special weakness to the group.

The criticisms of the book said that the conclusions were too vague. Drucker wanted to see a new form of society emerge but he does not describe that new society. Hence, the criticisms are not wrong. He is being vague. Yet, it suggests that he is going to approach the management problem as an empiricist. He will likely let the forces of society shape the organization. At the same time, he is clearly approaching these problems as one who understand the broad sweep of Western culture. To him Marx and Calvin represent the same kind of failure.

Monday, February 15, 2010

The End of Economic Man, Chapter 7 Miracle or Mirage

As I come to the end of this book, I keep reminding myself that this is the founder of modern management and that he will shortly move from critiquing totalitarianism to developing a strategy for managing business. He is deeply involved in this discussion and would appear to be starting a career as a political economist. There are two things that seem to be the foundation for his future work: personal freedom and economic equality. He argues that communism failed to provide equality and that democracy failed to provide freedom to Europe and Italy.

Therefore, both countries were vulnerable to the negative political movement of totalitarianism.
A second point is the fact that totalitarianism makes organization an end in itself and that such an end is poor indeed. He points to the claim that Fascist Italy “made the trains run on time” as illustrating the nature of totalitarianism. Such as state is mechanistic and has only mechanistic goals.

While the first point seems a useful starting point for a discussion of business, the second seems to pose some problems. These problems seem especially acute to us when we look at SWOT analyses, and metrics and feedback loops and the like. Drucker will be making a case for a certain style of management, a style that may start to vanish in the middle of his career.

Friday, February 12, 2010

The End of Economic Man, Chapter 6 (pt 3)

I’m going to work to finish this book next week. I have spent a month on this one even though it is far from central to my work. The macro economics is fascinating, however. Drucker claims that the validity of his argument can be seen in the unfavorable balance of German trade.

The Germans are distorting their economy by giving people non-economic rewards and protecting the farmer from industrialization. In the process, this prevents Germany from developing the resources it needs and causes an unfavorable balance of trade.

Of course, we have just survived an era in which macro economics failed to predict a collapse of housing prices and the failure of a housing market.

Thursday, February 11, 2010

The End of Economic Man, Chapter 6 (pt 2)

I wish that I had a different fuller understanding of the history as I read this chapter and didn’t have to rely on Drucker for all of my information. Drucker is a compelling writer and makes a strong argument. I just don’t know if he is giving us the full picture.

Even if he is not, it is a strong case. Drucker is claiming that the Nazis decided that they were not going to address economic inequality but were going to give their people new opportunities for social status in the Nazi party for increases in income. He talks about how top positions in the party were most often given to lower class individuals.

I understand the claim, though it grates on me a bit. I would like to think that we can get satisfaction from non-economic rewards. But Drucker has argued for the supremacy of economics in the human sphere and he is arguing here that the Nazis controlled Germany by suppressing the proper role of economics.

Wednesday, February 10, 2010

The End of Economic Man, Chapter 6 - Fascist Non-economic Society

At the moment, I am blogging while trying to maintain both by school responsibilities and my duties with the Computer Society in the midst of a blizzard. I returned home moenday night after a week of meetings in LA. (I was delayed 3 days by snow in DC.) Upon return, I realized that I would be trapped by the next blizzard if I did not leave immediately for my next round of meetings in Atlanta. So at 3:00 am, I depart for Dulles and a new plane, the only reservation I could get.

In this chapter, Drucker claims that the Nazi’s tried to substitute non-economic rewards for economic gains. It is an odd thing to read after you have dashed through the early morning snows to do volunteer work. As volunteer work has developed during the past 50 years, it is a way to get rewards for non-economic work. Certainly it gives many people an opportunity to work on a scale or scope or intensity that they cannot find in the jobs that support them.

Tuesday, February 9, 2010

The End of Economic Man, Chapter 5 (pt 2)

I apparently don’t live in a revolutionary time. My world of 2010 seems to have little in common with Drucker’s world of 1939. I have participated in many discussions about the goals and activities of formal organizations. School. Church. Job. I have rarely been involved in a discussion that seriously considered a major restructuring of any organization. Many times I have heard people argue that they should be in charger, rather than the current leadership.

Equally often I have listened to people claim that the organization was pursuing the wrong goals.
The situation that Drucker describes is difficult to imagine. Do people really let major institutions collapse because they never really believed in them? Sometimes I have heard people state that they no longer trust a certain institution but their words usually don’t convey their honest feelings. The love for stability is strong. They are usually saying that they merely want their candidate to be in charge.

I suppose that the closest parallel we might have are the new institutions of globalization, the agreements that have built and strengthened the global economy. To what extent are the middle classes committed to them? Could we simply abandon them because they were weakly won. This is not Drucker’s world of 1939 but are there feelings that we can find in the society?

Monday, February 8, 2010

The End of Economic Man, Chapter 5 - The Totalitarian Miracle

Well, we are marching away. In this chapter Drucker is trying to identify the aspects of German and Italian society that are unique to those countries and are found nowhere else in Europe and hence can be used to explain why those countries were the first to become fascist.

