The Skeptical Optimist

Goodbye, Peter Drucker

The "father of management" and one of my favorite authors, Peter Drucker, died Friday just before turning 96.  He was appropriately described as "the 20th century's most influential philosopher" in this excellently written obituary in the Financial Express; go read all of it. 

Drucker was the source for many entries in my favorite quotes file—and I wasn'€™t even finished transcribing all the underlining I've done in his books over the years.  If you'€™ve never read anything of his, I strongly suggest fixing that problem.  A good start is a recent book, The Daily Drucker, consisting of 366 different snippets from his past writings.  Go to Amazon, or your favorite bookstore, and get it. 

Here are a few Drucker gems from my file...

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I am not an economist—€”something I have known since, in 1934 as a young economist in a London merchant bank, I sat in the John Maynard Keynes seminar in Cambridge, I suddenly realized that Keynes was interested in the behavior of commodities, while I was interested in the behavior of people.
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I am not only willing but insist that in all political and social decisions the economic costs are calculated and taken into account.  To talk only of "benefits" I consider irresponsible and bound to lead to disaster.  And I believe in free markets, having seen far too much of the alternative.
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Management will remain a basic and dominant institution perhaps as long as Western civilization itself survives. . . Management is the organ of society specifically charged with making resources productive, that is, with the responsibility for organized economic advance.
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Joseph Schumpeter insisted that innovation is the very essence of economics and most certainly of a modern economy. . . In the economy of change and innovation, a profit, in contrast to Karl Marx's theory, is not a "surplus value" stolen from the workers.  On the contrary, it is the only source of jobs for workers and of labor income.  The theory of economic development shows that no one except the innovator makes a genuine "profit"; and the innovator's profit is always quite short-lived.
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For me the tension between the need for continuity and the need for innovation and change was central to society and civilization.
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I am one of many who will miss him.

A Ray of Hope

At last, economic growth (also known as “escape from poverty”) is demanding a little more attention.  Ray Kurzweil has written a new book about the probabilities, not just possibilities, of quickly -compounding growth in the very near future.  Thanks to a TCS article by Arnold Kling, I found out about it yesterday, and it’s now on the way.  I’ll read Kurzweil’s book about our economic future (The Singularity is Near) right after I finish John Steele Gordon’s book about our economic history (An Empire of Wealth). 

How does a doubling of GDP per worker in five years sound to you?  How about faster than that?  For me, books and articles like this are the perfect antidote to all the politically-inspired pessimistic doomsday material monopolizing today's headlines. 

Here’s an excerpt from Arnold Kling’s article in Tech Central Station (go read the whole thing):

This good news [that productivity has been speeding up since 1992] rarely surfaces in the media. In part, this represents a general pessimistic bias in the media and among the population at large. In part, it reflects the inability of people to grasp nonlinear thinking...

If output per person in 2025 is more than 5 times what it is today, then the economy will have won the race. That means that all of the concerns that economists raise about the middle of this century, such as the external debt of the U.S. economy (the cumulative trade deficit), the fiscal implications of Social Security and Medicare, or gloomy scenarios for global warming, will be trivialized by the sheer heights that economic wealth will have scaled by that time. If Kurzweil is correct, then the mountain of debt that we fear we are accumulating now will seem like a molehill by 2040. We will pay off this debt the way someone who wins a million-dollar lottery pays off a car loan.

I’ll be sending a link to Arnold Kling’s article to a few of my debt-phobia-afflicted friends.  Maybe a copy of Kurzweil’s book, too, if it turns out to be as good as it looks.   

Why Bush was the better choice

Guess what: The masses aren't so stupid after all (...although that should be no surprise to free-market advocates).  This book explains why . . .

Nine thousand editors

I'm glad I read Hugh Hewitt's new book ("Blog").  I used to think that a big drawback to the internet was the lack of editors—that anyone who could type could post anything they wanted, true or not.  However, today I am happy to say that never, ever has an assumption of mine been so wrong . . .

A real page-turner on GDP growth

For some reason, I enjoy finding a good nonfiction book on economic growth more than I enjoy spotting the next Clancy thriller. Why is that? Probably an abnormally-wired chromosome.

In any case, I'm 30 pages into a real page-turner by an ex-World Bank economist who can communicate with the rest of us in plain talk, as opposed to econo-speak: The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics.  It's a recent book about what works and (mostly) what doesn't work in the endeavor to help poor countries lift themselves out of poverty—but the fundamental lesson applies generally, not just to poor countries: successful programs require that the right incentives be put in place.

William Easterly starts off his book with a plain-talk explanation of why GDP growth is so important: "We experts don't care about rising gross domestic product for its own sake. We care because it betters the lot of the poor and reduces the proportion of people who are poor. We care because richer people can eat more and buy more medicines for their babies." Here it is:

Deja Vu, Dad

I read this book twenty-six years ago, and remember how glad I was that I'd discovered it.  Four years later, I reread it—and remember thinking that was the last time I'd need it . . . so I forgot all about it.  No wonder it has disappeared. 

No wonder I couldn't find it anywhere yesterday, now that I need it again. 

I should have realized it would be needed every twenty-five years or so.  Why didn't I save it?  Oh well, there goes another three bucks wasted.  (It's not the first time I've wasted money, though.)

Anyway, the problem is now solved.  I bought a replacement copy from Amazon, and it is on its way to my son and his wife. 

Also: I've already told them I won't at all mind being called "Gramps."

Beginning bridge books for Boomers

If my previous posts (1,2,3) have begun to persuade you to give bridge a try, I'd like to introduce you to just a few excellent books for newcomers. 

Indispensable little book

It costs less than one lunch, and it belongs next to every monitor that's used for email or blogging.  Me?  I own three copies: one each at the office desk, home desk, and home easy chair.  I'll start keeping one in my car, too, if the rush hour traffic jams get any worse. 

Here's the book I'm talking about ...

How the West Grew Rich

"The perception of poverty as morally intolerable in a rich society had to await the emergence of a rich society." 

"Growth is, of course, a form of change, and growth is impossible when change is not permitted. And successful change requires a large measure of freedom to experiment. A grant of that kind of freedom costs a society's rulers their feeling of control... The great majority of societies, past and present, have not allowed it. Nor have they escaped from poverty."

Bridge: How to get started (it's easy)

•  The first thing you should do is locate your local bridge club, then take the time to go meet a few of the people running it.  Welcoming newcomers is one of their primary responsiblilities.  They'll have many helpful suggestions for you. 

•  The second thing you should do is visit the home page of the American Contract Bridge League.  There's a good section within that website for people interested in learning the game.