Rick Wartzman is senior advisor to the Drucker Institute at Claremont Graduate University. He is also author of the forthcoming book, The End of Loyalty: The Rise and Fall of Good Jobs in America, due next spring. His latest article on - How Corporate America Led Donald Trump To Victory - appeared in the Fortune magazine. Here below are some excerpts:
“Beware the man on the white horse,” the late Peter Drucker used to warn.
Drucker, who died in 2005 at the age of 95, knew well what he was talking about. Although he is widely remembered as a business guru—“the man who invented management,” as he was called—Drucker began his career by exploring what happens when a significant chunk of the population concludes that their basic institutions have let them down for too long.
“The failure to establish equality . . . has destroyed the belief in capitalism as a social system,” Drucker wrote in The End of Economic Man, which was published in 1939, not long after he had fled Germany and the Nazis.
The book traces the rise of National Socialism in Europe—a scourge brought on, Drucker explained, by “the breakdown of the old order and the absence of a new one.”
As people were “thrown on the industrial scrap heap” by the Great Depression, fascism filled the void.
“In despair,” Drucker wrote, “the masses turn to the magician who promises to make the impossible possible . . . to increase the price of wheat and at the same time to lower the price of bread.”
When people are full of anxiety and seething with anger, they are highly susceptible to what Drucker called “the charismatic leader”—someone who trots out superficial slogans and facile promises, someone who is prone to find easy scapegoats to blame for everything.
In the 1930s, millions of Europeans were hypnotized by “the abracadabra of fascism,” to use Drucker’s words. Today, millions of Americans have been taken in by the abracadabra of Trumpism.
“The sorcerer is a sorcerer because he does supernatural things in a supernatural way unknown to all reasonable tradition and contrary to all laws of logic,” Drucker wrote. “And it is a sorcerer able to work powerful miracles that the masses . . . demand.”
To be fair, it would have made no sense to fight many of the economic forces that have brought Trump’s supporters to this desperate place.
Companies have long needed to operate in the context of a global economy, and the advance of technology is all to the greater good, even if has meant eliminating a large number of factory jobs over time. To try to have stopped either of these developments would have been foolish, undermining our national prosperity.
Nor is it the fault of business that more and more high-paying positions require a college degree or, at a minimum, a credential attesting to a person’s knowledge and skills. This is progress, not something to decry.
The problem is that our institutions—business very much among them—haven’t done nearly enough to cushion the blow for the half of Americans who lack the education and training that they need to thrive in this new world.
In fact, corporations have made the wounds worse during the past 40 years by not investing in developing their people; holding down wages and continually cutting back benefits; and downsizing their ranks—even when they’re profitable.
The social contract between employer and employee in America has been broken.
Much of this has been done in the name of “maximizing shareholder value,” which, in turn, has made senior executives wildly rich through the issuance of stock options.
“What’s absolutely unforgivable is the financial benefit top management people get for laying off people,” Drucker said. “There’s no excuse for it. No justification. No explanation. This is morally and socially unforgivable, and we’ll pay a very nasty price.”
Those running many of America’s biggest companies may not like Trump. But he is, in many respects, a creature of their own making.