Dignity, Status, and Function: Pay Attention to the New Concerns of Knowledge Workers

Karen Linkletter, Ph.D.

PUBLISHED:

December 15, 2022

The recently averted railroad worker strike reminded me of an important event in history that most people today are probably unaware of. In 1877, rail workers across the United States went on strike, creating what historians now refer to as the Great Railroad Strike. When historians think an event was significant, causing some kind of cultural, economic, social or other upheaval, they designate it with the term “Great” (the Great Depression, the Great Awakening, the Great Recession).


Peter Drucker looked at events of his time through the lens of a social ecologist: someone looking for meaningful change that has already impacted or would impact society in the long run. This change may be in the form of demographic trends, shifting attitudes, or significant events. In hindsight, we know that the 1877 strike was significant although, at the time, it appeared to be a short-lived, albeit violent, worker uprising.  The Great Railroad Strike showed the changing nature of class identity, and what can happen when people feel a loss of dignity, status and function in society. While certainly not a “great” event, the averted 2022 strike is perhaps another event that points to changing attitudes about work and the continued importance of dignity, status and function. I think it presents us with a moment to consider the nature of work in our post-pandemic environment, particularly as many organizations grapple with challenges related to finding and retaining qualified workers – especially knowledge workers.


Before we get to the details of the 2022 railroad strike that didn’t happen, I’ll give a brief summary of the Great Railroad Strike. Economic conditions in 1877 were grim. The United States suffered an economic “panic” in 1873, when the failure of a major investment firm triggered a loss of confidence in the financial markets. The country plunged into a depression, and firms began cutting jobs and wages, raising unemployment and further dampening the economy. The railroads, which were the primary means of transporting goods across the United States, had been a growth industry until the Panic of 1873, and employed large numbers of workers. In May of 1877, the Pennsylvania Railroad, the nation’s largest railroad, cut wages by ten percent, and then cut them by another ten percent the following month. Other railroad companies did the same thing, and also cut the work week down to a couple of days. In July, the Pennsylvania Railroad doubled the size of its eastbound trains with no increase in staff to manage the additional workload. In that month, workers began to rebel, taking control of train switches and preventing cars from moving. Violent strikes began to erupt in cities across the country; Maryland, West Virginia and Pennsylvania called up their state militias to respond to the violence. In some cities, militia members sympathized with the strikers, and joined in. President Rutherford B. Hayes called in federal troops, and in Pittsburgh, these troops fired into crowds of people, killing more than 20 civilians. By the end of July, the strike had subsided, leaving 100 people dead across the country and over a thousand arrested.

The workers received none of their demands (better pay, restored hours), and labor unrest continued in the industry well through the late 1800s. So why was this such a momentous event?


·     Public support: Mark Twain published The Gilded Age: A Tale of Today in 1873. In this novel, he satirizes the wealth inequality that was a feature of American society in the late nineteenth century. The greed and political corruption of this era is well documented; as working-class Americans became increasingly aware of the growing class divisions in society, they sympathized with the railroad strikers. This public opinion fueled an eventual call for labor reform.

·     Multi-industry support: This was the first general strike in American history, where workers from other industries supported the rail workers. The Great Railroad Strike touched a nerve in the growing working class, who felt devalued, increasingly marginalized, and exploited by a wealthy ruling class.

·     Catalyst for unionization: At the time, there were few organized labor unions; organized labor consisted of local brotherhoods of primarily skilled workers. The Great Railroad Strike galvanized workers to organize into more effective unions, such as the American Federation of Labor, to attempt to ameliorate their work conditions, hours, and wages.

·     Power: The Great Railroad Strike showed the power of human action. Without any organization and structure, rail workers were able to cripple the transportation network of the United States. Meat rotted on railroad cars, mail was not delivered – an entire national system of order was brought to a halt by a relatively small group of people wielding enormous power.

 

There are some parallels between the Great Railroad Strike and the averted 2022 railroad strike, and also some remarkable differences. First, the parallels.


·     Essential workers: People in the 1800s paid a LOT of attention to what happened with railroads, because they understood how goods moved through the country, and they felt the impact. The COVID 19 pandemic highlighted the importance of “essential workers,” including those employed in transportation. As supply chain constraints led to shortages of all kinds of goods, from microchips to toys to food items, most Americans, probably for the first time, were unable to purchase some product for lack of supply. During the pandemic, essential workers in health care and grocery stores were heralded as “heroes.” Workers in rail transport received little attention even though that industry experienced enormous upheaval. However, the threat of a strike in 2022 just before the holidays put the railroad industry in the spotlight, showing how, in spite of their small numbers, these workers could inflict considerable damage and pain to the U.S. economy. President Biden cited the devastating effects of a rail strike, pointing to the possible loss of 765,000 jobs. In 1877, railroad workers shut down the economy of the United States in a time where rail transportation was the primary way to ship material interstate. Rail workers were few, but powerful. Today, rail workers are an even smaller portion of the labor force, but they still wield power as essential workers.

