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Book Review: 'The End of Economic Man'

Tamara Wilhite is a technical writer, industrial engineer, mother of two, and published sci-fi and horror author.


“The End of Economic Man” by Peter Drucker was written as an analysis of the social factors that led to the rise of fascism. The first version was written in the early years of World War 2, while updated introductions were written in the decades after the war. Drucker has a unique insight into the social factors of fascism’s rise separate from the political and economic one. What are the lessons we can learn from “The End of Economic Man”, a book considered so important it was given to every British officer school graduate during World War 2?

Fascist societies arise from social movements, not economic factors, though long depressions can make the fascist movement seem like the solution.

Fascist societies arise from social movements, not economic factors, though long depressions can make the fascist movement seem like the solution.

The Lessons of “The End of Economic Man”

Why is the sociological analysis of fascism important? First, social factors can alter economics, such as when people buy more expensive products to support local businesses or their favorite causes. And political movements cannot succeed unless they are backed by the population, the social masses. If people hate a political ideology or its representatives, short of a massive use of force, it cannot stay in power.

To quote Drucker, “The rise of totalitarianism was a social event. It was driven in part by people disappointed by Marxism’s failure.” Fascism under Mussolini and Hitler was a reflection of many people still wanting to be taken care of or see solutions imposed top down. We see this today in socialism’s failure to deliver prosperity or equality of outcomes, so the social movement behind it becomes ever more irrational and hysterical even as it becomes more undemocratic. The EU and U.S.’s leadership taking positions in direct opposition of its population’s wishes and safety are evidence of this, as is their increasing reliance on decrees and scorn of democracy.

“Churches can and should preach a social gospel. But they cannot substitute politics for grace and social science for redemption.” We see this today in the decline of liberal church denominations that saw government welfare programs as charity, divorcing people from charitable acts, as well as seeing political stances as moral ones. So Methodists and Episcopalians see declining membership while evangelicals see growth.

Peter Drucker wrote, “Totalitarianism was a revolution that replaced hope by despair, reason by magic, belief by the frenzied, blood thirsty violence of the terror stricken.” The Social Justice Warriors of the left rip apart anyone, whether their own members or others, who express dissenting views are one example of this. Some of these people do so because fascism gives them permission to act out their most brutal tendencies in the name of the cause, while others do so in order not to be attacked by their peers.

When defining fascism, Drucker says, “Fascist totalitarianism has no positive ideology but confines itself to refuting traditional ideals. It not only refutes all old ideas but denies the foundations on which all prior social and political systems were built. People don’t join as masses because they believe its promises but because they don’t. It is anti-everything, defined by how it attacks everything and everyone.” This isn’t rational, but it doesn’t need to be. “No one would have been a Nazi if rational belief in Nazi promises was a pre-requisite.” It is the freedom of action free of prior constraints, ability to restrain others or permission to attack others that leads many to join.

Drucker states, “The fascist revolution, like all predecessors, arises when the old order breaks down from within. But in marked contrast to historical precedent, no new positive creed has appeared to replace the one that collapsed.” Fascism is thus marked by being against everything and for nothing but itself.

And when no new order can be created from the ruins of the past one using its foundations, people are attracted to the leader who promises to make the impossible possible. In short, when people are cut loose from their historical moorings and institutions by the prior revolution, lose their faith in its history from which they could draw solutions, they are susceptible to a leader who promises what cannot be done because at least he’s promising to do something. And the fact that he says it is all propaganda or a dream is irrelevant, because he promised something else than the chaos. Thus the totalitarianism becomes possible.

Fascism does not have to justify itself as benefiting the masses, which all prior political systems took care to do, if only to protect the people from external invasion. It sees the revolution as reason enough for it to exist, and because it seeks to destroy the past, it readily claims this as progress. If someone says they have to smash it all and create a new world order, it is because they cannot base the justification for their structure on anything at all, not even the flimsiest reasons, hence the call to destroy it all and start over. And these are the fascists.

“Marxist socialism can still be a creed in pre-capitalist and pre-industrial colonial or feudal countries like pre-Bolshevik Russia, Spain, colonial Asian and South America, where social conditions make the classless society appear feasible; a handful of landowners and a few entrepreneurs on one side, the mass of proletariat at the other. The masses can think that removing these few creates a classless society … but in these societies the middle class is missing.” And he dedicates several pages to discusses how industrial society creates the large middle class, and how they are the more essential to its running as engineers, managers, planners and secretaries than the base laborers. Therefore, a communist / Marxist system cannot exist when there is a large middle class on which the economy is dependant.

When revolution leads to industrialization, it creates the large unequally privileged middle class. This middle class that is more important than the laborers and thus more privileged and unequal than the laborers is the downfall of Marxism.

The use of the military as a social leveler was heavy in fascism. Many rich families sent their children to military school to essentially strip them of their economic privilege. And in women’s groups, where this outlet did not exist, lower class women routinely leveled charges of conspiracy on wealthier ones to punish them for their economic privilege. Asking people to denounce their privilege and self-flagellate wasn’t limited to fascist societies; many Communist regimes made educated and wealthy people self-flagellate and grovel about their privilege in the hope of not being killed.

