Divided We Fall

Feb 032012
 

In his new book, Coming Apart, American Enterprise Institute scholar Charles Murray argues that the United States is cleaving as never before.

Murray divides Americans by income into two groups—the top 20% and the bottom 30%, and presents a host of data to make the case that, more and more, these castes are culturally isolated from each other. They watch different TV shows, eat different foods and live in different clusters. The top live old-fashioned middle-class lives, while the bottom live unstable, atomized lives.

“The truth is, members of the upper tribe . . . have low divorce rates, arduous work ethics and strict codes to regulate their kids,” David Brooks wrote recently in the New York Times, as he summarized Murray’s book. Meantime, members of the “lower tribe” are plagued by high rates of divorce, single parenthood and joblessness. (To eliminate race as a complicating factor, Murray confines his study to white Americans.)

Murray, a libertarian, sees reduced government as a solution. Regardless of whether one agrees with such a remedy, however, the problem remains. How does the U.S. regain cohesion and offer dignity to the bottom 30%?

Peter Drucker, as we’ve noted, greatly valued the habits of middle-class American life, but he considered its preservation to be a significant challenge—especially at a time when the labor force has split into two main cohorts: knowledge workers and service workers.

Illustration credit: Andy Davey

“The rapid increase in the productivity of the workers making and moving things overcame the 19th century’s nightmare of ‘class conflict,’” Drucker wrote (as he explored a theme we’ve taken up before). “Now, a rapid increase in the productivity of service workers is required to avert the danger of a new ‘class conflict’ between” them and their knowledge-worker cousins.

“Knowledge workers and service workers are not ‘classes’ in the traditional sense,” Drucker added. “The line between the two is porous. In the same family, there are likely to be service workers and knowledge workers who have advanced education. But there is a danger that . . . society will become a class society unless service workers attain both income and dignity. This requires productivity. But it also requires opportunities for advancement and recognition.”

Is the United States segmenting into two castes?  If so, what can be done about it?

Management Lessons From the Anarchists

Nov 092011
 

The Occupy Wall Street protests (which we first explored last month) have endured for much longer than many observers considered likely, and a recent article in Bloomberg Businessweek took a look at some of the tactics that have come to define the movement.

Among the most important, Businessweek noted, has been the rise of what are called general assemblies.  “A ‘GA’ is a carefully facilitated group discussion through which decisions are made—not by a few leaders, or even by majority rule, but by consensus,” the magazine reported. “Unresolved questions are referred to working groups within the assembly, but eventually everyone has to agree, even in assemblies that swell into the thousands.”

Peter Drucker wrote a lot about consensus, both its costs and benefits. And in times of immediate danger, he believed, seeking out painstaking agreement is an unaffordable luxury. “In a situation of common peril,” Drucker wrote in Management Challenges for the 21st Century, “survival of all depends on clear command. If the ship goes down, the captain does not call a meeting, the captain gives an order.”

But Drucker also pointed out that consensus has been important to the health of many organizations. “Surely no more perfect example of the autocratic personality exists than the head of a big Japanese organization, whether government agency or business,” Drucker wrote in Toward the Next Economics. “Yet decision making is by consensus and participation, and starts at the bottom rather than at the top.”

At the same time, this “expression of a general will” in a traditional Japanese organization should not be mistaken for complete unanimity on the final decision. “The Japanese do not make decisions by consensus, rather they deliberate by consensus,” Drucker explained. “Then a decision can be reached which the organization understands, even though large groups within it do not necessarily agree or would have preferred a different decision. 

Indeed, as we’ve discussed, Drucker felt that to reach any good decision, it requires healthy debate. “Effective decision-makers . . . create dissension and disagreement rather than consensus,” Drucker wrote in The Effective Executive.

That seems to be the case for Occupy Wall Street, where the quest for consensus “can be an arduous process,” in the words of Businessweek. That’s a quality Drucker would have admired.

Where have you seen the quest for consensus work—or not work—in your organization? 

The Feedback

Nov 082011
 

Reader responses to last week’s question about how we should understand the condition of life below the poverty line were particularly thought-provoking.

Reader Richard B Mann, PhD drew on memories of being a 7-year-old during the Great Depression to make his point:

My father lost his job. I had a sister and two bothers at that time (two more came later). We all walked up and down the railroad tracks picking up coal that fell off the steam engines so we could heat the house and cook our meals. I thought it was fun, like a game. . . . Defining people as poor and giving them welfare turns them into slaves and takes away their dignity, IMHO! It may buy votes, but robs people of their humanity.

Reader Nelson drew a distinction between types of poverty—temporary poverty and chronic poverty—and argued that the latter is much harder to overcome:

There are people in situational poverty and those who are in generational poverty. . . . I ask, ‘Will you go live in a generationally poor neighborhood and raise your family?’

Reader Theodore Radamaker argued that children can’t be poor the way adults are, since poverty “largely involves a feeling of humiliation.” He added:

Not being able to provide any particular need for one’s family, whether medical or dental care, a pair of shoes or a birthday present is to experience the humiliation of poverty. So does presenting food stamps at the grocery cashier. The attitudes of others toward those they perceive to be in poverty also has a lot to do with the extent of humiliation suffered by the poor.

And reader David Robinson tied together the sting of poverty with a proposed measurement of its severity:

Think of the mental toll of both adults and children of getting your clothes at clothing banks, paying at the supermarket with food stamps and having no choice but to go to the emergency room because that is the only healthcare available. A good measurement might be: Are the children in poverty getting out or are they perpetuating the cycle?

 

A Poor Statistic

Nov 042011
 

No one thinks that life below the poverty line (at just $22,350 for a family of four) is easy. But how bad is it, really?

