Wednesday, April 21, 2010

Cold War: The Concept of the Corporation Chapt 1

So by nature, businessmen are Cold Warriors.

This is one of those chapters that flips the work on its head. It defines “free enterprise” in the process, but I will get to that later. I have often heard the argument that “Free Trade Prevents War” and have generally assumed that someone derived that idea from the nature of capitalism or their desire to promote capitalism. I had never thought that someone would start with that point and then derive the principles of free economy from it, but Drucker does so.

His title for this chapters “Capitalism in one Country” is a direct mockery of Stalin’s policy of “Socialism in one country.” Stalin’s theory, proclaimed in 1924, was that the Russian leadership could no longer assume that that the socialist revolution would would spread naturally to the other countries of the world. Therefore, the leadership of the Soviet Union had to establish socialism in the USSR and use the power of the state to help spread it. “Formerly, the victory of the revolution in one country was considered impossible,” explained Stalin in his lectures on Lenin, “on the assumption that it would require the combined action of the proletarians of all or at least of a majority of the advanced countries to achieve victory over the bourgeoisie. Now this point of view no longer fits in with the facts.”

So Drucker starts with the conflict between Capitalism and Communism, with the idealogical stand off that will eventually be called the Cold War. “Thus to make our free-enterprise system function—as the basis of domestic strength and unity and as a model for others, “ he argues, “is the most important and the most immediate contribution Americans can make to international peace.”

Peace. We form large corporations because we want Peace.

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