Monday, May 10, 2010

Conservation of Intellectual Energy: The Concept of the Corporation Chapt 2

We know the end of the story, or at least the next chapter, and so some of Drucker’s predictions ring hollow. He clearly has great faith in mass production as a form of industrial organization. “Indeed it may be said that the rate of industrial expansion in this country depends very largely upon our ability to recruit and train a sufficient number of potential leaders in mass production industry,” he argues.

It is a prediction that seems to be based on the idea that the labor pool will be stable, that communities will not engage in a race to the bottom for labor costs, and that international trade will not grow. I suppose that we can forgive him the last misstep. The GATT treated, which starts the modern international trade regime, is being negotiated as he writes this book.

Still, he makes an interesting claim about mass production by stating that it redistributes work from the craftsman to the manager. “Intellectual energy like any other form of energy cannot be eliminated; and what is saved at the bottom must be added at the top,” he claims. If such were the case, then his prediction would have been largely true, subject to dislocations of labor.

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