 

·     Industry turmoil: In the late 1800s, the United States was in the throes of an economic decline precipitated by a financial panic. The railroads were the primary source of interstate transportation (and also a new, growth industry, and thus their securities were susceptible to price fluctuations). The railroad industry of the 21st century also faced considerable turmoil, including international pressure. Following a steady decline since the 1940s, employment in the railroad sector remained relatively stable from the 1980s until 2018, when employment numbers began to drop. One reason for this decline in jobs was the decrease in shipments of coal resulting from a shift away from fossil fuels. Another reason was the uncertain trade relationships the United States had with key partners, particularly China. Tariff threats between the two countries involving both agricultural products and manufactured goods caused rail companies to reconsider hiring new employees. Company practices also played a role. In the early 2000s, the railroad companies began to pursue a business model that emphasized boosting profits by reducing labor costs. The implementation of precision scheduled railroading (PSR) allowed railroads to operate more efficiently, but it also eliminated the business’s ability to have staffing cushions or manage unforeseen circumstances, such as weather disruptions. Finally, like all industries, the nationwide shutdowns forced by the COVID-19 virus outbreak caused widespread unemployment in the railroads. When the economy began to recovery from the pandemic in 2020, the industry faced staffing shortages, and made increasing demands on workers’ already stressed schedules. Train operators don’t have regular days off; when they return from a trip, they are rotated to the bottom of the staffing list to give them time off. However, if the staffing list is short, workers have little to no time off, and are discouraged from taking any paid leave. With deteriorating work conditions, attrition increased, exacerbating the railroad companies’ already stretched staffing problems. As was the case in many other sectors, the “Great Resignation” impacted the rail business, as older workers opted to retire, and younger workers prioritized work-life balance over wages.  So, as in the late nineteenth century, the industry looked to labor reductions to cope with changes in externalities.

 

·     Lack of dignity, status, and function: In the 19th century, workers felt devalued for a number of reasons. As America industrialized in the early 1800s, skilled workers saw themselves as partners with management; management and labor both had a seat at the table to negotiate work conditions, output, wages, and goals. In a way, these early years of labor reflected Drucker’s idea of Management by Objectives. Each party saw themselves as having responsibility for the organization’s success. However, as industrialization matured in the late 1800s, coupled with immigration of lower-skilled labor, relations between management and labor soured. Growing class division and economic uncertainty fueled the working class’s sense that they were inferior, unvalued, underpaid, and lacking in status and function. The Great Railroad Strike was but the first of many labor actions that reflected this sense of indignity in a country that preached that hard work would equal success. In 2022, dignity for workers of all kinds means not just money. Railroad workers are highly paid, but cannot take time off for personal needs, such as doctor visits. In the 21st century, dignity involves being treated as a human being, not an economic being. Drucker wrote about this tirelessly. We should not be surprised that workers who cannot have time to have a meaningful life outside of work should be unhappy and unproductive. Railroad workers are not merely labor inputs.

 

Now, the historical divergences.


·     Union power: The Great Railroad Strike of 1877 did not involve union participation because there was no railroad union. Today, there are multiple unions representing the various trades associated with railroad work (37 railroads and 12 unions), including machinists, train operators, electricians, blacksmiths, and transportation communication professionals. The interests of all of these parties are not the same. Negotiating a labor agreement requires balancing the desires of all participants and involves compromise. The 2022 agreement was criticized by many – a sign that it was a compromise that involved parties giving in on positions. In 1877, workers had no bargaining power, and violence became the tool of last resort.


·     Unimportance of wages: The Great Strike of 1877 was primarily about wages (and job retention). The workers of 2022 were paid well; the average pay for a train conductor in 2022 was $53,571, and they certainly did not want more hours! The issue in 2022 was about time. As discussed previously, dignity, status and function – aspects that Drucker emphasized from the beginning of his writing – are key in both of these labor actions. In 1877, wages and more hours were valued. Today, workers value time with their families, time to take care of their personal needs, and having a life outside of work, especially if they are an essential worker, stretched to the limit during the pandemic and the years of recovery after. Money is important to cope with inflation and financial stressors, but this strike shows that highly-paid workers can still feel undervalued.


·     Technology: In 1877, the railroads were still relatively new technology. The financial meltdown in 1872 was a result of speculation in railroad securities. By 2022, rail transportation was a very old industry that has undergone major shifts to stay alive and relevant. The railroad industry, like many others, has seen an increased use of technology and a subsequent shift in job requirements for workers. Rather than rely on human eyes for inspecting tracks and equipment, companies use drones and sensors to collect large amounts of information and rely on data analytics to streamline operations and improve safety and efficiency. Positive Train Control (PTC) uses Artificial Intelligence and algorithms to determine the location, direction, and speed of a train on many routes, notifying the train operator of a problem and, if no action is taken, stopping the train. Those tasked with developing and using these new technologies are a new kind of knowledge worker in the rail industry.