This is why many people worry when told to “check their privilege” or apologize for white privilege; the specter of outright persecution for their economic status or racial category looms on the horizon. And while one can give all your money to the poor or the state, you can’t change your demographics, nor can you convert to the ideology and regain status as you can under Islamic fascism. The choices are to self-flagellate, apologizing for one's past (or even your entire ethnic group) as to gain a low status in the new order, or risk being expelled from mainstream society altogether.

Asking the current generation to atone for the sins of its ancestors and engaging in collective guilt is a scapegoating practice in fascist regimes.

Asking the current generation to atone for the sins of its ancestors and engaging in collective guilt is a scapegoating practice in fascist regimes.

The Best Quotes from “The End of Economic Man” by Peter Drucker

“History studies what happens on the surface. The –isms like communism, the philosophical systems, may be the atmosphere, but society is its ecology”.

“Revolution is a game of musical chairs, replacing kings … communism didn’t revolutionize society, rather replace one ruling group with another, though infinitely more rigid and autocratic one.”

“Totalitarianism is a genuine revolution, aiming at the overthrow of something much more fundamental than economic systems: values, beliefs and basic morality.”

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“Without Churchill, the US might well have resigned itself to Nazi domination of Europe and its still largely intact colonial empires. What Churchill gave was precisely what Europe needed: moral authority, belief in values, and faith in the rightness of rational action.”

“In their behavior, some student ‘activists’ are frighteningly reminiscent of Hitler’s storm troopers in their refusal to grant any rights – free speech for instance – to anyone else, in their use of character assassination, in their job in destruction and vandalism … the dreary nihilism of their prophets of hate.” Note that Drucker wrote this about the 1960s student movement; they are the political elite today.

“Maturity does not consist of trying to make the universe rational … it requires that we make our own behavior rational. This alone allows you a chance at a decent, meaningful, achieving life and decent society.”

“All revolutions shake man out of their customary routine tracks and releases their hidden, ferocious instincts.”

“The forces of destruction are as evil as they are blind.”

“Propaganda only converts those who already believe, and it only appeals to people if it answers an existing need or allays an existing fear.”

“Failing ancient regimes mistake revolutions as old foes in new disguises.”

“Freedom and equality have been Europe’s basic spiritual ideas since the introduction of Christianity”.

“Marxism stands and falls by the promise to overcome an unequal and unfree society of capitalism and to realize freedom and equality in a classless society. And it is because it has been proved that it cannot attain the classless society but must necessarily lead to an even more rigid and unfree pattern of classes (the Party) that Marxist socialism has ceased to be a creed.” Note that this observation was made even before the world learned of the Gulag Archipelago of Soviet Russia, a model North Korea emulated decades later.

The socialization of businesses eliminates the owner, but it does not eliminate the leaders of the organization, though it prevents those at the bottom from rising up. And while a private business has many layers from secretaries and drafters and managers between the owner and the laborer, the socialist system causes each person higher up who is less unfree to defend their position and status vociferously, as well as increase their ranks and power. “The Socialist state would produce a feudal society, though the serf would be proclaimed the beneficiary. … But social stratification in a socialist state cannot be justified.”

“Marx formulated Marxism as an economic theory only, and disregarded its entirely more important social aspect altogether.”

“For the common man, it is completely irrelevant whether the irrationality of war or depression are due to changes in their character or changes in belief. The individual does not care whether the forces which govern society have become irrational or whether it is a break down in their own rational concept of society that has broken down. The fact that the world has no order and follows no laws is all that is important to him.”

“The peace at any price party is willing to sacrifice all reality of democracy in order to banish the demon of war.”

“Freedom by definition is the right of the individual or a minority to behave differently without being outlawed. In the unfree society, the dissenter is a criminal.”

“A church that is a tiny, persecuted minority in a vast sea of atheists might still be strong and successful if it gave its adherents a real community. It would reveal triumphantly as soon as materialism had revealed itself as hollow. … But a Christian church which though strong in numbers and quality of believers cannot give them more than private satisfaction ceases to be a church altogether. … It loses its essential quality as the basis of the rational order of the chaos”. (This is done by setting up humans as valuable and a humanist society versus people valued only for economic value or political uses).

“You can only fight if you have an alternative to offer.”

“The use of a theory that portrays the different classes as equally important and indispensable members of one social organism is one of the oldest devices for the prevention of class warfare. It was used to dissuade the roman plebeians from revolting. … Fascism, on the other hand, uses the organic theory to create an equality of non-economic social importance, status and function in order to balance the economic inequality of the classes.””

In totalitarian societies, the privileged classes are not only the first to make sacrifices but their very privileges rest upon their readiness to sacrifice more than others. Fascism divorces social status from economic status, but it does not eliminate social status.

“Economic collapse through economic attrition is the ultimate outcome of the totalitarian economic system … but too many other and earlier possibilities of political or social collapse threaten to allow the remote economic peril to become practical politics.”

“Arming as a means to eliminate the demons of unemployment becomes as irrational as unemployment itself. … Yet the armaments must continue as the supreme aim and the non-economic society must continue to be based on the nation of arms. … There is but one solution: throw the blame on others.”

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