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.