 

 

Takeaways


·     Knowledge workers are essential workers too. The pandemic shed light on existing class divisions (as well as ethnic, racial, and gender divides). People celebrated “essential” workers who were visible, working on the front lines. But many other workers were just as “essential,” managing freight traffic to accommodate the shift towards purchasing consumer items during the lockdowns. When the economy reopened, these same workers were tasked with managing supply chain issues. In the 19th century, railroad workers were, for the most part, skilled labor. They are even more so now. We need to think through who is an “essential” worker and what is “knowledge” work.


·     All workers need balance. Workers in the 1800s needed adequate wages and hours to survive – but not to the point of being worked to death. Once unionization provided some control over wages, workers in the late 1800s and early 1900s were pushing for balance. “Eight hours labor, eight hours recreation, eight hours rest” became the rallying cry for an eight-hour work day. Knowledge workers may scoff at such an idea, but for manual laborers in heavy industry, physical labor takes a toll. Today, it is easy for knowledge workers to toil for 12 plus hours a day. But the pandemic created a shift in attitudes about work/life balance. We all need time to manage personal needs (doctor appointments, child care, etc.). Even if work isn’t physically grueling, it shouldn’t prevent us from being human beings.


·     Wages are important in an inflationary environment, but time is more important. Early labor actions fought for better wages and work conditions. Today, wages are important, and lower-skilled workers are fighting for better pay to keep up with the cost of living. Knowledge workers also need to be paid a reasonable wage or salary, especially given our inflationary environment. However, increasingly, time is more valuable to people than money. At some point, the utility of time outweighs the utility of money. The Great Resignation and the threatened railroad strike show that we are seeing this economic tradeoff become more widespread.


·     All workers need a sense of dignity, status, and function. This sounds great. What does it actually look like? It is complicated. In the 1800s, American society began to sort people into an increasingly divided class system, with industrial workers (no matter how skilled) at the bottom. The managerial and professional class began to rise as the new middle class (replacing teachers, tradesmen, and others of the old pre-industrial era), while the wealthy plantation owners and merchants were joined (in many cases surpassed) by a growing upper class of industrial elite. When the working class of the United States sensed a lack of dignity, status and function, they rebelled – and organized. When the organized railroad workers of 2022 sensed a lack of dignity, status and function as a result of years of overwork, they spoke. It seems to me that if managers can grasp the importance of such key aspects of MLA (dignity, status, function), then we can prevent such actions in the future. And, if we can view things through the lens of a social ecologist, we can see the bigger picture, understanding how history can teach us how not to repeat the errors of the past.

 

https://www.digitalhistory.uh.edu/disp_textbook.cfm?smtid=2&psid=3189

https://www.nytimes.com/2022/09/15/business/economy/railroad-workers-strike.html

https://www.aar.org/article/the-future-of-rail/

https://www.bls.gov/opub/mlr/2021/article/employment-in-rail-transportation-heads-downhill-between-november-2018-and-december-2020.htm

https://www.whitehouse.gov/briefing-room/statements-releases/2022/11/28/statement-from-president-joe-biden-on-averting-a-rail-shutdown/

https://raillaborfacts.org/bargaining-essentials/the-parties/

https://www.glassdoor.com/Salaries/railroad-conductor-salary-SRCH_KO0,18.htm

https://www.nelp.org/blog/this-week-in-labor-history-remembering-the-adamson-act/


