From Communism to Chrysler: Pointed Views From Drucker

Among Peter F. Drucker’s many virtues is longevity. As a young trainee in the cotton business, he wrote with a quill pen at a firm that used single-entry bookkeeping in giant ledgers chained to the tables.

He’s also old enough to have lived through both Russian revolutions. He spent the first in Vienna, his hometown. He sat out the latest in a comfortable suburban ranch house in Claremont, the smoggy old college town he lives in now.

At 82, Drucker is a cherished natural resource in California, not unlike El Capitan. Reflecting his impact on the field of management as well as his extraordinary range of interests, he’s both Clarke Professor of Social Sciences and Management at the Claremont Graduate School (whose management center bears his name) and Lecturer in Oriental Art at Pomona College.

Given the news of the past couple of years--the most important since World War II--it seemed only prudent to head to Claremont for a consultation.

Drucker will deny it--he’s more modest in person than in print--but he really is a visionary. He knew enough to get out of Europe before the Nazi conflagration, and he realized the importance of management when the term was almost unknown. He may have invented it as a field of study.

But the collapse of the Soviet empire, which he predicted in 1987, may be his grandest vindication. Despite their allure for his generation of European intellectuals, Drucker abhorred Nazism and communism. “I’m not a great friend of systems,” he says with a smile.

Some Drucker views on matters great and small:

- On communism: “The great illusion of the modern West is the belief in salvation by society, the belief that social systems can change the human being. Communism did not collapse because of its economic failure, though that helped, but because Communists had not succeeded in reforming the old Adam. The moral collapse is far more important.

“That belief--in the salvation by society--collapsed in the ‘60s, in every country.”

What about civil rights? What about the freeing of women? “Government didn’t do a damn thing about that,” he says.

Drucker, whose mother was a physician at a time when that was extremely rare, was a feminist long before women were common in the workplace.

“All through history, men and women have had equal labor-force participation. The idea that women weren’t in the labor force was a 19th-Century notion. Women worked more hours than men. What is new is that they are doing the same work. . . . That’s a new experiment in human history.”

Ironically, he says, “the pressure on my daughters is much greater than on my mother, because we had two or three domestic servants.”

He doesn’t see a return to servants, despite the increasing propensity of California’s bourgeoisie to hire Latin American women as housekeepers.

“One thing you can confidently predict is a sharp growth of places to put small children on the part of employers,” he says.

The only cars in Drucker’s driveway are Japanese, which is striking in someone who’s studied the auto industry intensively.

In fact, Drucker sees more hard times for Detroit: “In three years we’ll have twice the auto capacity in the world than we’ll have a demand for.”

As a result, he says, a number of car makers around the world won’t survive without government subsidy. “Chrysler can’t last more than two or three years,” he says. “It could become part of Mitsubishi.”

On General Motors, the subject of a seminal Drucker study in 1946: “I think the most plausible scenario is, by the year 2000 GM is going to be split into three companies, or maybe two. I don’t think you can save yourself by using your finance or buying EDS.” (GM bought the data processing firm for $2.5 billion from H. Ross Perot in 1984.)

“It’s terribly hard to break a monopoly mentality. AT&T; succeeded. The really interesting question is, can IBM do it?”

So what should we do about the Japanese? “Nothing,” he says.

Drucker believes that Japanese leaders know their country must change and will use the excuse of U.S. pressure to do so.

And he drives Japanese cars not just because of their reliability but because “the service is decent.”

Companies such as Toyota are fiends for quality and customer service “because of ruthless, cut-throat competition in Japan,” Drucker says. The U.S. market was thus a pushover. And he says Detroit still hasn’t got the message: “They have not yet started getting quality into the dealer.”

Drucker has little patience with managers whose excuse is that they don’t have good people.

“If you ever run into an industry that says it needs better people,” he says, “sell its shares. There are no better people. You have to use ordinary, everyday people and make them capable of doing the work.”

Which brings us to education: “Since the public schools aren’t going to reform, we need a voucher system. . . . There are six schools within biking distance in Claremont. There’s no reason for all of them to have the same pedagogical philosophy.”

Without vouchers, he adds, “you’ll never get any competition going.”

On government farm programs, Drucker is characteristically emphatic: “Farm programs by definition are idiotic; the Japanese no more than ours, which is no worse than the Europeans’.”

On cities, which he calls obsolescent: “Watch Bloomingdale’s, in New York. It’s almost the bellwether of the office-city. If Bloomingdale’s can be turned around, then maybe the office-city can be saved.”

And finally, on a topic closer to home, I ask Drucker about the future of fast-changing California.

“I know nothing about California,” he says flatly, in the Viennese accent that persists 65 years after he left town. “I only live here.”