That’s the question raised this week by a New York Times article. Although the number of poor Americans has officially risen by 10 million since the start of the recession, most poverty experts consider the statistic flawed because it fails to take into account assistance in food, housing and health. At the same time, the newspaper noted, the measure overlooks “the similarly formidable amounts” that the poor “lose to taxes and medical care.”

Image credit: Greg Groesch

On Monday, that may start to change. That’s when “the Census Bureau releases a long-promised alternate measure meant to do a better job of counting the resources the needy have and the bills they have to pay,” the Times reported.

Peter Drucker well understood that the only thing you can measure purely are physical phenomena, such as the rate of a falling stone. Whenever we stray into social territory, “the act of measurement is neither objective nor neutral,” he wrote in Management: Tasks, Responsibilities, Practices. “It is subjective and of necessity biased.”

When it came to poverty, Drucker’s observations coincided precisely with the points that current experts are making. “In terms of income America’s welfare recipients are doing quite well,” he argued in Managing in a Time of Great Change. “If non-cash benefits (e.g., food stamps or housing allowances) are included, the incomes of most are above the ‘poverty line.’”

In The New Realities, Drucker added: “In a modern society, poverty is far more a social than an economic condition.”

That didn’t mean, however, that Drucker didn’t see a real problem among those making little money. Despite the benefits they receive, Drucker asserted, many people “live in a squalor and degradation as bad as that of yesterday’s worst slums, if not worse.”

“The need for help—at least for temporary help—is surely going to grow,” Drucker predicted. “Developed and developing countries alike are undergoing major transformations of economy and society.”

What do you think: Is life below the poverty line better than most people think it is—or is it worse? And why?

Thou Doth Protest Too Much—Or Maybe Not Enough

Oct 052011
 

What started a few weeks ago as a stunt—or so it seemed—has grown exponentially in numbers. “Occupy Wall Street,” a protest movement that stands for many disparate things, but seems to unite in anger toward the nation’s financial elite, has drawn thousands of demonstrators in New York and elsewhere. Major labor leaders have also joined in.

Peter Drucker—who, as we’ve noted, frowned upon many of Wall Street’s practices—saw a lot of political movements over the course of his life, and he wrote about them with interest. He considered protest to be many things at once: often aimless, often ineffective, often dangerous—and yet in many ways healthy.

During the protests against globalization that took place in the late 1990s, for example, Drucker saw aimlessness. “So far, these protests have no focus,” he remarked in Managing in the Next Society. “They are protests against the system, whatever that means. … They are hitting out at yesterday’s targets, but they are hitting out because of today’s pain.”

The protests of the 1960s, meanwhile, struck Drucker as both ineffective and potentially dangerous. They were ineffective, because society, broadly speaking, was unaffected. “One might indeed assert that the highly publicized and highly visible developments and media events—the headline- and demonstration-makers—are little more than whitecaps on the surface of the ocean,” Drucker mused in Toward the Next Economics.

Photo credit: Frances M. Roberts/Newsroom

But in their absolute rejection of authority, the ’60s protestors were also treading in perilous territory. “There is even greater danger in the rebellion against organization by the young people of today: their vulnerability to false leaders,” Drucker warned in The Age of Discontinuity. “It is not true that young people repudiate leadership. They seek leadership. They need leadership. If they cannot find it in the ‘establishment’—not even with the ‘loyal opposition’—they become easy prey to the demagogues.”

Yet, in the end, the worst thing of all might be no protest whatsoever. “The danger does not lie in a ‘revolt of the masses,’” Drucker wrote in The Future of Industrial Man. “Revolt is, after all, still a form of participation in social life if only in protest.” Rather, the danger lies in “cynical indifference” or “complete despair.”

Do the current protests of Wall Street matter—and, if so, how?

Labor Force or Forced Labor?

Sep 232011
 

You’ve arrived from India to take a factory job in Kuwait, but your boss has taken your passport, you’re not allowed to leave the factory grounds, and your wages are being held back in order to pay for your plane ticket and your recruiter. Are you a slave?

Whatever label you want to give it, forced labor is a widespread problem around the globe. Now, a non-profit group with State Department funding is unveiling a website, www.slaveryfootprint.org, that will allow consumers to track what sort of things in their possession are likely to have been tied to slave labor.

Creators of the site, the New York Times reported this week, “hope to get consumers engaged enough in the issue to do something about it, primarily hoping people demand that companies carefully audit supply chains to ensure, as best as they can determine, that no ‘slave labor’ was used to manufacture its products.”

Peter Drucker wrote about slavery in a variety of contexts, and he pointed out that it isn’t just a concern for the enslaved. In every society that allowed slavery, all parties were debased. “Slavery affected the master just as much as it did the slave,” Drucker wrote in People and Performance. “It is the nature of a human relationship that it changes both parties—whether they are man and wife, father and child, or manager and people managed.”

Indeed, there is little doubt that Drucker would have compared what’s happening in at least some of today’s most oppressive factories with labor conditions of the 19thcentury. “In its eastward march through Europe, industrialization broke not only the bodies but the spirits of entire generations,” Drucker wrote in The New Society.

And yet Drucker also noted that, for the poor, especially for the peasant, a factory job can be an improvement, however slight. This was also the case for many workers during the dawn of the Industrial Revolution. “They were badly off, no doubt, and harshly treated,” Drucker asserted. “But they flocked to the factory precisely because they were still better off there than they were at the bottom of a static, tyrannical, and starving rural society. They still experienced a much better ‘quality of life.’”

When does work become slavery—and what’s a plausible way to combat it today?

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