An Unflinching Gaze: Peter Drucker's Self-Portrait Through a Fallen World

By Bo Yang Ph.D. • January 31, 2026
Peter Drucker’s memoir, Adventures of a Bystander, is a self-portrait of a most unusual kind. It reveals its subject not through direct autobiography, but through a series of incisive portraits of the people he encountered throughout a tumultuous life. Drucker positions himself as a "bystander," but this is no passive observer. Instead, he is an intellectual portraitist whose careful study of others becomes the very method by which he comes to understand himself and the fractured world he inhabited. The book’s central drama is framed by a vivid scene from the summer of 1940. Karl Polanyi, a brilliant economic historian and refugee from the war engulfing Europe, was staying with the young Drucker and his family in Vermont. Tormented by the news of France's surrender and the bombing of London, Polanyi was consumed by an agonizing question: "Why did this European catastrophe happen?" Each morning, as soon as he heard Drucker's infant daughter stir in her crib, he would rush into her room and pour out his developing theories, testing his grand intellectual framework on the most innocent of listeners. This single image captures the profound urgency that animates the book. For both Polanyi and Drucker, understanding the collapse of European civilization was not an abstract academic exercise; it was an existential necessity. To explain his unique perspective, Drucker employs the metaphor of the "bystander" as the "fireman in the theater." In old European theaters, two firemen were required to be present for every performance. They did not participate in the play, yet their presence was integral to it. From their unique vantage point, they saw the stage differently than the actors or the audience. Drucker clarifies that this viewpoint is not a simple reflection of reality. As he puts it, this kind of "reflection is a prism rather than a mirror; it refracts." In observing the world, the bystander sees reality broken down into its constituent parts, and in that refraction, he inevitably sees himself. This analysis will follow Drucker’s prismatic gaze. We will first explore his diagnosis of a European elite intellectually trapped by the failed ideas of the 19th century. We will then examine the desperate search for an exit from this intellectual prison, as seen through his dialogues with other brilliant minds on the edge of the abyss. Finally, we will uncover the alternative vision Drucker discovered—not in a grand ideology, but in the pragmatic realities of American society and the nascent practice of management. 1 Trapped in the 19th Century: The Collapse of a Worldview To comprehend the rise of 20th-century totalitarianism, Peter Drucker believed one must first understand the intellectual and imaginative paralysis of the European elites who preceded it. His portraits of the men and women of his youth are not mere nostalgic sketches; they are forensic examinations of a worldview in collapse. The catastrophe that befell Europe, he argues, was not caused by a sudden invasion of barbarism, but by an internal failure—a vacuum created when the continent’s leading minds became prisoners of their own history, unable to see, let alone confront, the monstrous new reality taking shape before them. Drucker uses the haunting metaphor of a "sunken city of Atlantis" to describe the Vienna—and by extension, the Europe—of his youth. He recalls a childhood story of a city whose inhabitants, punished for their pride and greed, are forced to live as the undead, re-enacting their empty rituals in a world without sunlight. For Drucker, this was the state of the European elite. They were the living dead, trapped in the illusion of a "prewar" world, going through the motions of a life that no longer existed. This clinging to the past was, in his words, a "miasmic smog... paralyzing everybody," stifling all thought and imagination. The Paralysis of the Liberals The first and most prominent group of prisoners were the 19th-century liberals among whom Drucker was raised. His own father, a high-ranking government official, simply could not believe that Hitler would invade Austria or that another great war was possible. The editors at the prestigious journal The Austrian Economist, men of international perspective, dismissed 18-year-old Drucker’s warnings about the rising Nazi movement as "Nonsense," convinced that electoral politics had solved the problem. Most damningly, Drucker recounts an episode at the liberal-minded Frankfurt University. After a Nazi official delivered an ominous speech to the faculty, the university’s most celebrated professor—a brilliant scientist and archetypal liberal—was expected to offer a rebuttal. Instead, he stood up and asked only one question: "Could you please clarify... will the research budget for physiology be increased?"  For Drucker, the liberals' catastrophic failure was therefore not moral but imaginative—a cognitive paralysis rooted in their unwavering faith in a 19th-century framework that was utterly unequipped to recognize, let alone combat, a radically new form of political evil. They saw the Nazis as crude and vulgar, a temporary aberration that could be managed with the old tools, never imagining a world where their own cherished principles were no longer relevant. The Disillusionment of the Socialists If the liberals failed because they could not imagine a world beyond the 19th century, the socialists failed because their imagination was entirely a reaction against it, leaving them equally blind to the political realities of the 20th. They correctly diagnosed the deep flaws of the old order but were tragically naive in their proposed solutions. Drucker tells the story of Count Traun-Trauneck, a brilliant young aristocrat who placed his faith in an international workers' movement, believing the solidarity of the proletariat could transcend national borders and prevent the coming war. His hopes were brutally shattered when that very movement was consumed by a tidal wave of nationalism, as the "workers of the world" eagerly marched off to kill one another. The Count, his faith destroyed, retreated into obscurity, a broken man. Even more cautionary is the tale of Noel Brailsford, a British dissenter who journeyed from liberalism to socialism out of a deep compassion for the oppressed. Horrified by Nazism, Brailsford adopted the desperate logic of "the enemy of my enemy is my friend," which led him to become an apologist for Stalin's Soviet Union. He knew of the atrocities, yet out of a desire to preserve a united front against fascism, he publicly defended the indefensible. Drucker saw in Brailsford a terrible paradox: a good man whose conscience led him to "condone evil." It was a lesson in how well-intentioned idealism, when detached from political reality, can become both morally compromised and politically naive. The Cul-de-Sac of Rationalism Drucker identified a deeper intellectual prison that held both liberals and socialists captive: "Rationalism." He was careful to distinguish this from reason itself. For Drucker, Rationalism is the arrogant impulse to force the mysterious, non-rational dimensions of human life into a single, quasi-scientific, all-encompassing explanatory system, mistaking the map for the territory. His prime example of this mindset is Sigmund Freud. In a masterful chapter, Drucker deconstructs three central "myths" about Freud: that he was impoverished, held back by anti-Semitism, and professionally neglected. In reality, Drucker argues, Freud was a quintessential "child of the Enlightenment." His great project was to take the dark, mysterious depths of the human psyche—the subconscious—and force them into a neat, rationalist framework. He promised a single key, sexual repression, that could unlock every human mystery. This quest for a perfect, totalizing explanation, Drucker argues, was the true intellectual disease of the 19th century. This rationalist obsession with a single, perfect system was the poison that contaminated the wells of European thought. It created an intellectual environment where even the most brilliant minds, in their search for an escape, would propose new, equally totalizing solutions—be it the perfect statesman, the perfect social design, or the perfect technology. 2. The Search for a Way Out: Dialogues on the Edge of an Abyss Drucker did not diagnose Europe's crisis from a detached, academic distance. His search for an answer was a lived experience, forged in intense dialogue with other thinkers who were also desperately seeking a path beyond the failed ideologies of the 19th century. In the portraits of his intellectual interlocutors—Fritz Kraemer, Karl Polanyi, Buckminster Fuller, and Marshall McLuhan—Drucker reveals a landscape of brilliant but ultimately flawed attempts to find an exit. The 'Third German' and Legitimate Power Fritz Kraemer was an eccentric political philosopher who provocatively advocated for monarchy, not out of nostalgia, but from a deeply held conviction that to resist the illegitimate, mob-driven power of Nazism, Germany needed a true conservatism grounded in legitimate authority and political virtue. He called for a "third German"—an "ideal Prussian"—to stand against both the corrupt "ugly German" of the establishment and the weak, ineffective "good German" of the liberal class. Drucker shared Kraemer's belief that the legitimacy of power was the central question of modern politics. Yet he ultimately diverged from Kraemer's solution, seeing it as too narrowly focused on the power of the state and overly reliant on the emergence of a "great man" to solve society's problems. The Perfect Society and the Embedded Market Drucker’s relationship with Karl Polanyi was one of the most formative of his life. Polanyi’s quest for an exit from the 19th-century trap was part of a larger family drama; each of his four siblings also pursued a radical alternative, from fascism and engineering a new society in Brazil to rural sociology and philosophical personalism, illustrating the sheer desperation of the search. Karl’s path was economic history. In his masterwork, The Great Transformation, he argued that the worship of a utopian "free market" was the root of social decay and proposed a "third way" in which the market would be "embedded" within social principles. Drucker, however, saw in Polanyi’s quest another form of the 19th-century impulse for "salvation by society." Polanyi’s own historical research became a source of disillusionment; he discovered that the pre-market societies he idealized were often built on slavery and coercion. Their fundamental difference was captured in Polanyi’s friendly dismissal of Drucker’s emerging philosophy as a "tepid compromise." Polanyi was searching for the perfect society; Drucker was beginning to formulate a vision for a tolerable one. The American Prophets and the Gospel of Technology After moving to America, Drucker encountered two thinkers who offered a completely different exit: technology. He called Buckminster Fuller and Marshall McLuhan true "prophets" because they understood that technology was not merely a set of tools but a new, formative reality. Fuller preached a technological "pantheism," seeing it as divine harmony, while McLuhan famously viewed it as an "extension of man," altering human perception itself. Drucker recognized their genius but warned against idolizing technology as a new "Golden Calf." To understand their difference from Drucker, one might imagine technology as a lamp. Fuller was concerned with whether the lamp's light aligned with the cosmic order of the stars. McLuhan was fascinated by how the lamp's light fundamentally altered our eyesight and perception of the world. Drucker, however, insisted on asking: Who is holding the lamp? What is the human 'work' of carrying it? And what social responsibilities does that act entail? For Drucker, these brilliant searches—for the perfect statesman, the perfect society, or the perfect technology—all pointed to a deeper modern pathology. The quest for "salvation by society," he concluded, had turned society itself into an idol. "Society" had become the "Great Baal and Moloch of modern man," a false god to which people were willing to sacrifice themselves and others in the pursuit of a worldly paradise. This deification of the social, he believed, was the ultimate source of totalitarian temptation. His own path, therefore, would require not a new system, but a new humility. 