He claims that the common factor is the fact that those two countries were late to unify and in the process never developed the affection for democracy and democratic institutions. When the people of these countries saw the faults of capitalism and socialism, they did not see democracy as a means of correcting the problems.

I am not in much of a position to argue, as I am not an historian of either country. At the same time. I suspect that this issue has been debated many times and remains an issue of contention, similar to the continuing argument over the start of the American Civil War.
But Fascism is not the topic that interests me. Drucker is. In these arguments, Drucker shows that his is facile in his ability to take society apart, identify the forces and institutions that hold the bulk of power, and interpret those entities in light of the two issues that concern him most: Freedom and equality.

From that standpoint, this book questions that should be foundational to my study. To what institutions were the early software developers loyal? Was their attachment emotional, rational, economic? Did they honestly expect a social reorganization or did they merely want to get rich?

Friday, February 5, 2010

The End of Economic Man, Chapter 4

This is a tough chapter to address, though like much of Drucker, I find the ideas – as I understand them – compelling. It is about the failure of churches to provide a new approach to Western Civilization. Apparently they focused on individual salvation rather than on the health of society.

In addition to citing a number of German theologians that I don’t know, he talks about Henry Adams, who I actually enjoy. Adams wrote at the start of the industrial age and foresaw the impact of 20th century technology. He pointed to technical knowledge and its ability to fragment society. I may a romantic view of Adams, shaped by the fact that I work hear the site of his home, but I also find his observations on technology chilling and pointed.

I’m spending the week at the Board of Governors meeting of the Computer Society, an activity that always reminds me of the problems of social structure. We are constantly thinking about how we could better organize ourselves and work more effectively. The problem that always hangs over our talks is the gap between goals and acts. Goals are almost always expiring. Actions, no matter how carefully we try to align them with our ideas, can fall short. Comically. Tragically. Ironically.

End of Week 3. I’ll be blogging next week from the IEEE Board meeting. New experience but same issues, I suspect.

Wednesday, February 3, 2010

The End of Economic Man, Chapter 3 (pt 3)

Drucker argues that the English faced the choice between two people, Churchill and Chamberlin, who represented radically different ideals. Churchill did not believe in equality and hence was not concerned about the use of force, while Chamberlin concluded that English society could not provide equality and hence was not willing to fight for it.

Drucker was a way of writing that we would no longer accept. A strong voice with no doublt, no data, no public opinion or focus groups. The field was not that old in 1939. Gallup had been working for less than 5 years. Market research was a little older but not much more disciplined. Does Drucker ever start to think about how the public perceives itself or does he always rely on his observations? That will be a big change that is already starting to occur and will be in place well before his 1970 Management book is published.

Tuesday, February 2, 2010

The End of Economic Man, Chapter 3 (pt 2)

For the reality of industrial society is one of inequality. “

This is Drucker on page 61. “The failure to realize the ideals for which the war had been fought is directly due to the basic and fundamental cleavage between the ideals and concepts of the society of Economic Man and its actually structure revealed by the war.” The chapter is largely about the sad compromise that people make, or the compromise that Drucker feels they make.

Drucker argues that people surrender freedom. When offered the choice of keeping their freedom or avoiding some problem, such as unemployment, people surrender their freedom. Security trumps.

It is something of an arrogant claim, but it has more than a little truth. History has generally shown people to be more concerned about their comforts than their ideas. George Orwell painted a gruesome picture of the power of high technology in 1984. When the technology of that novel became available, did we resist it? Did we approach it with caution, aware that it might limit our freedom, as Orwell suggested?

No, we ran to Best Buy to see what kind of a deal we would get with it.

Maybe digital communications will not restrict our lives as Orwell suggested. But we will learn that answer after the fact, not before.

Monday, February 1, 2010

The End of Economic Man, Chapter 3

The Return of the Demons.

It’s hard to keep focused on the idea that this is a book in 1939 about fascism. I keep wanting to turn it into a modern book about our current conflicts, especially those that I can connect to technology. There are a lot of ideas that are relevant but analogy is an imperfect process. We see ourselves at points of history that reflect the policies that we would like to implement.

We tell ourselves that our era is similar to the end of the Roman Empire or to the one that saw the invention of movable type or the rise of the national phone system. All may be true. None may be true. We only hope that history gives us a little perspective.

Drucker continues to focus on two issues: freedom and equality. As he sees it, European capitalism failed to provide equality, so people turned to Communism. Communism did nothing to help achieve equality and destroyed freedom. With the failure of communism, which he believed was evident in 1939, Europeans needed to turn to something else and the system that they found was Fascism, which had no theory beyond the obvious statement that it was neither capitalism nor communism.

Does any part of his argument apply to us? I would prefer to look beyond the partisan politics of the moment, which seems all too ready to raise the flag of socialism, and think about the global business environment. Drucker provided the ideas that drove the globalization of business. If he thought that Europe had failed to provide a satisfactory environment for business, how did he think that global business would work, as it straddled different cultures and political systems?

He was probably unconcerned with such things, as the global environment was a large war and two decades away.