The Unseen Revolution

Unlike many books where the title poses a question, Peter F. Drucker answers his question in the first ten pages. Having the suspense out of the way, he then proceeds to analyze and study the ramifications of the institutional changes and the accompanying series of events facing this country and many countries in the near future. In this way, Drucker is able to impress upon the reader the significance that “pension fund socialism” has for the future rather than focusing on the new idea that he brings forth.

It is certain that this work will be a topic of discussion and controversy in many circles simply because Peter Drucker has a sizeable following among people in management and business who will read The Unseen Revolution: How Pension Fund Socialism Came to America if for no other reason than to read the fifteenth book published by the venerable author. Written in the same vivid and clear writing style, Drucker brings together many of the insights and views expressed in his earlier works. In fact, many portions of this work have appeared in The Public Interest, a previous work by Drucker. However, this book will leave its impressions primarily because the author is dealing with a societal problem rather than the changing role of management, which has been a constant theme of interest for business people who have read Drucker’s work for other reasons. Drucker has been attempting to determine the changing role of business enterprise and professional management in society but with ramifications that are much more profound. He is a political philosopher who deserves attention from a much wider audience. In this work he unfolds an important episode in his evolving philosophy and brings out worthwhile intellectual substance that a wide-ranging audience can appreciate.

What Drucker defines as pension fund socialism is the result of a change in the structure of the pension fund system in America. He points to a subtle but significant event in 1950 when Charles Wilson, the President of General Motors Corporation, decided to establish a pension fund program for the employees of General Motors that would be vested in equity or common stock holdings of many corporations. Although this decision was not innovative and had precedents, Drucker recognizes that this decision by a major corporation under pressures to the contrary led the way to a major change in the structure of the pension fund system. Drucker points out that what appeared to be a subtle point now has a major impact on the structure as well as the future of the American system. The important difference is that through pension funds, American workers now own, technically, a substantial portion of the American productive system. By 1985, approximately fifty percent of equity capital will be owned by American workers via pension funds. Ironically, Drucker points out that this institution has resulted in a basic structural change in the American system and that change is, according to Drucker’s interpretation, that the American system has evolved into the only true socialist system where the means of production are “owned” by the workers and the primary unit of value becomes labor. Chastising other economic systems that lay claim to being socialism as mere forms of “government capitalism,” Drucker does not belabor this point with persuasion or argument, but focuses on the implications of pension fund socialism and points to the most difficult questions that society must address. Drucker has a special talent for bringing in provocative insights and startling conclusions as brief but ratiocinative inferences.

Associated with this new institution that Drucker...

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