3. The American Alternative: Society, Politics, and Management Drucker’s escape from the European intellectual labyrinth was not just theoretical; it was geographical and experiential. In the United States, he discovered a society that, while deeply flawed, offered a living, breathing alternative to the rigid and failed ideologies of Europe. It was not a perfect society, but a functioning one, and in its functioning, he found the raw materials for a new political and social vision. An Imperfect but Resilient Society Drucker was struck by the profound difference in how Americans and Europeans responded to the Great Depression. In Europe, the economic collapse bred "suspicion, surliness, fear, and envy," tearing the social fabric apart. In America, he observed, the Depression was largely viewed as a "natural disaster." This perception fostered solidarity; the community "closed ranks" rather than dissolving into class warfare. He identified a key source of this resilience in what he termed American "Tribalism." Contrary to Marxist predictions, the crisis did not produce a unified "proletariat." Instead, Americans fell back on their diverse religious and ethnic communities. Drucker acknowledged the dark side of this phenomenon, distinguishing between "discrimination against" others and "discrimination for" one's own group. Yet he argued that this flawed mechanism provided a powerful source of social cohesion that prevented total social collapse. This mosaic of particular communities was held together by an overarching "American Creed"—a set of abstract principles to which anyone could swear allegiance. A Politics of Pragmatism, Not Perfection This unique social structure was mirrored in what Drucker called "America's political genius": a rejection of the European obsession with ideological perfection. The core of this tradition was a concept he called "dualism": a refusal to separate the material from the ideal. For Americans, politics was neither a dirty game of power (Machiavelli) nor the deification of the state (Hegel). Instead, it was a moral and creative act of making "matter serve spirit"—using imperfect institutions to strive for ethical ends. This pragmatic approach, Drucker saw, reflected a kind of "pre-modern," community-based wisdom that Europe, in its obsession with grand "isms," had lost. The fierce debate between individualism and collectivism, for example, was resolved through a vibrant tradition of "voluntary group action," where citizens organized from the bottom up to solve problems. This focus on concrete, community-based action over abstract theory was the political equivalent of the practical wisdom he admired in the "pre-modern" figures of his youth. The Organization as the Locus of Freedom Drucker's political philosophy found its ultimate practical application in an unlikely place: the modern business corporation. A two-year study of General Motors in the 1940s crystallized his thinking. He found himself in a debate with GM's legendary chairman, Alfred Sloan, who held that a corporation's only responsibility was economic performance. Drucker argued for a broader vision: in a world where traditional communities were dissolving, the large corporation had become the central social institution. As such, it had to provide workers with the social status and function that the old order no longer could. He found an unexpected ally in GM's president, Charles E. Wilson, a self-proclaimed "socialist." Wilson championed two groundbreaking ideas: the employee pension fund, which Drucker predicted would make workers the owners of American industry, and the "self-governing plant community," a direct response to Drucker's call for granting workers more autonomy. From these observations, Drucker forged his most groundbreaking insight. Tyranny thrives in a vacuum of social status and function. The well-managed organization, therefore, is not just an economic entity; it is the primary non-governmental institution capable of providing individuals with the status, function, and community that prevent the alienation on which totalitarianism feeds. Management, understood correctly, was the concrete "alternative to tyranny." 4. The Enduring Mystery of the Person After a lifetime spent analyzing the grand ideologies that defined the 20th century, Peter Drucker’s ultimate answer to its crises lay not in a new system, but in a return to the irreducible and mysterious nature of the human person. The ideologies had failed because they were abstractions; they forgot the messy, contradictory reality of individual human beings. The way out was to recover a form of wisdom that looked unflinchingly at people as they are. The "Pre-Modern" Wisdom Drucker found this wisdom embodied not in great theorists, but in "pre-modern" figures. His grandmother dismissed complex economic theories with a simple analogy: a ruler cannot change its length and then claim people have grown taller. Confronted by a Nazi, she didn't argue ideology; she poked him with her umbrella and told him his swastika was as impolite as a pimple on his face—and he sheepishly removed it. Similarly, the dynamic salon hostess Genia Schwarzwald had a profound disdain for all "isms." Her passion was for solving concrete problems. As Drucker notes, her famous salon was not just a hub of intellectual life, but a compassionate "counter-world" she created as a refuge for the "old-time liberals" and other elites who felt trapped in the "sunken city" of a collapsing Europe. When a massive strike loomed, she forcefully intervened, knocking heads together. When accused of forcing both sides to betray their principles, she delivered a line that summarized her entire philosophy: "I have no use for principles which demand human sacrifice." Lessons from the "Men of Action" Drucker found further proof of this principle in the practical wisdom of the bankers and businessmen he met. The banker Ernest Freedberg insisted that any system must be "'foolproof,' because work is ultimately done by fools." The retail magnate Henry Bernheim taught him that "There are no irrational customers, only lazy merchants." Their insights were a constant reminder that effective action comes from observing people's actual behavior, not from imposing abstract models upon them. Drucker's Ultimate Insight Drucker’s entire intellectual journey was a movement toward this fundamental truth. As a young man, he had a startling religious insight: "The opposite of Sin... is not Virtue; it is Faith." Years later, while sitting in John Maynard Keynes's legendary economics seminar, he had a professional epiphany, realizing that everyone else in the room, including Keynes himself, was interested "in the behavior of commodities," whereas he was interested "in the behavior of people." This focus on the human person in all their complexity led him to his most profound conclusions. He came to see the problem of slavery in America not as a mere political mistake, but as a "sin"—a deep moral and spiritual wound that could only be healed by repentance and redemption. He was shaken to his core when a Black theologian argued that true freedom for Black Americans required confronting not only the sin of white oppression but also the "guilt and mystery" of their own African ancestors' role in the slave trade. For Peter Drucker, the bystander who had witnessed the collapse of a world, the most profound social and political problems were, at their root, moral and spiritual problems of the human heart. To escape the prisons of ideology, one must have the courage to set aside the quest for perfect systems and turn instead to the difficult, humbling, and ultimately liberating task of looking unflinchingly at the full, mysterious, and often contradictory nature of the person.

