Friday, January 29, 2010

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?

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