The New Realitiesby Peter Ferdinand Drucker, , Search Cheap Books, Discount Books, ISBN 0060161299

Customer Reviews:

Homeric hymn on business successes

This book, written before the fall of the Berlin Wall, contains different items that would become centre themes in Drucker's later works like 'Post-Capitalist Society': the knowledge society and the information-based organization.
He predicted clearly the diminishing influence of the omnipotent State, quoting its inefficient bureaucracy and Pareto's law: 'government cannot effectively change the distribution of incomes ... distribution is determined by the economy's productivity'. (p. 71)
On the other hand, his Homeric hymn on business successes (p. 177-8): 'business has increased the capacity to produce wealth explosively ... Half the expansion in wealth-producing capacity was used to create leisure time by cutting the hours worked while steadily increasing pay. An additional third ... has gone into health care ... There has been almost equal growth ... in the expenditures on formal schooling...' proved to be far away from the actual reality.
The working class is confronted since the nineteen seventies with decreasing real salaries. Today millions of US citizens cannot afford healthcare insurance and 60 % of the US working class don't earn a 'living' wage as determined by the Economic Policy Institute(Barbara Ehrenreich).

Peter Drucker stresses rightly the all importance of education for wealth creation. The Jesuits also knew its importance for other reasons: 'They designed the first modern school to make themselves masters of the high-born and the learned.' (p. 239)
Nevertheless, investment in education in the US has nearly disappeared (Molly Ivins, Lou DuBose).

The author castigates the arms industry as counterproductive. But defence programs take now half of the US real budget (Gore Vidal).
He criticizes harshly the hostile takeover as an assault on management: 'What underlies the takeover bid is the largest possible immediate gain to the shareholder ... the raider only often immediately dismantles or loots the going concern, sacrificing long-range, wealth-producing capacity to short-term gains.' (p. 228)
But the M & A game continues unabatedly.

Nevertheless, and all in all, this book continues to be a worth-while read.

Druckers predictions for our future (published in 1989)

As the title suggests, the scope of this book is vast. Drucker touches on the mega-trends affecting us ~ as individuals, consumers, students, workers, and voters. Interesting to read, especially since many of his projections of the future (remember this was written in 1989) are surprisingly correct:

1) Politicians in developed countries are increasingly becoming centrist, and function-oriented. Most political debate is focused on the means, not the goal. Chrisma is not needed.

2) The concept of government as the savior of society is dead. Instead, it will offer specific remedies for specific ills. The government cannot run the economy, but just help create the right climate for business, trade, and activity.

3) Society is segmenting into knowledge workers and non-knowledge workers (laborers). This concept runs through all his books.

4) Russia will segment and collapse. This will create imbalance as the majority of Russians are actually Asian and Muslim.

5) The military will continue to be a drag on the economy. Weapons will become increasingly counterproductive as the enemy unknown and elusive. Terrorism will rise, and the military will suffer an identity crisis.

6) The third sector (after the knowledge workers and manual laborers) will be non-profit. This serves a large function in society and provides many of the services once expected from the government. Volunteer hours totalling $150 billion (in imaginary wages).

7) Interest groups will continue to gain political influence. Drucker calls it the "tyranny of the small majority". These single cause minorities will be very vocal and usually against (rather than for) something.

8) In the transnational economy, cheap direct labor will no longer the way to competitiveness (since the portion of direct labor for goods is declining)

9) George Stigler, University of Chicago economist and Nobel prize winner, showed that NOT ONE of the regulations through which the US government tried to control, direct, or regulate the economy has worked. (pg 166)

10) Information based organizations should most resemble an orchestra. Each participant is a specialist and an individual contributor. They have separate responsibility and are expected to handle that work without direct supervision. Things get done, but only if the common objectives (the score) is clear and simple.

SUMMATION OF THE KEY QUESTIONS FOR THE 21ST CENTURY

In the current world, almost everyone is a specialist. With a minor ailment, a patient may have to visit with several medical professionals before receiving an accurate diagnosis and treatment. Peter Drucker is the exception to that rule when it comes to social, governmental, organizational, and personal trends. He notices what is going on in each area, points out where the current direction is a dead end, and asks clear questions that point us toward creating our own solutions. Although this book was first published in 1989, it is more current now than before. The main reason is that so many of the social, political, organizational, and personal debates and experiments of the last ten years were first framed in this remarkable, ground-breaking work. I recently reread this book, and was struck that I understand what to do with it now much more than I did ten years ago when I first read it. Whether your interest is the Internet, entrepreneurship, lean manufacturing, charitable organizations, having less government, or more personal responsibility, this book is an essential guide. You will enjoy reading his prediction of the end of the Soviet empire only months before it ceased to exist. His crystal ball has been very clear so far. We need this clarity especially now as many of the first initiatives that he proposes have been successfully completed. The design is in this book for deciding what to do now.

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