On Decisions and their “Agents”

By Richard Johnson Ph.D. • December 17, 2025
This essay was inspired by an article recently published by Karen Linkletter and Pooya Tabesh (2025). They were in search of the meaning of “decision” in the works of Peter Drucker. To this end, they used Python to identify and locate all the times the word, “decision”, came up in Peter Drucker’s oeuvre . They then characterized the contexts (“themes”) in which the word came up. The result was a nuanced but very clear characterization of the evolution of his thinking on the topic. Here, we will focus on a key theme for Drucker: the case where your decisions involve other people’s decisions and actions . For present purposes, we can start with their statement: One of Drucker’s valuable contributions to the literature on decision-making is his adamance that implementation be built into the decision-making process.” (Linkletter and Tabesh 2025 8) To be clear, “…it is not a surprise that his integration of implementation of and commitment to decisions is part of his process of decision-making. He argues that a decision “has not been made until it has been realized in action.” (2025 8) The question, therefore, is how to make this happen, how to turn an organization from an aggregate of individuals whose decisions may or may not be aligned, into an agent—an entity that makes decisions, implements them, and then ascertains that what was done was, in fact, what was decided, as we try to do when making purely individual decisions. Let’s look at the matter more closely… A few years ago, I read a story about a road crew that was painting a double-yellow line on a highway. In their path was a dead raccoon that had been hit by a car or truck. It was lying right in the middle of the road. The crew didn’t stop. Someone later took a picture of the dead raccoon with a double-yellow line freshly painted right over it. The picture is below. It went viral on the Internet.

