Review: The Post-Capitalist Society

Post-Capitalist Society, Peter F. Drucker. New York: Harper Collins, 1993.

Summary: Describes the transformation of a society based on capital to one based on knowledge whose key structure is the responsibility-based organization.

Peter Drucker, who died in 2005 was the business guru I looked to as a young leader in a non-profit organization. He wrote Post-Capitalist Society in 1993. In many ways, it captures a number of his key ideas, and in many ways seems prophetic, twenty-eight years later.

His key idea here is that we have witnessed a transformation from a capitalist society to a knowledge society, based on the successive Industrial, Productivity, and Management Revolutions. Now we are not in a situation of knowledge but knowledges–specialized knowledge for work in more highly specialized organizations. Organizations make knowledge productive for a special purpose. In a knowledge society, the workers own the capital, which is their knowledge, but need the organization to make it productive.

He has a fascinating discussion on the source of capital in pension funds through institutional investors. Here as well, employees are the ultimate “owners” even while trustees manage these funds. He points to the critical role of corporate governance in creating organizations responsible to these employee-owners. As he looks at the question of productivity, he advocates for corporate restructuring and outsourcing so that organizations concentrate on what they are most effective at doing. Effective responsible organizations are ones where everyone takes responsibility for the organization.

He then turns from the knowledge society of organizations to the wider polity of which they are a part. He envisions the transitions from nations to megastates, as we see in the European Union, NAFTA, and other regional economic polities. Even in 1994, Drucker recognized the environment as one of the needs for transnational arrangements, as well as counter-terrorism efforts and arms control. Even while he recognizes this movement to regional entities and transnational agreements, he foresaw the rise of tribalism, and the stress on diversity rather than unity. For Drucker, tribal and transnational identities go together. And maybe this is so, but not in the ethnic ways he sees but in the radical political identities on the far right and left of the political spectrum that find iterations in many countries.

He is witheringly critical of “the nanny state” in which taxation and economic policy is designed not to make the “patient” healthy but rather to feel good. He points to the success of Germany (before 1989) and Japan and the “Asian tigers” that had high taxes but high investment in education, in facilities, and infrastructure. He argues that patriotism is not enough and that what is needed is the revitalization of community (even more true today) and citizenship expressed through voluntarism.

In the final section, he focuses even more on the cultivation of knowledge. He argues that we know more than we do and need to learn to “only connect,” to see how disparate pieces connect as a whole. He considers here the needs of education, and contends here, as well, for outsourcing and charter schools (an area that has a very mixed record of effectiveness). He advocates for the “accountable” school. While Drucker had a richer vision of the results he would seek from education, his was among the voices that sustained an accountability movement that has focused more on test-taking than learning, to the discouragement of many teachers. Ultimately Drucker believed people needed to be educated for work in two cultures simultaneously–“that of the ‘intellectual,’ who focuses on words and idea, and that of the ‘manager,’ who focuses on people and work.”

Where Drucker seems the most prescient is his understanding of the knowledge economy. What I don’t think he foresaw was the monetization of knowledge in the information economy. He recognized the growth of transnationalism, but didn’t fully reckon with the reactionary character of nationalism, often acting against its own interests. He had wisdom that both corporations and governments need about long-term planning and especially for governments, the follies of budget deficits in good times as well as bad. Perhaps most compelling to me was his call beyond patriotism to work for the common good and to citizenship expressed in voluntarism. He recognized that we need people educated both in humane ideals and technical skill, refusing to come down on one side or the other. None of us sees the future with complete clarity. Drucker saw it better than many, understanding the developments and trajectory of history and the challenges facing organizations and large polities of his time.

One thought on “Review: The Post-Capitalist Society

  1. Pingback: The Month in Reviews: July 2021 | Bob on Books

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