Post-Capitalist Society by Peter Drucker

A probing and incisive analysis of the major world transformation from the Age of Capitalism to the Knowledge Society and how it will affect society, economics, business, and politics now and in the years ahead. In Post-Capitalist Society, Peter Drucker describes how every few hundred years a sharp transformation has taken place and greatly affected society - its worldview, its basic values, its business and economics, and its social and political structure. According to Drucker, we are right in the middle of another time of radical change, from the Age of Capitalism and the Nation-State to a Knowledge Society and a Society of Organizations. The primary resource in the post-capitalist society will be knowledge and the leading social groups will be "knowledge workers." Looking backward and forward, Drucker discusses the Industrial Revolution, the Productivity Revolution, the Management Revolution, and the governance of corporations. He explains the new functions of organizations, the economics of knowledge, and productivity as a social and economic priority. He covers the transformation from Nation-State to Megastate, the new pluralism of political systems, and the needed government turnaround. Finally, Drucker details the knowledge issues and the role and use of knowledge in post-capitalist society. Divided into three parts - Society, Polity, and Knowledge - Post-Capitalist Society provides a searching look into the future as well as a vital analysis of the past, focusing on the challenges of the present transition period and how, if we can understand and respond to them, we can create a new future.

The book's thesis is based on a Marxist-like definition of capitalism. A capitalist society, according to the book, is dominated by two classes: a small group of capitalists who own and control the means of production, and the workers who own little. All of the rest of society is organized around this fact. In this view, the age of capitalism peaked around the turn of the century. The reason, according to Drucker, is that "no one has matched in power or visibility the likes of Morgan, Rockefeller, Carnegie or Ford." Apparently, highly visible capitalists are a necessary condition; without them we no longer have a capitalist economy.
Drucker concedes that there are still rich people, but "economically, they have ceased to matter." Why? Because most corporations are run by professional managers, a result of the "Managerial Revolution." Drucker contends that, with the owners of capital no longer directly managing the corporation, it cannot be described as capitalism. The recognition of this separation of ownership from control was a major intellectual issue thirty years ago.

Post-capitalism is, according to Drucker, when "new classes" will rise to dominance. These new classes are the likes of computer programmers and telecommunications specialists. Society will order itself around them because they control what will be the "new central resource," knowledge.

Past financial empires were built on steel, railways, or banking. These industries are no longer where the profits are. Post World War II has seen the rise of the "super rich" in the computer industry, telecommunications, television production and other industries producing information processing hardware and software. This, Drucker says, is evidence of the fact that we are already in a post-capitalist world. Information is the dominant commodity, even more important than the production and distribution of "things." He makes the curious statement, "the actual product of the pharmaceutical industry is knowledge; pills and prescription ointment are no more than packaging for knowledge."
This new central commodity of knowledge is throwing economic theory into turmoil, says Drucker. Conventional models cannot explain current events. "We need an economic theory that puts knowledge into the center of the wealth-producing process. Such a theory alone can explain the present economy. It alone can explain economic growth." Drucker believes that one of economists' basis assumptions is the existence of perfect competition. He believes economists think that information is free and universally available.
Drucker continues, "another of economists' basic assumptions is that an economy is determined by either consumption or investment." He contends that there is "no shred of evidence" that increasing consumption or investment increases knowledge.

Traditional economic theory, according to Drucker, lacks "a common denominator for different kinds of knowledge." He notes that different pieces of land give different yields and are therefore priced differently. He believes we cannot yet do that for knowledge.

Drucker's style is interesting and encrusted with anecdotes from numerous disciplines. He quotes from novelists, economists, politicians, historians and others. The book is a 'Must Read' for all leaders and administrators (current & aspiring).