Paul Polman: Management, Sustainability, and Stewardship as a Liberal Art

By Robert Kirkland Ph.D. • December 17, 2025
When Paul Polman became CEO of Unilever in 2009, he did not inherit a troubled company. He stepped into a large global enterprise with familiar consumer brands that sat on shelves in cities from Amsterdam to Manila. Even with that scale and reach, the business rested on foundations that were beginning to crack. Public faith in multinational firms was fading, climate change was moving from a distant worry to a financial reality, and investors were increasingly locked into the rhythm of quarterly results that encouraged short term decisions and discouraged real strategy. Polman’s answer was surprisingly philosophical for a leader of such a company. Rather than defend profitability as the central corporate purpose, he attempted to redefine what the company was for. His response may suggest a contemporary expression of Peter Drucker’s idea of Management as a Liberal Art. Drucker described management as a moral undertaking that must be anchored in judgment, responsibility, and service, not only in efficiency or cost control. Redefining Corporate Purpose Soon after taking the role, Polman stunned many investors by ending quarterly earnings guidance. He went further and encouraged investors who focused only on short term returns to place their money elsewhere (Polman and Winston, 2021). The gesture appears to have been meant to reset the company’s relationship with financial markets. Drucker consistently argued that true leadership cannot be tied to the emotional fluctuations of short term financial reporting. By refusing to follow the ninety day cycle, Polman gave Unilever enough breathing space to think about long term issues. He also sent a powerful message inside the company. Unilever would no longer place shareholder extraction above every other consideration. Drucker might say that Polman was returning management to a place where purpose and meaning had priority. Drucker had long argued that institutions must be run for durability and social legitimacy, not just for quarterly outcomes (Drucker, 1946). The Unilever Sustainable Living Plan In 2010, Polman introduced the Unilever Sustainable Living Plan, which attempted to grow the company while reducing its environmental footprint (Unilever, 2010). The plan contained measurable goals for carbon emissions, water use, waste, sustainable sourcing, health, hygiene, nutrition, and economic livelihoods in the supply chain (Unilever, 2018). This was not presented as charity. It was presented as the business model itself. This approach fits well with Drucker’s view that a company must justify its existence through contributions to the common good (Drucker, 1946). Polman noted that a company serving billions of consumers could not thrive in a world marked by climate disruption, fragile supply chains, and social instability (Polman and Winston, 2021). He reframed sustainability as a competitive requirement. There are many examples of how this mindset influenced operations, such as targeted efforts to stabilize incomes for small farming communities or reduce water dependency in detergent production. Drucker would likely describe this approach as a return to institutional citizenship, which is the idea that power involves obligation (Drucker, 1989 and 1993). Human Dignity in Management Drucker believed that effective management is inseparable from human dignity. He argued that organizations must offer people both identity and contribution (Drucker, 1946). Polman appeared to take this to heart. Under his leadership, Unilever pushed for higher wages, safer working conditions, and expanded training programs across its vast networks of suppliers and small scale producers (Unilever, 2018). He also shifted language in a revealing way. Polman preferred speaking about farmers and families rather than vendors and suppliers (Polman and Winston, 2021). This change hinted at a deeper moral view of business. It positioned Unilever as a partner invested in the stability of the people who provided its raw materials. That reading fits closely with the idea of management as a liberal art, which sees leadership as an act of stewardship for the growth of people, not just the supervision of tasks (Drucker, 1989). Climate Leadership and Ethical Risk Management Drucker warned that management cannot be reduced to engineering efficiency. Managing also requires wrestling with consequences (Drucker, 1990). Polman pressed Unilever to treat climate risk as a direct business issue. He connected environmental damage to cost volatility, to consumer trust, and to the company’s long term future. Under his leadership, Unilever accelerated its use of renewable energy, sustainable materials, lighter packaging, and lower water use in many products (Unilever, 2010 and 2018). Polman’s climate agenda blended science, logistics, ethics, psychology, and an understanding of global politics. Drucker described this type of synthesis as central to Management as a Liberal Art. Responsible executives, he argued, must integrate many forms of knowledge into decisions (Drucker, 1989 and 1993). Polman framed sustainability as fiduciary responsibility rather than philanthropy. His influence is still visible in the way many global firms now treat environmental commitments as strategy rather than charity. This framing closely reflects Drucker’s view that corporate social responsibility must be rooted in a firm’s core mission, capabilities, and day-to-day operations rather than treated as a separate act of goodwill. By embedding sustainability into Unilever’s strategy and value chain, Polman demonstrated Drucker’s argument that responsible management integrates social obligations into how the business competes and performs, allowing ethical action and profitability to reinforce rather than undermine one another. Reviving Stakeholder Capitalism Polman helped restore credibility to the idea of stakeholder capitalism. He insisted that corporations must serve employees, consumers, suppliers, communities, and the environment rather than focus only on investor returns (Polman and Winston, 2021). He also pushed Unilever to evaluate brand performance partly through its social or health impact (Unilever, 2018). Under this model, brand equity included moral equity. This aligns with Drucker’s view that corporate legitimacy must be earned and never assumed (Drucker, 1989). For Polman, consumer trust was a survival requirement. When customers believe that a firm contributes to a worsening world, the company risks losing not just reputation but also the permission to operate (Drucker, 1990). Moral Leadership and Institutional Courage Polman spoke in moral terms more openly than most executives. He frequently challenged governments that fell short on climate commitments and he encouraged other business leaders to adopt fair labor standards and responsible tax behavior (Polman and Winston, 2021). Drucker argued that real authority is moral before it is positional. Polman’s conduct fits that idea well (Drucker, 1989 and 1990).  Inside the company, Polman asked employees to see themselves as contributors to social improvement and not merely as managers of brands or operations (Unilever, 2010). This practice reflects MLA. Drucker believed that people should find meaning and contribution through their work, not only wages (Drucker, 1989). Performance, Profit, and Purpose Some critics argue that purpose oriented leadership reduces profitability. Polman countered this by pointing to performance. During his tenure, Unilever posted steady growth, especially in emerging markets, improved margins, and delivered strong long term returns (Unilever, 2018). He argued that long term value and social value reinforce one another (Polman and Winston, 2021). Drucker had long dismissed the idea that ethical leadership conflicts with economic effectiveness (Drucker, 1999). Even with strong performance, tension remained. Certain investors disliked the refusal to play the quarterly guidance game. Some environmental advocates believed Unilever could have moved faster on issues such as plastics. Drucker never said that Management as a Liberal Art would eliminate conflict. He said that it would give leaders a moral compass for navigating conflict in a transparent way (Drucker, 1989). Polman seemed to follow that guidance by making tradeoffs visible and by emphasizing choices that protected dignity, stability, and ecological viability (Drucker, 1990). Building a Network of Responsible Institutions After leaving Unilever, Polman co founded Imagine, an organization that works with senior executives to accelerate progress toward the United Nations Sustainable Development Goals (Polman and Winston, 2021). This next step reinforces the idea that sustainability for Polman is a theory of governance rather than a branding strategy. Drucker believed that modern society relies on networks of responsible institutions. These include corporations, governments, and nonprofit organizations that understand their interdependence and act accordingly (Drucker, 1946 and 1993). Polman’s post CEO work attempts to strengthen that network. He is essentially trying to rebuild the trust and cooperation among institutions that Drucker warned could erode in a fragmented society (Drucker, 1999). The Legacy of a Modern Druckerian Paul Polman’s leadership at Unilever provides one of the clearest contemporary examples of Drucker’s idea of Management as a Liberal Art. He treated the corporation as a civic institution rather than a simple profit generator. He wove climate stability, labor dignity, and social inclusion into the core of strategic planning. He asked brands to earn moral legitimacy. He emphasized supply chains as human communities. He took personal risks by arguing that corporations hold responsibility for the future of the planet on which their operations depend (Polman and Winston, 2021). In Drucker’s language, Polman practiced stewardship. He demonstrated that management concerns human beings, the communities they inhabit, and the ecological systems that support them (Drucker, 1989 and 1990). In an era shaped by climate upheaval, inequality, and declining institutional trust, Polman shifted the central question. Instead of asking whether companies can afford to care, he asked whether they can survive if they refuse to care at all. References Drucker, P. F. (1946). The concept of the corporation. New York: The John Day Company. Drucker, P. F. (1989). The new realities: In government and politics, in economics and business, in society and world view. New York: Harper & Row. Drucker, P. F. (1990). Managing the non-profit organization: Practices and principles. New York: HarperBusiness. Drucker, P. F. (1993). Post-capitalist society. New York: HarperBusiness. Drucker, P. F. (1999). Management challenges for the 21st century. New York: HarperBusiness. Polman, P., & Winston, A. (2021). Net Positive: How courageous companies thrive by giving more than they take. Harvard Business Review Press. Unilever. (2010). Unilever Sustainable Living Plan. Unilever PLC. Unilever. (2018). Sustainable sourcing and livelihoods progress report. Unilever PLC. World Business Council for Sustainable Development. (2019). Business leadership for a net-zero economy.
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